diff --git a/CLOUD_SESSION_LEGAL_DB_BUILD.md b/CLOUD_SESSION_LEGAL_DB_BUILD.md new file mode 100644 index 0000000..9be292e --- /dev/null +++ b/CLOUD_SESSION_LEGAL_DB_BUILD.md @@ -0,0 +1,969 @@ +# CLOUD SESSION: Legal Document Database Build +## Handoff Plan for Claude Code Cloud Execution + +**Mission:** Download legal documents from official sources and integrate into self-hosted local vector database. + +**Constraints:** +- Using Claude Code CLI (not SDK) +- Self-hosted vector DB (Chroma - Pinecone has no local option) +- Target: Contract analysis reference corpus + +--- + +## PHASE 1: ENVIRONMENT SETUP + +### 1.1 Create Project Structure +```bash +mkdir -p ~/legal-corpus/{raw,processed,embeddings,scripts} +cd ~/legal-corpus +``` + +### 1.2 Install Dependencies +```bash +# Python environment +python3 -m venv venv +source venv/bin/activate + +# Core dependencies +pip install chromadb sentence-transformers requests beautifulsoup4 \ + pypdf2 python-docx lxml tqdm pandas httpx aiohttp + +# Legal-specific embedding model +pip install voyageai # For voyage-law-2 (best for legal) +# OR use free alternative: +pip install -U sentence-transformers # For legal-bert +``` + +### 1.3 Initialize Chroma (Local Vector DB) +```python +# scripts/init_chroma.py +import chromadb +from chromadb.config import Settings + +# Persistent local storage +client = chromadb.PersistentClient( + path="./chroma_db", + settings=Settings( + anonymized_telemetry=False, + allow_reset=True + ) +) + +# Create collections for each jurisdiction +collections = [ + "us_federal_law", + "us_case_law", + "eu_directives", + "eu_regulations", + "canada_federal", + "australia_federal", + "contract_clauses" # From CUAD dataset +] + +for name in collections: + client.get_or_create_collection( + name=name, + metadata={"description": f"Legal corpus: {name}"} + ) + +print("Chroma initialized with collections:", collections) +``` + +--- + +## PHASE 2: DOWNLOAD LEGAL DOCUMENTS + +### 2.1 US Federal Law (GovInfo API) + +**API Endpoint:** https://api.govinfo.gov/ +**API Key:** Free, get from https://api.data.gov/signup/ + +```python +# scripts/download_us_federal.py +import httpx +import json +import os +from tqdm import tqdm + +API_KEY = os.environ.get("GOVINFO_API_KEY", "DEMO_KEY") +BASE_URL = "https://api.govinfo.gov" + +# Collections to download +COLLECTIONS = [ + "USCODE", # US Code (statutes) + "CFR", # Code of Federal Regulations + "BILLS", # Congressional Bills +] + +def get_collection_packages(collection, page_size=100, max_pages=10): + """Fetch package list from a collection""" + packages = [] + offset = 0 + + for page in range(max_pages): + url = f"{BASE_URL}/collections/{collection}/{offset}?pageSize={page_size}&api_key={API_KEY}" + resp = httpx.get(url, timeout=30) + + if resp.status_code != 200: + print(f"Error: {resp.status_code}") + break + + data = resp.json() + packages.extend(data.get("packages", [])) + + if len(data.get("packages", [])) < page_size: + break + offset += page_size + + return packages + +def download_package_content(package_id, output_dir): + """Download package summary and full text""" + # Get package summary + url = f"{BASE_URL}/packages/{package_id}/summary?api_key={API_KEY}" + resp = httpx.get(url, timeout=30) + + if resp.status_code == 200: + summary = resp.json() + + # Save summary + with open(f"{output_dir}/{package_id}_summary.json", "w") as f: + json.dump(summary, f, indent=2) + + # Get granules (sections) if available + granules_url = f"{BASE_URL}/packages/{package_id}/granules?api_key={API_KEY}" + granules_resp = httpx.get(granules_url, timeout=30) + + if granules_resp.status_code == 200: + granules = granules_resp.json() + with open(f"{output_dir}/{package_id}_granules.json", "w") as f: + json.dump(granules, f, indent=2) + +if __name__ == "__main__": + for collection in COLLECTIONS: + output_dir = f"raw/us_federal/{collection}" + os.makedirs(output_dir, exist_ok=True) + + print(f"Fetching {collection}...") + packages = get_collection_packages(collection) + + print(f"Downloading {len(packages)} packages...") + for pkg in tqdm(packages[:100]): # Limit for initial test + download_package_content(pkg["packageId"], output_dir) +``` + +### 2.2 US Case Law (CourtListener/Free Law Project) + +**API Endpoint:** https://www.courtlistener.com/api/rest/v4/ +**Note:** Free tier has rate limits; paid for commercial use + +```python +# scripts/download_us_caselaw.py +import httpx +import json +import os +from tqdm import tqdm +import time + +BASE_URL = "https://www.courtlistener.com/api/rest/v4" + +# Focus on contract-related cases +SEARCH_QUERIES = [ + "non-compete agreement", + "intellectual property assignment", + "work for hire", + "indemnification clause", + "arbitration clause", + "confidentiality agreement", + "breach of contract freelance", +] + +def search_opinions(query, max_results=50): + """Search for case opinions""" + results = [] + url = f"{BASE_URL}/search/" + + params = { + "q": query, + "type": "o", # opinions + "order_by": "score desc", + } + + resp = httpx.get(url, params=params, timeout=30) + + if resp.status_code == 200: + data = resp.json() + results = data.get("results", [])[:max_results] + + return results + +def download_opinion(opinion_id, output_dir): + """Download full opinion text""" + url = f"{BASE_URL}/opinions/{opinion_id}/" + resp = httpx.get(url, timeout=30) + + if resp.status_code == 200: + opinion = resp.json() + with open(f"{output_dir}/{opinion_id}.json", "w") as f: + json.dump(opinion, f, indent=2) + return True + return False + +if __name__ == "__main__": + output_dir = "raw/us_caselaw" + os.makedirs(output_dir, exist_ok=True) + + all_opinions = [] + for query in SEARCH_QUERIES: + print(f"Searching: {query}") + opinions = search_opinions(query) + all_opinions.extend(opinions) + time.sleep(1) # Rate limiting + + # Deduplicate + seen_ids = set() + unique_opinions = [] + for op in all_opinions: + if op["id"] not in seen_ids: + seen_ids.add(op["id"]) + unique_opinions.append(op) + + print(f"Downloading {len(unique_opinions)} unique opinions...") + for op in tqdm(unique_opinions): + download_opinion(op["id"], output_dir) + time.sleep(0.5) # Rate limiting +``` + +### 2.3 EU Law (EUR-Lex via SPARQL) + +**Endpoint:** https://publications.europa.eu/webapi/rdf/sparql +**Note:** REST API is limited; SPARQL gives better access + +```python +# scripts/download_eu_law.py +import httpx +import json +import os +from tqdm import tqdm + +SPARQL_ENDPOINT = "https://publications.europa.eu/webapi/rdf/sparql" + +# SPARQL query for directives and regulations related to contracts/employment +SPARQL_QUERY = """ +PREFIX cdm: +PREFIX skos: + +SELECT DISTINCT ?work ?title ?celex ?date +WHERE { + ?work cdm:work_has_resource-type . + ?work cdm:work_date_document ?date . + ?work cdm:resource_legal_id_celex ?celex . + + OPTIONAL { ?work cdm:work_title ?title } + + FILTER(YEAR(?date) >= 2010) +} +ORDER BY DESC(?date) +LIMIT 500 +""" + +def query_eurlex(sparql_query): + """Execute SPARQL query against EUR-Lex""" + headers = { + "Accept": "application/sparql-results+json", + "Content-Type": "application/x-www-form-urlencoded" + } + + data = {"query": sparql_query} + + resp = httpx.post(SPARQL_ENDPOINT, headers=headers, data=data, timeout=60) + + if resp.status_code == 200: + return resp.json() + else: + print(f"Error: {resp.status_code} - {resp.text}") + return None + +def download_celex_document(celex_id, output_dir): + """Download document by CELEX ID""" + # EUR-Lex document URL pattern + url = f"https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:{celex_id}" + + # For machine-readable, use the REST API + api_url = f"https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:{celex_id}" + + resp = httpx.get(api_url, timeout=30, follow_redirects=True) + + if resp.status_code == 200: + with open(f"{output_dir}/{celex_id.replace(':', '_')}.html", "w") as f: + f.write(resp.text) + return True + return False + +if __name__ == "__main__": + output_dir = "raw/eu_law" + os.makedirs(output_dir, exist_ok=True) + + print("Querying EUR-Lex SPARQL endpoint...") + results = query_eurlex(SPARQL_QUERY) + + if results: + bindings = results.get("results", {}).get("bindings", []) + print(f"Found {len(bindings)} documents") + + # Save metadata + with open(f"{output_dir}/metadata.json", "w") as f: + json.dump(bindings, f, indent=2) + + # Download documents + for item in tqdm(bindings[:100]): # Limit for test + celex = item.get("celex", {}).get("value", "") + if celex: + download_celex_document(celex, output_dir) +``` + +### 2.4 Canada (CanLII) + +**Note:** CanLII API requires registration; use web scraping for initial corpus + +```python +# scripts/download_canada_law.py +import httpx +from bs4 import BeautifulSoup +import json +import os +from tqdm import tqdm +import time + +BASE_URL = "https://www.canlii.org" + +# Key federal statutes for contracts +STATUTES = [ + "/en/ca/laws/stat/rsc-1985-c-c-46/latest/rsc-1985-c-c-46.html", # Criminal Code + "/en/ca/laws/stat/rsc-1985-c-l-2/latest/rsc-1985-c-l-2.html", # Canada Labour Code + "/en/ca/laws/stat/sc-2000-c-5/latest/sc-2000-c-5.html", # PIPEDA +] + +def download_statute(path, output_dir): + """Download statute HTML""" + url = f"{BASE_URL}{path}" + + headers = { + "User-Agent": "Mozilla/5.0 (Legal Research Bot)" + } + + resp = httpx.get(url, headers=headers, timeout=30) + + if resp.status_code == 200: + filename = path.split("/")[-1] + with open(f"{output_dir}/{filename}", "w") as f: + f.write(resp.text) + return True + return False + +if __name__ == "__main__": + output_dir = "raw/canada_law" + os.makedirs(output_dir, exist_ok=True) + + for statute in tqdm(STATUTES): + download_statute(statute, output_dir) + time.sleep(2) # Respectful rate limiting +``` + +### 2.5 Australia (AustLII) + +```python +# scripts/download_australia_law.py +import httpx +from bs4 import BeautifulSoup +import json +import os +from tqdm import tqdm +import time + +BASE_URL = "https://www.austlii.edu.au" + +# Key federal acts +ACTS = [ + "/au/legis/cth/consol_act/fwa2009114/", # Fair Work Act + "/au/legis/cth/consol_act/caca2010265/", # Competition and Consumer Act + "/au/legis/cth/consol_act/pa1990109/", # Privacy Act + "/au/legis/cth/consol_act/ca1968133/", # Copyright Act +] + +def download_act(path, output_dir): + """Download act HTML""" + url = f"{BASE_URL}{path}" + + resp = httpx.get(url, timeout=30) + + if resp.status_code == 200: + filename = path.replace("/", "_").strip("_") + ".html" + with open(f"{output_dir}/{filename}", "w") as f: + f.write(resp.text) + return True + return False + +if __name__ == "__main__": + output_dir = "raw/australia_law" + os.makedirs(output_dir, exist_ok=True) + + for act in tqdm(ACTS): + download_act(act, output_dir) + time.sleep(2) +``` + +### 2.6 CUAD Dataset (Pre-labeled Contracts) + +**This is the most valuable dataset - 13K+ labeled contract clauses** + +```python +# scripts/download_cuad.py +import httpx +import zipfile +import os + +CUAD_URL = "https://github.com/TheAtticusProject/cuad/archive/refs/heads/main.zip" + +def download_cuad(output_dir): + """Download CUAD dataset from GitHub""" + os.makedirs(output_dir, exist_ok=True) + + print("Downloading CUAD dataset...") + resp = httpx.get(CUAD_URL, follow_redirects=True, timeout=120) + + if resp.status_code == 200: + zip_path = f"{output_dir}/cuad.zip" + with open(zip_path, "wb") as f: + f.write(resp.content) + + print("Extracting...") + with zipfile.ZipFile(zip_path, "r") as zip_ref: + zip_ref.extractall(output_dir) + + os.remove(zip_path) + print("CUAD downloaded and extracted!") + return True + + return False + +if __name__ == "__main__": + download_cuad("raw/cuad") +``` + +--- + +## PHASE 3: PROCESS AND CHUNK DOCUMENTS + +### 3.1 Document Processing Pipeline + +```python +# scripts/process_documents.py +import os +import json +import re +from bs4 import BeautifulSoup +from tqdm import tqdm +import hashlib + +def clean_html(html_content): + """Extract text from HTML""" + soup = BeautifulSoup(html_content, "lxml") + + # Remove scripts and styles + for tag in soup(["script", "style", "nav", "footer", "header"]): + tag.decompose() + + return soup.get_text(separator="\n", strip=True) + +def chunk_text(text, chunk_size=1000, overlap=200): + """Split text into overlapping chunks""" + chunks = [] + start = 0 + + while start < len(text): + end = start + chunk_size + chunk = text[start:end] + + # Try to break at sentence boundary + if end < len(text): + last_period = chunk.rfind(". ") + if last_period > chunk_size * 0.5: + end = start + last_period + 1 + chunk = text[start:end] + + chunks.append({ + "text": chunk.strip(), + "start": start, + "end": end, + "hash": hashlib.md5(chunk.encode()).hexdigest()[:12] + }) + + start = end - overlap + + return chunks + +def process_jurisdiction(input_dir, output_dir, jurisdiction): + """Process all documents for a jurisdiction""" + os.makedirs(output_dir, exist_ok=True) + + all_chunks = [] + + for filename in tqdm(os.listdir(input_dir)): + filepath = os.path.join(input_dir, filename) + + if filename.endswith(".html"): + with open(filepath, "r", errors="ignore") as f: + content = clean_html(f.read()) + elif filename.endswith(".json"): + with open(filepath, "r") as f: + data = json.load(f) + content = json.dumps(data, indent=2) + else: + continue + + if len(content) < 100: + continue + + chunks = chunk_text(content) + + for i, chunk in enumerate(chunks): + chunk["source_file"] = filename + chunk["jurisdiction"] = jurisdiction + chunk["chunk_index"] = i + chunk["total_chunks"] = len(chunks) + all_chunks.append(chunk) + + # Save processed chunks + output_file = os.path.join(output_dir, f"{jurisdiction}_chunks.json") + with open(output_file, "w") as f: + json.dump(all_chunks, f, indent=2) + + print(f"{jurisdiction}: {len(all_chunks)} chunks from {len(os.listdir(input_dir))} files") + return all_chunks + +if __name__ == "__main__": + jurisdictions = [ + ("raw/us_federal", "processed", "us_federal"), + ("raw/us_caselaw", "processed", "us_caselaw"), + ("raw/eu_law", "processed", "eu_law"), + ("raw/canada_law", "processed", "canada_law"), + ("raw/australia_law", "processed", "australia_law"), + ] + + for input_dir, output_dir, name in jurisdictions: + if os.path.exists(input_dir): + process_jurisdiction(input_dir, output_dir, name) +``` + +### 3.2 CUAD-Specific Processing + +```python +# scripts/process_cuad.py +import os +import json +import pandas as pd +from tqdm import tqdm + +CUAD_PATH = "raw/cuad/cuad-main" + +# CUAD has 41 clause types - these are the key ones for freelancers +KEY_CLAUSES = [ + "Governing Law", + "Non-Compete", + "Exclusivity", + "No-Solicit Of Employees", + "IP Ownership Assignment", + "License Grant", + "Non-Disparagement", + "Termination For Convenience", + "Limitation Of Liability", + "Indemnification", + "Insurance", + "Cap On Liability", + "Audit Rights", + "Uncapped Liability", + "Warranty Duration", + "Post-Termination Services", + "Covenant Not To Sue", + "Third Party Beneficiary" +] + +def process_cuad(): + """Process CUAD dataset into chunks""" + + # Load CUAD annotations + train_file = os.path.join(CUAD_PATH, "CUADv1.json") + + if not os.path.exists(train_file): + print(f"CUAD not found at {train_file}") + print("Run download_cuad.py first") + return + + with open(train_file) as f: + cuad_data = json.load(f) + + processed = [] + + for item in tqdm(cuad_data["data"]): + title = item["title"] + + for para in item["paragraphs"]: + context = para["context"] + + for qa in para["qas"]: + question = qa["question"] + clause_type = question # CUAD questions = clause types + + if qa["answers"]: + for answer in qa["answers"]: + processed.append({ + "contract_title": title, + "clause_type": clause_type, + "clause_text": answer["text"], + "start_pos": answer["answer_start"], + "context_snippet": context[max(0, answer["answer_start"]-100):answer["answer_start"]+len(answer["text"])+100], + "is_key_clause": clause_type in KEY_CLAUSES + }) + + # Save processed + os.makedirs("processed", exist_ok=True) + with open("processed/cuad_clauses.json", "w") as f: + json.dump(processed, f, indent=2) + + print(f"Processed {len(processed)} clause annotations") + + # Summary stats + df = pd.DataFrame(processed) + print("\nClause type distribution:") + print(df["clause_type"].value_counts().head(20)) + +if __name__ == "__main__": + process_cuad() +``` + +--- + +## PHASE 4: EMBED AND INDEX INTO CHROMA + +### 4.1 Embedding Configuration + +```python +# scripts/config.py + +# Option 1: Voyage AI (Best for legal, requires API key) +VOYAGE_CONFIG = { + "model": "voyage-law-2", + "api_key_env": "VOYAGE_API_KEY", + "batch_size": 128, + "dimensions": 1024 +} + +# Option 2: Free local model (Good enough for MVP) +LOCAL_CONFIG = { + "model": "sentence-transformers/all-MiniLM-L6-v2", # Fast, small + # OR "nlpaueb/legal-bert-base-uncased" # Legal-specific + "batch_size": 32, + "dimensions": 384 # or 768 for legal-bert +} + +# Use local for cost-free operation +EMBEDDING_CONFIG = LOCAL_CONFIG +``` + +### 4.2 Embedding and Indexing Script + +```python +# scripts/embed_and_index.py +import os +import json +import chromadb +from chromadb.config import Settings +from sentence_transformers import SentenceTransformer +from tqdm import tqdm +import hashlib + +# Configuration +CHROMA_PATH = "./chroma_db" +PROCESSED_DIR = "./processed" +BATCH_SIZE = 100 + +def get_embedding_model(): + """Load embedding model""" + print("Loading embedding model...") + model = SentenceTransformer("sentence-transformers/all-MiniLM-L6-v2") + # For legal-specific: model = SentenceTransformer("nlpaueb/legal-bert-base-uncased") + return model + +def init_chroma(): + """Initialize Chroma client""" + return chromadb.PersistentClient( + path=CHROMA_PATH, + settings=Settings(anonymized_telemetry=False) + ) + +def index_chunks(chunks, collection_name, model, client): + """Embed and index chunks into Chroma""" + + collection = client.get_or_create_collection( + name=collection_name, + metadata={"hnsw:space": "cosine"} + ) + + # Process in batches + for i in tqdm(range(0, len(chunks), BATCH_SIZE)): + batch = chunks[i:i+BATCH_SIZE] + + texts = [c["text"] for c in batch] + ids = [f"{collection_name}_{c['hash']}_{j}" for j, c in enumerate(batch, start=i)] + metadatas = [ + { + "source_file": c.get("source_file", ""), + "jurisdiction": c.get("jurisdiction", ""), + "chunk_index": c.get("chunk_index", 0), + "clause_type": c.get("clause_type", "general") + } + for c in batch + ] + + # Generate embeddings + embeddings = model.encode(texts, show_progress_bar=False).tolist() + + # Add to collection + collection.add( + ids=ids, + embeddings=embeddings, + documents=texts, + metadatas=metadatas + ) + + print(f"Indexed {len(chunks)} chunks into {collection_name}") + +def main(): + model = get_embedding_model() + client = init_chroma() + + # Index each jurisdiction + jurisdiction_files = { + "us_federal_law": "processed/us_federal_chunks.json", + "us_case_law": "processed/us_caselaw_chunks.json", + "eu_directives": "processed/eu_law_chunks.json", + "canada_federal": "processed/canada_law_chunks.json", + "australia_federal": "processed/australia_law_chunks.json", + } + + for collection_name, filepath in jurisdiction_files.items(): + if os.path.exists(filepath): + print(f"\nProcessing {collection_name}...") + with open(filepath) as f: + chunks = json.load(f) + index_chunks(chunks, collection_name, model, client) + else: + print(f"Skipping {collection_name} - file not found") + + # Index CUAD clauses + cuad_path = "processed/cuad_clauses.json" + if os.path.exists(cuad_path): + print("\nProcessing CUAD clauses...") + with open(cuad_path) as f: + cuad_data = json.load(f) + + # Convert to chunk format + cuad_chunks = [ + { + "text": item["clause_text"], + "hash": hashlib.md5(item["clause_text"].encode()).hexdigest()[:12], + "clause_type": item["clause_type"], + "source_file": item["contract_title"], + "jurisdiction": "cuad_reference" + } + for item in cuad_data + if len(item["clause_text"]) > 20 + ] + + index_chunks(cuad_chunks, "contract_clauses", model, client) + + # Print stats + print("\n" + "="*50) + print("INDEXING COMPLETE") + print("="*50) + for coll in client.list_collections(): + count = coll.count() + print(f" {coll.name}: {count:,} vectors") + +if __name__ == "__main__": + main() +``` + +--- + +## PHASE 5: QUERY INTERFACE + +### 5.1 Search Function + +```python +# scripts/search_legal.py +import chromadb +from chromadb.config import Settings +from sentence_transformers import SentenceTransformer + +CHROMA_PATH = "./chroma_db" + +def init(): + client = chromadb.PersistentClient(path=CHROMA_PATH, settings=Settings(anonymized_telemetry=False)) + model = SentenceTransformer("sentence-transformers/all-MiniLM-L6-v2") + return client, model + +def search(query, collection_name=None, n_results=5, client=None, model=None): + """Search legal corpus""" + if client is None or model is None: + client, model = init() + + query_embedding = model.encode([query])[0].tolist() + + results = [] + + if collection_name: + collections = [client.get_collection(collection_name)] + else: + collections = client.list_collections() + + for coll in collections: + try: + res = coll.query( + query_embeddings=[query_embedding], + n_results=n_results, + include=["documents", "metadatas", "distances"] + ) + + for i, doc in enumerate(res["documents"][0]): + results.append({ + "collection": coll.name, + "text": doc, + "metadata": res["metadatas"][0][i], + "distance": res["distances"][0][i] + }) + except Exception as e: + print(f"Error querying {coll.name}: {e}") + + # Sort by distance (lower = more similar) + results.sort(key=lambda x: x["distance"]) + + return results[:n_results] + +# Example usage +if __name__ == "__main__": + client, model = init() + + # Test queries + queries = [ + "non-compete clause duration", + "intellectual property assignment", + "indemnification liability cap", + "termination for convenience", + ] + + for q in queries: + print(f"\n{'='*50}") + print(f"Query: {q}") + print("="*50) + + results = search(q, n_results=3, client=client, model=model) + + for i, r in enumerate(results, 1): + print(f"\n[{i}] {r['collection']} (dist: {r['distance']:.3f})") + print(f" {r['text'][:200]}...") +``` + +--- + +## PHASE 6: EXECUTION CHECKLIST + +Run these commands in order: + +```bash +# 1. Setup +cd ~/legal-corpus +python3 -m venv venv +source venv/bin/activate +pip install chromadb sentence-transformers requests beautifulsoup4 pypdf2 lxml tqdm pandas httpx aiohttp + +# 2. Initialize Chroma +python scripts/init_chroma.py + +# 3. Download data (run each, takes time) +export GOVINFO_API_KEY="your_key_here" # Get from api.data.gov +python scripts/download_cuad.py # Priority 1 - most valuable +python scripts/download_us_federal.py # Priority 2 +python scripts/download_us_caselaw.py # Priority 3 +python scripts/download_eu_law.py # Priority 4 +python scripts/download_canada_law.py # Priority 5 +python scripts/download_australia_law.py # Priority 6 + +# 4. Process documents +python scripts/process_cuad.py +python scripts/process_documents.py + +# 5. Embed and index +python scripts/embed_and_index.py + +# 6. Test search +python scripts/search_legal.py +``` + +--- + +## EXPECTED OUTPUT + +After completion, you should have: + +``` +~/legal-corpus/ +├── chroma_db/ # Vector database (persistent) +│ ├── chroma.sqlite3 +│ └── [collection folders] +├── raw/ # Downloaded documents +│ ├── cuad/ +│ ├── us_federal/ +│ ├── us_caselaw/ +│ ├── eu_law/ +│ ├── canada_law/ +│ └── australia_law/ +├── processed/ # Chunked JSON files +│ ├── cuad_clauses.json +│ ├── us_federal_chunks.json +│ └── ... +└── scripts/ # All Python scripts +``` + +**Estimated sizes:** +- CUAD: ~500MB raw, ~50MB processed +- US Federal: ~2GB raw, ~200MB processed +- Total Chroma DB: ~500MB-1GB + +**Estimated time:** +- Downloads: 2-4 hours (rate limited) +- Processing: 30-60 minutes +- Embedding: 1-2 hours (CPU) or 10-20 min (GPU) + +--- + +## TROUBLESHOOTING + +| Issue | Solution | +|-------|----------| +| Rate limited by APIs | Increase sleep delays, run overnight | +| Out of memory | Reduce batch size in embedding | +| CUAD not found | Check GitHub URL, download manually | +| Chroma errors | Delete chroma_db folder, reinitialize | +| Slow embedding | Use GPU or smaller model | + +--- + +## NEXT SESSION HANDOFF + +After this session completes, the next session should: +1. Verify Chroma collections populated +2. Test search accuracy on contract queries +3. Build contract analysis prompts using RAG results +4. Integrate with contract upload pipeline diff --git a/LEGAL_CORPUS_IMPORT_LIST.md b/LEGAL_CORPUS_IMPORT_LIST.md new file mode 100755 index 0000000..58050af --- /dev/null +++ b/LEGAL_CORPUS_IMPORT_LIST.md @@ -0,0 +1,481 @@ +# ContractGuard Legal Corpus Import List +## Complete Document Inventory for Chroma Vector Database + +**Generated:** 2025-11-27 +**Purpose:** Define all legal documents to download and index for contract analysis AI +**Target:** Self-hosted Chroma vector database + +--- + +## Table of Contents + +1. [Summary Statistics](#summary-statistics) +2. [Priority Legend](#priority-legend) +3. [US Federal Law](#1-us-federal-law) +4. [US State Law](#2-us-state-law) +5. [European Union](#3-european-union) +6. [Germany](#4-germany) +7. [France](#5-france) +8. [Canada](#6-canada) +9. [Australia](#7-australia) +10. [United Kingdom](#8-united-kingdom) +11. [Contract Datasets](#9-contract-datasets-pre-labeled) +12. [Case Law](#10-landmark-case-law) +13. [Industry Standards](#11-industry-standards) +14. [Download Scripts Reference](#12-download-scripts-reference) + +--- + +## Summary Statistics + +| Category | Document Count | Est. Size | Priority P0 | +|----------|---------------|-----------|-------------| +| US Federal | 15 | ~50MB | 8 | +| US State | 24 | ~30MB | 6 | +| EU Directives/Regs | 10 | ~20MB | 6 | +| Germany (BGB) | 6 | ~15MB | 4 | +| France | 4 | ~10MB | 2 | +| Canada | 10 | ~15MB | 5 | +| Australia | 6 | ~10MB | 3 | +| UK | 8 | ~12MB | 5 | +| Datasets (CUAD etc) | 3 | ~500MB | 3 | +| Case Law | 25 | ~100MB | 10 | +| Industry Standards | 12 | ~20MB | 6 | +| **TOTAL** | **~123 sources** | **~780MB** | **58** | + +--- + +## Priority Legend + +| Priority | Meaning | Action | +|----------|---------|--------| +| **P0** | Critical - Must have for MVP | Import immediately | +| **P1** | Important - Should have | Import in Phase 2 | +| **P2** | Supplementary - Nice to have | Import in Phase 3 | + +--- + +## 1. US FEDERAL LAW + +### 1.1 US Code Titles + +| Document | Title | Source | Format | URL | Priority | +|----------|-------|--------|--------|-----|----------| +| **17 USC** | Copyright | House.gov | XML | https://uscode.house.gov/download/download.shtml | **P0** | +| **35 USC** | Patents | House.gov | XML | https://uscode.house.gov/download/download.shtml | **P0** | +| **18 USC Ch.63** | Mail/Wire Fraud | House.gov | XML | https://uscode.house.gov/download/download.shtml | P1 | +| **15 USC §1681** | Fair Credit Reporting | FTC | PDF | https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act | P1 | +| **15 USC §6801** | Gramm-Leach-Bliley | FTC | PDF | https://www.ftc.gov/business-guidance/privacy-security/gramm-leach-bliley-act | P1 | + +### 1.2 Code of Federal Regulations + +| Document | Title | Source | Format | URL | Priority | +|----------|-------|--------|--------|-----|----------| +| **29 CFR** | Labor | eCFR | XML | https://www.ecfr.gov/current/title-29 | **P0** | +| **37 CFR** | Patents/Trademarks/Copyright | eCFR | XML | https://www.ecfr.gov/current/title-37 | **P0** | +| **16 CFR Part 310** | Telemarketing Sales | FTC | XML | https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-310 | P1 | +| **16 CFR Part 314** | Safeguards Rule | FTC | XML | https://www.ecfr.gov/current/title-16/part-314 | P1 | + +### 1.3 Named Federal Statutes + +| Document | Citation | Source | Format | URL | Priority | +|----------|----------|--------|--------|-----|----------| +| **Defend Trade Secrets Act** | 18 USC §1836 | Congress.gov | PDF | https://www.congress.gov/114/plaws/publ153/PLAW-114publ153.pdf | **P0** | +| **Work-for-Hire Definition** | 17 USC §101 | Copyright Office | HTML | https://www.copyright.gov/title17/ | **P0** | +| **Copyright Ownership** | 17 USC §201 | Copyright Office | HTML | https://www.copyright.gov/title17/ | **P0** | +| **FTC Non-Compete Rule** | 2024 Rule | Federal Register | PDF | https://www.federalregister.gov/documents/2024/05/07/2024-09171/non-compete-clause-rule | P1 | +| **ADA Title I** | 42 USC §12101 | EEOC | PDF | https://www.eeoc.gov/statutes/titles-i-and-v-americans-disabilities-act-1990-ada | P2 | + +### 1.4 Bulk Download Sources + +| Source | Coverage | API | URL | +|--------|----------|-----|-----| +| **GovInfo Bulk Data** | All USC, CFR | REST | https://www.govinfo.gov/bulkdata/ | +| **eCFR API v1** | Current CFR | REST/JSON | https://www.ecfr.gov/developers/documentation/api/v1 | +| **House.gov Download** | US Code by Title | XML/PDF | https://uscode.house.gov/download/download.shtml | +| **Congress.gov** | Bills, Laws | REST | https://www.congress.gov/help/using-data-offsite | + +--- + +## 2. US STATE LAW + +### 2.1 California (P0 - Most Restrictive) + +| Document | Citation | Key Sections | URL | Priority | +|----------|----------|--------------|-----|----------| +| **Non-Compete Ban** | BPC §16600 | §16600, §16600.1, §16600.5 | https://law.justia.com/codes/california/code-bpc/ | **P0** | +| **Freelance Worker Protection Act** | BPC §18100+ | SB 988 (eff. 1/1/25) | https://leginfo.legislature.ca.gov/ | **P0** | +| **ABC Test (IC Classification)** | Labor Code §2775 | AB 5 provisions | https://leginfo.legislature.ca.gov/ | **P0** | +| **SILENCED Act** | CCP §1001 | SB 331 | https://leginfo.legislature.ca.gov/ | P1 | +| **CCPA/CPRA** | Civ. Code §1798.100 | Data processing | https://oag.ca.gov/privacy/ccpa | P1 | + +### 2.2 New York (P0 - Freelancer Protections) + +| Document | Citation | Key Sections | URL | Priority | +|----------|----------|--------------|-----|----------| +| **Freelance Isn't Free Act (State)** | GBL Art. 44-A | Labor Law §191-d | https://dol.ny.gov/freelance-isnt-free-act | **P0** | +| **Freelance Isn't Free Act (NYC)** | NYC Admin Code Title 20 | Local Law 140 | https://www.nyc.gov/site/dca/about/freelance-isnt-free-act.page | **P0** | +| **Non-Compete Standards** | Gen. Oblig. Law §510-512 | Common law tests | https://www.nysenate.gov/legislation/laws/GOB | P1 | + +### 2.3 Texas (P1 - Employer-Friendly) + +| Document | Citation | Key Sections | URL | Priority | +|----------|----------|--------------|-----|----------| +| **Non-Compete Enforceability** | BCC §15.50 | §15.50-15.52 | https://codes.findlaw.com/tx/business-and-commerce-code/ | P1 | +| **Healthcare Non-Compete** | BCC §15.501 | SB 1318 (eff. 9/1/25) | https://capitol.texas.gov/ | P1 | + +### 2.4 Delaware (P1 - Governing Law Choice) + +| Document | Citation | Key Sections | URL | Priority | +|----------|----------|--------------|-----|----------| +| **Choice of Law** | Del. Code Title 6 §2708 | Contract choice-of-law | https://delcode.delaware.gov/title6/ | P1 | +| **Contract Law** | Del. Code Title 6 Ch.27 | General contracts | https://delcode.delaware.gov/title6/c027/ | P1 | + +### 2.5 Other Key States + +| State | Document | Citation | Key Issue | Priority | +|-------|----------|----------|-----------|----------| +| **Colorado** | Restrictive Covenant Law | CRS §8-2-113 | $101K+ threshold | P1 | +| **Illinois** | Freedom to Work Act | 820 ILCS 90 | $75K threshold | P1 | +| **Washington** | Non-Compete Law | RCW 49.62 | $250K IC threshold | **P0** | +| **Florida** | Non-Compete + CHOICE Act | Fla. Stat. §542.335 | 4-year expansion | P2 | +| **Massachusetts** | ABC Test | MGL c.149 §148B | Strict IC classification | P1 | +| **Minnesota** | Non-Compete Ban | Near-total ban | Similar to CA | P2 | +| **Oklahoma** | Non-Compete Ban | Near-total ban | Similar to CA | P2 | +| **North Dakota** | Non-Compete Ban | Near-total ban | Similar to CA | P2 | + +--- + +## 3. EUROPEAN UNION + +### 3.1 EU Directives + +| Document | CELEX ID | Subject | EUR-Lex URL | Priority | +|----------|----------|---------|-------------|----------| +| **Transparent Working Conditions** | 32019L1152 | Worker rights baseline | https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32019L1152 | **P0** | +| **Platform Workers Directive** | 32024L2831 | Gig economy status | https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32024L2831 | **P0** | +| **Copyright Directive** | 32019L0790 | IP ownership | https://eur-lex.europa.eu/eli/dir/2019/790/oj | **P0** | +| **Trade Secrets Directive** | 32016L0943 | Confidentiality | https://eur-lex.europa.eu/eli/dir/2016/943/oj | **P0** | +| **GDPR** | 32016R0679 | Data processing | https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02016R0679-20160504 | **P0** | +| **Rental/Lending Rights** | 32006L0115 | IP licensing | https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex:32006L0115 | P1 | +| **OSH Framework** | 31989L0391 | Health & safety | https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex:31989L0391 | P2 | + +### 3.2 EU Regulations + +| Document | CELEX ID | Subject | EUR-Lex URL | Priority | +|----------|----------|---------|-------------|----------| +| **Digital Services Act** | 32022R2065 | Platform obligations | https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022R2065 | P1 | +| **EU AI Act** | 32024R1689 | AI training rights | https://eur-lex.europa.eu/eli/reg/2024/1689/oj | **P0** | + +--- + +## 4. GERMANY + +### 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code) + +| Section | Subject | English Available | URL | Priority | +|---------|---------|-------------------|-----|----------| +| **§611 et seq.** | Service Contract (Dienstvertrag) | Yes | https://www.gesetze-im-internet.de/englisch_bgb/ | **P0** | +| **§631 et seq.** | Work Contract (Werkvertrag) | Yes | https://www.gesetze-im-internet.de/englisch_bgb/ | **P0** | +| **§611a** | Employee vs Self-Employed | Yes | https://www.gesetze-im-internet.de/englisch_bgb/ | **P0** | +| **§705 et seq.** | Partnership (GbR) | Yes | https://www.gesetze-im-internet.de/englisch_bgb/ | P1 | +| **§14** | Entrepreneur Definition | Yes | https://www.gesetze-im-internet.de/englisch_bgb/ | **P0** | + +### 4.2 Other German Law + +| Document | Subject | URL | Priority | +|----------|---------|-----|----------| +| **UWG (Unfair Competition)** | Business practices | https://www.gesetze-im-internet.de/englisch_uwg/ | P1 | +| **SGB IV §7** | Social security classification | German law database | P1 | + +--- + +## 5. FRANCE + +### 5.1 Code du Travail (Labor Code) + +| Article | Subject | URL | Priority | +|---------|---------|-----|----------| +| **L1221-6, L1221-19** | Recruitment, trial periods | https://www.legifrance.gouv.fr/codes/ | P1 | +| **L1222-1, L1222-9** | Good faith, remote work | https://www.legifrance.gouv.fr/codes/ | P1 | + +### 5.2 Code de la Propriété Intellectuelle + +| Article | Subject | URL | Priority | +|---------|---------|-----|----------| +| **L.111-1** | Copyright ownership default | https://www.legifrance.gouv.fr/ | **P0** | +| **D132-28, D132-29** | Freelance photographer rates | https://www.legifrance.gouv.fr/ | P2 | +| **Part 2** | Industrial property | WIPO Lex | **P0** | + +--- + +## 6. CANADA + +### 6.1 Federal Legislation + +| Document | Citation | Source | URL | Priority | +|----------|----------|--------|-----|----------| +| **Copyright Act** | RSC 1985, c C-42 | Justice Canada | https://laws-lois.justice.gc.ca/eng/acts/C-42/ | **P0** | +| **Competition Act** | RSC 1985, c C-34 | Justice Canada | https://laws.justice.gc.ca/eng/acts/C-34/ | P1 | +| **Canada Labour Code** | RSC 1985, c L-2 | CanLII | https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-l-2/ | P1 | +| **PIPEDA** | SC 2000, c 5 | Privacy Commissioner | https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/the-personal-information-protection-and-electronic-documents-act-pipeda/ | **P0** | +| **Employment Insurance Act** | SC 1996, c 23 | CanLII | https://www.canlii.org/en/ca/laws/stat/sc-1996-c-23/ | P1 | +| **Employment Equity Act** | SC 1995, c 44 | CanLII | https://www.canlii.org/en/ca/laws/stat/sc-1995-c-44/ | P2 | + +### 6.2 Provincial Legislation + +| Province | Document | Citation | URL | Priority | +|----------|----------|----------|-----|----------| +| **Ontario** | Employment Standards Act | O. Reg. 435/07 | https://www.ontario.ca/laws/statute/00e41 | **P0** | +| **BC** | Employment Standards Act | RSBC 1996, c 113 | BC Legislature | **P0** | +| **Quebec** | Labour Standards Act | CQLR c N-1.1 | https://www.canlii.org/en/qc/laws/stat/cqlr-c-n-1.1/ | **P0** | + +--- + +## 7. AUSTRALIA + +### 7.1 Federal Legislation + +| Document | Citation | Source | URL | Priority | +|----------|----------|--------|-----|----------| +| **Fair Work Act 2009** | Cth | Fair Work | https://www.fairwork.gov.au/about-us/legislation | **P0** | +| **Independent Contractors Act 2006** | Act No. 162 | Legislation.gov.au | https://www.legislation.gov.au/Series/C2006A00162 | **P0** | +| **Copyright Act 1968** | Cth | AustLII | https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ | **P0** | +| **Competition and Consumer Act 2010** | Cth | Legislation.gov.au | https://www.legislation.gov.au/C2004A00109/latest | P1 | +| **Privacy Act 1988** | Cth | AustLII | https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ | P1 | +| **Australian Consumer Law** | Part II CCA | Legislation.gov.au | https://www.legislation.gov.au/C2004A00109/latest | P1 | + +--- + +## 8. UNITED KINGDOM + +### 8.1 Acts of Parliament + +| Document | Citation | Source | URL | Priority | +|----------|----------|--------|-----|----------| +| **Employment Rights Act 1996** | c. 18 | legislation.gov.uk | https://www.legislation.gov.uk/ukpga/1996/18/contents | **P0** | +| **Copyright, Designs and Patents Act 1988** | c. 48 | legislation.gov.uk | https://www.legislation.gov.uk/ukpga/1988/48 | **P0** | +| **Patents Act 1977** | c. 37 | legislation.gov.uk | https://www.legislation.gov.uk/ukpga/1977/37 | P1 | +| **Trade Secrets Regulations 2018** | SI 2018/597 | legislation.gov.uk | https://www.legislation.gov.uk/uksi/2018/597/made | **P0** | + +### 8.2 IR35 (Off-Payroll Working) + +| Document | Citation | Source | URL | Priority | +|----------|----------|--------|-----|----------| +| **Social Security (Intermediaries) Regs** | SI 2000/727 | legislation.gov.uk | https://www.legislation.gov.uk/uksi/2000/727 | **P0** | +| **ITEPA 2003 Part 2 Ch.8** | c. 1 | legislation.gov.uk | https://www.legislation.gov.uk/ukpga/2003/1 | **P0** | +| **Database Rights Regs 1997** | SI 1997/3032 | legislation.gov.uk | https://www.legislation.gov.uk/uksi/1997/3032 | P2 | + +--- + +## 9. CONTRACT DATASETS (Pre-Labeled) + +### 9.1 Primary Training Data + +| Dataset | Description | Size | Source | Priority | +|---------|-------------|------|--------|----------| +| **CUAD** | 13K+ labeled clause annotations, 510 contracts, 41 clause types | ~500MB | https://www.atticusprojectai.org/cuad | **P0** | +| **ContractNLI** | Natural language inference for contracts | ~50MB | Stanford NLP | **P0** | +| **LEDGAR** | SEC filing provisions, corporate baseline | ~200MB | HuggingFace | **P0** | + +### 9.2 CUAD Clause Types (41 Total) + +**Critical for Freelancers (Import First):** +- Governing Law +- Non-Compete +- Exclusivity +- IP Ownership Assignment +- License Grant +- Non-Disparagement +- Termination For Convenience +- Limitation Of Liability +- Indemnification +- Insurance +- Cap On Liability +- Uncapped Liability +- Warranty Duration +- Post-Termination Services + +--- + +## 10. LANDMARK CASE LAW + +### 10.1 Non-Compete Cases + +| Case | Citation | Jurisdiction | Year | Key Test | Priority | +|------|----------|--------------|------|----------|----------| +| **PepsiCo v. Redmond** | 54 F.3d 1262 | 7th Cir. | 1995 | Inevitable disclosure | **P0** | +| **Mitchell v. Reynolds** | Common Law | England | 1711 | Reasonableness framework | **P0** | +| **Oregon Steam v. Winsor** | 87 U.S. 564 | SCOTUS | 1874 | Ancillary to sale | P1 | +| **Ryan v. FTC** | 5th Cir. 2024 | 5th Cir. | 2024 | FTC authority limits | P1 | + +### 10.2 IP / Work-for-Hire Cases + +| Case | Citation | Jurisdiction | Year | Key Test | Priority | +|------|----------|--------------|------|----------|----------| +| **CCNV v. Reid** | 490 U.S. 730 | SCOTUS | 1989 | 12-factor agency test | **P0** | +| **Dubilier Condenser** | 289 U.S. 178 | SCOTUS | 1933 | Hired-to-invent doctrine | P1 | +| **SCA Hygiene v. First Quality** | 580 U.S. 557 | SCOTUS | 2017 | Patent damages limits | P2 | + +### 10.3 Indemnification Cases + +| Case | Citation | Jurisdiction | Year | Key Test | Priority | +|------|----------|--------------|------|----------|----------| +| **Brooks v. Judlau** | 11 NY3d 204 | NY | 2008 | Comparative negligence | **P0** | +| **Santa Barbara v. Superior Court** | 41 Cal.4th 747 | CA | 2007 | Gross negligence exception | **P0** | +| **Steamfitters v. Erie Insurance** | 233 A.3d 59 | MD | 2020 | Clear/unequivocal standard | P1 | + +### 10.4 Arbitration Cases + +| Case | Citation | Jurisdiction | Year | Key Test | Priority | +|------|----------|--------------|------|----------|----------| +| **Epic Systems v. Lewis** | 584 U.S. ___ | SCOTUS | 2018 | FAA enforcement | **P0** | +| **Mastrobuono v. Shearson** | 514 U.S. 52 | SCOTUS | 1995 | Choice-of-law vs arbitration | **P0** | +| **Pinnacle v. Pinnacle Market** | 55 Cal.4th 223 | CA | 2012 | Unconscionability 2-prong | **P0** | + +### 10.5 Trade Secrets / NDA Cases + +| Case | Citation | Jurisdiction | Year | Key Test | Priority | +|------|----------|--------------|------|----------|----------| +| **Silicon Image v. Analogk** | N.D. Cal. | N.D. Cal. | 2008 | NDA expiration effects | P1 | +| **Hamilton v. Juul Labs** | N.D. Cal. | N.D. Cal. | 2021 | Overbreadth analysis | P1 | +| **Gordon v. Landau** | 49 Cal.2d 212 | CA | 1958 | CA §16600 trade secret exception | P1 | + +### 10.6 Moral Rights Cases + +| Case | Citation | Jurisdiction | Year | Key Test | Priority | +|------|----------|--------------|------|----------|----------| +| **Gilliam v. ABC** | 538 F.2d 14 | 2d Cir. | 1976 | Integrity/mutilation test | **P0** | +| **Frisby v. BBC** | UK Court | UK | - | Contractual moral rights | P1 | +| **Confetti Records v. Warner** | UK Court | UK | - | CDPA 1988 requirements | P1 | + +--- + +## 11. INDUSTRY STANDARDS + +### 11.1 Gaming Industry + +| Standard | Organization | URL | Priority | +|----------|--------------|-----|----------| +| **Steam Distribution Agreement** | Valve | https://store.steampowered.com | **P0** | +| **Epic Games Store Agreement** | Epic | https://dev.epicgames.com/docs/epic-games-store/agreements | **P0** | +| **PlayStation GDPA** | Sony | SEC Filings | P1 | +| **Xbox Publisher License** | Microsoft | SEC Filings | P1 | +| **IGDA Contract Walk-Through** | IGDA | https://igda.org/resourcelibrary/game-industry-standards/ | **P0** | +| **IGDA Crediting Guidelines** | IGDA | https://igda.org/ | P1 | + +### 11.2 Entertainment + +| Standard | Organization | URL | Priority | +|----------|--------------|-----|----------| +| **SAG-AFTRA 2025 Commercials** | SAG-AFTRA | https://www.sagaftra.org/ | **P0** | +| **SAG-AFTRA Video Game Agreement** | SAG-AFTRA | https://www.sagaftra.org/production-center/contract/802/ | **P0** | +| **WGA Minimum Basic Agreement** | WGA | https://www.wga.org/contracts/contracts/schedule-of-minimums | **P0** | + +### 11.3 Creative Services + +| Standard | Organization | URL | Priority | +|----------|--------------|-----|----------| +| **AIGA Standard Agreement** | AIGA | https://www.aiga.org/resources/aiga-standard-form-of-agreement-for-design-services | **P0** | +| **GAG Handbook (17th Ed)** | Graphic Artists Guild | https://graphicartistsguild.org/ | **P0** | +| **Photography Licensing Standards** | Various | https://www.pixsy.com/image-licensing/photo-licensing-agreement | P1 | + +### 11.4 Tech/Software + +| Standard | Organization | URL | Priority | +|----------|--------------|-----|----------| +| **Open Source Licenses** | OSI | https://opensource.org/licenses | P1 | +| **MIT License** | OSI | https://opensource.org/license/mit | P1 | +| **Apache 2.0** | Apache | https://www.apache.org/licenses/LICENSE-2.0 | P1 | +| **GPL v3** | GNU | https://www.gnu.org/licenses/gpl-3.0.en.html | P1 | + +--- + +## 12. DOWNLOAD SCRIPTS REFERENCE + +All download scripts are in: `/home/setup/CLOUD_SESSION_LEGAL_DB_BUILD.md` + +### Script Mapping + +| Script | Data Source | Output Directory | +|--------|-------------|------------------| +| `download_cuad.py` | CUAD Dataset | `raw/cuad/` | +| `download_us_federal.py` | GovInfo API | `raw/us_federal/` | +| `download_us_caselaw.py` | CourtListener | `raw/us_caselaw/` | +| `download_eu_law.py` | EUR-Lex SPARQL | `raw/eu_law/` | +| `download_canada_law.py` | CanLII | `raw/canada_law/` | +| `download_australia_law.py` | AustLII | `raw/australia_law/` | + +### Execution Order + +```bash +# Phase 1: Datasets (Highest Value) +python scripts/download_cuad.py + +# Phase 2: US Federal +export GOVINFO_API_KEY="your_key" +python scripts/download_us_federal.py +python scripts/download_us_caselaw.py + +# Phase 3: International +python scripts/download_eu_law.py +python scripts/download_canada_law.py +python scripts/download_australia_law.py + +# Phase 4: Process & Index +python scripts/process_cuad.py +python scripts/process_documents.py +python scripts/embed_and_index.py +``` + +--- + +## Chroma Collection Structure + +After import, Chroma will have these collections: + +``` +chroma_db/ +├── contract_clauses # CUAD labeled clauses (P0) +├── us_federal_law # USC, CFR (P0) +├── us_state_law # CA, NY, TX, etc. (P0) +├── us_case_law # CourtListener opinions (P1) +├── eu_directives # EUR-Lex (P0) +├── eu_regulations # GDPR, AI Act, DSA (P0) +├── germany_bgb # Civil Code (P0) +├── france_code # Labor, IP codes (P1) +├── canada_federal # Copyright, PIPEDA (P0) +├── canada_provincial # ON, BC, QC employment (P0) +├── australia_federal # Fair Work, Copyright (P0) +├── uk_legislation # ERA, CDPA, IR35 (P0) +└── industry_standards # AIGA, GAG, IGDA (P1) +``` + +--- + +## Estimated Totals + +| Metric | Value | +|--------|-------| +| **Total Documents** | ~123 sources | +| **Total Raw Size** | ~780MB | +| **Processed Chunks** | ~500K vectors | +| **Chroma DB Size** | ~1-2GB | +| **P0 Documents** | 58 (must have) | +| **Download Time** | 4-6 hours | +| **Processing Time** | 2-3 hours | +| **Embedding Time** | 1-2 hours (CPU) | + +--- + +## Next Steps + +1. Execute `CLOUD_SESSION_LEGAL_DB_BUILD.md` to download and index +2. Validate with test queries +3. Build contract analysis prompts using RAG +4. Integrate with upload pipeline + +--- + +*Generated by IF.optimise Haiku swarm research* +*6 parallel agents, ~15 minutes total research time* diff --git a/ROADMAP.md b/ROADMAP.md new file mode 100644 index 0000000..802d807 --- /dev/null +++ b/ROADMAP.md @@ -0,0 +1,11 @@ +# Legal Corpus Roadmap + +This roadmap tracks coverage of the inventory listed in `LEGAL_CORPUS_IMPORT_LIST.md`. + +| inventory_path | document_name | download_status | index_status | notes | +| --- | --- | --- | --- | --- | +| inventory_file | LEGAL_CORPUS_IMPORT_LIST.md | planned | not_started | Inventory present; run `scripts/download_all.py` to populate manifest and start downloads. | + +## Unable to download — reasons and workarounds +- Items without direct URLs (for example, some case law rows) will be marked `no_direct_link` in the manifest. Extend the downloader to use CourtListener or other APIs by citation to automate these where possible. + diff --git a/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/data_level0.bin b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/data_level0.bin new file mode 100644 index 0000000..a1e44f9 Binary files /dev/null and b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/data_level0.bin differ diff --git a/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/header.bin b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/header.bin new file mode 100644 index 0000000..28e1463 Binary files /dev/null and b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/header.bin differ diff --git a/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/index_metadata.pickle b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/index_metadata.pickle new file mode 100644 index 0000000..5314680 Binary files /dev/null and b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/index_metadata.pickle differ diff --git a/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/length.bin b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/length.bin new file mode 100644 index 0000000..2320ba0 Binary files /dev/null and b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/length.bin differ diff --git a/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/link_lists.bin b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/link_lists.bin new file mode 100644 index 0000000..a066991 Binary files /dev/null and b/indexes/chromadb/4049f7d7-6873-4b93-82ec-330302b6c3d7/link_lists.bin differ diff --git a/indexes/chromadb/chroma.sqlite3 b/indexes/chromadb/chroma.sqlite3 new file mode 100644 index 0000000..53cefb0 Binary files /dev/null and b/indexes/chromadb/chroma.sqlite3 differ diff --git a/logs/download_log.csv b/logs/download_log.csv new file mode 100644 index 0000000..2fdfee8 --- /dev/null +++ b/logs/download_log.csv @@ -0,0 +1,150 @@ +timestamp,inventory_path,document_name,url_used,local_path,status,bytes,sha256,notes + +2025-11-28T00:08:37.786390,Summary Statistics,US Federal,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786499,Summary Statistics,US State,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786536,Summary Statistics,EU Directives/Regs,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786561,Summary Statistics,Germany (BGB),,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786583,Summary Statistics,France,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786606,Summary Statistics,Canada,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786630,Summary Statistics,Australia,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786664,Summary Statistics,UK,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786697,Summary Statistics,Datasets (CUAD etc),,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786721,Summary Statistics,Case Law,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786743,Summary Statistics,Industry Standards,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786766,Summary Statistics,TOTAL,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786788,Priority Legend,P0,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786809,Priority Legend,P1,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:08:37.786830,Priority Legend,P2,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:09:07.870773,1. US FEDERAL LAW / 1.1 US Code Titles,17 USC,https://uscode.house.gov/download/download.shtml,raw/us_federal/17-usc,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +2025-11-28T00:09:38.010661,1. US FEDERAL LAW / 1.1 US Code Titles,35 USC,https://uscode.house.gov/download/download.shtml,raw/us_federal/35-usc,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +2025-11-28T00:10:08.086694,1. US FEDERAL LAW / 1.1 US Code Titles,18 USC Ch.63,https://uscode.house.gov/download/download.shtml,raw/us_federal/18-usc-ch-63,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +2025-11-28T00:10:09.013309,1. US FEDERAL LAW / 1.1 US Code Titles,15 USC §1681,https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act,raw/us_federal/15-usc-ss1681,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act +2025-11-28T00:10:09.081918,1. US FEDERAL LAW / 1.1 US Code Titles,15 USC §6801,https://www.ftc.gov/business-guidance/privacy-security/gramm-leach-bliley-act,raw/us_federal/15-usc-ss6801,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.ftc.gov/business-guidance/privacy-security/gramm-leach-bliley-act +2025-11-28T00:10:09.873369,1. US FEDERAL LAW / 1.2 Code of Federal Regulations,29 CFR,https://www.ecfr.gov/current/title-29,raw/us_federal/29-cfr,success,4272,768f528a8f8b06deceb59224622df3cc5039d8c296277372954d2f873756d48f, +2025-11-28T00:10:10.471719,1. US FEDERAL LAW / 1.2 Code of Federal Regulations,37 CFR,https://www.ecfr.gov/current/title-37,raw/us_federal/37-cfr,success,4272,5b1a7fc0eae3e435936a7698eadb1f16da2f8f9dc10e7cab0e10f9e83a586ea6, +2025-11-28T00:10:11.072371,1. US FEDERAL LAW / 1.2 Code of Federal Regulations,16 CFR Part 310,https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-310,raw/us_federal/16-cfr-part-310,success,4272,01589d2cfde314587dbb541e8b2c49068149fa76f84a56191d9a8ccb41b3fb92, +2025-11-28T00:10:11.708609,1. US FEDERAL LAW / 1.2 Code of Federal Regulations,16 CFR Part 314,https://www.ecfr.gov/current/title-16/part-314,raw/us_federal/16-cfr-part-314,success,4272,47a1ff3fbd3275c64d5f6da5fd44d8e175f3a842308fa31fed3f8bca819342f3, +2025-11-28T00:10:11.955966,1. US FEDERAL LAW / 1.3 Named Federal Statutes,Defend Trade Secrets Act,https://www.congress.gov/114/plaws/publ153/PLAW-114publ153.pdf,raw/us_federal/defend-trade-secrets-act.pdf,success,262018,2c526decb25a6496544c24cdf56d4de773a1fcbd57c0721d982a9d98c8cd630f, +2025-11-28T00:10:12.046794,1. US FEDERAL LAW / 1.3 Named Federal Statutes,Work-for-Hire Definition,https://www.copyright.gov/title17/,raw/us_federal/work-for-hire-definition,success,35265,787cb0b8b81e3feaa2208b8e65f4e41ed1aa363106cf90ad348ab62aa293f88e, +2025-11-28T00:10:12.122263,1. US FEDERAL LAW / 1.3 Named Federal Statutes,Copyright Ownership,https://www.copyright.gov/title17/,raw/us_federal/copyright-ownership,success,35265,787cb0b8b81e3feaa2208b8e65f4e41ed1aa363106cf90ad348ab62aa293f88e, +2025-11-28T00:10:12.725612,1. US FEDERAL LAW / 1.3 Named Federal Statutes,FTC Non-Compete Rule,https://www.federalregister.gov/documents/2024/05/07/2024-09171/non-compete-clause-rule,raw/us_federal/ftc-non-compete-rule,success,4272,6c490dac33a4f6065f6abd3e94ceafb5f0236d505454632693802ae5a32580bc, +2025-11-28T00:10:13.298266,1. US FEDERAL LAW / 1.3 Named Federal Statutes,ADA Title I,https://www.eeoc.gov/statutes/titles-i-and-v-americans-disabilities-act-1990-ada,raw/us_federal/ada-title-i,success,118596,f24d430345a01f1fc9c9c37c6b3c8636d517c681bd9090bafef17f2d4c7a29a5, +2025-11-28T00:10:13.811368,1. US FEDERAL LAW / 1.4 Bulk Download Sources,GovInfo Bulk Data,https://www.govinfo.gov/bulkdata/,raw/us_federal/govinfo-bulk-data,success,67383,4b6a6e5eb328fa684b058bf9582448ae6f8a25d740d0f066e51dd927ff2dafea, +2025-11-28T00:10:14.397347,1. US FEDERAL LAW / 1.4 Bulk Download Sources,eCFR API v1,https://www.ecfr.gov/developers/documentation/api/v1,raw/us_federal/ecfr-api-v1,success,4272,00922d45d25f0a40f4c9420490fb335e75987f1da2061bcd8e6bcff825b541af, +2025-11-28T00:10:44.494022,1. US FEDERAL LAW / 1.4 Bulk Download Sources,House.gov Download,https://uscode.house.gov/download/download.shtml,raw/us_federal/house-gov-download,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +2025-11-28T00:10:44.576640,1. US FEDERAL LAW / 1.4 Bulk Download Sources,Congress.gov,https://www.congress.gov/help/using-data-offsite,raw/us_federal/congress-gov,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.congress.gov/help/using-data-offsite +2025-11-28T00:10:44.681489,2. US STATE LAW / 2.1 California (P0 - Most Restrictive),Non-Compete Ban,https://law.justia.com/codes/california/code-bpc/,raw/us_state/non-compete-ban,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://law.justia.com/codes/california/code-bpc/ +2025-11-28T00:10:45.616008,2. US STATE LAW / 2.1 California (P0 - Most Restrictive),Freelance Worker Protection Act,https://leginfo.legislature.ca.gov/,raw/us_state/freelance-worker-protection-act,success,162782,a9436c1ccbb969d2a72faf6bfb7a1ffc5e205a175efa919df6d871147c3af25a, +2025-11-28T00:10:46.539771,2. US STATE LAW / 2.1 California (P0 - Most Restrictive),ABC Test (IC Classification),https://leginfo.legislature.ca.gov/,raw/us_state/abc-test-ic-classification,success,162782,1d290744ba925a4ca504435ac655c821dad08e9a02b2712e1bd83be26ce60904, +2025-11-28T00:10:47.458535,2. US STATE LAW / 2.1 California (P0 - Most Restrictive),SILENCED Act,https://leginfo.legislature.ca.gov/,raw/us_state/silenced-act,success,164510,e3c22032a9db3e2dfbc320bae284b0413575ceaa5dda3c1ab86d91064f05f907, +2025-11-28T00:10:48.678030,2. US STATE LAW / 2.1 California (P0 - Most Restrictive),CCPA/CPRA,https://oag.ca.gov/privacy/ccpa,raw/us_state/ccpa-cpra,success,124204,02218b57d20f6ad5d9f1c8dbb82ec0682ac2a1642c17e89e5c54301c4c63723e, +2025-11-28T00:10:49.054579,2. US STATE LAW / 2.2 New York (P0 - Freelancer Protections),Freelance Isn't Free Act (State),https://dol.ny.gov/freelance-isnt-free-act,raw/us_state/freelance-isn-t-free-act-state,success,28498,ca0b66cefec7e251bef1b240d504fd0907d61496941b5c9a43d0f3dbcaeac0c1, +2025-11-28T00:10:49.358196,2. US STATE LAW / 2.2 New York (P0 - Freelancer Protections),Freelance Isn't Free Act (NYC),https://www.nyc.gov/site/dca/about/freelance-isnt-free-act.page,raw/us_state/freelance-isn-t-free-act-nyc,success,24521,71ae7beaf302def42ad06142096ce379fe4c63e3c40ea1e44c5d18f3ddb6a945, +2025-11-28T00:10:50.005570,2. US STATE LAW / 2.2 New York (P0 - Freelancer Protections),Non-Compete Standards,https://www.nysenate.gov/legislation/laws/GOB,raw/us_state/non-compete-standards,success,39443,f042d1eb21de998e5fd70b9d410595fea47671772457afdfe9c53927a3f9bb21, +2025-11-28T00:10:50.126786,2. US STATE LAW / 2.3 Texas (P1 - Employer-Friendly),Non-Compete Enforceability,https://codes.findlaw.com/tx/business-and-commerce-code/,raw/us_state/non-compete-enforceability,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://codes.findlaw.com/tx/business-and-commerce-code/ +2025-11-28T00:10:50.888686,2. US STATE LAW / 2.3 Texas (P1 - Employer-Friendly),Healthcare Non-Compete,https://capitol.texas.gov/,raw/us_state/healthcare-non-compete,success,34033,441a2988bd046c27e3f3131f2e5ab45aa887b4ebf6186bfe7f9a9bc8691b3fa6, +2025-11-28T00:10:51.503894,2. US STATE LAW / 2.4 Delaware (P1 - Governing Law Choice),Choice of Law,https://delcode.delaware.gov/title6/,raw/us_state/choice-of-law,success,21411,c7fb5f910f5ab2ceeb6834e078fa350d8a4c1d40a90c0f15bebf9b34b57af34e, +2025-11-28T00:10:52.121479,2. US STATE LAW / 2.4 Delaware (P1 - Governing Law Choice),Contract Law,https://delcode.delaware.gov/title6/c027/,raw/us_state/contract-law,success,7660,096323f253d05aa45b72fafe27ad80e1027a31ba73c5c0ef4386998090a8bc75, +2025-11-28T00:10:52.121652,2. US STATE LAW / 2.5 Other Key States,Restrictive Covenant Law - $101K+ threshold,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.121688,2. US STATE LAW / 2.5 Other Key States,Freedom to Work Act - $75K threshold,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.121715,2. US STATE LAW / 2.5 Other Key States,Non-Compete Law - $250K IC threshold,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.121739,2. US STATE LAW / 2.5 Other Key States,Non-Compete + CHOICE Act - 4-year expansion,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.121763,2. US STATE LAW / 2.5 Other Key States,ABC Test - Strict IC classification,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.121796,2. US STATE LAW / 2.5 Other Key States,Non-Compete Ban - Similar to CA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.121818,2. US STATE LAW / 2.5 Other Key States,Non-Compete Ban - Similar to CA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.121840,2. US STATE LAW / 2.5 Other Key States,Non-Compete Ban - Similar to CA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:52.344604,3. EUROPEAN UNION / 3.1 EU Directives,Transparent Working Conditions - Worker rights baseline,,raw/eu/transparent-working-conditions-worker-rights-baseline,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232019L1152%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:52.693763,3. EUROPEAN UNION / 3.1 EU Directives,Platform Workers Directive - Gig economy status,,raw/eu/platform-workers-directive-gig-economy-status,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232024L2831%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:52.956371,3. EUROPEAN UNION / 3.1 EU Directives,Copyright Directive - IP ownership,,raw/eu/copyright-directive-ip-ownership,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232019L0790%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:53.221206,3. EUROPEAN UNION / 3.1 EU Directives,Trade Secrets Directive - Confidentiality,,raw/eu/trade-secrets-directive-confidentiality,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232016L0943%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:53.514244,3. EUROPEAN UNION / 3.1 EU Directives,GDPR - Data processing,,raw/eu/gdpr-data-processing,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232016R0679%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:53.749862,3. EUROPEAN UNION / 3.1 EU Directives,Rental/Lending Rights - IP licensing,,raw/eu/rental-lending-rights-ip-licensing,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232006L0115%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:54.027001,3. EUROPEAN UNION / 3.1 EU Directives,OSH Framework - Health & safety,,raw/eu/osh-framework-health-safety,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2231989L0391%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:54.289999,3. EUROPEAN UNION / 3.2 EU Regulations,Digital Services Act - Platform obligations,,raw/eu/digital-services-act-platform-obligations,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232022R2065%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:54.557606,3. EUROPEAN UNION / 3.2 EU Regulations,EU AI Act - AI training rights,,raw/eu/eu-ai-act-ai-training-rights,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232024R1689%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +2025-11-28T00:10:54.817494,4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§611 et seq. - Service Contract (Dienstvertrag),https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss611-et-seq-service-contract-dienstvertrag,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +2025-11-28T00:10:55.104132,4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§631 et seq. - Work Contract (Werkvertrag),https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss631-et-seq-work-contract-werkvertrag,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +2025-11-28T00:10:55.369606,4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§611a - Employee vs Self-Employed,https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss611a-employee-vs-self-employed,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +2025-11-28T00:10:55.626430,4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§705 et seq. - Partnership (GbR),https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss705-et-seq-partnership-gbr,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +2025-11-28T00:10:55.984298,4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§14 - Entrepreneur Definition,https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss14-entrepreneur-definition,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +2025-11-28T00:10:56.109657,4. GERMANY / 4.2 Other German Law,UWG (Unfair Competition) - Business practices,https://www.gesetze-im-internet.de/englisch_uwg/,raw/germany/uwg-unfair-competition-business-practices,success,13442,00b1d8693206228c3acbd0eadc421006530f2446ab4a3b7b7e4db1be97e58910, +2025-11-28T00:10:56.109901,4. GERMANY / 4.2 Other German Law,SGB IV §7 - Social security classification,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:56.269960,5. FRANCE / 5.1 Code du Travail (Labor Code),"L1221-6, L1221-19 - Recruitment, trial periods",https://www.legifrance.gouv.fr/codes/,raw/france/l1221-6-l1221-19-recruitment-trial-periods,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/codes/ +2025-11-28T00:10:56.390185,5. FRANCE / 5.1 Code du Travail (Labor Code),"L1222-1, L1222-9 - Good faith, remote work",https://www.legifrance.gouv.fr/codes/,raw/france/l1222-1-l1222-9-good-faith-remote-work,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/codes/ +2025-11-28T00:10:56.469488,5. FRANCE / 5.2 Code de la Propriété Intellectuelle,L.111-1 - Copyright ownership default,https://www.legifrance.gouv.fr/,raw/france/l-111-1-copyright-ownership-default,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/ +2025-11-28T00:10:56.538601,5. FRANCE / 5.2 Code de la Propriété Intellectuelle,"D132-28, D132-29 - Freelance photographer rates",https://www.legifrance.gouv.fr/,raw/france/d132-28-d132-29-freelance-photographer-rates,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/ +2025-11-28T00:10:56.538747,5. FRANCE / 5.2 Code de la Propriété Intellectuelle,Part 2 - Industrial property,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:10:57.142135,6. CANADA / 6.1 Federal Legislation,Copyright Act,https://laws-lois.justice.gc.ca/eng/acts/C-42/,raw/canada/copyright-act,success,38443,2af1030a0f868c3a4b50ebf98ea40d7b4ea1e0224643f311f2871d497407bc0b, +2025-11-28T00:10:57.812938,6. CANADA / 6.1 Federal Legislation,Competition Act,https://laws.justice.gc.ca/eng/acts/C-34/,raw/canada/competition-act,success,27175,1efb1cbc3922655de2fa1dcdfa2c0c41e84e88ed8b44bd5fff7c2593baa6fff7, +2025-11-28T00:10:58.284001,6. CANADA / 6.1 Federal Legislation,Canada Labour Code,https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-l-2/,raw/canada/canada-labour-code,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-l-2/ +2025-11-28T00:10:58.933228,6. CANADA / 6.1 Federal Legislation,PIPEDA,https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/the-personal-information-protection-and-electronic-documents-act-pipeda/,raw/canada/pipeda,success,25833,c99f09543c7857d41738f60c93a4629676b61a336feb235fbd7db31400c00f31, +2025-11-28T00:10:59.398487,6. CANADA / 6.1 Federal Legislation,Employment Insurance Act,https://www.canlii.org/en/ca/laws/stat/sc-1996-c-23/,raw/canada/employment-insurance-act,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/ca/laws/stat/sc-1996-c-23/ +2025-11-28T00:10:59.879159,6. CANADA / 6.1 Federal Legislation,Employment Equity Act,https://www.canlii.org/en/ca/laws/stat/sc-1995-c-44/,raw/canada/employment-equity-act,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/ca/laws/stat/sc-1995-c-44/ +2025-11-28T00:11:00.513159,6. CANADA / 6.2 Provincial Legislation,Employment Standards Act,https://www.ontario.ca/laws/statute/00e41,raw/canada/employment-standards-act,success,53141,672384e19be379317c46886265bf504e134989138b4b6fa3a1a303fd3e10fb93, +2025-11-28T00:11:00.513245,6. CANADA / 6.2 Provincial Legislation,Employment Standards Act,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:11:00.980059,6. CANADA / 6.2 Provincial Legislation,Labour Standards Act,https://www.canlii.org/en/qc/laws/stat/cqlr-c-n-1.1/,raw/canada/labour-standards-act,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/qc/laws/stat/cqlr-c-n-1.1/ +2025-11-28T00:11:31.438752,7. AUSTRALIA / 7.1 Federal Legislation,Fair Work Act 2009,https://www.fairwork.gov.au/about-us/legislation,raw/australia/fair-work-act-2009,error,0,,"Request error: HTTPSConnectionPool(host='www.fairwork.gov.au', port=443): Read timed out. (read timeout=30)" +2025-11-28T00:11:33.287953,7. AUSTRALIA / 7.1 Federal Legislation,Independent Contractors Act 2006,https://www.legislation.gov.au/Series/C2006A00162,raw/australia/independent-contractors-act-2006,success,154588,86c18976f7c399459b9699e5d1fc83d1704c90089b8da52fd3387313a06d6228, +2025-11-28T00:11:34.740986,7. AUSTRALIA / 7.1 Federal Legislation,Copyright Act 1968,https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/,raw/australia/copyright-act-1968,error,0,,HTTP error: 410 Client Error: Gone for url: https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ +2025-11-28T00:11:36.009684,7. AUSTRALIA / 7.1 Federal Legislation,Competition and Consumer Act 2010,https://www.legislation.gov.au/C2004A00109/latest,raw/australia/competition-and-consumer-act-2010,success,1333871,4c61581f971c33a6145b849d6aad869989f86c613f3a7b72fefe24f55e139ff0, +2025-11-28T00:11:37.440245,7. AUSTRALIA / 7.1 Federal Legislation,Privacy Act 1988,https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/,raw/australia/privacy-act-1988,error,0,,HTTP error: 410 Client Error: Gone for url: https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ +2025-11-28T00:11:39.524380,7. AUSTRALIA / 7.1 Federal Legislation,Australian Consumer Law,https://www.legislation.gov.au/C2004A00109/latest,raw/australia/australian-consumer-law,success,1333871,bdc461c9abb68249e9f0a3588a8aa91f2a4aab77294dd6613b83b06d2ee11fe1, +2025-11-28T00:11:39.699071,8. UNITED KINGDOM / 8.1 Acts of Parliament,Employment Rights Act 1996,https://www.legislation.gov.uk/ukpga/1996/18/contents,raw/uk/employment-rights-act-1996,success,234794,f72b8ed35ee46f25acf84bb8263298d61644e932dae0907290372cffbda0f892, +2025-11-28T00:11:46.612913,8. UNITED KINGDOM / 8.1 Acts of Parliament,"Copyright, Designs and Patents Act 1988",https://www.legislation.gov.uk/ukpga/1988/48,raw/uk/copyright-designs-and-patents-act-1988,success,4083690,55d91ce6f35fc835e751b1b8ba2cb1625136c9e917d59b07c00b2594020d3423, +2025-11-28T00:11:48.914359,8. UNITED KINGDOM / 8.1 Acts of Parliament,Patents Act 1977,https://www.legislation.gov.uk/ukpga/1977/37,raw/uk/patents-act-1977,success,1497139,19df13c0375d1620efa7b8fab54dedb7c580e5e919053252b7a13bd11c8c1d90, +2025-11-28T00:11:49.222202,8. UNITED KINGDOM / 8.1 Acts of Parliament,Trade Secrets Regulations 2018,https://www.legislation.gov.uk/uksi/2018/597/made,raw/uk/trade-secrets-regulations-2018,success,79427,e00a06553147a784e4a7196c0d91ddf7b6406e17a20fbe0ae0205c1adf4b5d58, +2025-11-28T00:11:49.886214,8. UNITED KINGDOM / 8.2 IR35 (Off-Payroll Working),Social Security (Intermediaries) Regs,https://www.legislation.gov.uk/uksi/2000/727,raw/uk/social-security-intermediaries-regs,success,312018,0dbb4125336770bebf17ee00c5df3378c15751ecb8216694904a130393bd31ce, +2025-11-28T00:12:16.431610,8. UNITED KINGDOM / 8.2 IR35 (Off-Payroll Working),ITEPA 2003 Part 2 Ch.8,https://www.legislation.gov.uk/ukpga/2003/1,raw/uk/itepa-2003-part-2-ch-8,success,9786044,4bcaee53dc08d4514246eb84db30d9e05b05c0fa5e5311a4f9bbdeae71a9aff4, +2025-11-28T00:12:17.144239,8. UNITED KINGDOM / 8.2 IR35 (Off-Payroll Working),Database Rights Regs 1997,https://www.legislation.gov.uk/uksi/1997/3032,raw/uk/database-rights-regs-1997,success,221664,9a9273efa2e926e87cba76cd15a646911493434f4e9b27fce820b85ce87a7acc, +2025-11-28T00:12:17.342750,9. CONTRACT DATASETS (Pre-Labeled) / 9.1 Primary Training Data,CUAD,https://www.atticusprojectai.org/cuad,raw/datasets/cuad,success,723333,3eb753aa9bb2e28b71cee450f62f35896c1f0964b62a80135c06bef04e80e523, +2025-11-28T00:12:17.342835,9. CONTRACT DATASETS (Pre-Labeled) / 9.1 Primary Training Data,ContractNLI,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.342864,9. CONTRACT DATASETS (Pre-Labeled) / 9.1 Primary Training Data,LEDGAR,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.342888,10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,PepsiCo v. Redmond,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.342911,10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,Mitchell v. Reynolds,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.342935,10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,Oregon Steam v. Winsor,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.342958,10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,Ryan v. FTC,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.342980,10. LANDMARK CASE LAW / 10.2 IP / Work-for-Hire Cases,CCNV v. Reid,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343002,10. LANDMARK CASE LAW / 10.2 IP / Work-for-Hire Cases,Dubilier Condenser,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343024,10. LANDMARK CASE LAW / 10.2 IP / Work-for-Hire Cases,SCA Hygiene v. First Quality,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343046,10. LANDMARK CASE LAW / 10.3 Indemnification Cases,Brooks v. Judlau,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343070,10. LANDMARK CASE LAW / 10.3 Indemnification Cases,Santa Barbara v. Superior Court,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343092,10. LANDMARK CASE LAW / 10.3 Indemnification Cases,Steamfitters v. Erie Insurance,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343136,10. LANDMARK CASE LAW / 10.4 Arbitration Cases,Epic Systems v. Lewis,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343159,10. LANDMARK CASE LAW / 10.4 Arbitration Cases,Mastrobuono v. Shearson,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343181,10. LANDMARK CASE LAW / 10.4 Arbitration Cases,Pinnacle v. Pinnacle Market,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343203,10. LANDMARK CASE LAW / 10.5 Trade Secrets / NDA Cases,Silicon Image v. Analogk,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343224,10. LANDMARK CASE LAW / 10.5 Trade Secrets / NDA Cases,Hamilton v. Juul Labs,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343245,10. LANDMARK CASE LAW / 10.5 Trade Secrets / NDA Cases,Gordon v. Landau,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343268,10. LANDMARK CASE LAW / 10.6 Moral Rights Cases,Gilliam v. ABC,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343335,10. LANDMARK CASE LAW / 10.6 Moral Rights Cases,Frisby v. BBC,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.343370,10. LANDMARK CASE LAW / 10.6 Moral Rights Cases,Confetti Records v. Warner,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:17.924235,11. INDUSTRY STANDARDS / 11.1 Gaming Industry,Steam Distribution Agreement - Steam Distribution Agreement,https://store.steampowered.com,raw/industry/steam-distribution-agreement-steam-distribution-agreement,success,804459,0214d4069e54bcb07811f3afa41b1c0b776ca8d43ed0fa50a56f6de2ec6ea876, +2025-11-28T00:12:18.022434,11. INDUSTRY STANDARDS / 11.1 Gaming Industry,Epic Games Store Agreement - Epic Games Store Agreement,https://dev.epicgames.com/docs/epic-games-store/agreements,raw/industry/epic-games-store-agreement-epic-games-store-agreement,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://dev.epicgames.com/docs/epic-games-store/agreements +2025-11-28T00:12:18.022499,11. INDUSTRY STANDARDS / 11.1 Gaming Industry,PlayStation GDPA - PlayStation GDPA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:18.022555,11. INDUSTRY STANDARDS / 11.1 Gaming Industry,Xbox Publisher License - Xbox Publisher License,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:18.928453,11. INDUSTRY STANDARDS / 11.1 Gaming Industry,IGDA Contract Walk-Through - IGDA Contract Walk-Through,https://igda.org/resourcelibrary/game-industry-standards/,raw/industry/igda-contract-walk-through-igda-contract-walk-through,success,52706,c614250a37a5f4f16085c1d42d15fb4495f61beac088b7806626f090e390acae, +2025-11-28T00:12:19.909372,11. INDUSTRY STANDARDS / 11.1 Gaming Industry,IGDA Crediting Guidelines - IGDA Crediting Guidelines,https://igda.org/,raw/industry/igda-crediting-guidelines-igda-crediting-guidelines,success,57195,5aff0e5f9e1619bd2462264cb5683de5260f941bf31c5bdfb1b0217372c74af8, +2025-11-28T00:12:19.992213,11. INDUSTRY STANDARDS / 11.2 Entertainment,SAG-AFTRA 2025 Commercials - SAG-AFTRA 2025 Commercials,https://www.sagaftra.org/,raw/industry/sag-aftra-2025-commercials-sag-aftra-2025-commercials,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.sagaftra.org/ +2025-11-28T00:12:20.071327,11. INDUSTRY STANDARDS / 11.2 Entertainment,SAG-AFTRA Video Game Agreement - SAG-AFTRA Video Game Agreement,https://www.sagaftra.org/production-center/contract/802/,raw/industry/sag-aftra-video-game-agreement-sag-aftra-video-game-agreement,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.sagaftra.org/production-center/contract/802/ +2025-11-28T00:12:21.114747,11. INDUSTRY STANDARDS / 11.2 Entertainment,WGA Minimum Basic Agreement - WGA Minimum Basic Agreement,https://www.wga.org/contracts/contracts/schedule-of-minimums,raw/industry/wga-minimum-basic-agreement-wga-minimum-basic-agreement,success,72989,c74762803d06aaaa1df7ed68fb7c72bd636f56f30baa67cfeb02d7a13da4ad49, +2025-11-28T00:12:21.198035,11. INDUSTRY STANDARDS / 11.3 Creative Services,AIGA Standard Agreement - AIGA Standard Agreement,https://www.aiga.org/resources/aiga-standard-form-of-agreement-for-design-services,raw/industry/aiga-standard-agreement-aiga-standard-agreement,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.aiga.org/resources/aiga-standard-form-of-agreement-for-design-services +2025-11-28T00:12:22.113644,11. INDUSTRY STANDARDS / 11.3 Creative Services,GAG Handbook (17th Ed) - GAG Handbook (17th Ed),https://graphicartistsguild.org/,raw/industry/gag-handbook-17th-ed-gag-handbook-17th-ed,success,549493,8255c97e711bd68d32efbb239f0d5b7d3dc2595157d5f0f5bf961e1681a76125, +2025-11-28T00:12:22.208117,11. INDUSTRY STANDARDS / 11.3 Creative Services,Photography Licensing Standards - Photography Licensing Standards,https://www.pixsy.com/image-licensing/photo-licensing-agreement,raw/industry/photography-licensing-standards-photography-licensing-standards,success,91495,094390fe2e31ba39e79cf7559fd6520b6b132686bfe5ea994bc969f93486ccc4, +2025-11-28T00:12:22.308188,11. INDUSTRY STANDARDS / 11.4 Tech/Software,Open Source Licenses - Open Source Licenses,https://opensource.org/licenses,raw/industry/open-source-licenses-open-source-licenses,success,207101,a6770e8deab553b38bfad51669e9b596953b23ae4730bd8a441fcd910e08a702, +2025-11-28T00:12:22.392468,11. INDUSTRY STANDARDS / 11.4 Tech/Software,MIT License - MIT License,https://opensource.org/license/mit,raw/industry/mit-license-mit-license,success,138252,e2407bc4cf4efbab4fd32e169b4d216fe3f0ccadb51563b5b0ce67dfa5464b4b, +2025-11-28T00:12:22.512196,11. INDUSTRY STANDARDS / 11.4 Tech/Software,Apache 2.0 - Apache 2.0,https://www.apache.org/licenses/LICENSE-2.0,raw/industry/apache-2-0-apache-2-0,success,11358,cfc7749b96f63bd31c3c42b5c471bf756814053e847c10f3eb003417bc523d30, +2025-11-28T00:12:22.966843,11. INDUSTRY STANDARDS / 11.4 Tech/Software,GPL v3 - GPL v3,https://www.gnu.org/licenses/gpl-3.0.en.html,raw/industry/gpl-v3-gpl-v3.html,success,50943,4c4204f396473be585ff9b5f345a97501329d60bea9c39df0ee8a40658f927be, +2025-11-28T00:12:22.966896,12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_cuad.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.966923,12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_us_federal.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.966946,12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_us_caselaw.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.966995,12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_eu_law.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967021,12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_canada_law.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967044,12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_australia_law.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967068,Estimated Totals,Total Documents,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967091,Estimated Totals,Total Raw Size,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967155,Estimated Totals,Processed Chunks,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967203,Estimated Totals,Chroma DB Size,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967230,Estimated Totals,P0 Documents,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967252,Estimated Totals,Download Time,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967274,Estimated Totals,Processing Time,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2025-11-28T00:12:22.967295,Estimated Totals,Embedding Time,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. diff --git a/manifests/download_manifest.csv b/manifests/download_manifest.csv new file mode 100644 index 0000000..17b4c5b --- /dev/null +++ b/manifests/download_manifest.csv @@ -0,0 +1,150 @@ +inventory_path,document_name,url_used,local_path,status,bytes,sha256,notes + +Summary Statistics,US Federal,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,US State,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,EU Directives/Regs,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,Germany (BGB),,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,France,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,Canada,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,Australia,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,UK,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,Datasets (CUAD etc),,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,Case Law,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,Industry Standards,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Summary Statistics,TOTAL,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Priority Legend,P0,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Priority Legend,P1,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Priority Legend,P2,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +1. US FEDERAL LAW / 1.1 US Code Titles,17 USC,https://uscode.house.gov/download/download.shtml,raw/us_federal/17-usc,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +1. US FEDERAL LAW / 1.1 US Code Titles,35 USC,https://uscode.house.gov/download/download.shtml,raw/us_federal/35-usc,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +1. US FEDERAL LAW / 1.1 US Code Titles,18 USC Ch.63,https://uscode.house.gov/download/download.shtml,raw/us_federal/18-usc-ch-63,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +1. US FEDERAL LAW / 1.1 US Code Titles,15 USC §1681,https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act,raw/us_federal/15-usc-ss1681,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act +1. US FEDERAL LAW / 1.1 US Code Titles,15 USC §6801,https://www.ftc.gov/business-guidance/privacy-security/gramm-leach-bliley-act,raw/us_federal/15-usc-ss6801,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.ftc.gov/business-guidance/privacy-security/gramm-leach-bliley-act +1. US FEDERAL LAW / 1.2 Code of Federal Regulations,29 CFR,https://www.ecfr.gov/current/title-29,raw/us_federal/29-cfr,success,4272,768f528a8f8b06deceb59224622df3cc5039d8c296277372954d2f873756d48f, +1. US FEDERAL LAW / 1.2 Code of Federal Regulations,37 CFR,https://www.ecfr.gov/current/title-37,raw/us_federal/37-cfr,success,4272,5b1a7fc0eae3e435936a7698eadb1f16da2f8f9dc10e7cab0e10f9e83a586ea6, +1. US FEDERAL LAW / 1.2 Code of Federal Regulations,16 CFR Part 310,https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-310,raw/us_federal/16-cfr-part-310,success,4272,01589d2cfde314587dbb541e8b2c49068149fa76f84a56191d9a8ccb41b3fb92, +1. US FEDERAL LAW / 1.2 Code of Federal Regulations,16 CFR Part 314,https://www.ecfr.gov/current/title-16/part-314,raw/us_federal/16-cfr-part-314,success,4272,47a1ff3fbd3275c64d5f6da5fd44d8e175f3a842308fa31fed3f8bca819342f3, +1. US FEDERAL LAW / 1.3 Named Federal Statutes,Defend Trade Secrets Act,https://www.congress.gov/114/plaws/publ153/PLAW-114publ153.pdf,raw/us_federal/defend-trade-secrets-act.pdf,success,262018,2c526decb25a6496544c24cdf56d4de773a1fcbd57c0721d982a9d98c8cd630f, +1. US FEDERAL LAW / 1.3 Named Federal Statutes,Work-for-Hire Definition,https://www.copyright.gov/title17/,raw/us_federal/work-for-hire-definition,success,35265,787cb0b8b81e3feaa2208b8e65f4e41ed1aa363106cf90ad348ab62aa293f88e, +1. US FEDERAL LAW / 1.3 Named Federal Statutes,Copyright Ownership,https://www.copyright.gov/title17/,raw/us_federal/copyright-ownership,success,35265,787cb0b8b81e3feaa2208b8e65f4e41ed1aa363106cf90ad348ab62aa293f88e, +1. US FEDERAL LAW / 1.3 Named Federal Statutes,FTC Non-Compete Rule,https://www.federalregister.gov/documents/2024/05/07/2024-09171/non-compete-clause-rule,raw/us_federal/ftc-non-compete-rule,success,4272,6c490dac33a4f6065f6abd3e94ceafb5f0236d505454632693802ae5a32580bc, +1. US FEDERAL LAW / 1.3 Named Federal Statutes,ADA Title I,https://www.eeoc.gov/statutes/titles-i-and-v-americans-disabilities-act-1990-ada,raw/us_federal/ada-title-i,success,118596,f24d430345a01f1fc9c9c37c6b3c8636d517c681bd9090bafef17f2d4c7a29a5, +1. US FEDERAL LAW / 1.4 Bulk Download Sources,GovInfo Bulk Data,https://www.govinfo.gov/bulkdata/,raw/us_federal/govinfo-bulk-data,success,67383,4b6a6e5eb328fa684b058bf9582448ae6f8a25d740d0f066e51dd927ff2dafea, +1. US FEDERAL LAW / 1.4 Bulk Download Sources,eCFR API v1,https://www.ecfr.gov/developers/documentation/api/v1,raw/us_federal/ecfr-api-v1,success,4272,00922d45d25f0a40f4c9420490fb335e75987f1da2061bcd8e6bcff825b541af, +1. US FEDERAL LAW / 1.4 Bulk Download Sources,House.gov Download,https://uscode.house.gov/download/download.shtml,raw/us_federal/house-gov-download,error,0,,"Request error: HTTPSConnectionPool(host='uscode.house.gov', port=443): Max retries exceeded with url: /download/download.shtml (Caused by ConnectTimeoutError(, 'Connection to uscode.house.gov timed out. (connect timeout=30)'))" +1. US FEDERAL LAW / 1.4 Bulk Download Sources,Congress.gov,https://www.congress.gov/help/using-data-offsite,raw/us_federal/congress-gov,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.congress.gov/help/using-data-offsite +2. US STATE LAW / 2.1 California (P0 - Most Restrictive),Non-Compete Ban,https://law.justia.com/codes/california/code-bpc/,raw/us_state/non-compete-ban,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://law.justia.com/codes/california/code-bpc/ +2. US STATE LAW / 2.1 California (P0 - Most Restrictive),Freelance Worker Protection Act,https://leginfo.legislature.ca.gov/,raw/us_state/freelance-worker-protection-act,success,162782,a9436c1ccbb969d2a72faf6bfb7a1ffc5e205a175efa919df6d871147c3af25a, +2. US STATE LAW / 2.1 California (P0 - Most Restrictive),ABC Test (IC Classification),https://leginfo.legislature.ca.gov/,raw/us_state/abc-test-ic-classification,success,162782,1d290744ba925a4ca504435ac655c821dad08e9a02b2712e1bd83be26ce60904, +2. US STATE LAW / 2.1 California (P0 - Most Restrictive),SILENCED Act,https://leginfo.legislature.ca.gov/,raw/us_state/silenced-act,success,164510,e3c22032a9db3e2dfbc320bae284b0413575ceaa5dda3c1ab86d91064f05f907, +2. US STATE LAW / 2.1 California (P0 - Most Restrictive),CCPA/CPRA,https://oag.ca.gov/privacy/ccpa,raw/us_state/ccpa-cpra,success,124204,02218b57d20f6ad5d9f1c8dbb82ec0682ac2a1642c17e89e5c54301c4c63723e, +2. US STATE LAW / 2.2 New York (P0 - Freelancer Protections),Freelance Isn't Free Act (State),https://dol.ny.gov/freelance-isnt-free-act,raw/us_state/freelance-isn-t-free-act-state,success,28498,ca0b66cefec7e251bef1b240d504fd0907d61496941b5c9a43d0f3dbcaeac0c1, +2. US STATE LAW / 2.2 New York (P0 - Freelancer Protections),Freelance Isn't Free Act (NYC),https://www.nyc.gov/site/dca/about/freelance-isnt-free-act.page,raw/us_state/freelance-isn-t-free-act-nyc,success,24521,71ae7beaf302def42ad06142096ce379fe4c63e3c40ea1e44c5d18f3ddb6a945, +2. US STATE LAW / 2.2 New York (P0 - Freelancer Protections),Non-Compete Standards,https://www.nysenate.gov/legislation/laws/GOB,raw/us_state/non-compete-standards,success,39443,f042d1eb21de998e5fd70b9d410595fea47671772457afdfe9c53927a3f9bb21, +2. US STATE LAW / 2.3 Texas (P1 - Employer-Friendly),Non-Compete Enforceability,https://codes.findlaw.com/tx/business-and-commerce-code/,raw/us_state/non-compete-enforceability,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://codes.findlaw.com/tx/business-and-commerce-code/ +2. US STATE LAW / 2.3 Texas (P1 - Employer-Friendly),Healthcare Non-Compete,https://capitol.texas.gov/,raw/us_state/healthcare-non-compete,success,34033,441a2988bd046c27e3f3131f2e5ab45aa887b4ebf6186bfe7f9a9bc8691b3fa6, +2. US STATE LAW / 2.4 Delaware (P1 - Governing Law Choice),Choice of Law,https://delcode.delaware.gov/title6/,raw/us_state/choice-of-law,success,21411,c7fb5f910f5ab2ceeb6834e078fa350d8a4c1d40a90c0f15bebf9b34b57af34e, +2. US STATE LAW / 2.4 Delaware (P1 - Governing Law Choice),Contract Law,https://delcode.delaware.gov/title6/c027/,raw/us_state/contract-law,success,7660,096323f253d05aa45b72fafe27ad80e1027a31ba73c5c0ef4386998090a8bc75, +2. US STATE LAW / 2.5 Other Key States,Restrictive Covenant Law - $101K+ threshold,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2. US STATE LAW / 2.5 Other Key States,Freedom to Work Act - $75K threshold,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2. US STATE LAW / 2.5 Other Key States,Non-Compete Law - $250K IC threshold,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2. US STATE LAW / 2.5 Other Key States,Non-Compete + CHOICE Act - 4-year expansion,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2. US STATE LAW / 2.5 Other Key States,ABC Test - Strict IC classification,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2. US STATE LAW / 2.5 Other Key States,Non-Compete Ban - Similar to CA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2. US STATE LAW / 2.5 Other Key States,Non-Compete Ban - Similar to CA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +2. US STATE LAW / 2.5 Other Key States,Non-Compete Ban - Similar to CA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +3. EUROPEAN UNION / 3.1 EU Directives,Transparent Working Conditions - Worker rights baseline,,raw/eu/transparent-working-conditions-worker-rights-baseline,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232019L1152%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.1 EU Directives,Platform Workers Directive - Gig economy status,,raw/eu/platform-workers-directive-gig-economy-status,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232024L2831%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.1 EU Directives,Copyright Directive - IP ownership,,raw/eu/copyright-directive-ip-ownership,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232019L0790%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.1 EU Directives,Trade Secrets Directive - Confidentiality,,raw/eu/trade-secrets-directive-confidentiality,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232016L0943%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.1 EU Directives,GDPR - Data processing,,raw/eu/gdpr-data-processing,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232016R0679%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.1 EU Directives,Rental/Lending Rights - IP licensing,,raw/eu/rental-lending-rights-ip-licensing,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232006L0115%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.1 EU Directives,OSH Framework - Health & safety,,raw/eu/osh-framework-health-safety,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2231989L0391%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.2 EU Regulations,Digital Services Act - Platform obligations,,raw/eu/digital-services-act-platform-obligations,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232022R2065%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +3. EUROPEAN UNION / 3.2 EU Regulations,EU AI Act - AI training rights,,raw/eu/eu-ai-act-ai-training-rights,error,0,,SPARQL error: 404 Client Error: Not Found for url: https://eur-lex.europa.eu/sparql?format=json&query=%0APREFIX+cdm%3A+%3Chttp%3A%2F%2Fpublications.europa.eu%2Fontology%2Fcdm%23%3E%0ASELECT+%3Fwork+%3Fpdf+WHERE+%7B%0A++%3Fwork+cdm%3Aresource_legal_id_celex+%2232024R1689%22+.%0A++OPTIONAL+%7B+%3Fexpression+cdm%3Aexpression_belongs_to_work+%3Fwork+.%0A+++++++++++++%3Fmanifestation+cdm%3Amanifestation_manifests_expression+%3Fexpression+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_file_type+%27pdf%27+.%0A+++++++++++++%3Fpdf+cdm%3Amanifestation_access_url+%3Fpdf+%7D%0A%7D%0A +4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§611 et seq. - Service Contract (Dienstvertrag),https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss611-et-seq-service-contract-dienstvertrag,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§631 et seq. - Work Contract (Werkvertrag),https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss631-et-seq-work-contract-werkvertrag,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§611a - Employee vs Self-Employed,https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss611a-employee-vs-self-employed,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§705 et seq. - Partnership (GbR),https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss705-et-seq-partnership-gbr,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +4. GERMANY / 4.1 Bürgerliches Gesetzbuch (BGB - Civil Code),§14 - Entrepreneur Definition,https://www.gesetze-im-internet.de/englisch_bgb/,raw/germany/ss14-entrepreneur-definition,success,498837,c15aee9c1a2e98de7f3869bd4ada610dbe1a9f5e04c7879cb48a560df27a1ec3, +4. GERMANY / 4.2 Other German Law,UWG (Unfair Competition) - Business practices,https://www.gesetze-im-internet.de/englisch_uwg/,raw/germany/uwg-unfair-competition-business-practices,success,13442,00b1d8693206228c3acbd0eadc421006530f2446ab4a3b7b7e4db1be97e58910, +4. GERMANY / 4.2 Other German Law,SGB IV §7 - Social security classification,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +5. FRANCE / 5.1 Code du Travail (Labor Code),"L1221-6, L1221-19 - Recruitment, trial periods",https://www.legifrance.gouv.fr/codes/,raw/france/l1221-6-l1221-19-recruitment-trial-periods,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/codes/ +5. FRANCE / 5.1 Code du Travail (Labor Code),"L1222-1, L1222-9 - Good faith, remote work",https://www.legifrance.gouv.fr/codes/,raw/france/l1222-1-l1222-9-good-faith-remote-work,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/codes/ +5. FRANCE / 5.2 Code de la Propriété Intellectuelle,L.111-1 - Copyright ownership default,https://www.legifrance.gouv.fr/,raw/france/l-111-1-copyright-ownership-default,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/ +5. FRANCE / 5.2 Code de la Propriété Intellectuelle,"D132-28, D132-29 - Freelance photographer rates",https://www.legifrance.gouv.fr/,raw/france/d132-28-d132-29-freelance-photographer-rates,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.legifrance.gouv.fr/ +5. FRANCE / 5.2 Code de la Propriété Intellectuelle,Part 2 - Industrial property,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +6. CANADA / 6.1 Federal Legislation,Copyright Act,https://laws-lois.justice.gc.ca/eng/acts/C-42/,raw/canada/copyright-act,success,38443,2af1030a0f868c3a4b50ebf98ea40d7b4ea1e0224643f311f2871d497407bc0b, +6. CANADA / 6.1 Federal Legislation,Competition Act,https://laws.justice.gc.ca/eng/acts/C-34/,raw/canada/competition-act,success,27175,1efb1cbc3922655de2fa1dcdfa2c0c41e84e88ed8b44bd5fff7c2593baa6fff7, +6. CANADA / 6.1 Federal Legislation,Canada Labour Code,https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-l-2/,raw/canada/canada-labour-code,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-l-2/ +6. CANADA / 6.1 Federal Legislation,PIPEDA,https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/the-personal-information-protection-and-electronic-documents-act-pipeda/,raw/canada/pipeda,success,25833,c99f09543c7857d41738f60c93a4629676b61a336feb235fbd7db31400c00f31, +6. CANADA / 6.1 Federal Legislation,Employment Insurance Act,https://www.canlii.org/en/ca/laws/stat/sc-1996-c-23/,raw/canada/employment-insurance-act,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/ca/laws/stat/sc-1996-c-23/ +6. CANADA / 6.1 Federal Legislation,Employment Equity Act,https://www.canlii.org/en/ca/laws/stat/sc-1995-c-44/,raw/canada/employment-equity-act,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/ca/laws/stat/sc-1995-c-44/ +6. CANADA / 6.2 Provincial Legislation,Employment Standards Act,https://www.ontario.ca/laws/statute/00e41,raw/canada/employment-standards-act,success,53141,672384e19be379317c46886265bf504e134989138b4b6fa3a1a303fd3e10fb93, +6. CANADA / 6.2 Provincial Legislation,Employment Standards Act,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +6. CANADA / 6.2 Provincial Legislation,Labour Standards Act,https://www.canlii.org/en/qc/laws/stat/cqlr-c-n-1.1/,raw/canada/labour-standards-act,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.canlii.org/en/qc/laws/stat/cqlr-c-n-1.1/ +7. AUSTRALIA / 7.1 Federal Legislation,Fair Work Act 2009,https://www.fairwork.gov.au/about-us/legislation,raw/australia/fair-work-act-2009,error,0,,"Request error: HTTPSConnectionPool(host='www.fairwork.gov.au', port=443): Read timed out. (read timeout=30)" +7. AUSTRALIA / 7.1 Federal Legislation,Independent Contractors Act 2006,https://www.legislation.gov.au/Series/C2006A00162,raw/australia/independent-contractors-act-2006,success,154588,86c18976f7c399459b9699e5d1fc83d1704c90089b8da52fd3387313a06d6228, +7. AUSTRALIA / 7.1 Federal Legislation,Copyright Act 1968,https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/,raw/australia/copyright-act-1968,error,0,,HTTP error: 410 Client Error: Gone for url: https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ +7. AUSTRALIA / 7.1 Federal Legislation,Competition and Consumer Act 2010,https://www.legislation.gov.au/C2004A00109/latest,raw/australia/competition-and-consumer-act-2010,success,1333871,4c61581f971c33a6145b849d6aad869989f86c613f3a7b72fefe24f55e139ff0, +7. AUSTRALIA / 7.1 Federal Legislation,Privacy Act 1988,https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/,raw/australia/privacy-act-1988,error,0,,HTTP error: 410 Client Error: Gone for url: https://www7.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ +7. AUSTRALIA / 7.1 Federal Legislation,Australian Consumer Law,https://www.legislation.gov.au/C2004A00109/latest,raw/australia/australian-consumer-law,success,1333871,bdc461c9abb68249e9f0a3588a8aa91f2a4aab77294dd6613b83b06d2ee11fe1, +8. UNITED KINGDOM / 8.1 Acts of Parliament,Employment Rights Act 1996,https://www.legislation.gov.uk/ukpga/1996/18/contents,raw/uk/employment-rights-act-1996,success,234794,f72b8ed35ee46f25acf84bb8263298d61644e932dae0907290372cffbda0f892, +8. UNITED KINGDOM / 8.1 Acts of Parliament,"Copyright, Designs and Patents Act 1988",https://www.legislation.gov.uk/ukpga/1988/48,raw/uk/copyright-designs-and-patents-act-1988,success,4083690,55d91ce6f35fc835e751b1b8ba2cb1625136c9e917d59b07c00b2594020d3423, +8. UNITED KINGDOM / 8.1 Acts of Parliament,Patents Act 1977,https://www.legislation.gov.uk/ukpga/1977/37,raw/uk/patents-act-1977,success,1497139,19df13c0375d1620efa7b8fab54dedb7c580e5e919053252b7a13bd11c8c1d90, +8. UNITED KINGDOM / 8.1 Acts of Parliament,Trade Secrets Regulations 2018,https://www.legislation.gov.uk/uksi/2018/597/made,raw/uk/trade-secrets-regulations-2018,success,79427,e00a06553147a784e4a7196c0d91ddf7b6406e17a20fbe0ae0205c1adf4b5d58, +8. UNITED KINGDOM / 8.2 IR35 (Off-Payroll Working),Social Security (Intermediaries) Regs,https://www.legislation.gov.uk/uksi/2000/727,raw/uk/social-security-intermediaries-regs,success,312018,0dbb4125336770bebf17ee00c5df3378c15751ecb8216694904a130393bd31ce, +8. UNITED KINGDOM / 8.2 IR35 (Off-Payroll Working),ITEPA 2003 Part 2 Ch.8,https://www.legislation.gov.uk/ukpga/2003/1,raw/uk/itepa-2003-part-2-ch-8,success,9786044,4bcaee53dc08d4514246eb84db30d9e05b05c0fa5e5311a4f9bbdeae71a9aff4, +8. UNITED KINGDOM / 8.2 IR35 (Off-Payroll Working),Database Rights Regs 1997,https://www.legislation.gov.uk/uksi/1997/3032,raw/uk/database-rights-regs-1997,success,221664,9a9273efa2e926e87cba76cd15a646911493434f4e9b27fce820b85ce87a7acc, +9. CONTRACT DATASETS (Pre-Labeled) / 9.1 Primary Training Data,CUAD,https://www.atticusprojectai.org/cuad,raw/datasets/cuad,success,723333,3eb753aa9bb2e28b71cee450f62f35896c1f0964b62a80135c06bef04e80e523, +9. CONTRACT DATASETS (Pre-Labeled) / 9.1 Primary Training Data,ContractNLI,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +9. CONTRACT DATASETS (Pre-Labeled) / 9.1 Primary Training Data,LEDGAR,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,PepsiCo v. Redmond,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,Mitchell v. Reynolds,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,Oregon Steam v. Winsor,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.1 Non-Compete Cases,Ryan v. FTC,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.2 IP / Work-for-Hire Cases,CCNV v. Reid,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.2 IP / Work-for-Hire Cases,Dubilier Condenser,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.2 IP / Work-for-Hire Cases,SCA Hygiene v. First Quality,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.3 Indemnification Cases,Brooks v. Judlau,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.3 Indemnification Cases,Santa Barbara v. Superior Court,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.3 Indemnification Cases,Steamfitters v. Erie Insurance,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.4 Arbitration Cases,Epic Systems v. Lewis,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.4 Arbitration Cases,Mastrobuono v. Shearson,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.4 Arbitration Cases,Pinnacle v. Pinnacle Market,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.5 Trade Secrets / NDA Cases,Silicon Image v. Analogk,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.5 Trade Secrets / NDA Cases,Hamilton v. Juul Labs,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.5 Trade Secrets / NDA Cases,Gordon v. Landau,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.6 Moral Rights Cases,Gilliam v. ABC,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.6 Moral Rights Cases,Frisby v. BBC,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +10. LANDMARK CASE LAW / 10.6 Moral Rights Cases,Confetti Records v. Warner,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +11. INDUSTRY STANDARDS / 11.1 Gaming Industry,Steam Distribution Agreement - Steam Distribution Agreement,https://store.steampowered.com,raw/industry/steam-distribution-agreement-steam-distribution-agreement,success,804459,0214d4069e54bcb07811f3afa41b1c0b776ca8d43ed0fa50a56f6de2ec6ea876, +11. INDUSTRY STANDARDS / 11.1 Gaming Industry,Epic Games Store Agreement - Epic Games Store Agreement,https://dev.epicgames.com/docs/epic-games-store/agreements,raw/industry/epic-games-store-agreement-epic-games-store-agreement,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://dev.epicgames.com/docs/epic-games-store/agreements +11. INDUSTRY STANDARDS / 11.1 Gaming Industry,PlayStation GDPA - PlayStation GDPA,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +11. INDUSTRY STANDARDS / 11.1 Gaming Industry,Xbox Publisher License - Xbox Publisher License,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +11. INDUSTRY STANDARDS / 11.1 Gaming Industry,IGDA Contract Walk-Through - IGDA Contract Walk-Through,https://igda.org/resourcelibrary/game-industry-standards/,raw/industry/igda-contract-walk-through-igda-contract-walk-through,success,52706,c614250a37a5f4f16085c1d42d15fb4495f61beac088b7806626f090e390acae, +11. INDUSTRY STANDARDS / 11.1 Gaming Industry,IGDA Crediting Guidelines - IGDA Crediting Guidelines,https://igda.org/,raw/industry/igda-crediting-guidelines-igda-crediting-guidelines,success,57195,5aff0e5f9e1619bd2462264cb5683de5260f941bf31c5bdfb1b0217372c74af8, +11. INDUSTRY STANDARDS / 11.2 Entertainment,SAG-AFTRA 2025 Commercials - SAG-AFTRA 2025 Commercials,https://www.sagaftra.org/,raw/industry/sag-aftra-2025-commercials-sag-aftra-2025-commercials,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.sagaftra.org/ +11. INDUSTRY STANDARDS / 11.2 Entertainment,SAG-AFTRA Video Game Agreement - SAG-AFTRA Video Game Agreement,https://www.sagaftra.org/production-center/contract/802/,raw/industry/sag-aftra-video-game-agreement-sag-aftra-video-game-agreement,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.sagaftra.org/production-center/contract/802/ +11. INDUSTRY STANDARDS / 11.2 Entertainment,WGA Minimum Basic Agreement - WGA Minimum Basic Agreement,https://www.wga.org/contracts/contracts/schedule-of-minimums,raw/industry/wga-minimum-basic-agreement-wga-minimum-basic-agreement,success,72989,c74762803d06aaaa1df7ed68fb7c72bd636f56f30baa67cfeb02d7a13da4ad49, +11. INDUSTRY STANDARDS / 11.3 Creative Services,AIGA Standard Agreement - AIGA Standard Agreement,https://www.aiga.org/resources/aiga-standard-form-of-agreement-for-design-services,raw/industry/aiga-standard-agreement-aiga-standard-agreement,error,0,,HTTP error: 403 Client Error: Forbidden for url: https://www.aiga.org/resources/aiga-standard-form-of-agreement-for-design-services +11. INDUSTRY STANDARDS / 11.3 Creative Services,GAG Handbook (17th Ed) - GAG Handbook (17th Ed),https://graphicartistsguild.org/,raw/industry/gag-handbook-17th-ed-gag-handbook-17th-ed,success,549493,8255c97e711bd68d32efbb239f0d5b7d3dc2595157d5f0f5bf961e1681a76125, +11. INDUSTRY STANDARDS / 11.3 Creative Services,Photography Licensing Standards - Photography Licensing Standards,https://www.pixsy.com/image-licensing/photo-licensing-agreement,raw/industry/photography-licensing-standards-photography-licensing-standards,success,91495,094390fe2e31ba39e79cf7559fd6520b6b132686bfe5ea994bc969f93486ccc4, +11. INDUSTRY STANDARDS / 11.4 Tech/Software,Open Source Licenses - Open Source Licenses,https://opensource.org/licenses,raw/industry/open-source-licenses-open-source-licenses,success,207101,a6770e8deab553b38bfad51669e9b596953b23ae4730bd8a441fcd910e08a702, +11. INDUSTRY STANDARDS / 11.4 Tech/Software,MIT License - MIT License,https://opensource.org/license/mit,raw/industry/mit-license-mit-license,success,138252,e2407bc4cf4efbab4fd32e169b4d216fe3f0ccadb51563b5b0ce67dfa5464b4b, +11. INDUSTRY STANDARDS / 11.4 Tech/Software,Apache 2.0 - Apache 2.0,https://www.apache.org/licenses/LICENSE-2.0,raw/industry/apache-2-0-apache-2-0,success,11358,cfc7749b96f63bd31c3c42b5c471bf756814053e847c10f3eb003417bc523d30, +11. INDUSTRY STANDARDS / 11.4 Tech/Software,GPL v3 - GPL v3,https://www.gnu.org/licenses/gpl-3.0.en.html,raw/industry/gpl-v3-gpl-v3.html,success,50943,4c4204f396473be585ff9b5f345a97501329d60bea9c39df0ee8a40658f927be, +12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_cuad.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_us_federal.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_us_caselaw.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_eu_law.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_canada_law.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +12. DOWNLOAD SCRIPTS REFERENCE / Script Mapping,`download_australia_law.py`,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,Total Documents,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,Total Raw Size,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,Processed Chunks,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,Chroma DB Size,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,P0 Documents,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,Download Time,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,Processing Time,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. +Estimated Totals,Embedding Time,,,no_direct_link,0,,No direct URL in inventory; extend downloader to handle by citation or identifier. diff --git a/raw/australia/australian-consumer-law b/raw/australia/australian-consumer-law new file mode 100644 index 0000000..646e149 --- /dev/null +++ b/raw/australia/australian-consumer-law @@ -0,0 +1,15 @@ + + + Competition and Consumer Act 2010 - Federal Register of Legislation + + + + + +
Australian Government Coat of ArmsAustralian Government

Federal Register of Legislation

Competition and Consumer Act 2010

In force +
Administered by
  • Attorney-General's Department
  • Department of Climate Change, Energy, the Environment and Water
  • Department of Industry, Science and Resources
  • Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts
  • Department of the Treasury
Latest version
C2025C00366 C15901 July 2025

Legislation text

Table of contents
+ + + \ No newline at end of file diff --git a/raw/australia/competition-and-consumer-act-2010 b/raw/australia/competition-and-consumer-act-2010 new file mode 100644 index 0000000..4680125 --- /dev/null +++ b/raw/australia/competition-and-consumer-act-2010 @@ -0,0 +1,15 @@ + + + Competition and Consumer Act 2010 - Federal Register of Legislation + + + + + +
Australian Government Coat of ArmsAustralian Government

Federal Register of Legislation

Competition and Consumer Act 2010

In force +
Administered by
  • Attorney-General's Department
  • Department of Climate Change, Energy, the Environment and Water
  • Department of Industry, Science and Resources
  • Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts
  • Department of the Treasury
Latest version
C2025C00366 C15901 July 2025

Legislation text

Table of contents
+ + + \ No newline at end of file diff --git a/raw/australia/independent-contractors-act-2006 b/raw/australia/independent-contractors-act-2006 new file mode 100644 index 0000000..c443204 --- /dev/null +++ b/raw/australia/independent-contractors-act-2006 @@ -0,0 +1,26 @@ + + + Independent Contractors Act 2006 - Federal Register of Legislation + + + + + +
Australian Government Coat of ArmsAustralian Government

Federal Register of Legislation

Independent Contractors Act 2006

In force +
Administered by
  • Department of Employment and Workplace Relations
Latest version
C2024C00351 C1026 August 2024

All versions

Compilation date
Filter by compilation date
Comp no.
ID
Notes
Includes amendments
26 Aug 2024
C10
C2024C00351
01 Sep 2021 - 25 Aug 2024
C09
C2021C00495
25 Aug 2018 - 31 Aug 2021
C08
C2018C00359
01 Jul 2016 - 24 Aug 2018
C07
C2016C00818
05 Mar 2016 - 30 Jun 2016
C06
C2016C00362
24 Jun 2014 - 04 Mar 2016
C05
C2014C00218
12 Apr 2013 - 23 Jun 2014
C04
C2013C00196
27 Dec 2011 - 11 Apr 2013
C03
C2012C00183
01 Jul 2009 - 26 Dec 2011
C02
C2009C00316
9 total

As made

Effective date
Assent date
Originating Bill and Explanatory Memorandum
11 Dec 2006 - 30 Jun 2009
11 Dec 2006

View Originating Bill and Explanatory Memorandum

+
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Competition Act (R.S.C., 1985, c. C-34)

Full Document:  

Act current to 2025-11-20 and last amended on 2025-06-20. Previous Versions

Notes :
  • See coming into force provision and notes, where applicable.
  • Shaded provisions are not in force. Help
+

Table of Contents

+ + + +

Related Information

+ +

+ Amendments + *

+ Amendment Citation + + Amendment date +
2023, c. 312025-06-20
2024, c. 152025-06-20
2023, c. 312024-12-15
2024, c. 152024-12-15
2024, c. 152024-06-20
2023, c. 312023-12-15
2022, c. 102023-06-23
2022, c. 102022-06-23
2020, c. 12020-07-01
2019, c. 252019-12-18

+ * List of amendments since 2019-01-01 (limited to last 10 amendments) [more details]

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Regulations made under this Act


Repealed regulations made under this Act

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Page Details

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Copyright Act (R.S.C., 1985, c. C-42)

Full Document:  

Act current to 2025-11-20 and last amended on 2024-11-07. Previous Versions

Notes :
  • See coming into force provision and notes, where applicable.
  • Shaded provisions are not in force. Help
+

Table of Contents

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Related Information

+ +

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+ Amendment Citation + + Amendment date +
2024, c. 262024-11-07
2024, c. 272024-11-07
2023, c. 82023-04-27
2022, c. 102022-12-30
2020, c. 12020-07-01
2014, c. 20, s. 366(1)2019-06-17
2018, c. 27, s. 2802019-04-01
2018, c. 27, s. 2812019-04-01
2018, c. 27, s. 2822019-04-01
2018, c. 27, s. 2832019-04-01

+ * List of amendments since 2019-01-01 (limited to last 10 amendments) [more details]

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The Personal Information Protection and Electronic Documents Act (PIPEDA)

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+ PIPEDA requirements in brief +

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Features

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Privacy Guide for Businesses

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What Canadian businesses need to know to comply with federal privacy law

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Learn about PIPEDA and find information to help businesses understand and comply with the law.

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Ten privacy tips for businesses

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Find tips to help businesses respect privacy, and a graphic version you can print and post.

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Protecting Your Customers' Privacy [video]

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Watch a brief video for businesses to understand the basic requirements of PIPEDA.

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+ + + + + + + + + + + + + + + + + \ No newline at end of file diff --git a/raw/datasets/cuad b/raw/datasets/cuad new file mode 100644 index 0000000..979b8f9 --- /dev/null +++ b/raw/datasets/cuad @@ -0,0 +1,1554 @@ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +CUAD | atticus-project + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
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Contract Understanding Atticus Dataset (CUAD)
+​

A dataset of legal contracts with rich expert annotations

+ +

 

+ +

Contract Understanding Atticus Dataset (CUAD) v1 is a corpus of 13,000+ labels in 510 commercial legal contracts that have been manually labeled under the supervision of experienced lawyers to identify 41 types of legal clauses that are considered important in contact review in connection with a corporate transaction, including mergers & acquisitions, etc. 

+ +

 

+ +

CUAD is curated and maintained by The Atticus Project, Inc. to support NLP research and development in legal contract review.

+ +

​

+ +

Read the full CUAD v1 announcement here!

CUAD Resources

+ +

​

Dataset

Dataset

Version 1

+ +

CUAD v1

README/Datasheet

+ +

Download here.

License

+ +

CC BY 4.0

Publication

Publication

Our paper on CUAD is accepted by NeurIPS 2021, the 35th Conference on Neural Information Processing Systems (Datasets and Benchmarks Track)! 

+ +

​

+ +

Check out the code for replicating the results and the trained model here.

People

Contributors

Attorney Advisors

+ +

Wei Chen

+ +

John Brockland

+ +

Kevin Chen

+ +

Jacky Fink

+ +

Spencer P. Goodson

+ +

Justin Haan

+ +

Alex Haskell

+ +

Kari Krusmark

+ +

Jenny Lin

+ +

Jonas Marson

+ +

Benjamin Petersen

+ +

Alexander Kwonji Rosenberg

+ +

William R. Sawyers

+ +

Brittany Schmeltz

+ +

Max Scott

+ +

Zhu Zhu

Law Student Leaders

+ +

John Batoha

+ +

Daisy Beckner

+ +

Lovina Consunji

+ +

Gina Diaz

+ +

Chris Gronseth

+ +

Calvin Hannagan

+ +

Joseph Kroon

+ +

Sheetal Sharma Saran

+ +

 

+ +

Law Student Contributors

+ +

Scott Aronin

+ +

Bryan Burgoon

+ +

Jigar Desai

+ +

Imani Haynes

+ +

Philip Katz

+ +

Jeongsoo Kim

+ +

Margaret Lynch

+ +

Allison Melville

+ +

Felix Mendez-Burgos

+ +

Nicole Mirkazemi

+ +

David Myers

+ +

Emily Rissberger

+ +

Behrang Seraj

+ +

Sarahginy Valcin

Technical Advisors & Contributors

+ +

Dan Hendrycks

+ +

Collin Burns

+ +

Spencer Ball

+ +

Anya Chen

The use of CUAD, Atticus Labels and other information provided by The Atticus Project is subject to our privacy policy and disclaimer.

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Logo Federal Ministry of Justice and Consumer ProtectionLogo Federal Office of Justice

German Civil Code
BGB

Full text in format:   HTML  PDF   text in German

Übersetzung durch den Langenscheidt Übersetzungsservice, aktualisiert durch Neil Mussett. Zuletzt aktualisiert und bearbeitet durch Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Translation provided by Langenscheidt Übersetzungsservice, updated by Neil Mussett. The translation has most recently been revised and updated by Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Stand: Die Übersetzung berücksichtigt die Änderung(en) des Gesetzes durch Artikel 1 des Gesetzes vom 10. August 2021 (BGBl. I S. 3515).
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Version information: The translation includes the amendment(s) to the Act by Article 1 of the Act of 10 August 2021 (Federal Law Gazette I p. 3515).
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Book 1
General part
Division 1
Persons
Title 1
Natural persons, consumers, traders
Section 1Beginning of legal capacity
Section 2Beginning of majority
Sections 3 – 6(repealed)
Section 7Residence; establishment and termination
Section 8Residence of persons who lack full capacity to contract
Section 9Residence of a soldier
Section 10(repealed)
Section 11Residence of a child
Section 12Right to a name
Section 13Consumer
Section 14Trader
Sections 15 - 20(repealed)
Title 2
Legal persons
Subtitle 1
Associations
Chapter 1
General provisions
Section 21Non-commercial association
Section 22Commercial association
Section 23(repealed)
Section 24Seat
Section 25Constitution
Section 26Board and representation
Section 27Appointment of and management by the board
Section 28Passing of resolutions by the board
Section 29Emergency appointment by local court
Section 30Special representatives
Section 31Liability of an association for organs
Section 31aLiability of members of organs and special representatives
Section 31bLiability of members of the association
Section 32General meeting; passing of resolutions
Section 33Amendment of articles of association
Section 34Exclusion from voting
Section 35Special rights
Section 36Convening the general meeting
Section 37Convening a meeting at the request of a minority
Section 38Membership
Section 39Leaving the association
Section 40Flexible provisions
Section 41Dissolution of the association
Section 42Insolvency
Section 43Deprivation of legal personality
Section 44Jurisdiction and procedure
Section 45Devolution of the assets of the association
Section 46Devolution on the treasury
Section 47Liquidation
Section 48Liquidators
Section 49Duties of the liquidators
Section 50Notice by publication of the association in liquidation
Section 50aNewspaper for notices
Section 51One-year waiting period
Section 52Security for creditors
Section 53Liability in damages of the liquidators
Section 54Associations without legal personality
Chapter 2
Registered associations
Section 55Jurisdiction over entry in the register
Section 55aElectronic register of associations
Section 56Minimum number of members of the association
Section 57Minimum requirements of the articles of association
Section 58Recommended contents of the articles of association
Section 59Application for registration
Section 60Rejection of the application
Sections 61 - 63(repealed)
Section 64Contents of the entry in the register of associations
Section 65Addition to name
Section 66Notice by publication of the entry and safekeeping of documents
Section 67Changes to the board
Section 68Protection of public confidence by the register of associations
Section 69Documentary proof of composition of the board
Section 70Protection of public confidence in case of entries on power of agency
Section 71Amendments of the articles of association
Section 72Certificate on number of members
Section 73Decrease to below the minimum number of members
Section 74Dissolution
Section 75Entries in the case of insolvency
Section 76Register entries in the event of liquidation
Section 77Parties obliged to apply for entry in the register and form of applications
Section 78Assessment of coercive fines
Section 79Inspection of the register of associations
Section 79aApplication of Regulation (EU) 2016/679 to registration proceedings
Subtitle 2
Foundations
Section 80Formation of a foundation having legal personality
Section 81Endowment transaction
Section 82Duty of founder to make transfers
Section 83Testamentary foundation
Section 84Recognition after the death of the founder
Section 85Constitution of foundation
Section 86Application of law on associations
Section 87Change of objects; termination
Section 88Devolution of assets
Subtitle 3
Legal persons under public law
Section 89Liability for organs; insolvency
Division 2
Things and animals
Section 90Concept of the thing
Section 90aAnimals
Section 91Fungible things
Section 92Consumable things
Section 93Essential parts of a thing
Section 94Essential parts of a plot of land or a building
Section 95Merely temporary purpose
Section 96Rights as parts of a plot of land
Section 97Accessories
Section 98Commercial and agricultural inventory
Section 99Fruits
Section 100Emoluments
Section 101Division of fruits
Section 102Reimbursement of costs of production
Section 103Allocation of charges
Division 3
Legal transactions
Title 1
Capacity to contract
Section 104Incapacity to contract
Section 105Voidness of declaration of intent
Section 105aEveryday transactions
Section 106Limited capacity for minors to contract
Section 107Consent of legal representative
Section 108Entry into a contract without consent
Section 109Right of withdrawal by the other party
Section 110Performance effected with means of the minor’s own
Section 111Unilateral legal transactions
Section 112Independent operation of a trade or business
Section 113Service or employment relationship
Sections 114, 115(repealed)
Title 2
Declaration of intent
Section 116Mental reservation
Section 117Sham transaction
Section 118Lack of seriousness
Section 119Voidability for mistake
Section 120Voidability for incorrect transmission
Section 121Period for avoidance
Section 122Liability in damages of the person avoiding a declaration
Section 123Voidability on the grounds of deceit or duress
Section 124Period of time for avoidance
Section 125Voidness resulting from a defect of form
Section 126Written form
Section 126aElectronic form
Section 126bText form
Section 127Agreed form
Section 127aCourt settlement
Section 128Notarial recording
Section 129Official certification
Section 130Effectiveness of a declaration of intent to absent parties
Section 131Effectiveness in relation to persons without full capacity to contract
Section 132Substitution of service for receipt
Section 133Interpretation of a declaration of intent
Section 134Statutory prohibition
Section 135Statutory prohibition of alienation
Section 136Official prohibition of alienation
Section 137Prohibition of dispositions in a legal transaction
Section 138Legal transaction offending common decency; usury
Section 139Partial invalidity
Section 140Re-interpretation
Section 141Confirmation of a void legal transaction
Section 142Effect of avoidance
Section 143Declaration of avoidance
Section 144Confirmation of a voidable legal transaction
Title 3
Contract
Section 145Binding effect of an offer
Section 146Expiry of an offer
Section 147Period for acceptance
Section 148Fixing a period for acceptance
Section 149Late receipt of a declaration of acceptance
Section 150Late acceptance and acceptance altering the offer
Section 151Acceptance without declaration to the offeror
Section 152Acceptance in the case of notarial recording
Section 153Death of the offeror or offeror’s incapacity to contract
Section 154Overt lack of agreement; lack of notarial recording
Section 155Hidden lack of agreement
Section 156Entry into contracts at auctions
Section 157Interpretation of contracts
Title 4
Conditions and specification of time
Section 158Conditions precedent and subsequent
Section 159Retroactive effect
Section 160Liability during the period pending fulfilment of the condition
Section 161Ineffectiveness of dispositions in the period pending fulfilment of the condition
Section 162Prevention of or bringing about the satisfaction of the condition
Section 163Specification of time
Title 5
Agency and authority
Section 164Effect of a declaration made by the agent
Section 165Agent with limited capacity to contract
Section 166Vitiation of intent; imputed knowledge
Section 167Conferment of authority
Section 168Expiry of authority
Section 169Authority of the authorised representative and the managing partner
Section 170Period of effectiveness of the authority
Section 171Period of effectiveness in the case of announcement
Section 172Letter of authorisation
Section 173Period of effectiveness in the case of knowledge and negligent lack of knowledge
Section 174Unilateral legal transaction by an authorised representative
Section 175Return of the letter of authorisation
Section 176Declaration of invalidity of the letter of authorisation
Section 177Entry into contract by a representative having no power of agency
Section 178Right of revocation of the other party
Section 179Liability of a representative having no power of agency
Section 180Unilateral legal transactions
Section 181Contracting with oneself
Title 6
Consent and ratification
Section 182Approval
Section 183Revocability of consent
Section 184Retroactive effect of ratification
Section 185Disposition by an unauthorised person
Division 4
Periods of time and fixed dates
Section 186Scope of applicability
Section 187Beginning of a period of time
Section 188End of a period of time
Section 189Calculation of individual periods of time
Section 190Extension of a period of time
Section 191Calculation of periods of time
Section 192Beginning, middle and end of a month
Section 193Sundays and holidays; Saturdays
Division 5
Limitation
Title 1
Subject-matter and duration of limitation
Section 194Subject-matter of limitation
Section 195Standard limitation period
Section 196Limitation period for rights to a plot of land
Section 197Thirty-year limitation period
Section 198Limitation in the case of a successor in title
Section 199Commencement of the standard limitation period and maximum limitation periods
Section 200Commencement of other limitation periods
Section 201Commencement of the limitation period for recognised claims
Section 202Inadmissibility of agreements on limitation
Title 2
Suspension, suspension of expiry and recommencement of the limitation period
Section 203Suspension of limitation in the case of negotiations
Section 204Suspension of limitation as a result of prosecution of rights
Section 205Suspension of limitation in the case of a right to refuse performance
Section 206Suspension of limitation in case of force majeure
Section 207Suspension of limitation for reasons of family relationship and similar reasons
Section 208Suspension of limitation in the case of claims for infringement of the right to sexual self-determination
Section 209Effect of suspension
Section 210Suspension of expiry of the limitation period in the case of persons without full capacity to contract
Section 211Suspension of expiry of the limitation period in matters relating to estates
Section 212Recommencement of the limitation period
Section 213Suspension, suspension of expiry of the limitation period and recommencement of limitation in the case of other claims
Title 3
Legal consequences of limitation
Section 214Effect of limitation
Section 215Set-off and right of retention after a claim is statute-barred
Section 216Effect of limitation in the case of secured claims
Section 217Limitation of collateral performance
Section 218Ineffectiveness of rescission
Sections 219 to 225(repealed)
Division 6
Exercise of rights, self-defence, self-help
Section 226Prohibition of chicanery
Section 227Self-defence against persons
Section 228Necessity
Section 229Self-help
Section 230Limits of self-help
Section 231Self-help by mistake
Division 7
Provision of security
Section 232Types
Section 233Effect of deposit
Section 234Suitable securities
Section 235Right to exchange
Section 236Book-entry securities
Section 237Movable things
Section 238Mortgages, land charges and annuity land charges
Section 239Surety
Section 240Duty to supplement security
Book 2
Law of obligations
Division 1
Subject matter of obligations
Title 1
Duty to render performance
Section 241Duties arising from an obligation
Section 241aUnsolicited performance
Section 242Performance in good faith
Section 243Obligation described by class
Section 244Foreign currency obligation
Section 245Obligation payable in a specific denomination of money
Section 246Statutory interest rate
Section 247Basic rate of interest
Section 248Compound interest
Section 249Nature and extent of compensation of damages
Section 250Damages in money after the specification of a period of time
Section 251Damages in money without the specification of a period of time
Section 252Lost profits
Section 253Intangible damage
Section 254Contributory negligence
Section 255Assignment of claims to compensation
Section 256Payment of interest on expenses
Section 257Claim to release
Section 258Right of removal
Section 259Extent of duty to render accounts
Section 260Duties when surrendering objects or providing information on an aggregate of objects
Section 261Modification of a declaration in lieu of an oath; costs
Section 262Alternative obligation; right of choice
Section 263Exercise of the right of choice; effect
Section 264Default by the person entitled to the right of choice
Section 265Impossibility in case of alternative obligations
Section 266Part performance
Section 267Performance by third parties
Section 268Right of redemption of a third party
Section 269Place of performance
Section 270Place of payment
Section 270aAgreements on fees for the use of non-cash means of payment
Section 271Time of performance
Section 271aAgreements on payment deadlines, verification periods or periods for acceptance
Section 272Interim interest
Section 273Right of retention
Section 274Effects of the right of retention
Section 275Exclusion of the duty of performance
Section 276Responsibility of the obligor
Section 277Standard of care in one’s own affairs
Section 278Responsibility of the obligor for third parties
Section 279(repealed)
Section 280Damages for breach of duty
Section 281Damages in lieu of performance for non-performance or failure to render performance as owed
Section 282Damages in lieu of performance for breach of a duty under section 241 (2)
Section 283Damages in lieu of performance where the duty of performance is excluded
Section 284Reimbursement of futile expenses
Section 285Surrender of substitute benefit
Section 286Default of the obligor
Section 287Responsibility during default
Section 288Default interest and other damage caused by default *)
Section 289Prohibition of compound interest
Section 290Interest on compensation for value
Section 291Interest during legal proceedings
Section 292Liability in the case of a duty to surrender
Title 2
Default by the obligee
Section 293Default in acceptance
Section 294Actual offer
Section 295Verbal offer
Section 296Dispensability of the offer
Section 297Inability of the obligor
Section 298Concurrent performance
Section 299Temporary prevention of acceptance
Section 300Effects of default by the obligee
Section 301Cessation of interest
Section 302Emoluments
Section 303Right to abandon possession
Section 304Compensation for extra expenses
Division 2
Drafting contractual obligations by means of standard business terms
Section 305Incorporation of standard business terms into the contract
Section 305aIncorporation in special cases
Section 305bPriority of individually agreed terms
Section 305cSurprising and ambiguous clauses
Section 306Legal consequences of non-incorporation and ineffectiveness
Section 306aProhibition of circumvention
Section 307Test of reasonableness of contents
Section 308Prohibited clauses with the possibility of valuation
Section 309Prohibited clauses without the possibility of valuation
Section 310Scope of application
Division 3
Contractual obligations
Title 1
Creation, subject matter and termination
Subtitle 1
Creation
Section 311Obligations created by legal transaction and obligations similar to legal transactions
Section 311aImpediment preventing performance at conclusion of contract
Section 311bContracts on plots of land, assets and an estate
Section 311cApplication to accessories
Subtitle 2
Principles applying to consumer contracts; particular types of sale
Chapter 1
Scope of application and principles applying to consumer contracts
Section 312Scope of application
Section 312aGeneral obligations and principles applying to consumer contracts; limits to the agreement of remuneration
Chapter 2
Off-premises contracts and distance contracts
Section 312bOff-premises contracts
Section 312cDistance contracts
Section 312dObligations to provide information
Section 312eViolation of information obligations as to costs
Section 312fCopies and confirmations
Section 312gRight of withdrawal
Section 312hTermination and authorisation to terminate
Chapter 3
Contracts concluded in electronic commerce
Section 312iGeneral obligations in electronic commerce
Section 312jSpecial obligations vis-à-vis consumers in electronic commerce
Chapter 4
Deviating agreements and burden of proof
Section 312kDeviating agreements and burden of proof
Subtitle 3
Adaptation and ending of contracts
Section 313Interference with the basis of the transaction
Section 314Termination, for a compelling reason, of contracts for the performance of a continuing obligation
Subtitle 4
Unilateral rights to specify performance
Section 315Specification of performance by one party
Section 316Specification of consideration
Section 317Specification of performance by a third party
Section 318Avoidance of specification
Section 319Ineffectiveness of the specification; substitution
Title 2
Reciprocal contract
Section 320Defence of unperformed contract
Section 321Defence of uncertainty
Section 322Order to perform in return for, and concurrently with, performance
Section 323Rescission for non-performance or for performance not as contractually agreed
Section 324Rescission for breach of a duty under section 241 (2)
Section 325Damages and revocation
Section 326Release from consideration and rescission where the duty of performance is excluded
Title 2a
Contracts on digital products
Subtitle 1
Consumer contracts on digital products
Section 327Scope of application
Section 327aApplication to bundle contracts and contracts relating to things with digital elements
Section 327bSupply of digital products
Section 327cRights in the case of failure to effect supply
Section 327dConformity of digital products
Section 327eProduct deficiency
Section 327fUpdates
Section 327gDefect of title
Section 327hDeviating agreements on product features
Section 327iRights of the consumer in the case of deficiencies
Section 327jLimitation
Section 327kShifting the burden of proof
Section 327lCure
Section 327mTermination of the contract and compensation of damages
Section 327nAbatement
Section 327oDeclaration of termination of contract and its legal consequences
Section 327pContinued use following termination of the contract
Section 327qConsequences under contract law of declarations governed by data protection law made by the consumer
Section 327rModifications of digital products
Section 327sDeviating agreements
Subtitle 2
Special provisions on contracts on digital products between traders
Section 327tScope of application
Section 327uRecourse of the trader
Title 3
Promise of performance to a third party
Section 328Contract for the benefit of third parties
Section 329Interpretation rule where there is an assumption of the duty to perform
Section 330Interpretation rule in the case of life annuity contracts
Section 331Performance after death
Section 332Modification by disposition mortis causa in case of reservation
Section 333Rejection of the right by the third party
Section 334Objections of the obligor in relation to the third party
Section 335Right of the promisee to make demands
Title 4
Earnest, penalty for breach of contract
Section 336Interpretation of earnest
Section 337Crediting or return of the earnest
Section 338Earnest in case of impossibility of performance for which the giver of earnest is responsible
Section 339Payability of penalty for breach of contract
Section 340Promise to pay a penalty for non-performance
Section 341Promise of a penalty for improper performance
Section 342Alternatives to monetary penalty
Section 343Reduction of the penalty
Section 344Ineffective promise of a penalty
Section 345Burden of proof
Title 5
Revocation; right of withdrawal in consumer contracts
Subtitle 1
Rescission
Section 346Effects of rescission
Section 347Emoluments and outlays after rescission
Section 348Satisfaction of obligations in return for, and concurrently with, performance
Section 349Declaration of rescission
Section 350Expiry of the right of rescission after a period of time has been specified
Section 351Indivisibility of the right of rescission
Section 352Set-off after non-performance
Section 353Rescission in return for forfeit money
Section 354Forfeiture of rights
Subtitle 2
Right of withdrawal in the case of consumer contracts
Section 355Right of withdrawal in the case of consumer contracts
Section 356Right of withdrawal in the case of off-premises contracts and distance contracts
Section 356aRight of withdrawal in the case of timeshare contracts, long-term holiday product contracts, brokerage contracts, and exchange system contracts
Section 356bRight of withdrawal in the case of consumer credit agreements
Section 356cRight of withdrawal in the case of contracts for delivery by instalments
Section 356dWithdrawal right of the consumer in the case of credit agreements for a gratuitous loan and in the case of gratuitous financial accommodation
Section 356eRight of withdrawal in the case of construction contracts with consumers
Section 357Legal consequences of the withdrawal from off-premises contracts and distance contracts, to the exception of contracts relating to financial services
Section 357aLegal consequences of the withdrawal from contracts relating to financial services
Section 357bLegal consequences of the withdrawal from timeshare, long-term holiday product, brokerage contracts, and exchange system contracts
Section 357cLegal consequences of the withdrawal from contracts for delivery by instalments that are neither distance contracts nor off-premises contracts
Section 357dLegal consequences of the withdrawal from a construction contract with a consumer
Section 358Contracts linked to the contract from which the consumer has withdrawn
Section 359Objections in the case of linked contracts
Section 360Related contracts
Section 361Further claims, deviating agreements and burden of proof
Division 4
Extinction of obligations
Title 1
Performance
Section 362Extinction by performance
Section 363Burden of proof in the case of acceptance as performance of contract
Section 364Acceptance in lieu of performance of contract
Section 365Warranty in the case of handover in lieu of performance of contract
Section 366Crediting of performance to more than one claim
Section 367Crediting to interest and costs
Section 368Receipt
Section 369Costs of the receipt
Section 370Performance to the bringer of the receipt
Section 371Return of the certificate of indebtedness
Title 2
Deposit
Section 372Prerequisites
Section 373Concurrent performance
Section 374Place of deposit; duty to notify
Section 375Retroactive effect with dispatch by mail
Section 376Right to take back
Section 377Unpledgeability of the right to take back
Section 378Effect of deposit where taking back is excluded
Section 379Effect of deposit where taking back is not excluded
Section 380Proof of entitlement to receive
Section 381Costs of deposit
Section 382Extinction of the right of the obligee
Section 383Auction of things not capable of deposit
Section 384Warning of auction
Section 385Sale by private agreement
Section 386Costs of the auction
Title 3
Set-off
Section 387Prerequisites
Section 388Declaration of set-off
Section 389Effect of set-off
Section 390No set-off against a claim subject to a defence
Section 391Set-off in the case of different places of performance
Section 392Set-off against a seized claim
Section 393No set-off against a claim in tort
Section 394No set-off against an unpledgeable claim
Section 395Set-off against claims of public-law corporations
Section 396More than one claim
Title 4
Forgiveness
Section 397Contract of forgiveness, acknowledgement of non-indebtedness
Division 5
Transfer of a claim
Section 398Assignment
Section 399Exclusion of assignment in case of change of content or by agreement
Section 400Exclusion in case of unpledgeable claims
Section 401Devolution of accessory rights and preferential rights
Section 402Duty to provide information; provision of documents
Section 403Duty of notarial recording
Section 404Objections by the obligor
Section 405Assignment with presentation of documents
Section 406Set-off in relation to the new obligee
Section 407Legal acts in relation to the previous obligee
Section 408Multiple assignments
Section 409Notice of assignment
Section 410Delivery of the assignment document
Section 411Assignment of salary
Section 412Statutory devolution of claims
Section 413Transfer of other rights
Division 6
Assumption of debt
Section 414Contract between obligee and transferee
Section 415Contract between obligor and transferee
Section 416Assumption of a mortgage debt
Section 417Objections of the transferee
Section 418Extinction of security rights and preferential rights
Section 419(repealed)
Division 7
More than one obligor and obligee
Section 420Divisible performance
Section 421Joint and several debtors
Section 422Effect of performance
Section 423Effect of forgiveness
Section 424Effect of default by the obligee
Section 425Effect of other facts
Section 426Duty to adjust advancements, devolution of claim
Section 427Joint contractual duty
Section 428Joint and several obligees
Section 429Effect of changes
Section 430Duty of the joint and several obligees to adjust advancements
Section 431More than one obligor of indivisible performance
Section 432More than one obligee of indivisible performance
Division 8
Particular types of obligations
Title 1
Purchase, exchange
Subtitle 1
General provisions
Section 433Contractual duties typical for a purchase agreement
Section 434Material defects
Section 435Defects of title
Section 436Public charges on plots of land
Section 437Rights of buyer in the case of defects
Section 438Limitation of claims for defects
Section 439Cure
Section 440Special provisions on rescission and damages
Section 441Abatement of price
Section 442Knowledge of the buyer
Section 443Guarantee
Section 444Exclusion of liability
Section 445Limitation of liability in the case of public auctions
Section 445aRecourse of the seller
Section 445bLimitation of recourse claims
Section 445cRecourse in the case of contracts on digital products
Section 446Devolution of risk and of charges
Section 447Devolution of risk in the case of sales shipment
Section 448Costs of delivery and comparable costs
Section 449Retention of title
Section 450Excluded buyers in the case of certain sales
Section 451Purchase by excluded buyer
Section 452Purchase of a ship
Section 453Purchase of rights, consumer contract on the purchase of digital content
Subtitle 2
Special types of purchase
Chapter 1
Purchase on approval
Section 454Coming into existence of the purchase agreement
Section 455Approval period
Chapter 2
Repurchase
Section 456Coming into existence of the repurchase agreement
Section 457Liability of the reseller
Section 458Removal of third-party rights
Section 459Reimbursement of outlays
Section 460Repurchase at estimated value
Section 461More than one person entitled to repurchase
Section 462Cut-off period
Chapter 3
Preemption
Section 463Prerequisites for exercise
Section 464Exercise of the right of preemption
Section 465Ineffective agreements
Section 466Collateral performance
Section 467Total price
Section 468Deferral of the purchase price
Section 469Duty to notify, exercise period
Section 470Sale to heir on intestacy
Section 471Sale in case of compulsory enforcement or insolvency
Section 472More than one person with a right of preemption
Section 473Non-transferability
Subtitle 3
Purchase of consumer goods
Section 474Purchase of consumer goods
Section 475Applicable provisions
Section 475aContract for the sale of consumer goods relating to digital products
Section 475bMaterial defect of a good with digital elements
Section 475cMaterial defect of a good with digital elements where the digital elements are supplied on a continuous basis
Section 475dSpecial provisions on rescission and compensation of damages
Section 475eSpecial provisions on limitation
Section 476Deviating agreements
Section 477Shifting the burden of proof
Section 478Special provisions concerning recourse by the trader
Section 479Special provisions for guarantees
Subtitle 4
Exchange
Section 480Exchange
Title 2
Timeshare contracts, long-term holiday product contracts, brokerage contracts and exchange system contracts
Section 481Time share contracts
Section 481aLong-term holiday product contract
Section 481bFacilitation contract, exchange system contract
Section 482Preliminary contract information, advertising and prohibition of sale as an investment
Section 482aInstructions on the right of withdrawal
Section 483Language of the contract and of the pre-contractual information
Section 484Form and content of the contract
Section 485Right of withdrawal
Section 486Prohibition of down payment
Section 486aSpecial provisions for long-term holiday product contracts
Section 487Deviating agreements
Title 3
Loan contract; financial accommodation and contracts for delivery by instalments between a trader and a consumer
Subtitle 1
Loan contract
Chapter 1
General provisions
Section 488Contractual duties typical for a credit agreement
Section 489Right of the borrower to give notice of termination in accordance with usual procedure
Section 490Right to terminate for cause
Chapter 2
Special provisions for consumer credit agreements
Section 491Consumer credit agreement
Section 491aPreliminary contract information obligations with consumer credit agreements
Section 492Written form, contents of the contract
Section 492aTying practices in the case of consumer credit agreements relating to immovable property
Section 492bPermissible tying practices
Section 493Information during the contractual relationship
Section 494Legal consequences of defects of form
Section 495Right of withdrawal; reflection period
Section 496Waiver of objections, prohibition of bills of exchange and cheques
Section 497Default of the borrower
Section 498Calling in entire loan in the case of loans repayable in instalments
Section 499Right of the lender to terminate; right to refuse performance
Section 500Termination right of the borrower; early repayment
Section 501Cost reduction in the case of early repayment and in the case of termination
Section 502Compensation for early repayment of a loan
Section 503Conversion to an alternative currency of a foreign-currency consumer credit agreement relating to immovable property
Section 504Granted overdraft
Section 504aObligation to provide advisory services where the overdraft facility is used
Section 505Tolerated overdraft
Section 505aObligation to perform a creditworthiness assessment for consumer credit agreements
Section 505bBasis of the creditworthiness assessment in the case of consumer credit agreements
Section 505cFurther obligations in the case of consumer credit agreements relating to immovable property secured by a mortgage or by a charge on land
Section 505dBreach of the obligation to conduct an assessment of creditworthiness
Section 505eAuthorisation to issue statutory instruments
Subtitle 2
Financial accommodation between a trader and a consumer
Section 506Deferment of payment, other financial accommodation
Section 507Instalment payment transactions
Section 508Revocation with regard to instalment payment transactions
Section 509(repealed)
Subtitle 3
Contracts for delivery by instalments between a trader and a consumer
Section 510Contracts for delivery by instalments
Subtitle 4
Advisory services provided in the case of consumer credit agreements relating to immovable property
Section 511Advisory services provided in the case of consumer credit agreements relating to immovable property
Subtitle 5
Mandatory nature, application to founders of new businesses
Section 512Deviating agreements
Section 513Application to founders of new businesses
Subtitle 6
Gratuitous credit agreements and gratuitous financial accommodation between a trader and a consumer
Section 514Gratuitous credit agreements
Section 515Gratuitous financial accommodation
Title 4
Donation
Section 516Concept of donation
Section 516aConsumer contract on the donation of digital products
Section 517Failure to acquire assets
Section 518Form of promise of donation
Section 519Defence of paying for necessaries
Section 520Expiry of the promise of an annuity
Section 521Liability of the donor
Section 522No default interest
Section 523Liability for defects of title
Section 524Liability for material defects
Section 525Donation subject to conditions
Section 526Refusal to fulfil the condition
Section 527Non-fulfilment of the condition
Section 528Claim for return due to impoverishment of the donor
Section 529Exclusion of claim for return
Section 530Revocation of donation
Section 531Declaration of revocation
Section 532Exclusion of revocation
Section 533Waiver of the right of revocation
Section 534Donations for duty and decency
Title 5
Lease, usufructuary lease
Subtitle 1
General provisions for leases
Section 535Contents and primary duties of the lease agreement
Section 536Abatement of the rent for material defects and defects of title
Section 536aClaim of lessee for damages and reimbursement of expenses due to a defect
Section 536bLessee knows of the defect at conclusion of the contract or upon acceptance
Section 536cDefects occurring during the lease period; notice of defect by the lessee
Section 536dContractual exclusion of rights of lessee with regard to defects
Section 537Payment of rent when the lessee is unable to be present in person
Section 538Wear and tear on the leased property from contractually agreed use
Section 539Reimbursement of other expenses and right of removal of the lessee
Section 540Making available the leased property for use use by third parties
Section 541Application for prohibitory injunction in the case of use in breach of contract
Section 542End of the lease
Section 543Termination for cause without notice for a compelling reason
Section 544Lease for more than 30 years
Section 545Tacit extension of the lease
Section 546Duty of lessee to return
Section 546aCompensation of the lessor in the case of late return
Section 547Reimbursement of rent paid in advance
Section 548Limitation of compensation claims and of the right of removal
Section 548aLease of digital products
Subtitle 2
Leases for residential space
Chapter 1
General provisions
Section 549Provisions applicable to leases of residential space
Section 550Form of the lease agreement
Section 551Restriction and investment of rent security deposits
Section 552Warding off the right of removal of the lessee
Section 553Making residential space available for use by third parties
Section 554Improved accessibility, e-mobility and burglary protection
Section 555Ineffectiveness of a penalty for breach of contract
Chapter 1a
Structural maintenance and modernisation measures
Section 555aStructural maintenance measures
Section 555bModernisation measures
Section 555cAnnouncement of modernisation measures
Section 555dToleration of modernisation measures, time limit
Section 555eSpecial right of termination of the lessee in case of modernisation measures
Section 555fAgreements on structural maintenance or modernisation measures
Chapter 2
Rent
Subchapter 1
Agreements on rent
Section 556Agreements on operating costs
Section 556aAccounting criterion for operating costs
Section 556bDue date of rent, right to set-off and right of retention
Section 556cCosts of heat supply as operating costs, authorisation to issue statutory instruments
Subchapter 1a
Agreements on the rent amount at commencement of the lease in areas in which the housing market is under pressure
Section 556dPermissible rent amount at commencement of the lease; authorisation to issue statutory instruments
Section 556eConsideration of the rent paid previously, or of modernisation work done
Section 556fExceptions
Section 556gLegal consequences; information on the rent
Subchapter 2
Provisions on the rent amount
Section 557Increases in rent by agreement or law
Section 557aStepped rent
Section 557bIndexed rent
Section 558Increase in rent up to the reference rent customary in the locality
Section 558aForm and justification of the rent increase
Section 558bApproval of a rent increase
Section 558cList of representative rents
Section 558dExpert list of representative rents
Section 558eRent database
Section 559Rent increase after modernisation measures
Section 559aCrediting of third-party funds
Section 559bAssertion of an increase; effect of declaration of increase
Section 559cSimplified procedure
Section 559dBreaches of duty in announcing or implementing structural changes
Section 560Changes in operating costs
Section 561Special right of termination of the lessee following a rent increase
Chapter 3
Security right of the lessor
Section 562Extent of the security right of the lessor
Section 562aExtinction of the security right of the lessor
Section 562bSelf-help; claim to surrender
Section 562cWarding off the security right by provision of security
Section 562dAttachment by a third party
Chapter 4
Change of contractual parties
Section 563Right of accession upon death of the lessee
Section 563aContinuation with surviving lessees
Section 563bLiability in the case of accession or continuation
Section 564Continuation of the lease with the heir; termination for cause
Section 565Commercial subletting
Section 566Purchase is subject to existing leases
Section 566aRent security deposit
Section 566bAdvance disposition over the rent
Section 566cAgreement between lessee and lessor on the rent
Section 566dSet-off by the lessee
Section 566eNotification by the lessor of the devolution of ownership
Section 567Encumbrance of the residential space by the lessor
Section 567aAlienation or encumbrance prior to residential space being made available for use
Section 567bOnward alienation or encumbrance by the acquirer
Chapter 5
Termination of the lease
Subchapter 1
General provisions
Section 568Form and contents of the notice of termination
Section 569Termination for cause without notice for a compelling reason
Section 570Exclusion of the right of retention
Section 571Further compensation of damages for late return of residential space
Section 572Agreement on right of rescission; lease subject to condition subsequent
Subchapter 2
Leases for an indefinite period of time
Section 573Notice of termination by the lessor in accordance with usual procedure
Section 573aEased termination by the lessor
Section 573bPartial termination by the lessor
Section 573cPeriods of time to be observed in giving notice of termination in accordance with usual procedure
Section 573dTermination for cause observing the statutory notice period
Section 574Objection of lessee to termination
Section 574aContinuation of lease after objection
Section 574bRequirements as to form and period of time for objection
Section 574cFurther continuation of the lease in the case of unforeseen circumstances
Subchapter 3
Leases for a specified period of time
Section 575Fixed-term lease
Section 575aTermination for cause observing the statutory notice period
Subchapter 4
Tied dwellings
Section 576Periods of time to be observed in giving notice of termination in accordance with usual procedure in the case of tied leased dwellings
Section 576aSpecial features of the right to raise an objection in the case of tied leased dwellings
Section 576bApplication of landlord and tenant law accordingly in connection with tied dwellings
Chapter 6
Special features when creating title to leased residences
Section 577Lessee’s right of preemption
Section 577aRestriction of termination in connection with conversion of the dwelling
Subtitle 3
Leases of other things and digital products
Section 578Leases of plots of land and premises
Section 578aLease of registered ships
Section 578bContracts on the lease of digital products
Section 579Due date of the rent
Section 580Notice of termination for cause in the case of the death of the lessee
Section 580aNotice periods
Subtitle 4
Usufructuary lease
Section 581Contractual duties typical for a usufructuary lease
Section 582Maintenance of inventory
Section 582aAssumption of inventory at its estimated value
Section 583Security right of usufructuary lessee over inventory
Section 583aRestrictions on disposition over inventory
Section 584Period of notice
Section 584aExclusion of certain rights of termination under landlord and tenant law
Section 584bLate return
Subtitle 5
Farm lease
Section 585Concept of farm lease
Section 585aForm of a farm lease
Section 585bDescription of the leased property
Section 586Contractual duties typical for a farm lease
Section 586aEncumbrances on the leased property
Section 587Due date of rent; payment of rent where the usufructuary lessee is personally prevented
Section 588Measures of maintenance or improvement
Section 589Making available the leased property to third parties for their use
Section 590Change of agricultural purpose or of previous use
Section 590aUse in breach of contract
Section 590bNecessary outlays
Section 591Outlays that increase value
Section 591aRemoval of installations
Section 591bLimitation of compensation claims
Section 592Security right of the usufructuary lessor
Section 593Amendment of farm leases
Section 593aTransfer of a business
Section 593bAlienation or encumbrance of the leased property
Section 594Termination and extension of the lease
Section 594aNotice periods
Section 594bLease for more than 30 years
Section 594cTermination in the case of occupational disability of the usufructuary lessee
Section 594dDeath of the usufructuary lessee
Section 594eTermination for cause without notice for a compelling reason
Section 594fWritten form of termination
Section 595Continuation of the lease
Section 595aEarly notice of termination of farm leases
Section 596Return of the leased property
Section 596aDuty to compensate for early termination of lease
Section 596bDuty to leave behind
Section 597Late return
Title 6
Gratuitous loan
Section 598Contractual duties typical for the case of a gratuitous loan
Section 599Liability of the lender
Section 600Liability for defects
Section 601Reimbursement of outlays
Section 602Wear and tear on the thing
Section 603Contractually agreed use
Section 604Duty to return
Section 605Right of termination
Section 606Short limitation period
Title 7
Contract for the loan of a thing
Section 607Contractual duties typical for a contract for the loan of a thing
Section 608Termination
Section 609Payment
Section 610(repealed)
Title 8
Service contract and similar contracts
Subtitle 1
Service contract
Section 611Contractual duties typical for a service contract
Section 611aEmployment contract
Section 611b(repealed)
Section 612Remuneration
Section 612aProhibition of victimisation
Section 613Non-transferability
Section 613aRights and duties in the case of transfer of business
Section 614Due date of remuneration
Section 615Remuneration in the case of default in acceptance and business risk
Section 616Temporary prevention from performing services
Section 617Duty of medical care
Section 618Duty to take protective measures
Section 619Absolute nature of welfare duties
Section 619aBurden of proof when the employee is liable
Section 620End of services relationship
Section 621Periods of notice for service relationships
Section 622Notice periods in the case of employment relationships
Section 623Written form of termination
Section 624Notice period in the case of contracts lasting longer than five years
Section 625Tacit extension
Section 626Termination without notice for a compelling reason
Section 627Termination without notice in the case of a position of trust
Section 628Partial remuneration and damages in case of termination without notice
Section 629Time off for search for employment
Section 630Duty to provide a reference
Subtitle 2
Treatment contract
Section 630aContractual duties typical for a treatment contract
Section 630bApplicable provisions
Section 630cCooperation between the contracting parties; obligations to provide information
Section 630dConsent
Section 630eObligations to provide information
Section 630fDocumentation of the treatment
Section 630gInspection of the medical records
Section 630hBurden of proof in case of liability for malpractice and errors in providing information
Title 9
Contract to produce a work and similar contracts
Subtitle 1
Contract to produce a work
Chapter 1
General provisions
Section 631Contractual duties typical for a contract to produce a work
Section 632Remuneration
Section 632aPart payments
Section 633Material defects and defects of title
Section 634Rights of the customer in the case of defects
Section 634aLimitation of claims for defects
Section 635Cure
Section 636Special provisions on rescission and damages
Section 637Self-help
Section 638Abatement of price
Section 639Exclusion of liability
Section 640Acceptance
Section 641Due date of remuneration
Section 641a(repealed)
Section 642Cooperation by the customer
Section 643Termination for failure to collaborate
Section 644Allocation of risk
Section 645Responsibility of the customer
Section 646Completion in lieu of acceptance
Section 647Security right of the contractor
Section 647aMortgage of the owner of a shipyard
Section 648Right of termination of the customer
Section 648aTermination for a compelling reason
Section 649Cost estimate
Section 650Contract for work and materials; consumer contract on the production of digital products
Chapter 2
Construction contract
Section 650aConstruction contract
Section 650bAmendment of the contract; right of the customer to issue orders
Section 650cAdjustment of remuneration in case of orders pursuant to section 650b (2)
Section 650dInjunction
Section 650eMortgage of a building contractor
Section 650fBuilder’s security
Section 650gDetermination of the status in the case of acceptance being refused; final invoice
Section 650hWritten form of the termination
Chapter 3
Construction contract with a consumer
Section 650iConstruction contract with a consumer
Section 650jSpecifications
Section 650kSubject matter of the contract
Section 650lRight of withdrawal
Section 650mPart payments; security for the claim to remuneration
Section 650nPreparation of documents and surrender
Chapter 4
Mandatory nature
Section 650oDeviating agreements
Subtitle 2
Contract for architectural services and contract for engineering services
Section 650pContractual duties typical for contracts for architectural and for engineering services
Section 650qApplicable provisions
Section 650rSpecial right of termination
Section 650sPartial acceptance
Section 650tJoint and several liability with the contractor executing the construction work
Subtitle 3
Developer contract
Section 650uDeveloper contract; applicable provisions
Section 650vPart payments
Subtitle 4
Package travel contract, brokerage of travel contracts and brokerage of linked travel arrangements
Section 651aContractual duties typical for a package travel contract
Section 651bDelimitation from brokerage
Section 651cLinked online booking processes
Section 651dObligations to provide information; contents of the contract
Section 651eTransfer of contract
Section 651fReservations of the right to modify; price reduction
Section 651gSignificant amendments of the contract
Section 651hRescission before the start of the package
Section 651iRights of the traveller in the case of a lack of conformity of the package
Section 651jLimitation
Section 651kRemedy
Section 651lTermination
Section 651mAbatement of the price
Section 651nDamages
Section 651oNotification by the traveller of a lack of conformity
Section 651pAdmissible limitation of liability; set-off
Section 651qOrganiser’s obligation to provide assistance
Section 651rInsolvency protection; security certificate
Section 651sInsolvency protection of the organisers established in the European Economic Area
Section 651tRepatriation, prepayments
Section 651uExchange student stays
Section 651vFacilitation of travel
Section 651wFacilitation of linked travel arrangements
Section 651xLiability for booking errors
Section 651yDeviating agreements
Title 10
Brokerage contract
Subtitle 1
General provisions
Section 652Accrual of fee claim
Section 653Brokerage fee
Section 654Forfeiture of the fee claim
Section 655Reduction of the brokerage fee
Subtitle 2
Intermediation of consumer credit agreements and non-gratuitous financial accommodation
Section 655aCredit intermediation contract
Section 655bWritten form in the case of a contract with a consumer
Section 655cRemuneration
Section 655dAncillary payment
Section 655eDeviating agreements, application to founders of new businesses
Subtitle 3
Marriage broking
Section 656Marriage broking
Subtitle 4
Brokerage of purchase contracts for flats and single family houses
Section 656aText form
Section 656bPersonal scope of sections 656c and 656d
Section 656cFee claim in the case of the broker working for both parties
Section 656dAgreements on the broker’s costs
Title 11
Promise of a reward
Section 657Binding promise
Section 658Revocation
Section 659Act undertaken more than once
Section 660Collaboration by more than one person
Section 661Prize competition
Section 661aPromises of prizes
Title 12
Mandate, contract for the management of the affairs of another and payment services
Subtitle 1
Mandate
Section 662Contractual duties typical for a mandate
Section 663Duty to notify in the case of rejection
Section 664Non-transferability; liability for assistants
Section 665Deviation from instructions
Section 666Duty of information and duty to render accounts
Section 667Duty to surrender
Section 668Interest on money used
Section 669Duty of advance payment
Section 670Reimbursement of expenses
Section 671Withdrawal; termination
Section 672Death or incapacity to contract of the mandator
Section 673Death of the mandatary
Section 674Legal construct of continuation
Subtitle 2
Contract for the management of the affairs of another
Section 675Non-gratuitous management of the affairs of another
Section 675aDuties to provide information
Section 675bOrders to transfer securities in systems
Subtitle 3
Payment services
Chapter 1
General provisions
Section 675cPayment services and e-money
Section 675dInformation on payment services
Section 675eDeviating agreements
Chapter 2
Payment services contract
Section 675fPayment services contract
Section 675gAmendment of the framework contract on payment services
Section 675hNotice of termination in accordance with usual procedure of a framework contract on payment services
Section 675iExceptions for low-value payment instruments and e-money
Chapter 3
Provision and use of payment services
Subchapter 1
Authorisation of payment transactions; payment instruments; refusal of access to the payment account
Section 675jConsent and withdrawal of consent
Section 675kRestrictions on the use of a payment instrument; refusal of access to the payment account
Section 675lObligations of the payment service user with regard to payment instruments
Section 675mObligations of the payment service provider with regard to payment instruments; risk of dispatch
Subchapter 2
Execution of payment transactions
Section 675nReceipt of payment orders
Section 675oRefusal of payment orders
Section 675pIrrevocability of a payment order
Section 675qCharges for payment transactions
Section 675rExecution of a payment transaction using unique identifiers
Section 675sExecution deadline for payment transactions
Section 675tValue date and availability of funds; blocking available funds
Subchapter 3
Liability
Section 675uLiability of the payment service provider for unauthorised payment transactions
Section 675vLiability of the payer in case of misappropriation of a payment instrument
Section 675wProof of authentication
Section 675xRefund claim in case of an authorised payment transaction initiated by or through the payee
Section 675yLiability of the payment service provider in case of non-execution, defective or late execution of a payment order; obligation to make enquiries
Section 675zOther claims in case of non-execution, defective or late execution of a payment order or in case of an unauthorised payment transaction
Section 676Proof of execution of payment transactions
Section 676aEqualisation claim
Section 676bNotification of unauthorised or incorrectly executed payment transactions
Section 676cDisclaimer
Title 13
Voluntary agency without specific authorisation
Section 677Duties of the voluntary agent
Section 678Agency contrary to the will of the principal
Section 679Irrelevance of the contrary will of the principal
Section 680Agency of necessity
Section 681Ancillary duties of the voluntary agent
Section 682Lack of capacity to contract on the part of the voluntary agent
Section 683Reimbursement of expenses
Section 684Surrender of enrichment
Section 685Intention to donate
Section 686Error as to the identity of the principal
Section 687False voluntary agency without specific authorisation
Title 14
Safekeeping
Section 688Contractual duties typical for safekeeping
Section 689Remuneration
Section 690Liability for gratuitous safekeeping
Section 691Deposit with third parties
Section 692Change of safekeeping
Section 693Reimbursement of expenses
Section 694Liability in damages of the depositor
Section 695Right of the depositor to demand return
Section 696Claim of depositary for repossession of the thing deposited
Section 697Place for return
Section 698Interest on money used
Section 699Due date of remuneration
Section 700Irregular safekeeping contract
Title 15
Bringing things onto the premises of innkeepers
Section 701Liability of the innkeeper
Section 702Limitation of liability; valuables
Section 702aRelease from liability
Section 703Extinction of the claim for damages
Section 704Security right of the innkeeper
Title 16
Partnership
Section 705Contents of partnership agreement
Section 706Contributions of the partners
Section 707Increase of the agreed contribution
Section 707a to 707c(will enter into force at a future time)
Section 707dAuthorisation to issue statutory instruments
Section 708Liability of the partners
Section 709Joint management
Section 710Transfer of management
Section 711Right to object
Section 712Revocation and dismissal of management
Section 713Rights and duties of managing partners
Section 714Power of agency
Section 715Revocation of the power of agency
Section 716Right of control of the partners
Section 717Non-transferability of partner rights
Section 718Partnership assets
Section 719Joint assets
Section 720Protection of good-faith debtor
Section 721Distribution of profits and losses
Section 722Shares in profits and losses
Section 723Termination by partner
Section 724Notice of termination in the case of a partnership for life or a continuing partnership
Section 725Termination by attachment creditors
Section 726Dissolution due to achievement or impossibility of its object
Section 727Dissolution due to the death of a partner
Section 728Dissolution due to insolvency of the partnership or one of its partners
Section 729Continuation of authority to manage
Section 730Winding-up of the partnership; management
Section 731Procedure for winding-up of the partnership
Section 732Return of objects
Section 733Discharge of partnership debts; reimbursement of capital contributions
Section 734Distribution of the surplus
Section 735Duty to make subsequent contributions in case of loss
Section 736Retirement of a partner; continuing liability
Section 737Exclusion of a partner
Section 738Winding-up of the partnership on retirement
Section 739Liability for deficit
Section 740Sharing in the financial results of pending transactions
Title 17
Co-ownership
Section 741Co-ownership by defined shares
Section 742Equal shares
Section 743Share in the fruits; authority to use
Section 744Joint administration
Section 745Administration and use by resolution
Section 746Effect in relation to successors in interest
Section 747Disposition over a share and joint objects
Section 748Bearing of charges and costs
Section 749Claim to dissolution
Section 750Exclusion of dissolution in case of death
Section 751Exclusion of dissolution and successors in interest
Section 752Division in kind
Section 753Division by sale
Section 754Sale of joint claims
Section 755Discharge of a joint debt
Section 756Discharge of the debt of a part owner
Section 757Warranty upon allocation to a part owner
Section 758Claim to dissolution not subject to the statute of limitations
Title 18
Life annuity
Section 759Duration and amount of the annuity
Section 760Advance payment
Section 761Form of life annuity commitment
Title 19
Imperfect obligations
Section 762Gaming, betting
Section 763Lottery contracts and gaming contracts
Section 764(repealed)
Title 20
Suretyship
Section 765Contractual duties typical for suretyship
Section 766Written form of the declaration of suretyship
Section 767Extent of the suretyship debt
Section 768Defences of a surety
Section 769Co-suretyship
Section 770Defences of voidability and set-off
Section 771Defence of failure to pursue remedies
Section 772Duty of creditor of enforcement and realisation
Section 773Exclusion of defence of failure to pursue remedies
Section 774Statutory devolution of claims
Section 775Claim to release of the surety
Section 776Waiver of a security
Section 777Temporary suretyship
Section 778Credit mandate
Title 21
Settlement
Section 779Concept of settlement; mistake as to the basis of the settlement
Title 22
Promise to fulfil an obligation; acknowledgement of debt
Section 780Promise to fulfil an obligation
Section 781Acknowledgement of a debt
Section 782No requirements as to form for settlement
Title 23
Order
Section 783Rights derived from instruction
Section 784Acceptance of the instruction
Section 785Handover of the instruction
Section 786(repealed)
Section 787Instruction to assume debt
Section 788Underlying debt relationship
Section 789Duty of recipient of the document setting out the instruction to notify
Section 790Revocation of the instruction
Section 791Death or incapacity to contract of a party involved
Section 792Transfer of the instruction
Title 24
Bearer bond
Section 793Rights under a bearer bond
Section 794Liability of the issuer
Section 795(repealed)
Section 796Objections of the issuer
Section 797Duty to render performance only in return for handover
Section 798Replacement instrument
Section 799Declaration of invalidity
Section 800Effect of the declaration of invalidity
Section 801Extinction; prescription
Section 802Blockage of payment
Section 803Interest coupons
Section 804Loss of interest coupons or similar coupons
Section 805New interest coupons and annuity coupons
Section 806Reregistration under name
Section 807Bearer tickets and stamps
Section 808Registered securities with bearer clause
Title 25
Presentation of things
Section 809Inspection of a thing
Section 810Right to inspect instruments
Section 811Place of presentation, risk and costs
Title 26
Unjust enrichment
Section 812Claim to surrender
Section 813Performance notwithstanding defence
Section 814Knowledge that debt is not owed
Section 815Non-occurrence of result
Section 816Disposition by an unauthorised person
Section 817Breach of law or act offending common decency
Section 818Scope of the claim to enrichment
Section 819Increased liability in case of knowledge and in cases of breaches of law or acts offending common decency
Section 820Increased liability where the result is uncertain
Section 821Enrichment defence
Section 822Duty to surrender of third parties
Title 27
Torts
Section 823Liability in damages
Section 824Endangering credit
Section 825Inducing others to sexual acts
Section 826Intentional damage inflicted in a manner offending common decency
Section 827Exclusion and reduction of responsibility
Section 828Minors
Section 829Liability in damages for reasons of equity
Section 830Joint tortfeasors and persons involved
Section 831Liability for vicarious agents
Section 832Liability of a person with a duty of supervision
Section 833Liability of animal keeper
Section 834Liability of animal minder
Section 835(repealed)
Section 836Liability of the owner of a plot of land
Section 837Liability of building possessor
Section 838Liability of the person with a duty of upkeep regarding a building
Section 839Liability in case of breach of official duty
Section 839aLiability of court-appointed expert
Section 840Liability of more than one person
Section 841Compensation for liability of a public official
Section 842Extent of liability in damages in case of injury of a person
Section 843Annuity in money or lump sum settlement
Section 844Third-party compensation claims in the case of death
Section 845Compensation claims for lost services
Section 846Contributory negligence of the injured person
Section 847(repealed)
Section 848Liability for chance in the case of deprivation of a thing
Section 849Interest on the compensation sum
Section 850Reimbursement of outlays
Section 851Compensation payment to unauthorised parties
Section 852Claim to surrender after end of limitation period
Section 853Defence of bad faith
Book 3
Law of property
Division 1
Possession
Section 854Acquisition of possession
Section 855Agent in possession
Section 856Ending of possession
Section 857Inheritability
Section 858Prohibited interference with possession
Section 859Self-help by the possessor
Section 860Self-help by the agent in possession
Section 861Claim on account of deprivation of possession
Section 862Claim on account of interference with possession
Section 863Objections of the party depriving of possession or of the disturber
Section 864Extinction of claims to possession
Section 865Part possession
Section 866Co-possession
Section 867Possessor’s right of pursuit
Section 868Indirect possession
Section 869Claims of the indirect possessor
Section 870Transfer of indirect possession
Section 871Multilevel indirect possession
Section 872Proprietary possession
Division 2
General provisions on rights in land
Section 873Acquisition by agreement and registration
Section 874Reference to approval of registration
Section 875Cancellation of a right
Section 876Cancellation of an encumbered right
Section 877Alterations of rights
Section 878Subsequent restrictions on disposition
Section 879Order of priority of more than one right
Section 880Change of priority
Section 881Reservation of priority
Section 882Maximum amount of compensation for lost value
Section 883Prerequisites and effect of priority notice
Section 884Effect in relation to heirs
Section 885Prerequisite for the entry of the priority notice
Section 886Claim for removal
Section 887Judicial call of the priority notice claimant
Section 888Claim to approval of the person entitled to the priority notice
Section 889Exclusion of merger for rights in rem
Section 890Union of plots of land; addition
Section 891Statutory presumption
Section 892Presumption of legal force of the contents of the Land Register
Section 893Legal transaction with the person entered in the Land Register
Section 894Correction of the Land Register
Section 895Prior entry of the person obliged
Section 896Submission of certificate
Section 897Costs of correction
Section 898Claims to correction not subject to the statute of limitations
Section 899Entry of an objection
Section 899aProvisos for civil-law partnerships
Section 900Acquisition by prescription following entry in the Land Register
Section 901Extinction of rights not entered in the Land Register
Section 902Rights entered in the Land Register not subject to the statute of limitations
Division 3
Ownership
Title 1
Subject matter of ownership
Section 903Powers of the owner
Section 904Necessity
Section 905Restriction of ownership
Section 906Introduction of imponderable substances
Section 907Facilities threatening danger
Section 908Imminent collapse of building
Section 909Excavation
Section 910Overhang
Section 911Falling fruit
Section 912Encroachment; duty to tolerate
Section 913Payment of periodical payments for encroachment
Section 914Priority, registration and extinction of periodical payments
Section 915Purchase
Section 916Adverse effect on heritable building right or servitude
Section 917Right of way of necessity
Section 918Exclusion of the right of way of necessity
Section 919Boundary marking
Section 920Confusion of boundaries
Section 921Joint use of boundary installations
Section 922Manner of use and maintenance
Section 923Boundary tree
Section 924Neighbour-law claims not subject to the statute of limitations
Title 2
Acquisition and loss of ownership of plots of land
Section 925Declaration of conveyance
Section 925aDocument of land transaction
Section 926Accessories of the plot of land
Section 927Judicial call procedure
Section 928Relinquishment of ownership, appropriation by fiscal authority
Title 3
Acquisition and loss of ownership of movable things
Subtitle 1
Transfer
Section 929Agreement and delivery
Section 929aAgreement with regard to unregistered ship
Section 930Constructive delivery
Section 931Assignment of claim to surrender
Section 932Good faith acquisition from a person not entitled
Section 932aGood faith acquisition of unregistered ships
Section 933Good faith acquisition on constructive delivery
Section 934Good faith acquisition on assignment of claim to surrender
Section 935No good faith acquisition of lost things
Section 936Extinction of third party rights
Subtitle 2
Acquisition by prescription
Section 937Prerequisites, exclusion in the case of knowledge
Section 938Presumption of proprietary possession
Section 939Suspension of prescription
Section 940Interruption by loss of possession
Section 941Interruption by act of execution
Section 942Effect of interruption
Section 943Acquisition by prescription and succession in title
Section 944Possessor of an inheritance
Section 945Extinction of third party rights
Subtitle 3
Combination, intermixture, processing
Section 946Combination with a plot of land
Section 947Combination with movable things
Section 948Intermixture
Section 949Extinction of third party rights
Section 950Processing
Section 951Compensation for loss of rights
Section 952Ownership of documents of debt
Subtitle 4
Acquisition of products and other components of a thing
Section 953Ownership of separated products and components
Section 954Acquisition by person entitled in rem
Section 955Acquisition by proprietary possessor in good faith
Section 956Acquisition by person entitled in personam
Section 957Permission by the person not entitled
Subtitle 5
Appropriation
Section 958Acquisition of ownership of ownerless movable things
Section 959Abandonment of ownership
Section 960Wild animals
Section 961Loss of ownership of bee swarms
Section 962Right of pursuit of the owner
Section 963Merging of bee swarms
Section 964Intermixture of bee swarms
Subtitle 6
Finding
Section 965Duty of the finder to notify
Section 966Duty of safekeeping
Section 967Duty to deliver
Section 968Extent of liability
Section 969Surrender to the loser
Section 970Reimbursement of expenses
Section 971Finder’s reward
Section 972Right of retention of the finder
Section 973Acquisition of ownership by the finder
Section 974Acquisition of ownership after concealment
Section 975Rights of the finder after delivery
Section 976Acquisition of ownership by the municipality
Section 977Claim in enrichment
Section 978Finding in public authority or transport agency
Section 979Sale; authorisation to issue an ordinance
Section 980Notice by publication of the finding
Section 981Receipt of the proceeds of auction
Section 982Provisions for implementation
Section 983Undeliverable things in the possession of authorities
Section 984Treasure trove
Title 4
Claims arising from ownership
Section 985Claim to surrender
Section 986Objections of the possessor
Section 987Emoluments after litigation is pending
Section 988Emoluments of the possessor who makes no payment
Section 989Damages after litigation is pending
Section 990Liability of possessor with knowledge
Section 991Liability of intermediary possessor in the case of indirect possession
Section 992Liability of the wrongful possessor
Section 993Liability of the possessor in good faith
Section 994Necessary outlays
Section 995Charges
Section 996Useful outlays
Section 997Right of removal
Section 998Farming costs for agricultural plot of land
Section 999Reimbursement of outlays of the predecessor in title
Section 1000Right of retention of the possessor
Section 1001Action for reimbursement of outlays
Section 1002Extinction of the claim for outlays
Section 1003Right to satisfaction of the possessor
Section 1004Claim for removal and injunction
Section 1005Right of pursuit
Section 1006Presumption of ownership for possessor
Section 1007Claims of the former possessor, exclusion in the case of knowledge
Title 5
Co-ownership
Section 1008Co-ownership by fractional shares
Section 1009Encumbrance to the benefit of a co-owner
Section 1010Successor in interest of a co-owner
Section 1011Claims arising from co-ownership
Sections 1012 - 1017(repealed)
Division 4
Servitudes
Title 1
Easements
Section 1018Statutory definition of easement
Section 1019Benefit of the dominant plot of land
Section 1020Considerate use
Section 1021Agreed duty of maintenance
Section 1022Installations on building structures
Section 1023Moving the use
Section 1024Coincidence of more than one right of use
Section 1025Division of the dominant plot of land
Section 1026Division of the servient plot of land
Section 1027Interference with easement
Section 1028Limitation
Section 1029Protection of possession of the lawful possessor
Title 2
Usufruct
Subtitle 1
Usufruct in things
Section 1030Statutory definition of usufruct in things
Section 1031Application to accessories
Section 1032Creation of usufruct in movable things
Section 1033Acquisition by prescription
Section 1034Determination of the condition
Section 1035Usufruct in aggregate of things; list
Section 1036Right of possession; exercise of usufruct
Section 1037Transformation
Section 1038Economic plan for forests and mines
Section 1039Excessive taking of fruits
Section 1040Treasure
Section 1041Upkeep of the thing
Section 1042Duty of notification by the usufructuary
Section 1043Repair or replacement
Section 1044Toleration of repairs
Section 1045Obligation of the usufructuary to insure
Section 1046Usufruct in an insurance claim
Section 1047Bearing of charges
Section 1048Usufruct in plot of land with inventory
Section 1049Reimbursement of outlays
Section 1050Wear and tear
Section 1051Provision of security
Section 1052Judicial administration in the absence of security
Section 1053Application for a prohibitory injunction in the case of unauthorised use
Section 1054Judicial administration on the basis of breach of duty
Section 1055Duty of return of the usufructuary
Section 1056Leases and usufructuary leases at the end of the usufruct
Section 1057Limitation of compensation claims
Section 1058Grantor as owner
Section 1059Non-transferability; ceding the exercise
Section 1059aTransferability in the case of a legal person or of a partnership having legal personality
Section 1059bNon-distrainability
Section 1059cDevolution or transfer of usufruct
Section 1059dLeases and usufructuary leases on the transfer of the usufruct
Section 1059eClaim to grant of the usufruct
Section 1060Coincidence of more than one right of use
Section 1061Death of the usufructuary
Section 1062Extension of cancellation to accessories
Section 1063Coincidence with ownership
Section 1064Cancellation of usufruct in movable things
Section 1065Adverse effect on right of usufruct
Section 1066Usufruct in the share of a co-owner
Section 1067Usufruct in consumable things
Subtitle 2
Usufruct in rights
Section 1068Statutory definition of usufruct in rights
Section 1069Creation
Section 1070Usufruct in a right to performance
Section 1071Cancellation or alteration of the encumbered right
Section 1072Termination of usufruct
Section 1073Usufruct in a life annuity
Section 1074Usufruct in a claim; notice and collection
Section 1075Effect of performance
Section 1076Usufruct in claim bearing interest
Section 1077Notice of termination and payment
Section 1078Cooperation in collection
Section 1079Investment of the capital
Section 1080Usufruct in a land charge or annuity land charge
Section 1081Usufruct in bearer instruments or instruments made out to order
Section 1082Deposit
Section 1083Cooperation in collection
Section 1084Consumable things
Subtitle 3
Usufruct in assets
Section 1085Creation of usufruct in assets
Section 1086Rights of the creditors of the grantor
Section 1087Relationship between usufructuary and grantor
Section 1088Liability of the usufructuary
Section 1089Usufruct in an inheritance
Title 3
Restricted personal easements
Section 1090Statutory definition of the restricted personal easement
Section 1091Scope
Section 1092Non-transferability; ceding the exercise
Section 1093Right of residence
Division 5
Right of preemption
Section 1094Statutory contents of the in-rem right of preemption
Section 1095Encumbrance of a fraction
Section 1096Application to accessories
Section 1097Creation for one or more cases of sale
Section 1098Effect of a right of preemption
Section 1099Notifications
Section 1100Rights of the purchaser
Section 1101Release of the person entitled
Section 1102Release of the purchaser
Section 1103Subjective in-rem right of preemption and personal right of preemption
Section 1104Exclusion of unknown entitled persons
Division 6
Charges on land
Section 1105Statutory contents of the charge on land
Section 1106Encumbrance of a fraction
Section 1107Individual payments
Section 1108Personal liability of the owner
Section 1109Division of the dominant plot of land
Section 1110Subjective in-rem charge on land
Section 1111Personal charge on land
Section 1112Exclusion of unknown entitled persons
Division 7
Mortgage, land charge, annuity land charge
Title 1
Mortgage
Section 1113Statutory contents of the mortgage
Section 1114Encumbrance of a fraction
Section 1115Entry of the mortgage
Section 1116Certificated and uncertificated mortgage
Section 1117Acquisition of the certificated mortgage
Section 1118Liability for incidental claims
Section 1119Extension of liability for interest
Section 1120Extension to products, parts and accessories
Section 1121Release from liability through alienation and removal
Section 1122Release from liability without alienation
Section 1123Extension to claim for rent or for usufructuary rent
Section 1124Advance disposition over the rent or usufructuary rent
Section 1125Set-off against rent or usufructuary rent
Section 1126Extension to recurring acts of performance
Section 1127Extension to insurance claim
Section 1128Insurance on buildings
Section 1129Other insurance against damage
Section 1130Replacement clause
Section 1131Addition of a plot of land
Section 1132Blanket mortgage
Section 1133Danger to the security of the mortgage
Section 1134Application for an injunction
Section 1135Deterioration of accessories
Section 1136Restraint on disposition by legal transaction
Section 1137Defences of the owner
Section 1138Presumption of legal force of the contents of the Land Register
Section 1139Objection with regard to an uncertificated mortgage for a loan
Section 1140Mortgage certificate and inaccuracy of the Land Register
Section 1141Notice of termination of the mortgage
Section 1142Owner’s right to provide satisfaction
Section 1143Devolution of claim
Section 1144Handover of documents
Section 1145Partial satisfaction
Section 1146Default interest
Section 1147Satisfaction by compulsory enforcement
Section 1148Fiction of ownership
Section 1149Prohibited agreements on satisfaction
Section 1150Right of redemption of third parties
Section 1151Change of priority for partial mortgages
Section 1152Partial mortgage certificate
Section 1153Transfer of mortgage and claim
Section 1154Assignment of the claim
Section 1155Presumption of legal force of certified declarations of assignment
Section 1156Legal relationship between the owner and the new creditor
Section 1157Continuation of defences against the mortgage
Section 1158Future collateral performance
Section 1159Arrears of collateral performance
Section 1160Enforcement of a certificated mortgage
Section 1161Enforcement of the claim
Section 1162Judicial call with regard to the mortgage certificate
Section 1163Owner mortgage
Section 1164Devolution of the mortgage to the debtor
Section 1165Discharge of the debtor
Section 1166Notification of the debtor
Section 1167Delivery of correction documents
Section 1168Waiver of the mortgage
Section 1169Defence with a negative effect on a right
Section 1170Exclusion of unknown creditors
Section 1171Exclusion by deposit
Section 1172Owner blanket mortgage
Section 1173Satisfaction by one of the owners
Section 1174Satisfaction by the personal debtor
Section 1175Waiver of the blanket mortgage
Section 1176Owner partial mortgage; conflict clause
Section 1177Owner land charge, owner mortgage
Section 1178Mortgage for collateral performance and costs
Section 1179Priority notice of right to deletion
Section 1179aClaim to deletion in the case of third party rights
Section 1179bClaim to deletion based on one’s own right
Section 1180Substitution for the claim
Section 1181Extinction by satisfaction from the plot of land
Section 1182Transfer in the case of satisfaction from the blanket mortgage
Section 1183Cancellation of the mortgage
Section 1184Debt-securing mortgage
Section 1185Uncertificated mortgage; inapplicable provisions
Section 1186Permitted conversions
Section 1187Debt-securing mortgage for bearer instruments and instruments made out to order
Section 1188Special provision for bearer bonds
Section 1189Appointment of a Land Register representative
Section 1190Maximum amount mortgage
Title 2
Land charge, annuity land charge
Subtitle 1
Land charge
Section 1191Statutory contents of the land charge
Section 1192Applicable provisions
Section 1193Termination
Section 1194Place of payment
Section 1195Bearer land charge
Section 1196Owner land charge
Section 1197Deviations from third party land charge
Section 1198Permitted conversions
Subtitle 2
Annuity land charge
Section 1199Statutory contents of the annuity land charge
Section 1200Applicable provisions
Section 1201Right of redemption
Section 1202Termination
Section 1203Permitted conversions
Division 8
Pledge of movable things and over rights
Title 1
Pledge of movable things
Section 1204Statutory contents of the pledge of movable things
Section 1205Creation
Section 1206Replacement of delivery by granting joint possession
Section 1207Pledging by an unauthorised person
Section 1208Acquisition of priority of rank in good faith
Section 1209Priority of the pledge
Section 1210Extent of liability of the pledge
Section 1211Defences of the pledgor
Section 1212Extension to separated products
Section 1213Pledge of emoluments
Section 1214Duties of the pledgee entitled to emoluments
Section 1215Duty of safekeeping
Section 1216Reimbursement of outlays
Section 1217Violation of rights by the pledgee
Section 1218Rights of the pledgor in the case of imminent spoilage
Section 1219Rights of the pledgee in the case of imminent spoilage
Section 1220Warning of auction
Section 1221Sale by private agreement
Section 1222Pledge of more than one thing
Section 1223Duty to return the pledged item; right to redeem the pledged item
Section 1224Satisfaction by deposit or set-off
Section 1225Devolution of claim to the pledgor
Section 1226Limitation of compensation claims
Section 1227Protection of the pledge
Section 1228Satisfaction by sale of the pledged item
Section 1229Prohibition of a forfeiture agreement
Section 1230Selection of pledged item from more than one pledged item
Section 1231Surrender of pledged item for sale
Section 1232Lower-ranking pledgees
Section 1233Execution of the sale
Section 1234Warning of sale; waiting period
Section 1235Public auction
Section 1236Place of auction
Section 1237Notice by publication
Section 1238Conditions of sale
Section 1239Bidding by creditor and owner
Section 1240Things made of gold or silver
Section 1241Notification of the owner
Section 1242Effects of the lawful alienation
Section 1243Unlawful alienation
Section 1244Acquisition in good faith
Section 1245Deviating agreements
Section 1246Deviation for reasons of equity
Section 1247Proceeds of the pledged item
Section 1248Presumption of ownership
Section 1249Right of redemption
Section 1250Transfer of claim
Section 1251Effect of the devolution of the pledge
Section 1252Extinction with the claim
Section 1253Extinction by return
Section 1254Claim for return
Section 1255Cancellation of the pledge
Section 1256Coincidence of pledge and ownership
Section 1257Pledge by operation of law
Section 1258Pledge of the share of a co-owner
Section 1259Realisation of a commercial pledged item
Sections 1260 - 1272(repealed)
Title 2
Pledge of rights
Section 1273Statutory contents of the pledge of rights
Section 1274Creation
Section 1275Pledge of right to performance
Section 1276Cancellation or alteration of the pledged right
Section 1277Satisfaction by compulsory enforcement
Section 1278Extinction by return
Section 1279Pledge of a claim
Section 1280Notification of the debtor
Section 1281Performance before the due date
Section 1282Performance after the due date
Section 1283Termination
Section 1284Deviating agreements
Section 1285Cooperation in collection
Section 1286Duty of termination in the case of danger
Section 1287Effect of performance
Section 1288Investment of collected money
Section 1289Extension to the interest
Section 1290Collection in the case of multiple pledges
Section 1291Pledge of land charge or annuity land charge
Section 1292Pledging of instruments made out to order
Section 1293Pledge of bearer instruments
Section 1294Collection and notice of termination
Section 1295Private sale of instruments made out to order
Section 1296Extension to interest coupons
Book 4
Family law
Division 1
Civil marriage
Title 1
Engagement
Section 1297No petition for a marriage to be entered into, nullity of a promise to pay a penalty
Section 1298Duty of compensation in the case of withdrawal
Section 1299Withdrawal by reason of fault of the other party
Section 1300(repealed)
Section 1301Return of the presents
Section 1302Limitation
Title 2
Entering into marriage
Subtitle 1
Capacity to marry
Section 1303Marriageable age
Section 1304Incapacity to contract
Section 1305(repealed)
Subtitle 2
Impediments to marriage
Section 1306Existing marriage or life partnership
Section 1307Relationship by blood
Section 1308Adoption
Subtitle 3
Certificate of no impediment
Section 1309Certificate of no impediment for foreigners
Subtitle 4
Marriage
Section 1310Competence of the registrar of births, deaths and marriages, curing defective marriages
Section 1311Personal declaration
Section 1312Marriage ceremony
Title 3
Annulment of marriage
Section 1313Annulment by judicial decision
Section 1314Grounds of annulment
Section 1315Exclusion of annulment
Section 1316Entitlement to petition
Section 1317Period for filing the petition
Section 1318Consequences of annulment
Title 4
Remarriage after declaration of death
Section 1319Annulment of the previous marriage
Section 1320Annulment of the new marriage
Sections 1321 - 1352(repealed)
Title 5
Effects of marriage in general
Section 1353Conjugal union
Section 1354(repealed)
Section 1355Family name
Section 1356Household management, gainful employment
Section 1357Transactions to provide the necessities of life
Section 1358(repealed)
Section 1359Scope of duty of care
Section 1360Duty of family maintenance
Section 1360aScope of the obligation to maintain
Section 1360bOverpayment
Section 1361Maintenance when spouses are living apart
Section 1361aAllocation of household effects when spouses are living apart
Section 1361bMatrimonial residence when spouses are living apart
Section 1362Presumption of ownership
Title 6
Matrimonial property regime
Subtitle 1
Statutory property regime
Section 1363Community of accrued gains
Section 1364Management of assets
Section 1365Disposition over assets as a whole
Section 1366Ratification of contracts
Section 1367Unilateral legal transactions
Section 1368Asserting the ineffectiveness
Section 1369Dispositions over household objects
Section 1370(repealed)
Section 1371Equalisation of accrued gains in the case of death
Section 1372Equalisation of accrued gains in other cases
Section 1373Accrued gains
Section 1374Initial assets
Section 1375Final assets
Section 1376Ascertainment of the value of the initial and final assets
Section 1377List of initial assets
Section 1378Equalisation claim
Section 1379Duty of information
Section 1380Set-off of advancements
Section 1381Refusal of satisfaction for gross inequity
Section 1382Deferment
Section 1383Transfer of assets
Section 1384Cut-off date for computing the accrued gains and the amount of the equalisation claim in the case of divorce
Section 1385Premature equalisation of accrued gains of the spouse entitled to an equalisation claim in case of premature cancellation of the community of accrued gains
Section 1386Premature suspension of the community of accrued gains
Section 1387Cut-off date for computing the accrued gains and amount of the equalisation claim in the case of premature equalisation or premature suspension
Section 1388Occurrence of separation of property
Section 1389(repealed)
Section 1390Claims against third parties of the person entitled to equalisation
Sections 1391 - 1407(repealed)
Subtitle 2
Contractual property regime
Chapter 1
General provisions
Section 1408Marriage contract, freedom of contract
Section 1409Restriction of freedom of contract
Section 1410Form
Section 1411Marriage contracts of persons placed under the care of a custodian
Section 1412Effect in relation to third parties
Section 1413Revocation of permission to manage assets
Chapter 2
Separation of property
Section 1414Commencement of separation of property
Chapter 3
Community of property
Subchapter 1
General provisions
Section 1415Agreement by marriage contract
Section 1416Common matrimonial property
Section 1417Separate property
Section 1418Reserved property
Section 1419Joint ownership
Section 1420Use for maintenance
Section 1421Management of the common matrimonial property
Subchapter 2
Management of the common matrimonial property by one spouse
Section 1422Subject matter of right of management
Section 1423Disposition over the common matrimonial property as a whole
Section 1424Disposition over plots of land, ships or ships under construction
Section 1425Donations
Section 1426Substitution of the approval of the other spouse
Section 1427Legal consequences of lack of consent
Section 1428Dispositions without approval
Section 1429Emergency right of management
Section 1430Substitution of the approval of the managing spouse
Section 1431Independent trade or business
Section 1432Acceptance of an inheritance; refusal of offer to enter into contract or of donation
Section 1433Continuation of a legal dispute
Section 1434Unjust enrichment of the common matrimonial property
Section 1435Duties of the managing spouse
Section 1436Managing spouse under custodianship
Section 1437Obligations of the common matrimonial property; personal liability
Section 1438Liability of the common matrimonial property
Section 1439No liability on acquisition of an inheritance
Section 1440Liability for reserved or separate property
Section 1441Liability as between the spouses
Section 1442Obligations of the separate property and of a trade or business
Section 1443Costs of litigation
Section 1444Costs of the advancement of a child
Section 1445Equalisation between reserved property, separate property and common matrimonial property
Section 1446Due date of the equalisation claim
Section 1447Petition of the non-managing spouse for termination
Section 1448Petition of the managing spouse for termination
Section 1449Effect of the judicial termination decision
Subchapter 3
Joint management of the common matrimonial property by the spouses
Section 1450Joint management by the spouses
Section 1451Duty of both spouses to cooperate
Section 1452Substitution of approval
Section 1453Disposition without consent
Section 1454Emergency right of management
Section 1455Acts of management without the cooperation of the other spouse
Section 1456Independent trade or business
Section 1457Unjust enrichment of the common matrimonial property
Section 1458(repealed)
Section 1459Obligations of the common matrimonial property; personal liability
Section 1460Liability of the common matrimonial property
Section 1461No liability on acquisition of an inheritance
Section 1462Liability for reserved or separate property
Section 1463Liability as between the spouses
Section 1464Obligations of the separate property and of a trade or business
Section 1465Costs of litigation
Section 1466Costs of the advancement of a child that is not a child of the spouses
Section 1467Equalisation between reserved property, separate property and common matrimonial property
Section 1468Due date of the equalisation claim
Section 1469Petition for termination
Section 1470Effect of the judicial termination decision
Subchapter 4
Partitioning of the common matrimonial property
Section 1471Beginning of the partitioning
Section 1472Joint management of the common matrimonial property
Section 1473Direct substitution
Section 1474Implementation of the partitioning
Section 1475Discharge of the obligations of the common matrimonial property
Section 1476Division of the surplus
Section 1477Implementation of the division
Section 1478Partitioning after divorce
Section 1479Partitioning after judicial termination decision
Section 1480Liability to third parties after the division
Section 1481Liability of the spouses to each other
Section 1482Dissolution of marriage by death
Subchapter 5
Continued community of property
Section 1483Occurrence of continued community of property
Section 1484Refusal of continued community of property
Section 1485Common matrimonial property
Section 1486Reserved property; separate property
Section 1487Legal position of the spouse and the descendants
Section 1488Obligations of the common matrimonial property
Section 1489Personal liability for the obligations of the common matrimonial property
Section 1490Death of a descendant
Section 1491Waiver by a descendant
Section 1492Termination by the surviving spouse
Section 1493Remarriage or establishment of a life partnership by the surviving spouse
Section 1494Death of the surviving spouse
Section 1495Petition of a descendant for termination
Section 1496Effect of the judicial termination decision
Section 1497Legal relationship until partitioning
Section 1498Implementation of the partitioning
Section 1499Obligations borne by the surviving spouse
Section 1500Obligations borne by the descendants
Section 1501Set-off of lump sum payments
Section 1502Right of surviving spouse to assume assets
Section 1503Division among the descendants
Section 1504Adjustment of liability between descendants
Section 1505Supplementation of the share of a descendant
Section 1506Unworthiness to receive a share
Section 1507Certificate on continuation of the community of property
Section 1508(repealed)
Section 1509Exclusion of the continued community of property by testamentary disposition
Section 1510Effect of exclusion
Section 1511Exclusion of a descendant
Section 1512Reduction of the share
Section 1513Deprivation of the share
Section 1514Disposition of the amount withheld
Section 1515Right of a descendant and of the spouse to assume assets
Section 1516Approval of the other spouse
Section 1517Waiver of their share by a descendant
Section 1518Mandatory law
Chapter 4
Optional Regime of the Community of Accrued Gains
Section 1519Agreement by marriage contract
Section 1520 to 1557(repealed)
Subtitle 3
Matrimonial property register
Section 1558Competent court of registration
Section 1559Change of habitual residence
Section 1560Application for entry
Section 1561Requirements for application
Section 1562Notice by publication
Section 1563Inspection of the register; application of Regulation (EU) 2016/679 in registry proceedings
Title 7
Divorce
Subtitle 1
Grounds of divorce
Section 1564Divorce by judicial decision
Section 1565Breakdown of marriage
Section 1566Presumption of breakdown
Section 1567Living apart
Section 1568Hardship clause
Subtitle 1a
Treatment of the matrimonial residence and of the household objects on the occasion of divorce
Section 1568aMatrimonial residence
Section 1568bHousehold objects
Subtitle 2
Maintenance of the divorced spouse
Chapter 1
Principle
Section 1569Principle of personal responsibility
Chapter 2
Entitlement to maintenance
Section 1570Maintenance to care for a child
Section 1571Maintenance by reason of old age
Section 1572Maintenance for illness or infirmity
Section 1573Maintenance for unemployment and topping-up maintenance
Section 1574Appropriate gainful employment
Section 1575Training, further training or retraining
Section 1576Maintenance for reasons of equity
Section 1577Indigence
Section 1578Amount of maintenance
Section 1578aPresumption of cover in the case of additional expenditure resulting from injury
Section 1578bReduction and time limitation of maintenance on grounds of inequity
Section 1579Restriction or refusal of maintenance for gross inequity
Section 1580Duty of information
Chapter 3
Ability to pay and priority
Section 1581Ability to pay
Section 1582Priority of the divorced spouse where more than one person is entitled to maintenance
Section 1583Influence of the matrimonial property regime
Section 1584Priority of more than one person liable for maintenance
Chapter 4
Form of the maintenance claim
Section 1585Nature of maintenance payment
Section 1585aProvision of security
Section 1585bMaintenance for the past
Section 1585cAgreements on maintenance
Chapter 5
End of the maintenance claim
Section 1586Remarriage, establishment of a life partnership or death of the person entitled
Section 1586aRevival of the maintenance claim
Section 1586bObligation not extinguished on death of the person obliged
Subtitle 3
Equalisation of pension rights
Section 1587Reference to the Equalisation of Pension Rights Act (Versorgungsausgleichsgesetz)
Title 8
Church duties
Section 1588(no heading)
Division 2
Relationship
Title 1
General provisions
Section 1589Relationship by blood
Section 1590Relationship by marriage
Title 2
Descent
Section 1591Maternity
Section 1592Paternity
Section 1593Paternity in the case of dissolution of the marriage by death
Section 1594Acknowledgement of paternity
Section 1595Need for approval of the acknowledgement
Section 1596Acknowledgement and approval in the case of lack of capacity to contract or limited capacity to contract
Section 1597Formal requirements; revocation
Section 1597aProhibition of wrongful acknowledgment of paternity
Section 1598Ineffectiveness of acknowledgement, approval and revocation
Section 1598aClaim to consent to a genetic examination to clarify natural parentage
Section 1599Non-existence of paternity
Section 1600Persons entitled to contest
Section 1600aPersonal contestation; contestation in the case of lack of capacity to contract or limited capacity to contract
Section 1600bContestation periods
Section 1600cPresumption of paternity in contestation proceedings
Section 1600dCourt determination of paternity
Title 3
Obligation to maintain
Subtitle 1
General provisions
Section 1601Persons with an obligation to maintain
Section 1602Indigence
Section 1603Ability to pay
Section 1604Influence of the matrimonial property regime
Section 1605Duty of information
Section 1606Order of priority of more than one person obliged
Section 1607Substituted liability and statutory devolution of claim
Section 1608Liability of the spouse or life partner
Section 1609Priority of more than person entitled to maintenance
Section 1610Amount of maintenance
Section 1610aPresumption of cover in the case of additional expenditure resulting from injury
Section 1611Restriction or end of obligation
Section 1612Nature of maintenance payment
Section 1612aMinimum maintenance of minor children; authorisation to issue statutory instruments
Section 1612bMeeting cash requirements through child benefit
Section 1612cSet-off of other child-related payments
Section 1613Maintenance for the past
Section 1614Waiver of maintenance claim; advance performance
Section 1615Extinction of the maintenance claim
Subtitle 2
Special provisions for the child and its parents who are not married to each other
Section 1615aApplicable provisions
Sections 1615b to 1615k(repealed)
Section 1615lMaintenance claim of mother and father by reason of the birth
Section 1615mFuneral costs for the mother
Section 1615nNo expiry on the death of the father or stillbirth
Title 4
Legal relationship between the parents and the child in general
Section 1616Birth name in the case of parents with family name
Section 1617Birth name in the case of parents without family name and with joint parental custody
Section 1617aBirth name in the case of parents without family name and with sole parental custody
Section 1617bName in the case of subsequent joint parental custody or ostensible paternity
Section 1617cName in the case of change of name by the parents
Section 1618Bringing a child under a family name
Section 1618aDuty of assistance and respect
Section 1619Services in house and business
Section 1620Outlays of the child for the household of its parents
Sections 1621 - 1623(repealed)
Section 1624Advancement from the parental assets
Section 1625Advancement from the assets of the child
Title 5
Parental custody
Section 1626Parental custody, principles
Section 1626aParental custody of parents who are not married to one another; declarations of parental custody
Section 1626bSpecial prerequisites for the effectiveness of the declaration of parental custody
Section 1626cDeclaring in person; parent with limited capacity to contract
Section 1626dForm; duty of notification
Section 1626eIneffectiveness
Section 1627Exercise of parental custody
Section 1628Court decision in the case of differences of opinion between the parents
Section 1629Representation of the child
Section 1629aRestriction of liability of minors
Section 1630Parental custody in the case of appointment of a curator or of foster care
Section 1631Contents and limits of care for the person of the child
Section 1631aTraining and profession
Section 1631bPlacement involving deprivation of liberty and measures involving deprivation of liberty
Section 1631cProhibition of sterilisation
Section 1631dCircumcision of the male child
Section 1631eTreatment of children with variants of sexual development
Section 1632Surrender of the child; determination of contact; order that child remains in foster care
Section 1633(repealed)
Sections 1634 - 1637(repealed)
Section 1638Restriction of care for the assets of the child
Section 1639Directions of the testator or donor
Section 1640Inventory of assets
Section 1641Prohibition of donation
Section 1642Investment of money
Section 1643Legal transactions subject to approval
Section 1644Making available assets to the child
Section 1645New trade or business
Section 1646Acquisition with funds of the child
Section 1647(repealed)
Section 1648Reimbursement of outlays
Section 1649Use of the income from the assets of the child
Sections 1650 - 1663(repealed)
Section 1664Limited liability of the parents
Section 1665(repealed)
Section 1666Court measures in the case of endangerment of the best interests of the child
Section 1666aPrinciple of proportionality; priority of public support measures
Section 1667Court measures in the case of endangerment of the assets of the child
Sections 1668 - 1670(repealed)
Section 1671Transfer of sole custody where the parents live apart
Section 1672(repealed)
Section 1673Suspension of parental custody in the case of a legal impediment
Section 1674Suspension of parental custody in the case of a factual impediment
Section 1674aSuspension of the mother’s parental custody for a child delivered by confidential birth
Section 1675Effect of the suspension
Section 1676(repealed)
Section 1677Termination of parental custody by declaration of death
Section 1678Consequences for the other parent of the actual prevention or of the suspension
Section 1679(repealed)
Section 1680Death of a parent or removal of the parental custody
Section 1681Declaration of death of a parent
Section 1682Order that the child remains with persons to whom it relates
Section 1683(repealed)
Section 1684Contact of the child with its parents
Section 1685Contact of the child with other persons to whom it relates
Section 1686Information on the personal circumstances of the child
Section 1686aRights of the biological but not legal father
Section 1687Exercise of joint parental custody when the parents live apart
Section 1687aPower to make decision of the parent without parental custody
Section 1687bParental custody powers of the spouse
Section 1688Decisions of the foster carer
Sections 1689 - 1692(repealed)
Section 1693Court measures where the parents are prevented
Sections 1694, 1695(repealed)
Section 1696Amendment of judicial decisions and of court-approved settlements
Section 1697(repealed)
Section 1697aPrinciple of best interests of child
Section 1698Surrender of the assets of the child; rendering accounts
Section 1698aContinuation of transactions in ignorance that parental custody has ended
Section 1698bContinuation of urgent transactions after the death of the child
Sections 1699 - 1711(repealed)
Title 6
Legal advisership
Section 1712Youth welfare office as legal adviser; tasks
Section 1713Persons entitled to apply
Section 1714Occurrence of legal advisership
Section 1715Termination of legal advisership
Section 1716Effects of legal advisership
Section 1717Requirement of habitual residence on domestic territory
Sections 1718 - 1740(repealed)
Title 7
Adoption
Subtitle 1
Adoption of minors
Section 1741Admissibility of the adoption
Section 1742Adoption only as child of the spouses
Section 1743Minimum age
Section 1744Probationary period
Section 1745Prohibition of adoption
Section 1746Consent of the child
Section 1747Consent of the parents of the child
Section 1748Substitution of the consent of a parent
Section 1749Consent of the spouse
Section 1750Declaration of consent
Section 1751Effect of parental consent, maintenance obligation
Section 1752Order of the family court, application
Section 1753Adoption after death
Section 1754Effect of adoption
Section 1755Extinction of relationships
Section 1756Continuation of relationships
Section 1757Name of the child
Section 1758Prohibition on disclosure and exploratory questioning
Section 1759Cancellation of the adoption relationship
Section 1760Setting aside for lack of declarations
Section 1761Impediments preventing cancellation
Section 1762Entitlement to apply; period for filing application, form
Section 1763Cancellation by the court of its own motion
Section 1764Effect of cancellation
Section 1765Name of the child after the cancellation
Section 1766Marriage between adoptive parent and child
Section 1766aAdoption of children of a partner who is not a spouse
Subtitle 2
Adoption of persons of full age
Section 1767Admissibility of adoption, applicable provisions
Section 1768Application
Section 1769Prohibition of adoption
Section 1770Effect of adoption
Section 1771Cancellation of the adoption relationship
Section 1772Adoption with the effects of the adoption of a minor
Division 3
Guardianship, legal curatorship, custodianship
Title 1
Guardianship
Subtitle 1
Creation of guardianship
Section 1773Prerequisites
Section 1774Order by the court of its own motion
Section 1775More than one guardian
Section 1776Right of the parents to name the guardian
Section 1777Prerequisites for the right to name the guardian
Section 1778Passing over the guardian named
Section 1779Selection by the family court
Section 1780Lack of capacity to be a guardian
Section 1781Unsuitability to be a guardian
Section 1782Exclusion by the parents
Section 1783(repealed)
Section 1784Official or church officer as guardian
Section 1785Duty to assume guardianship
Section 1786Right to refuse
Section 1787Consequences of unjustified refusal
Section 1788Coercive fine
Section 1789Appointment by the family court
Section 1790Appointment subject to a reservation
Section 1791Certificate of appointment
Section 1791aGuardianship by association
Section 1791bOfficial guardianship of the Youth Welfare Office by appointment
Section 1791cStatutory official guardianship of the Youth Welfare Office
Section 1792Supervisory guardian
Subtitle 2
Conducting of the guardianship
Section 1793Duties of the guardian, liability of the ward
Section 1794Restriction as a result of curatorship
Section 1795Exclusion of power of agency
Section 1796Revocation of power of agency
Section 1797More than one guardian
Section 1798Differences of opinion
Section 1799Duties and rights of the supervisory guardian
Section 1800Scope of care for the person
Section 1801Religious education
Section 1802Inventory of assets
Section 1803Management of assets in the case of inheritance or donation
Section 1804Donations made by the guardian
Section 1805Use for the guardian
Section 1806Investment of money held in trust for a ward
Section 1807Nature of investment
Section 1808(repealed)
Section 1809Investment with blocking note
Section 1810Cooperation of supervisory guardian or family court
Section 1811Other investment
Section 1812Dispositions over claims and securities
Section 1813Transactions not requiring approval
Section 1814Deposit of bearer instruments
Section 1815Change of registration and conversion of bearer instruments
Section 1816Blocking of book-entry securities
Section 1817Exemption
Section 1818Order of deposit
Section 1819Approval in the case of deposit
Section 1820Approval after change of registration and conversion
Section 1821Approval of transactions relating to plots of land, ships or ships under construction
Section 1822Approval for other transactions
Section 1823Approval where the ward has a trade or business
Section 1824Approval for making available objects to the ward for their use
Section 1825General authorisation
Section 1826Hearing of the supervisory guardian before giving the approval
Section 1827(repealed)
Section 1828Pronouncement of approval
Section 1829Subsequent approval
Section 1830Right of revocation of the other party
Section 1831Unilateral legal transaction without approval
Section 1832Ratification by the supervisory guardian
Section 1833Liability of the guardian
Section 1834Duty to pay interest
Section 1835Reimbursement of outlays
Section 1835aReimbursement for expenses
Section 1836Payment of the guardian
Sections 1836a and 1836b(repealed)
Section 1836cFunds to be applied by the ward
Section 1836dDestitution of the ward
Section 1836eStatutory devolution of claim
Subtitle 3
Care and supervision of the family court
Section 1837Advice and supervision
Section 1838(repealed)
Section 1839Duty of information of the guardian
Section 1840Report and rendering of account
Section 1841Contents of the accounts rendered
Section 1842Cooperation of the supervisory guardian
Section 1843Examination by the family court
Section 1844(repealed)
Section 1845(repealed)
Section 1846Interim measures of the family court
Section 1847Hearing of the relatives
Section 1848(repealed)
Subtitle 4
Cooperation of the Youth Welfare Office
Sections 1849, 1850(repealed)
Section 1851Duties of notification
Subtitle 5
Exempted guardianship
Section 1852Exemption by the father
Section 1853Exemption from deposit and blocking
Section 1854Exemption from duty to render accounts
Section 1855Exemption by the mother
Section 1856Prerequisites for exemption
Section 1857Cancellation of the exemption by the family court
Section 1857aExemption of the Youth Welfare Office and the association
Sections 1858 - 1881(repealed)
Subtitle 6
Termination of the guardianship
Section 1882Cessation of the prerequisites
Section 1883(repealed)
Section 1884Ward missing and declaration of death of the ward
Section 1885(repealed)
Section 1886Removal of the sole guardian
Section 1887Removal of the Youth Welfare Office or association
Section 1888Removal of officials and church officers
Section 1889Removal on application by the guardian
Section 1890Surrender of assets and rendering accounts
Section 1891Cooperation of the supervisory guardian
Section 1892Examination and approval of the account
Section 1893Continuation of transactions after the termination of the guardianship, return of certificates
Section 1894Notification on death of the guardian
Section 1895Termination of office of the supervisory guardian
Title 2
Legal custodianship
Section 1896Prerequisites
Section 1897Appointment of a natural person
Section 1898Duty to assume custodianship
Section 1899More than one custodian
Section 1900Custodianship by association or public authority
Section 1901Scope of the custodianship, duties of the custodian
Section 1901aLiving will
Section 1901bDiscussion to ascertain the patient’s will
Section 1901cWishes in writing with regard to custodianship, enduring power of attorney
Section 1902Representation of the person under custodianship
Section 1903Reservation of consent
Section 1904Ratification by the custodianship court in the case of medical treatment
Section 1905Sterilisation
Section 1906Ratification by the custodianship court in the case of placement involving deprivation of liberty and in the case of measures involving deprivation of liberty
Section 1906aRatification by the custodianship court in the case of coercive measures by physicians
Section 1907Ratification by the custodianship court in the case of the abandonment of rented residence
Section 1908Ratification by the custodianship court with regard to advancement
Section 1908aPrecautionary appointment of a custodian and order of reservation of consent for minors
Section 1908bRemoval of the custodian
Section 1908cAppointment of a new custodian
Section 1908dCancellation or alteration of custodianship and reservation of consent
Section 1908e(repealed)
Section 1908fRecognition as custodianship association
Section 1908gPublic authority custodian
Section 1908h(repealed)
Section 1908iProvisions applicable accordingly
Section 1908k(repealed)
Title 3
Curatorship
Section 1909Supplementary curatorship
Section 1910(repealed)
Section 1911Curatorship of absentees
Section 1912Curatorship for an unborn child
Section 1913Curatorship for unknown persons involved
Section 1914Curatorship for collected assets
Section 1915Application of guardianship law
Section 1916Designation as supplementary curator
Section 1917Naming of the supplementary curator by testator and third parties
Section 1918Termination of the curatorship by operation of law
Section 1919Cancellation of the curatorship on cessation of reason
Section 1920(repealed)
Section 1921Cancellation of the curatorship of absentees
Book 5
Law of succession
Division 1
Succession
Section 1922Universal succession
Section 1923Capacity to inherit
Section 1924Heirs on intestacy of the first degree
Section 1925Heirs on intestacy of the second degree
Section 1926Heirs on intestacy of the third degree
Section 1927More than one share of the inheritance in the case of multiple relationship
Section 1928Heirs on intestacy of the fourth degree
Section 1929More distant degrees
Section 1930Priority of the degrees
Section 1931Right of intestate succession of the spouse
Section 1932Preferential benefit of the spouse
Section 1933Exclusion of the right of succession of the spouse
Section 1934Right of succession of spouse who is a relative
Section 1935Consequences of increase of share of the inheritance
Section 1936Right of intestate succession of the State
Section 1937Appointment of heir by testamentary disposition
Section 1938Disinheritance without appointment of an heir
Section 1939Legacy
Section 1940Testamentary burden
Section 1941Contract of inheritance
Division 2
Legal position of the heir
Title 1
Acceptance and disclaimer of the inheritance; supervision of the probate court
Section 1942Devolution and disclaimer of the inheritance
Section 1943Acceptance and disclaimer of the inheritance
Section 1944Period for disclaimer
Section 1945Form of disclaimer
Section 1946Date for acceptance or disclaimer
Section 1947Condition and stipulation as to time
Section 1948More than one ground of entitlement
Section 1949Mistake as to the ground of entitlement
Section 1950Partial acceptance; partial disclaimer
Section 1951More than one share of the inheritance
Section 1952Inheritability of the right of disclaimer
Section 1953Effect of disclaimer
Section 1954Period of avoidance
Section 1955Form of avoidance
Section 1956Avoidance of failure to disclaim in good time
Section 1957Effect of avoidance
Section 1958Judicial assertion of claims against the heir
Section 1959Management before the disclaimer
Section 1960Securing the estate; curator of the estate
Section 1961Curatorship of the estate on application
Section 1962Jurisdiction of the probate court
Section 1963Maintenance for the mother-to-be of an heir
Section 1964Presumption that the treasury is heir
Section 1965Public invitation to register the rights of succession
Section 1966Legal position of the treasury before determination
Title 2
Liability of the heir for the obligations of the estate
Subtitle 1
Obligations of the estate
Section 1967Liability of heir, obligations of the estate
Section 1968Costs of funeral
Section 1969Maintenance for 30 days
Subtitle 2
Judicial call for the creditors of the estate
Section 1970Notification of the claims
Section 1971Creditors not affected
Section 1972Rights not affected
Section 1973Exclusion of creditors of the estate
Section 1974Defence of withheld information
Subtitle 3
Restriction of the liability of the heir
Section 1975Administration of estate; estate insolvency
Section 1976Effect on legal relationships extinguished by merger
Section 1977Effect on a set-off
Section 1978Responsibility of the heir for previous administration, reimbursement of expenses
Section 1979Discharge of obligations of the estate
Section 1980Application for opening of estate insolvency proceedings
Section 1981Order of administration of the estate
Section 1982Refusal to order administration of the estate for insufficiency of assets
Section 1983Notice by publication
Section 1984Effect of the order
Section 1985Duties and liability of the administrator of the estate
Section 1986Surrender of the estate
Section 1987Payment of the administrator of the estate
Section 1988End and cancellation of administration of the estate
Section 1989Defence by the heir of exhaustion of assets
Section 1990Defence by the heir as to insufficiency of assets
Section 1991Consequences of defence as to insufficiency of assets
Section 1992Over-indebtedness as a result of legacies and testamentary burdens
Subtitle 4
Filing of an inventory, unlimited liability of the heir
Section 1993Filing of an inventory
Section 1994Inventory period
Section 1995Length of the period
Section 1996Fixing a new period
Section 1997Suspension of the expiry of the period
Section 1998Death of the heir before expiry of the period
Section 1999Notice to the court
Section 2000Ineffectiveness of the fixing of the period
Section 2001Contents of the inventory
Section 2002Preparation of the inventory by the heir
Section 2003Official preparation of the inventory
Section 2004Reference to an existing inventory
Section 2005Unlimited liability of the heir if the inventory is incorrect
Section 2006Declaration in lieu of an oath
Section 2007Liability in the case of more than one share of the inheritance
Section 2008Inventory for an inheritance that is part of common matrimonial property
Section 2009Effect of filing of inventory
Section 2010Inspection of the inventory
Section 2011No inventory period for the treasury as heir
Section 2012No inventory period for the curator and administrator of the estate
Section 2013Consequences of the unlimited liability of the heir
Subtitle 5
Suspensive defences
Section 2014Defence within three months
Section 2015Defence of judicial call procedure
Section 2016Exclusion of defences in the case of unlimited liability of the heir
Section 2017Beginning of the period of time in the case of curatorship of the estate
Title 3
Claim to inheritance
Section 2018Duty to surrender of the possessor of the inheritance
Section 2019Direct substitution
Section 2020Emoluments and fruits
Section 2021Duty to surrender under principles of unjust enrichment
Section 2022Reimbursement of outlays and expenses
Section 2023Liability after litigation is pending and for emoluments and outlays
Section 2024Liability with knowledge
Section 2025Liability in the case of tort
Section 2026No reliance on acquisition by prescription
Section 2027Duty of information of the possessor of the inheritance
Section 2028Duty of information of occupant of house
Section 2029Liability in the case of individual claims by the heir
Section 2030Legal position of the acquirer of the inheritance
Section 2031Claim to surrender of a person declared dead
Title 4
More than one heir
Subtitle 1
Legal relationship of the heirs between themselves
Section 2032Community of heirs
Section 2033Right of disposition of the co-heir
Section 2034Right of preemption as against seller
Section 2035Right of preemption as against buyer
Section 2036Liability of buyer of share of the inheritance
Section 2037Onward alienation of the share of the inheritance
Section 2038Joint management of the estate
Section 2039Estate claims
Section 2040Alienation of objects of the estate, set-off
Section 2041Direct substitution
Section 2042Partitioning
Section 2043Postponement of partitioning
Section 2044Exclusion of partitioning
Section 2045Postponement of partitioning
Section 2046Discharge of obligations of the estate
Section 2047Distribution of the surplus
Section 2048Directions by the deceased for partitioning
Section 2049Taking over of a farm
Section 2050Duty to adjust advancements for descendants as heirs on intestacy
Section 2051Duty to adjust advancements if a descendant does not inherit
Section 2052Duty to adjust advancements for descendants as heirs by will
Section 2053Gift to more remote or adopted descendant
Section 2054Gift from the common matrimonial property
Section 2055Carrying out the adjustment
Section 2056Excess gifts
Section 2057Duty of information
Section 2057aDuty to adjust advancements in the case of special payments by one descendant
Subtitle 2
Legal relationship between the heirs and the creditors of the estate
Section 2058Joint and several liability
Section 2059Liability until division
Section 2060Liability after division
Section 2061Judicial call for the creditors of the estate
Section 2062Application for administration of the estate
Section 2063Filing of an inventory, limitation of liability
Division 3
Will
Title 1
General provisions
Section 2064Made in person
Section 2065Determination by third parties
Section 2066Heirs on intestacy of the testator
Section 2067Relatives of the testator
Section 2068Children of the testator
Section 2069Descendants of the testator
Section 2070Descendants of a third party
Section 2071Group of persons
Section 2072The poor
Section 2073Ambiguous designation
Section 2074Condition precedent
Section 2075Condition subsequent
Section 2076Condition for the benefit of a third party
Section 2077Ineffectiveness of testamentary dispositions on dissolution of marriage or engagement
Section 2078Avoidance for mistake or duress
Section 2079Avoidance for omission of a person entitled to a compulsory portion
Section 2080Person entitled to avoid
Section 2081Declaration of avoidance
Section 2082Period of avoidance
Section 2083Defence of voidability
Section 2084Interpretation favouring effectiveness
Section 2085Partial ineffectiveness
Section 2086Reservation of right to make addition
Title 2
Appointment of heirs
Section 2087Gift of assets, of fraction of assets or of individual objects
Section 2088Appointment to fractions
Section 2089Increase of the fractions
Section 2090Decrease of fractions
Section 2091Undetermined fractions
Section 2092Partial appointment to fractions
Section 2093Joint share of the inheritance
Section 2094Accrual
Section 2095Accrued share of the inheritance
Section 2096Substitute heir
Section 2097Rule of interpretation in the case of substitute heir
Section 2098Mutual appointment as substitute heir
Section 2099Substitute heir and accrual
Title 3
Appointment of a reversionary heir
Section 2100Reversionary heir
Section 2101Reversionary heir not yet conceived
Section 2102Reversionary heir and substitute heir
Section 2103Order to surrender the inheritance
Section 2104Heirs on intestacy as reversionary heirs
Section 2105Heirs on intestacy as provisional heirs
Section 2106Occurrence of reversionary succession
Section 2107Childless provisional heir
Section 2108Capacity to inherit; inheritability of the reversionary succession
Section 2109End of effectiveness of reversionary succession
Section 2110Scope of the right of reversionary succession
Section 2111Direct substitution
Section 2112Right of alienation of the provisional heir
Section 2113Dispositions of plots of land, ships and ships under construction; gifts
Section 2114Dispositions of mortgage claims, land charges and annuity land charges
Section 2115Dispositions of compulsory enforcement against provisional heir
Section 2116Deposit of securities
Section 2117Change of registration; conversion
Section 2118Blocking note in debt ledger
Section 2119Investment of money
Section 2120Duty of reversionary heir to consent
Section 2121List of objects of inheritance
Section 2122Determination of the condition of the inheritance
Section 2123Economic plan
Section 2124Costs of maintenance
Section 2125Outlays; right to remove
Section 2126Extraordinary burdens
Section 2127Right to information of reversionary heir
Section 2128Provision of security
Section 2129Effect of deprivation of management
Section 2130Duty to surrender after the occurrence of reversionary succession, duty to render accounts
Section 2131Scope of duty of care
Section 2132No liability for ordinary wear and tear
Section 2133Improper or excessive taking of fruits
Section 2134Own use
Section 2135Lease and usufructuary lease in reversionary succession
Section 2136Release of the provisional heir
Section 2137Rule of interpretation for the release
Section 2138Restricted duty to surrender
Section 2139Effect of occurrence of reversionary succession
Section 2140Dispositions of the provisional heir after occurrence of reversionary succession
Section 2141Maintenance for the mother-to-be of a reversionary heir
Section 2142Disclaimer of reversionary succession
Section 2143Restoration of extinguished legal relationships
Section 2144Liability of the reversionary heir for the obligations of the estate
Section 2145Liability of the provisional heir for the obligations of the estate
Section 2146Duty of provisional heir to notify creditors of the estate
Title 4
Legacies
Section 2147Person charged with a legacy
Section 2148More than one person charged with a legacy
Section 2149Legacy for heirs on intestacy
Section 2150Preferential legacy
Section 2151Right to decide of the person charged or of a third person in the event of more than one person provided for
Section 2152Choice of persons provided for
Section 2153Determination of shares
Section 2154Optional legacy
Section 2155General legacy
Section 2156Legacy for a special purpose
Section 2157Joint legacy
Section 2158Accrual
Section 2159Independence of the accrual
Section 2160Prior death of person provided for
Section 2161Where the person charged does not inherit
Section 2162Thirty-year period for a suspended legacy
Section 2163Exceptions to the thirty-year period
Section 2164Extension to accessories and claims to compensation
Section 2165Charges
Section 2166Charge with a mortgage
Section 2167Charge with a blanket mortgage
Section 2168Charge with a blanket land charge
Section 2168aApplication to ships, ships under construction and ship mortgages
Section 2169Legacy of foreign objects
Section 2170Legacy to be procured
Section 2171Impossibility, statutory prohibition
Section 2172Combination, intermixture, mingling of the bequeathed thing
Section 2173Claim as a legacy
Section 2174Claim arising under a legacy
Section 2175Restoration of extinguished legal relationships
Section 2176Devolution of the legacy
Section 2177Devolution in the event of a condition or a time limit
Section 2178Devolution in the event of a person provided for not yet conceived or determined
Section 2179Period pending fulfilment
Section 2180Acceptance and disclaimer
Section 2181Discretionary due date
Section 2182Liability for defects of title
Section 2183Liability for material defects
Section 2184Fruits and emoluments
Section 2185Reimbursement of outlays and expenses
Section 2186Due date of sublegacy or testamentary burden
Section 2187Liability of the main legatee
Section 2188Reduction of the charges
Section 2189Directions concerning priority
Section 2190Substitute legatee
Section 2191Subsequent legatee
Title 5
Testamentary burden
Section 2192Applicable provisions
Section 2193Appointment of the beneficiary, period for fulfilment
Section 2194Claim for fulfilment
Section 2195Relationship between testamentary burden and gift
Section 2196Impossibility of fulfilment
Title 6
Executor
Section 2197Appointment of an executor
Section 2198Determination of the executor by a third person
Section 2199Appointment of co-executor or successor
Section 2200Appointment by the probate court
Section 2201Ineffectiveness of the appointment
Section 2202Acceptance and refusal of office
Section 2203Task of the executor
Section 2204Partitioning of the estate between co-heirs
Section 2205Administration of the estate, power of alienation
Section 2206Incurring obligations
Section 2207Extended authority
Section 2208Limitation of the rights of the executor, execution by the heir
Section 2209Permanent execution
Section 2210Thirty-year period for permanent execution
Section 2211Limitation on dispositions of the heir
Section 2212Assertion in court of the rights subject to the execution of the will
Section 2213Assertion in court of claims against the estate
Section 2214Creditors of the heir
Section 2215Inventory of the estate
Section 2216Proper administration of the estate, compliance with directions
Section 2217Making available objects of the estate
Section 2218Legal relationship with the heir; rendering of accounts
Section 2219Liability of the executor
Section 2220Mandatory law
Section 2221Remuneration of the executor
Section 2222Executor for the reversionary heir
Section 2223Executor of a legacy
Section 2224More than one executor
Section 2225Expiry of the office of the executor
Section 2226Notice of termination by the executor
Section 2227Dismissal of the executor
Section 2228Inspection of records
Title 7
The making and revocation of a will
Section 2229Testamentary capacity of minors, lack of testamentary capacity
Section 2230(repealed)
Section 2231Regular wills
Section 2232Public will
Section 2233Special cases
Sections 2234 - 2246(repealed)
Section 2247Holographic will
Section 2248Custody of a holographic will
Section 2249Emergency will made before the mayor
Section 2250Emergency will before three witnesses
Section 2251Emergency will made at sea
Section 2252Period of validity of emergency wills
Section 2253Revocation of the will
Section 2254Revocation by will
Section 2255Revocation by destruction or changes
Section 2256Revocation by the revocation of the will from official custody
Section 2257Revocation of the revocation
Section 2258Revocation by a later will
Section 2258a(repealed)
Section 2258b(repealed)
Section 2259Obligation to deliver
Section 2260(repealed)
Section 2261(repealed)
Section 2262(repealed)
Section 2263Voidness of a prohibition on opening the will
Section 2263a, 2264(repealed)
Title 8
Joint will
Section 2265Joint will made by spouses
Section 2266Joint emergency will
Section 2267Joint holographic will
Section 2268Effect of nullity or dissolution of marriage
Section 2269Reciprocal appointment
Section 2270Reciprocal dispositions
Section 2271Revocation of reciprocal dispositions
Section 2272Revocation of official custody
Section 2273(repealed)
Division 4
Contract of inheritance
Section 2274Entering into contract in person
Section 2275Prerequisites
Section 2276Form
Section 2277(repealed)
Section 2278Permissible contractual dispositions
Section 2279Contractual gifts and burdens, application of section 2077
Section 2280Application of section 2269
Section 2281Avoidance by the testator
Section 2282Representation, form of the avoidance
Section 2283Period of avoidance
Section 2284Confirmation
Section 2285Avoidance by third parties
Section 2286Dispositions inter vivos
Section 2287Gifts adversely affecting the contractual heir
Section 2288Prejudice to the legatee
Section 2289Effect of the contract of inheritance on testamentary dispositions; application of section 2338
Section 2290Cancellation by contract
Section 2291Cancellation by will
Section 2292Cancellation by joint will
Section 2293Revocation in the event of reservation
Section 2294Revocation in the event of the misconduct of the person provided for
Section 2295Revocation in the event of the extinction of a mutual obligation
Section 2296Representation, form of revocation
Section 2297Revocation by will
Section 2298Mutual contract of inheritance
Section 2299Unilateral dispositions
Section 2300Application of sections 2259 and 2263; removal from official or notarial custody
Section 2300a(repealed)
Section 2301Promise of donation mortis causa
Section 2302Unlimited testamentary freedom
Division 5
Compulsory share
Section 2303Person entitled to a compulsory share of the estate; amount of the share
Section 2304Rules of interpretation
Section 2305Additional compulsory share
Section 2306Limitations and charges
Section 2307Bequest of a legacy
Section 2308Avoidance of the disclaimer
Section 2309Right of parents and remoter descendants to a compulsory share
Section 2310Determination of the share of the inheritance for the calculation of the compulsory share
Section 2311Value of the estate
Section 2312Value of a farm
Section 2313Taking account of conditional, uncertain or unsecured rights; duty of determination of the heir
Section 2314Duty of the heir to provide information
Section 2315Counting gifts towards the compulsory share
Section 2316Duty to adjust advancements
Section 2317Creation and transferability of the claim to a compulsory share
Section 2318Burden of the compulsory share in the case of legacies and testamentary burdens
Section 2319Person entitled to a compulsory share as co-heir
Section 2320Compulsory share burden on the heir taking the place of the person entitled to a compulsory share
Section 2321Compulsory share burden in the event of a disclaimer of a legacy
Section 2322Reduction of legacies and testamentary burdens
Section 2323Heir not charged with a compulsory share
Section 2324Deviating directions by the testator concerning the compulsory share burden
Section 2325Claim for the augmentation of compulsory shares in the event of gifts
Section 2326Augmentation to more than half of the intestate portion
Section 2327Receipt of gift by a person entitled to a compulsory share
Section 2328Heir as person entitled to a compulsory share
Section 2329Claim against the recipient of a gift
Section 2330Gift arising from a moral duty
Section 2331Gifts made from common matrimonial property
Section 2331aDeferral
Section 2332Limitation
Section 2333Deprivation of a compulsory share
Section 2334(repealed)
Section 2335(repealed)
Section 2336Form, burden of proof and ineffectiveness of deprivation
Section 2337Forgiveness
Section 2338Limitation of the compulsory share
Division 6
Unworthiness to inherit
Section 2339Grounds for unworthiness to inherit
Section 2340Enforcement of the unworthiness to inherit by avoidance
Section 2341Persons entitled to avoid
Section 2342Action for avoidance
Section 2343Forgiveness
Section 2344Effect of a declaration of unworthiness to inherit
Section 2345Unworthiness to receive a legacy; unworthiness to receive a compulsory share
Division 7
Renunciation of inheritance
Section 2346Effect of the renunciation of inheritance, possibility of limitation
Section 2347Personal requirements, representation
Section 2348Form
Section 2349Extension to descendants
Section 2350Renunciation to the benefit of another
Section 2351Revocation of a renunciation of the inheritance
Section 2352Renunciation of gifts
Division 8
Certificate of inheritance
Section 2353Competence of the probate court, application
Sections 2354 to 2359(repealed)
Section 2360(repealed)
Section 2361Revocation or declaration of invalidity of an inaccurate certificate of inheritance
Section 2362Claim to surrender of the true heir and claim to information
Section 2363Claim to surrender of the reversionary heir and of the executor
Section 2364(repealed)
Section 2365Presumption of legitimacy of the certificate of inheritance
Section 2366Presumption of legal force of a certificate of inheritance
Section 2367Performance for the person named as heir in the certificate of inheritance
Section 2368Executor’s certificate
Section 2369(repealed)
Section 2370Presumption of legal force of a declaration of death
Division 9
Purchase of an inheritance
Section 2371Form
Section 2372Advantages due to purchaser
Section 2373Parts remaining for the seller
Section 2374Duty to surrender
Section 2375Duty to compensate
Section 2376Liability of the seller
Section 2377Restoration of extinguished legal relationships
Section 2378Obligations of the estate
Section 2379Emoluments and charges prior to the sale
Section 2380Devolution of the risk, emoluments and charges after the sale
Section 2381Reimbursement of outlays and expenses
Section 2382Liability of the purchaser in relation to the creditors of the estate
Section 2383Scope of liability of the purchaser
Section 2384The duty of notification of the seller towards the creditors of the estate, right of inspection
Section 2385Application to similar contracts
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German Civil Code
BGB

Full text in format:   HTML  PDF   text in German

Übersetzung durch den Langenscheidt Übersetzungsservice, aktualisiert durch Neil Mussett. Zuletzt aktualisiert und bearbeitet durch Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Translation provided by Langenscheidt Übersetzungsservice, updated by Neil Mussett. The translation has most recently been revised and updated by Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Stand: Die Übersetzung berücksichtigt die Änderung(en) des Gesetzes durch Artikel 1 des Gesetzes vom 10. August 2021 (BGBl. I S. 3515).
Der Stand der deutschsprachigen Dokumentation kann aktueller sein. Vergleichen Sie dazu bitte http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Version information: The translation includes the amendment(s) to the Act by Article 1 of the Act of 10 August 2021 (Federal Law Gazette I p. 3515).
Translations may not be updated at the same time as the German legal provisions displayed on this website. To compare with the current status of the German version, see http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Zur Nutzung dieser Übersetzung lesen Sie bitte den Hinweis unter "Translations".

For conditions governing use of this translation, please see the information provided under "Translations".

           
Book 1
General part
Division 1
Persons
Title 1
Natural persons, consumers, traders
Section 1Beginning of legal capacity
Section 2Beginning of majority
Sections 3 – 6(repealed)
Section 7Residence; establishment and termination
Section 8Residence of persons who lack full capacity to contract
Section 9Residence of a soldier
Section 10(repealed)
Section 11Residence of a child
Section 12Right to a name
Section 13Consumer
Section 14Trader
Sections 15 - 20(repealed)
Title 2
Legal persons
Subtitle 1
Associations
Chapter 1
General provisions
Section 21Non-commercial association
Section 22Commercial association
Section 23(repealed)
Section 24Seat
Section 25Constitution
Section 26Board and representation
Section 27Appointment of and management by the board
Section 28Passing of resolutions by the board
Section 29Emergency appointment by local court
Section 30Special representatives
Section 31Liability of an association for organs
Section 31aLiability of members of organs and special representatives
Section 31bLiability of members of the association
Section 32General meeting; passing of resolutions
Section 33Amendment of articles of association
Section 34Exclusion from voting
Section 35Special rights
Section 36Convening the general meeting
Section 37Convening a meeting at the request of a minority
Section 38Membership
Section 39Leaving the association
Section 40Flexible provisions
Section 41Dissolution of the association
Section 42Insolvency
Section 43Deprivation of legal personality
Section 44Jurisdiction and procedure
Section 45Devolution of the assets of the association
Section 46Devolution on the treasury
Section 47Liquidation
Section 48Liquidators
Section 49Duties of the liquidators
Section 50Notice by publication of the association in liquidation
Section 50aNewspaper for notices
Section 51One-year waiting period
Section 52Security for creditors
Section 53Liability in damages of the liquidators
Section 54Associations without legal personality
Chapter 2
Registered associations
Section 55Jurisdiction over entry in the register
Section 55aElectronic register of associations
Section 56Minimum number of members of the association
Section 57Minimum requirements of the articles of association
Section 58Recommended contents of the articles of association
Section 59Application for registration
Section 60Rejection of the application
Sections 61 - 63(repealed)
Section 64Contents of the entry in the register of associations
Section 65Addition to name
Section 66Notice by publication of the entry and safekeeping of documents
Section 67Changes to the board
Section 68Protection of public confidence by the register of associations
Section 69Documentary proof of composition of the board
Section 70Protection of public confidence in case of entries on power of agency
Section 71Amendments of the articles of association
Section 72Certificate on number of members
Section 73Decrease to below the minimum number of members
Section 74Dissolution
Section 75Entries in the case of insolvency
Section 76Register entries in the event of liquidation
Section 77Parties obliged to apply for entry in the register and form of applications
Section 78Assessment of coercive fines
Section 79Inspection of the register of associations
Section 79aApplication of Regulation (EU) 2016/679 to registration proceedings
Subtitle 2
Foundations
Section 80Formation of a foundation having legal personality
Section 81Endowment transaction
Section 82Duty of founder to make transfers
Section 83Testamentary foundation
Section 84Recognition after the death of the founder
Section 85Constitution of foundation
Section 86Application of law on associations
Section 87Change of objects; termination
Section 88Devolution of assets
Subtitle 3
Legal persons under public law
Section 89Liability for organs; insolvency
Division 2
Things and animals
Section 90Concept of the thing
Section 90aAnimals
Section 91Fungible things
Section 92Consumable things
Section 93Essential parts of a thing
Section 94Essential parts of a plot of land or a building
Section 95Merely temporary purpose
Section 96Rights as parts of a plot of land
Section 97Accessories
Section 98Commercial and agricultural inventory
Section 99Fruits
Section 100Emoluments
Section 101Division of fruits
Section 102Reimbursement of costs of production
Section 103Allocation of charges
Division 3
Legal transactions
Title 1
Capacity to contract
Section 104Incapacity to contract
Section 105Voidness of declaration of intent
Section 105aEveryday transactions
Section 106Limited capacity for minors to contract
Section 107Consent of legal representative
Section 108Entry into a contract without consent
Section 109Right of withdrawal by the other party
Section 110Performance effected with means of the minor’s own
Section 111Unilateral legal transactions
Section 112Independent operation of a trade or business
Section 113Service or employment relationship
Sections 114, 115(repealed)
Title 2
Declaration of intent
Section 116Mental reservation
Section 117Sham transaction
Section 118Lack of seriousness
Section 119Voidability for mistake
Section 120Voidability for incorrect transmission
Section 121Period for avoidance
Section 122Liability in damages of the person avoiding a declaration
Section 123Voidability on the grounds of deceit or duress
Section 124Period of time for avoidance
Section 125Voidness resulting from a defect of form
Section 126Written form
Section 126aElectronic form
Section 126bText form
Section 127Agreed form
Section 127aCourt settlement
Section 128Notarial recording
Section 129Official certification
Section 130Effectiveness of a declaration of intent to absent parties
Section 131Effectiveness in relation to persons without full capacity to contract
Section 132Substitution of service for receipt
Section 133Interpretation of a declaration of intent
Section 134Statutory prohibition
Section 135Statutory prohibition of alienation
Section 136Official prohibition of alienation
Section 137Prohibition of dispositions in a legal transaction
Section 138Legal transaction offending common decency; usury
Section 139Partial invalidity
Section 140Re-interpretation
Section 141Confirmation of a void legal transaction
Section 142Effect of avoidance
Section 143Declaration of avoidance
Section 144Confirmation of a voidable legal transaction
Title 3
Contract
Section 145Binding effect of an offer
Section 146Expiry of an offer
Section 147Period for acceptance
Section 148Fixing a period for acceptance
Section 149Late receipt of a declaration of acceptance
Section 150Late acceptance and acceptance altering the offer
Section 151Acceptance without declaration to the offeror
Section 152Acceptance in the case of notarial recording
Section 153Death of the offeror or offeror’s incapacity to contract
Section 154Overt lack of agreement; lack of notarial recording
Section 155Hidden lack of agreement
Section 156Entry into contracts at auctions
Section 157Interpretation of contracts
Title 4
Conditions and specification of time
Section 158Conditions precedent and subsequent
Section 159Retroactive effect
Section 160Liability during the period pending fulfilment of the condition
Section 161Ineffectiveness of dispositions in the period pending fulfilment of the condition
Section 162Prevention of or bringing about the satisfaction of the condition
Section 163Specification of time
Title 5
Agency and authority
Section 164Effect of a declaration made by the agent
Section 165Agent with limited capacity to contract
Section 166Vitiation of intent; imputed knowledge
Section 167Conferment of authority
Section 168Expiry of authority
Section 169Authority of the authorised representative and the managing partner
Section 170Period of effectiveness of the authority
Section 171Period of effectiveness in the case of announcement
Section 172Letter of authorisation
Section 173Period of effectiveness in the case of knowledge and negligent lack of knowledge
Section 174Unilateral legal transaction by an authorised representative
Section 175Return of the letter of authorisation
Section 176Declaration of invalidity of the letter of authorisation
Section 177Entry into contract by a representative having no power of agency
Section 178Right of revocation of the other party
Section 179Liability of a representative having no power of agency
Section 180Unilateral legal transactions
Section 181Contracting with oneself
Title 6
Consent and ratification
Section 182Approval
Section 183Revocability of consent
Section 184Retroactive effect of ratification
Section 185Disposition by an unauthorised person
Division 4
Periods of time and fixed dates
Section 186Scope of applicability
Section 187Beginning of a period of time
Section 188End of a period of time
Section 189Calculation of individual periods of time
Section 190Extension of a period of time
Section 191Calculation of periods of time
Section 192Beginning, middle and end of a month
Section 193Sundays and holidays; Saturdays
Division 5
Limitation
Title 1
Subject-matter and duration of limitation
Section 194Subject-matter of limitation
Section 195Standard limitation period
Section 196Limitation period for rights to a plot of land
Section 197Thirty-year limitation period
Section 198Limitation in the case of a successor in title
Section 199Commencement of the standard limitation period and maximum limitation periods
Section 200Commencement of other limitation periods
Section 201Commencement of the limitation period for recognised claims
Section 202Inadmissibility of agreements on limitation
Title 2
Suspension, suspension of expiry and recommencement of the limitation period
Section 203Suspension of limitation in the case of negotiations
Section 204Suspension of limitation as a result of prosecution of rights
Section 205Suspension of limitation in the case of a right to refuse performance
Section 206Suspension of limitation in case of force majeure
Section 207Suspension of limitation for reasons of family relationship and similar reasons
Section 208Suspension of limitation in the case of claims for infringement of the right to sexual self-determination
Section 209Effect of suspension
Section 210Suspension of expiry of the limitation period in the case of persons without full capacity to contract
Section 211Suspension of expiry of the limitation period in matters relating to estates
Section 212Recommencement of the limitation period
Section 213Suspension, suspension of expiry of the limitation period and recommencement of limitation in the case of other claims
Title 3
Legal consequences of limitation
Section 214Effect of limitation
Section 215Set-off and right of retention after a claim is statute-barred
Section 216Effect of limitation in the case of secured claims
Section 217Limitation of collateral performance
Section 218Ineffectiveness of rescission
Sections 219 to 225(repealed)
Division 6
Exercise of rights, self-defence, self-help
Section 226Prohibition of chicanery
Section 227Self-defence against persons
Section 228Necessity
Section 229Self-help
Section 230Limits of self-help
Section 231Self-help by mistake
Division 7
Provision of security
Section 232Types
Section 233Effect of deposit
Section 234Suitable securities
Section 235Right to exchange
Section 236Book-entry securities
Section 237Movable things
Section 238Mortgages, land charges and annuity land charges
Section 239Surety
Section 240Duty to supplement security
Book 2
Law of obligations
Division 1
Subject matter of obligations
Title 1
Duty to render performance
Section 241Duties arising from an obligation
Section 241aUnsolicited performance
Section 242Performance in good faith
Section 243Obligation described by class
Section 244Foreign currency obligation
Section 245Obligation payable in a specific denomination of money
Section 246Statutory interest rate
Section 247Basic rate of interest
Section 248Compound interest
Section 249Nature and extent of compensation of damages
Section 250Damages in money after the specification of a period of time
Section 251Damages in money without the specification of a period of time
Section 252Lost profits
Section 253Intangible damage
Section 254Contributory negligence
Section 255Assignment of claims to compensation
Section 256Payment of interest on expenses
Section 257Claim to release
Section 258Right of removal
Section 259Extent of duty to render accounts
Section 260Duties when surrendering objects or providing information on an aggregate of objects
Section 261Modification of a declaration in lieu of an oath; costs
Section 262Alternative obligation; right of choice
Section 263Exercise of the right of choice; effect
Section 264Default by the person entitled to the right of choice
Section 265Impossibility in case of alternative obligations
Section 266Part performance
Section 267Performance by third parties
Section 268Right of redemption of a third party
Section 269Place of performance
Section 270Place of payment
Section 270aAgreements on fees for the use of non-cash means of payment
Section 271Time of performance
Section 271aAgreements on payment deadlines, verification periods or periods for acceptance
Section 272Interim interest
Section 273Right of retention
Section 274Effects of the right of retention
Section 275Exclusion of the duty of performance
Section 276Responsibility of the obligor
Section 277Standard of care in one’s own affairs
Section 278Responsibility of the obligor for third parties
Section 279(repealed)
Section 280Damages for breach of duty
Section 281Damages in lieu of performance for non-performance or failure to render performance as owed
Section 282Damages in lieu of performance for breach of a duty under section 241 (2)
Section 283Damages in lieu of performance where the duty of performance is excluded
Section 284Reimbursement of futile expenses
Section 285Surrender of substitute benefit
Section 286Default of the obligor
Section 287Responsibility during default
Section 288Default interest and other damage caused by default *)
Section 289Prohibition of compound interest
Section 290Interest on compensation for value
Section 291Interest during legal proceedings
Section 292Liability in the case of a duty to surrender
Title 2
Default by the obligee
Section 293Default in acceptance
Section 294Actual offer
Section 295Verbal offer
Section 296Dispensability of the offer
Section 297Inability of the obligor
Section 298Concurrent performance
Section 299Temporary prevention of acceptance
Section 300Effects of default by the obligee
Section 301Cessation of interest
Section 302Emoluments
Section 303Right to abandon possession
Section 304Compensation for extra expenses
Division 2
Drafting contractual obligations by means of standard business terms
Section 305Incorporation of standard business terms into the contract
Section 305aIncorporation in special cases
Section 305bPriority of individually agreed terms
Section 305cSurprising and ambiguous clauses
Section 306Legal consequences of non-incorporation and ineffectiveness
Section 306aProhibition of circumvention
Section 307Test of reasonableness of contents
Section 308Prohibited clauses with the possibility of valuation
Section 309Prohibited clauses without the possibility of valuation
Section 310Scope of application
Division 3
Contractual obligations
Title 1
Creation, subject matter and termination
Subtitle 1
Creation
Section 311Obligations created by legal transaction and obligations similar to legal transactions
Section 311aImpediment preventing performance at conclusion of contract
Section 311bContracts on plots of land, assets and an estate
Section 311cApplication to accessories
Subtitle 2
Principles applying to consumer contracts; particular types of sale
Chapter 1
Scope of application and principles applying to consumer contracts
Section 312Scope of application
Section 312aGeneral obligations and principles applying to consumer contracts; limits to the agreement of remuneration
Chapter 2
Off-premises contracts and distance contracts
Section 312bOff-premises contracts
Section 312cDistance contracts
Section 312dObligations to provide information
Section 312eViolation of information obligations as to costs
Section 312fCopies and confirmations
Section 312gRight of withdrawal
Section 312hTermination and authorisation to terminate
Chapter 3
Contracts concluded in electronic commerce
Section 312iGeneral obligations in electronic commerce
Section 312jSpecial obligations vis-à-vis consumers in electronic commerce
Chapter 4
Deviating agreements and burden of proof
Section 312kDeviating agreements and burden of proof
Subtitle 3
Adaptation and ending of contracts
Section 313Interference with the basis of the transaction
Section 314Termination, for a compelling reason, of contracts for the performance of a continuing obligation
Subtitle 4
Unilateral rights to specify performance
Section 315Specification of performance by one party
Section 316Specification of consideration
Section 317Specification of performance by a third party
Section 318Avoidance of specification
Section 319Ineffectiveness of the specification; substitution
Title 2
Reciprocal contract
Section 320Defence of unperformed contract
Section 321Defence of uncertainty
Section 322Order to perform in return for, and concurrently with, performance
Section 323Rescission for non-performance or for performance not as contractually agreed
Section 324Rescission for breach of a duty under section 241 (2)
Section 325Damages and revocation
Section 326Release from consideration and rescission where the duty of performance is excluded
Title 2a
Contracts on digital products
Subtitle 1
Consumer contracts on digital products
Section 327Scope of application
Section 327aApplication to bundle contracts and contracts relating to things with digital elements
Section 327bSupply of digital products
Section 327cRights in the case of failure to effect supply
Section 327dConformity of digital products
Section 327eProduct deficiency
Section 327fUpdates
Section 327gDefect of title
Section 327hDeviating agreements on product features
Section 327iRights of the consumer in the case of deficiencies
Section 327jLimitation
Section 327kShifting the burden of proof
Section 327lCure
Section 327mTermination of the contract and compensation of damages
Section 327nAbatement
Section 327oDeclaration of termination of contract and its legal consequences
Section 327pContinued use following termination of the contract
Section 327qConsequences under contract law of declarations governed by data protection law made by the consumer
Section 327rModifications of digital products
Section 327sDeviating agreements
Subtitle 2
Special provisions on contracts on digital products between traders
Section 327tScope of application
Section 327uRecourse of the trader
Title 3
Promise of performance to a third party
Section 328Contract for the benefit of third parties
Section 329Interpretation rule where there is an assumption of the duty to perform
Section 330Interpretation rule in the case of life annuity contracts
Section 331Performance after death
Section 332Modification by disposition mortis causa in case of reservation
Section 333Rejection of the right by the third party
Section 334Objections of the obligor in relation to the third party
Section 335Right of the promisee to make demands
Title 4
Earnest, penalty for breach of contract
Section 336Interpretation of earnest
Section 337Crediting or return of the earnest
Section 338Earnest in case of impossibility of performance for which the giver of earnest is responsible
Section 339Payability of penalty for breach of contract
Section 340Promise to pay a penalty for non-performance
Section 341Promise of a penalty for improper performance
Section 342Alternatives to monetary penalty
Section 343Reduction of the penalty
Section 344Ineffective promise of a penalty
Section 345Burden of proof
Title 5
Revocation; right of withdrawal in consumer contracts
Subtitle 1
Rescission
Section 346Effects of rescission
Section 347Emoluments and outlays after rescission
Section 348Satisfaction of obligations in return for, and concurrently with, performance
Section 349Declaration of rescission
Section 350Expiry of the right of rescission after a period of time has been specified
Section 351Indivisibility of the right of rescission
Section 352Set-off after non-performance
Section 353Rescission in return for forfeit money
Section 354Forfeiture of rights
Subtitle 2
Right of withdrawal in the case of consumer contracts
Section 355Right of withdrawal in the case of consumer contracts
Section 356Right of withdrawal in the case of off-premises contracts and distance contracts
Section 356aRight of withdrawal in the case of timeshare contracts, long-term holiday product contracts, brokerage contracts, and exchange system contracts
Section 356bRight of withdrawal in the case of consumer credit agreements
Section 356cRight of withdrawal in the case of contracts for delivery by instalments
Section 356dWithdrawal right of the consumer in the case of credit agreements for a gratuitous loan and in the case of gratuitous financial accommodation
Section 356eRight of withdrawal in the case of construction contracts with consumers
Section 357Legal consequences of the withdrawal from off-premises contracts and distance contracts, to the exception of contracts relating to financial services
Section 357aLegal consequences of the withdrawal from contracts relating to financial services
Section 357bLegal consequences of the withdrawal from timeshare, long-term holiday product, brokerage contracts, and exchange system contracts
Section 357cLegal consequences of the withdrawal from contracts for delivery by instalments that are neither distance contracts nor off-premises contracts
Section 357dLegal consequences of the withdrawal from a construction contract with a consumer
Section 358Contracts linked to the contract from which the consumer has withdrawn
Section 359Objections in the case of linked contracts
Section 360Related contracts
Section 361Further claims, deviating agreements and burden of proof
Division 4
Extinction of obligations
Title 1
Performance
Section 362Extinction by performance
Section 363Burden of proof in the case of acceptance as performance of contract
Section 364Acceptance in lieu of performance of contract
Section 365Warranty in the case of handover in lieu of performance of contract
Section 366Crediting of performance to more than one claim
Section 367Crediting to interest and costs
Section 368Receipt
Section 369Costs of the receipt
Section 370Performance to the bringer of the receipt
Section 371Return of the certificate of indebtedness
Title 2
Deposit
Section 372Prerequisites
Section 373Concurrent performance
Section 374Place of deposit; duty to notify
Section 375Retroactive effect with dispatch by mail
Section 376Right to take back
Section 377Unpledgeability of the right to take back
Section 378Effect of deposit where taking back is excluded
Section 379Effect of deposit where taking back is not excluded
Section 380Proof of entitlement to receive
Section 381Costs of deposit
Section 382Extinction of the right of the obligee
Section 383Auction of things not capable of deposit
Section 384Warning of auction
Section 385Sale by private agreement
Section 386Costs of the auction
Title 3
Set-off
Section 387Prerequisites
Section 388Declaration of set-off
Section 389Effect of set-off
Section 390No set-off against a claim subject to a defence
Section 391Set-off in the case of different places of performance
Section 392Set-off against a seized claim
Section 393No set-off against a claim in tort
Section 394No set-off against an unpledgeable claim
Section 395Set-off against claims of public-law corporations
Section 396More than one claim
Title 4
Forgiveness
Section 397Contract of forgiveness, acknowledgement of non-indebtedness
Division 5
Transfer of a claim
Section 398Assignment
Section 399Exclusion of assignment in case of change of content or by agreement
Section 400Exclusion in case of unpledgeable claims
Section 401Devolution of accessory rights and preferential rights
Section 402Duty to provide information; provision of documents
Section 403Duty of notarial recording
Section 404Objections by the obligor
Section 405Assignment with presentation of documents
Section 406Set-off in relation to the new obligee
Section 407Legal acts in relation to the previous obligee
Section 408Multiple assignments
Section 409Notice of assignment
Section 410Delivery of the assignment document
Section 411Assignment of salary
Section 412Statutory devolution of claims
Section 413Transfer of other rights
Division 6
Assumption of debt
Section 414Contract between obligee and transferee
Section 415Contract between obligor and transferee
Section 416Assumption of a mortgage debt
Section 417Objections of the transferee
Section 418Extinction of security rights and preferential rights
Section 419(repealed)
Division 7
More than one obligor and obligee
Section 420Divisible performance
Section 421Joint and several debtors
Section 422Effect of performance
Section 423Effect of forgiveness
Section 424Effect of default by the obligee
Section 425Effect of other facts
Section 426Duty to adjust advancements, devolution of claim
Section 427Joint contractual duty
Section 428Joint and several obligees
Section 429Effect of changes
Section 430Duty of the joint and several obligees to adjust advancements
Section 431More than one obligor of indivisible performance
Section 432More than one obligee of indivisible performance
Division 8
Particular types of obligations
Title 1
Purchase, exchange
Subtitle 1
General provisions
Section 433Contractual duties typical for a purchase agreement
Section 434Material defects
Section 435Defects of title
Section 436Public charges on plots of land
Section 437Rights of buyer in the case of defects
Section 438Limitation of claims for defects
Section 439Cure
Section 440Special provisions on rescission and damages
Section 441Abatement of price
Section 442Knowledge of the buyer
Section 443Guarantee
Section 444Exclusion of liability
Section 445Limitation of liability in the case of public auctions
Section 445aRecourse of the seller
Section 445bLimitation of recourse claims
Section 445cRecourse in the case of contracts on digital products
Section 446Devolution of risk and of charges
Section 447Devolution of risk in the case of sales shipment
Section 448Costs of delivery and comparable costs
Section 449Retention of title
Section 450Excluded buyers in the case of certain sales
Section 451Purchase by excluded buyer
Section 452Purchase of a ship
Section 453Purchase of rights, consumer contract on the purchase of digital content
Subtitle 2
Special types of purchase
Chapter 1
Purchase on approval
Section 454Coming into existence of the purchase agreement
Section 455Approval period
Chapter 2
Repurchase
Section 456Coming into existence of the repurchase agreement
Section 457Liability of the reseller
Section 458Removal of third-party rights
Section 459Reimbursement of outlays
Section 460Repurchase at estimated value
Section 461More than one person entitled to repurchase
Section 462Cut-off period
Chapter 3
Preemption
Section 463Prerequisites for exercise
Section 464Exercise of the right of preemption
Section 465Ineffective agreements
Section 466Collateral performance
Section 467Total price
Section 468Deferral of the purchase price
Section 469Duty to notify, exercise period
Section 470Sale to heir on intestacy
Section 471Sale in case of compulsory enforcement or insolvency
Section 472More than one person with a right of preemption
Section 473Non-transferability
Subtitle 3
Purchase of consumer goods
Section 474Purchase of consumer goods
Section 475Applicable provisions
Section 475aContract for the sale of consumer goods relating to digital products
Section 475bMaterial defect of a good with digital elements
Section 475cMaterial defect of a good with digital elements where the digital elements are supplied on a continuous basis
Section 475dSpecial provisions on rescission and compensation of damages
Section 475eSpecial provisions on limitation
Section 476Deviating agreements
Section 477Shifting the burden of proof
Section 478Special provisions concerning recourse by the trader
Section 479Special provisions for guarantees
Subtitle 4
Exchange
Section 480Exchange
Title 2
Timeshare contracts, long-term holiday product contracts, brokerage contracts and exchange system contracts
Section 481Time share contracts
Section 481aLong-term holiday product contract
Section 481bFacilitation contract, exchange system contract
Section 482Preliminary contract information, advertising and prohibition of sale as an investment
Section 482aInstructions on the right of withdrawal
Section 483Language of the contract and of the pre-contractual information
Section 484Form and content of the contract
Section 485Right of withdrawal
Section 486Prohibition of down payment
Section 486aSpecial provisions for long-term holiday product contracts
Section 487Deviating agreements
Title 3
Loan contract; financial accommodation and contracts for delivery by instalments between a trader and a consumer
Subtitle 1
Loan contract
Chapter 1
General provisions
Section 488Contractual duties typical for a credit agreement
Section 489Right of the borrower to give notice of termination in accordance with usual procedure
Section 490Right to terminate for cause
Chapter 2
Special provisions for consumer credit agreements
Section 491Consumer credit agreement
Section 491aPreliminary contract information obligations with consumer credit agreements
Section 492Written form, contents of the contract
Section 492aTying practices in the case of consumer credit agreements relating to immovable property
Section 492bPermissible tying practices
Section 493Information during the contractual relationship
Section 494Legal consequences of defects of form
Section 495Right of withdrawal; reflection period
Section 496Waiver of objections, prohibition of bills of exchange and cheques
Section 497Default of the borrower
Section 498Calling in entire loan in the case of loans repayable in instalments
Section 499Right of the lender to terminate; right to refuse performance
Section 500Termination right of the borrower; early repayment
Section 501Cost reduction in the case of early repayment and in the case of termination
Section 502Compensation for early repayment of a loan
Section 503Conversion to an alternative currency of a foreign-currency consumer credit agreement relating to immovable property
Section 504Granted overdraft
Section 504aObligation to provide advisory services where the overdraft facility is used
Section 505Tolerated overdraft
Section 505aObligation to perform a creditworthiness assessment for consumer credit agreements
Section 505bBasis of the creditworthiness assessment in the case of consumer credit agreements
Section 505cFurther obligations in the case of consumer credit agreements relating to immovable property secured by a mortgage or by a charge on land
Section 505dBreach of the obligation to conduct an assessment of creditworthiness
Section 505eAuthorisation to issue statutory instruments
Subtitle 2
Financial accommodation between a trader and a consumer
Section 506Deferment of payment, other financial accommodation
Section 507Instalment payment transactions
Section 508Revocation with regard to instalment payment transactions
Section 509(repealed)
Subtitle 3
Contracts for delivery by instalments between a trader and a consumer
Section 510Contracts for delivery by instalments
Subtitle 4
Advisory services provided in the case of consumer credit agreements relating to immovable property
Section 511Advisory services provided in the case of consumer credit agreements relating to immovable property
Subtitle 5
Mandatory nature, application to founders of new businesses
Section 512Deviating agreements
Section 513Application to founders of new businesses
Subtitle 6
Gratuitous credit agreements and gratuitous financial accommodation between a trader and a consumer
Section 514Gratuitous credit agreements
Section 515Gratuitous financial accommodation
Title 4
Donation
Section 516Concept of donation
Section 516aConsumer contract on the donation of digital products
Section 517Failure to acquire assets
Section 518Form of promise of donation
Section 519Defence of paying for necessaries
Section 520Expiry of the promise of an annuity
Section 521Liability of the donor
Section 522No default interest
Section 523Liability for defects of title
Section 524Liability for material defects
Section 525Donation subject to conditions
Section 526Refusal to fulfil the condition
Section 527Non-fulfilment of the condition
Section 528Claim for return due to impoverishment of the donor
Section 529Exclusion of claim for return
Section 530Revocation of donation
Section 531Declaration of revocation
Section 532Exclusion of revocation
Section 533Waiver of the right of revocation
Section 534Donations for duty and decency
Title 5
Lease, usufructuary lease
Subtitle 1
General provisions for leases
Section 535Contents and primary duties of the lease agreement
Section 536Abatement of the rent for material defects and defects of title
Section 536aClaim of lessee for damages and reimbursement of expenses due to a defect
Section 536bLessee knows of the defect at conclusion of the contract or upon acceptance
Section 536cDefects occurring during the lease period; notice of defect by the lessee
Section 536dContractual exclusion of rights of lessee with regard to defects
Section 537Payment of rent when the lessee is unable to be present in person
Section 538Wear and tear on the leased property from contractually agreed use
Section 539Reimbursement of other expenses and right of removal of the lessee
Section 540Making available the leased property for use use by third parties
Section 541Application for prohibitory injunction in the case of use in breach of contract
Section 542End of the lease
Section 543Termination for cause without notice for a compelling reason
Section 544Lease for more than 30 years
Section 545Tacit extension of the lease
Section 546Duty of lessee to return
Section 546aCompensation of the lessor in the case of late return
Section 547Reimbursement of rent paid in advance
Section 548Limitation of compensation claims and of the right of removal
Section 548aLease of digital products
Subtitle 2
Leases for residential space
Chapter 1
General provisions
Section 549Provisions applicable to leases of residential space
Section 550Form of the lease agreement
Section 551Restriction and investment of rent security deposits
Section 552Warding off the right of removal of the lessee
Section 553Making residential space available for use by third parties
Section 554Improved accessibility, e-mobility and burglary protection
Section 555Ineffectiveness of a penalty for breach of contract
Chapter 1a
Structural maintenance and modernisation measures
Section 555aStructural maintenance measures
Section 555bModernisation measures
Section 555cAnnouncement of modernisation measures
Section 555dToleration of modernisation measures, time limit
Section 555eSpecial right of termination of the lessee in case of modernisation measures
Section 555fAgreements on structural maintenance or modernisation measures
Chapter 2
Rent
Subchapter 1
Agreements on rent
Section 556Agreements on operating costs
Section 556aAccounting criterion for operating costs
Section 556bDue date of rent, right to set-off and right of retention
Section 556cCosts of heat supply as operating costs, authorisation to issue statutory instruments
Subchapter 1a
Agreements on the rent amount at commencement of the lease in areas in which the housing market is under pressure
Section 556dPermissible rent amount at commencement of the lease; authorisation to issue statutory instruments
Section 556eConsideration of the rent paid previously, or of modernisation work done
Section 556fExceptions
Section 556gLegal consequences; information on the rent
Subchapter 2
Provisions on the rent amount
Section 557Increases in rent by agreement or law
Section 557aStepped rent
Section 557bIndexed rent
Section 558Increase in rent up to the reference rent customary in the locality
Section 558aForm and justification of the rent increase
Section 558bApproval of a rent increase
Section 558cList of representative rents
Section 558dExpert list of representative rents
Section 558eRent database
Section 559Rent increase after modernisation measures
Section 559aCrediting of third-party funds
Section 559bAssertion of an increase; effect of declaration of increase
Section 559cSimplified procedure
Section 559dBreaches of duty in announcing or implementing structural changes
Section 560Changes in operating costs
Section 561Special right of termination of the lessee following a rent increase
Chapter 3
Security right of the lessor
Section 562Extent of the security right of the lessor
Section 562aExtinction of the security right of the lessor
Section 562bSelf-help; claim to surrender
Section 562cWarding off the security right by provision of security
Section 562dAttachment by a third party
Chapter 4
Change of contractual parties
Section 563Right of accession upon death of the lessee
Section 563aContinuation with surviving lessees
Section 563bLiability in the case of accession or continuation
Section 564Continuation of the lease with the heir; termination for cause
Section 565Commercial subletting
Section 566Purchase is subject to existing leases
Section 566aRent security deposit
Section 566bAdvance disposition over the rent
Section 566cAgreement between lessee and lessor on the rent
Section 566dSet-off by the lessee
Section 566eNotification by the lessor of the devolution of ownership
Section 567Encumbrance of the residential space by the lessor
Section 567aAlienation or encumbrance prior to residential space being made available for use
Section 567bOnward alienation or encumbrance by the acquirer
Chapter 5
Termination of the lease
Subchapter 1
General provisions
Section 568Form and contents of the notice of termination
Section 569Termination for cause without notice for a compelling reason
Section 570Exclusion of the right of retention
Section 571Further compensation of damages for late return of residential space
Section 572Agreement on right of rescission; lease subject to condition subsequent
Subchapter 2
Leases for an indefinite period of time
Section 573Notice of termination by the lessor in accordance with usual procedure
Section 573aEased termination by the lessor
Section 573bPartial termination by the lessor
Section 573cPeriods of time to be observed in giving notice of termination in accordance with usual procedure
Section 573dTermination for cause observing the statutory notice period
Section 574Objection of lessee to termination
Section 574aContinuation of lease after objection
Section 574bRequirements as to form and period of time for objection
Section 574cFurther continuation of the lease in the case of unforeseen circumstances
Subchapter 3
Leases for a specified period of time
Section 575Fixed-term lease
Section 575aTermination for cause observing the statutory notice period
Subchapter 4
Tied dwellings
Section 576Periods of time to be observed in giving notice of termination in accordance with usual procedure in the case of tied leased dwellings
Section 576aSpecial features of the right to raise an objection in the case of tied leased dwellings
Section 576bApplication of landlord and tenant law accordingly in connection with tied dwellings
Chapter 6
Special features when creating title to leased residences
Section 577Lessee’s right of preemption
Section 577aRestriction of termination in connection with conversion of the dwelling
Subtitle 3
Leases of other things and digital products
Section 578Leases of plots of land and premises
Section 578aLease of registered ships
Section 578bContracts on the lease of digital products
Section 579Due date of the rent
Section 580Notice of termination for cause in the case of the death of the lessee
Section 580aNotice periods
Subtitle 4
Usufructuary lease
Section 581Contractual duties typical for a usufructuary lease
Section 582Maintenance of inventory
Section 582aAssumption of inventory at its estimated value
Section 583Security right of usufructuary lessee over inventory
Section 583aRestrictions on disposition over inventory
Section 584Period of notice
Section 584aExclusion of certain rights of termination under landlord and tenant law
Section 584bLate return
Subtitle 5
Farm lease
Section 585Concept of farm lease
Section 585aForm of a farm lease
Section 585bDescription of the leased property
Section 586Contractual duties typical for a farm lease
Section 586aEncumbrances on the leased property
Section 587Due date of rent; payment of rent where the usufructuary lessee is personally prevented
Section 588Measures of maintenance or improvement
Section 589Making available the leased property to third parties for their use
Section 590Change of agricultural purpose or of previous use
Section 590aUse in breach of contract
Section 590bNecessary outlays
Section 591Outlays that increase value
Section 591aRemoval of installations
Section 591bLimitation of compensation claims
Section 592Security right of the usufructuary lessor
Section 593Amendment of farm leases
Section 593aTransfer of a business
Section 593bAlienation or encumbrance of the leased property
Section 594Termination and extension of the lease
Section 594aNotice periods
Section 594bLease for more than 30 years
Section 594cTermination in the case of occupational disability of the usufructuary lessee
Section 594dDeath of the usufructuary lessee
Section 594eTermination for cause without notice for a compelling reason
Section 594fWritten form of termination
Section 595Continuation of the lease
Section 595aEarly notice of termination of farm leases
Section 596Return of the leased property
Section 596aDuty to compensate for early termination of lease
Section 596bDuty to leave behind
Section 597Late return
Title 6
Gratuitous loan
Section 598Contractual duties typical for the case of a gratuitous loan
Section 599Liability of the lender
Section 600Liability for defects
Section 601Reimbursement of outlays
Section 602Wear and tear on the thing
Section 603Contractually agreed use
Section 604Duty to return
Section 605Right of termination
Section 606Short limitation period
Title 7
Contract for the loan of a thing
Section 607Contractual duties typical for a contract for the loan of a thing
Section 608Termination
Section 609Payment
Section 610(repealed)
Title 8
Service contract and similar contracts
Subtitle 1
Service contract
Section 611Contractual duties typical for a service contract
Section 611aEmployment contract
Section 611b(repealed)
Section 612Remuneration
Section 612aProhibition of victimisation
Section 613Non-transferability
Section 613aRights and duties in the case of transfer of business
Section 614Due date of remuneration
Section 615Remuneration in the case of default in acceptance and business risk
Section 616Temporary prevention from performing services
Section 617Duty of medical care
Section 618Duty to take protective measures
Section 619Absolute nature of welfare duties
Section 619aBurden of proof when the employee is liable
Section 620End of services relationship
Section 621Periods of notice for service relationships
Section 622Notice periods in the case of employment relationships
Section 623Written form of termination
Section 624Notice period in the case of contracts lasting longer than five years
Section 625Tacit extension
Section 626Termination without notice for a compelling reason
Section 627Termination without notice in the case of a position of trust
Section 628Partial remuneration and damages in case of termination without notice
Section 629Time off for search for employment
Section 630Duty to provide a reference
Subtitle 2
Treatment contract
Section 630aContractual duties typical for a treatment contract
Section 630bApplicable provisions
Section 630cCooperation between the contracting parties; obligations to provide information
Section 630dConsent
Section 630eObligations to provide information
Section 630fDocumentation of the treatment
Section 630gInspection of the medical records
Section 630hBurden of proof in case of liability for malpractice and errors in providing information
Title 9
Contract to produce a work and similar contracts
Subtitle 1
Contract to produce a work
Chapter 1
General provisions
Section 631Contractual duties typical for a contract to produce a work
Section 632Remuneration
Section 632aPart payments
Section 633Material defects and defects of title
Section 634Rights of the customer in the case of defects
Section 634aLimitation of claims for defects
Section 635Cure
Section 636Special provisions on rescission and damages
Section 637Self-help
Section 638Abatement of price
Section 639Exclusion of liability
Section 640Acceptance
Section 641Due date of remuneration
Section 641a(repealed)
Section 642Cooperation by the customer
Section 643Termination for failure to collaborate
Section 644Allocation of risk
Section 645Responsibility of the customer
Section 646Completion in lieu of acceptance
Section 647Security right of the contractor
Section 647aMortgage of the owner of a shipyard
Section 648Right of termination of the customer
Section 648aTermination for a compelling reason
Section 649Cost estimate
Section 650Contract for work and materials; consumer contract on the production of digital products
Chapter 2
Construction contract
Section 650aConstruction contract
Section 650bAmendment of the contract; right of the customer to issue orders
Section 650cAdjustment of remuneration in case of orders pursuant to section 650b (2)
Section 650dInjunction
Section 650eMortgage of a building contractor
Section 650fBuilder’s security
Section 650gDetermination of the status in the case of acceptance being refused; final invoice
Section 650hWritten form of the termination
Chapter 3
Construction contract with a consumer
Section 650iConstruction contract with a consumer
Section 650jSpecifications
Section 650kSubject matter of the contract
Section 650lRight of withdrawal
Section 650mPart payments; security for the claim to remuneration
Section 650nPreparation of documents and surrender
Chapter 4
Mandatory nature
Section 650oDeviating agreements
Subtitle 2
Contract for architectural services and contract for engineering services
Section 650pContractual duties typical for contracts for architectural and for engineering services
Section 650qApplicable provisions
Section 650rSpecial right of termination
Section 650sPartial acceptance
Section 650tJoint and several liability with the contractor executing the construction work
Subtitle 3
Developer contract
Section 650uDeveloper contract; applicable provisions
Section 650vPart payments
Subtitle 4
Package travel contract, brokerage of travel contracts and brokerage of linked travel arrangements
Section 651aContractual duties typical for a package travel contract
Section 651bDelimitation from brokerage
Section 651cLinked online booking processes
Section 651dObligations to provide information; contents of the contract
Section 651eTransfer of contract
Section 651fReservations of the right to modify; price reduction
Section 651gSignificant amendments of the contract
Section 651hRescission before the start of the package
Section 651iRights of the traveller in the case of a lack of conformity of the package
Section 651jLimitation
Section 651kRemedy
Section 651lTermination
Section 651mAbatement of the price
Section 651nDamages
Section 651oNotification by the traveller of a lack of conformity
Section 651pAdmissible limitation of liability; set-off
Section 651qOrganiser’s obligation to provide assistance
Section 651rInsolvency protection; security certificate
Section 651sInsolvency protection of the organisers established in the European Economic Area
Section 651tRepatriation, prepayments
Section 651uExchange student stays
Section 651vFacilitation of travel
Section 651wFacilitation of linked travel arrangements
Section 651xLiability for booking errors
Section 651yDeviating agreements
Title 10
Brokerage contract
Subtitle 1
General provisions
Section 652Accrual of fee claim
Section 653Brokerage fee
Section 654Forfeiture of the fee claim
Section 655Reduction of the brokerage fee
Subtitle 2
Intermediation of consumer credit agreements and non-gratuitous financial accommodation
Section 655aCredit intermediation contract
Section 655bWritten form in the case of a contract with a consumer
Section 655cRemuneration
Section 655dAncillary payment
Section 655eDeviating agreements, application to founders of new businesses
Subtitle 3
Marriage broking
Section 656Marriage broking
Subtitle 4
Brokerage of purchase contracts for flats and single family houses
Section 656aText form
Section 656bPersonal scope of sections 656c and 656d
Section 656cFee claim in the case of the broker working for both parties
Section 656dAgreements on the broker’s costs
Title 11
Promise of a reward
Section 657Binding promise
Section 658Revocation
Section 659Act undertaken more than once
Section 660Collaboration by more than one person
Section 661Prize competition
Section 661aPromises of prizes
Title 12
Mandate, contract for the management of the affairs of another and payment services
Subtitle 1
Mandate
Section 662Contractual duties typical for a mandate
Section 663Duty to notify in the case of rejection
Section 664Non-transferability; liability for assistants
Section 665Deviation from instructions
Section 666Duty of information and duty to render accounts
Section 667Duty to surrender
Section 668Interest on money used
Section 669Duty of advance payment
Section 670Reimbursement of expenses
Section 671Withdrawal; termination
Section 672Death or incapacity to contract of the mandator
Section 673Death of the mandatary
Section 674Legal construct of continuation
Subtitle 2
Contract for the management of the affairs of another
Section 675Non-gratuitous management of the affairs of another
Section 675aDuties to provide information
Section 675bOrders to transfer securities in systems
Subtitle 3
Payment services
Chapter 1
General provisions
Section 675cPayment services and e-money
Section 675dInformation on payment services
Section 675eDeviating agreements
Chapter 2
Payment services contract
Section 675fPayment services contract
Section 675gAmendment of the framework contract on payment services
Section 675hNotice of termination in accordance with usual procedure of a framework contract on payment services
Section 675iExceptions for low-value payment instruments and e-money
Chapter 3
Provision and use of payment services
Subchapter 1
Authorisation of payment transactions; payment instruments; refusal of access to the payment account
Section 675jConsent and withdrawal of consent
Section 675kRestrictions on the use of a payment instrument; refusal of access to the payment account
Section 675lObligations of the payment service user with regard to payment instruments
Section 675mObligations of the payment service provider with regard to payment instruments; risk of dispatch
Subchapter 2
Execution of payment transactions
Section 675nReceipt of payment orders
Section 675oRefusal of payment orders
Section 675pIrrevocability of a payment order
Section 675qCharges for payment transactions
Section 675rExecution of a payment transaction using unique identifiers
Section 675sExecution deadline for payment transactions
Section 675tValue date and availability of funds; blocking available funds
Subchapter 3
Liability
Section 675uLiability of the payment service provider for unauthorised payment transactions
Section 675vLiability of the payer in case of misappropriation of a payment instrument
Section 675wProof of authentication
Section 675xRefund claim in case of an authorised payment transaction initiated by or through the payee
Section 675yLiability of the payment service provider in case of non-execution, defective or late execution of a payment order; obligation to make enquiries
Section 675zOther claims in case of non-execution, defective or late execution of a payment order or in case of an unauthorised payment transaction
Section 676Proof of execution of payment transactions
Section 676aEqualisation claim
Section 676bNotification of unauthorised or incorrectly executed payment transactions
Section 676cDisclaimer
Title 13
Voluntary agency without specific authorisation
Section 677Duties of the voluntary agent
Section 678Agency contrary to the will of the principal
Section 679Irrelevance of the contrary will of the principal
Section 680Agency of necessity
Section 681Ancillary duties of the voluntary agent
Section 682Lack of capacity to contract on the part of the voluntary agent
Section 683Reimbursement of expenses
Section 684Surrender of enrichment
Section 685Intention to donate
Section 686Error as to the identity of the principal
Section 687False voluntary agency without specific authorisation
Title 14
Safekeeping
Section 688Contractual duties typical for safekeeping
Section 689Remuneration
Section 690Liability for gratuitous safekeeping
Section 691Deposit with third parties
Section 692Change of safekeeping
Section 693Reimbursement of expenses
Section 694Liability in damages of the depositor
Section 695Right of the depositor to demand return
Section 696Claim of depositary for repossession of the thing deposited
Section 697Place for return
Section 698Interest on money used
Section 699Due date of remuneration
Section 700Irregular safekeeping contract
Title 15
Bringing things onto the premises of innkeepers
Section 701Liability of the innkeeper
Section 702Limitation of liability; valuables
Section 702aRelease from liability
Section 703Extinction of the claim for damages
Section 704Security right of the innkeeper
Title 16
Partnership
Section 705Contents of partnership agreement
Section 706Contributions of the partners
Section 707Increase of the agreed contribution
Section 707a to 707c(will enter into force at a future time)
Section 707dAuthorisation to issue statutory instruments
Section 708Liability of the partners
Section 709Joint management
Section 710Transfer of management
Section 711Right to object
Section 712Revocation and dismissal of management
Section 713Rights and duties of managing partners
Section 714Power of agency
Section 715Revocation of the power of agency
Section 716Right of control of the partners
Section 717Non-transferability of partner rights
Section 718Partnership assets
Section 719Joint assets
Section 720Protection of good-faith debtor
Section 721Distribution of profits and losses
Section 722Shares in profits and losses
Section 723Termination by partner
Section 724Notice of termination in the case of a partnership for life or a continuing partnership
Section 725Termination by attachment creditors
Section 726Dissolution due to achievement or impossibility of its object
Section 727Dissolution due to the death of a partner
Section 728Dissolution due to insolvency of the partnership or one of its partners
Section 729Continuation of authority to manage
Section 730Winding-up of the partnership; management
Section 731Procedure for winding-up of the partnership
Section 732Return of objects
Section 733Discharge of partnership debts; reimbursement of capital contributions
Section 734Distribution of the surplus
Section 735Duty to make subsequent contributions in case of loss
Section 736Retirement of a partner; continuing liability
Section 737Exclusion of a partner
Section 738Winding-up of the partnership on retirement
Section 739Liability for deficit
Section 740Sharing in the financial results of pending transactions
Title 17
Co-ownership
Section 741Co-ownership by defined shares
Section 742Equal shares
Section 743Share in the fruits; authority to use
Section 744Joint administration
Section 745Administration and use by resolution
Section 746Effect in relation to successors in interest
Section 747Disposition over a share and joint objects
Section 748Bearing of charges and costs
Section 749Claim to dissolution
Section 750Exclusion of dissolution in case of death
Section 751Exclusion of dissolution and successors in interest
Section 752Division in kind
Section 753Division by sale
Section 754Sale of joint claims
Section 755Discharge of a joint debt
Section 756Discharge of the debt of a part owner
Section 757Warranty upon allocation to a part owner
Section 758Claim to dissolution not subject to the statute of limitations
Title 18
Life annuity
Section 759Duration and amount of the annuity
Section 760Advance payment
Section 761Form of life annuity commitment
Title 19
Imperfect obligations
Section 762Gaming, betting
Section 763Lottery contracts and gaming contracts
Section 764(repealed)
Title 20
Suretyship
Section 765Contractual duties typical for suretyship
Section 766Written form of the declaration of suretyship
Section 767Extent of the suretyship debt
Section 768Defences of a surety
Section 769Co-suretyship
Section 770Defences of voidability and set-off
Section 771Defence of failure to pursue remedies
Section 772Duty of creditor of enforcement and realisation
Section 773Exclusion of defence of failure to pursue remedies
Section 774Statutory devolution of claims
Section 775Claim to release of the surety
Section 776Waiver of a security
Section 777Temporary suretyship
Section 778Credit mandate
Title 21
Settlement
Section 779Concept of settlement; mistake as to the basis of the settlement
Title 22
Promise to fulfil an obligation; acknowledgement of debt
Section 780Promise to fulfil an obligation
Section 781Acknowledgement of a debt
Section 782No requirements as to form for settlement
Title 23
Order
Section 783Rights derived from instruction
Section 784Acceptance of the instruction
Section 785Handover of the instruction
Section 786(repealed)
Section 787Instruction to assume debt
Section 788Underlying debt relationship
Section 789Duty of recipient of the document setting out the instruction to notify
Section 790Revocation of the instruction
Section 791Death or incapacity to contract of a party involved
Section 792Transfer of the instruction
Title 24
Bearer bond
Section 793Rights under a bearer bond
Section 794Liability of the issuer
Section 795(repealed)
Section 796Objections of the issuer
Section 797Duty to render performance only in return for handover
Section 798Replacement instrument
Section 799Declaration of invalidity
Section 800Effect of the declaration of invalidity
Section 801Extinction; prescription
Section 802Blockage of payment
Section 803Interest coupons
Section 804Loss of interest coupons or similar coupons
Section 805New interest coupons and annuity coupons
Section 806Reregistration under name
Section 807Bearer tickets and stamps
Section 808Registered securities with bearer clause
Title 25
Presentation of things
Section 809Inspection of a thing
Section 810Right to inspect instruments
Section 811Place of presentation, risk and costs
Title 26
Unjust enrichment
Section 812Claim to surrender
Section 813Performance notwithstanding defence
Section 814Knowledge that debt is not owed
Section 815Non-occurrence of result
Section 816Disposition by an unauthorised person
Section 817Breach of law or act offending common decency
Section 818Scope of the claim to enrichment
Section 819Increased liability in case of knowledge and in cases of breaches of law or acts offending common decency
Section 820Increased liability where the result is uncertain
Section 821Enrichment defence
Section 822Duty to surrender of third parties
Title 27
Torts
Section 823Liability in damages
Section 824Endangering credit
Section 825Inducing others to sexual acts
Section 826Intentional damage inflicted in a manner offending common decency
Section 827Exclusion and reduction of responsibility
Section 828Minors
Section 829Liability in damages for reasons of equity
Section 830Joint tortfeasors and persons involved
Section 831Liability for vicarious agents
Section 832Liability of a person with a duty of supervision
Section 833Liability of animal keeper
Section 834Liability of animal minder
Section 835(repealed)
Section 836Liability of the owner of a plot of land
Section 837Liability of building possessor
Section 838Liability of the person with a duty of upkeep regarding a building
Section 839Liability in case of breach of official duty
Section 839aLiability of court-appointed expert
Section 840Liability of more than one person
Section 841Compensation for liability of a public official
Section 842Extent of liability in damages in case of injury of a person
Section 843Annuity in money or lump sum settlement
Section 844Third-party compensation claims in the case of death
Section 845Compensation claims for lost services
Section 846Contributory negligence of the injured person
Section 847(repealed)
Section 848Liability for chance in the case of deprivation of a thing
Section 849Interest on the compensation sum
Section 850Reimbursement of outlays
Section 851Compensation payment to unauthorised parties
Section 852Claim to surrender after end of limitation period
Section 853Defence of bad faith
Book 3
Law of property
Division 1
Possession
Section 854Acquisition of possession
Section 855Agent in possession
Section 856Ending of possession
Section 857Inheritability
Section 858Prohibited interference with possession
Section 859Self-help by the possessor
Section 860Self-help by the agent in possession
Section 861Claim on account of deprivation of possession
Section 862Claim on account of interference with possession
Section 863Objections of the party depriving of possession or of the disturber
Section 864Extinction of claims to possession
Section 865Part possession
Section 866Co-possession
Section 867Possessor’s right of pursuit
Section 868Indirect possession
Section 869Claims of the indirect possessor
Section 870Transfer of indirect possession
Section 871Multilevel indirect possession
Section 872Proprietary possession
Division 2
General provisions on rights in land
Section 873Acquisition by agreement and registration
Section 874Reference to approval of registration
Section 875Cancellation of a right
Section 876Cancellation of an encumbered right
Section 877Alterations of rights
Section 878Subsequent restrictions on disposition
Section 879Order of priority of more than one right
Section 880Change of priority
Section 881Reservation of priority
Section 882Maximum amount of compensation for lost value
Section 883Prerequisites and effect of priority notice
Section 884Effect in relation to heirs
Section 885Prerequisite for the entry of the priority notice
Section 886Claim for removal
Section 887Judicial call of the priority notice claimant
Section 888Claim to approval of the person entitled to the priority notice
Section 889Exclusion of merger for rights in rem
Section 890Union of plots of land; addition
Section 891Statutory presumption
Section 892Presumption of legal force of the contents of the Land Register
Section 893Legal transaction with the person entered in the Land Register
Section 894Correction of the Land Register
Section 895Prior entry of the person obliged
Section 896Submission of certificate
Section 897Costs of correction
Section 898Claims to correction not subject to the statute of limitations
Section 899Entry of an objection
Section 899aProvisos for civil-law partnerships
Section 900Acquisition by prescription following entry in the Land Register
Section 901Extinction of rights not entered in the Land Register
Section 902Rights entered in the Land Register not subject to the statute of limitations
Division 3
Ownership
Title 1
Subject matter of ownership
Section 903Powers of the owner
Section 904Necessity
Section 905Restriction of ownership
Section 906Introduction of imponderable substances
Section 907Facilities threatening danger
Section 908Imminent collapse of building
Section 909Excavation
Section 910Overhang
Section 911Falling fruit
Section 912Encroachment; duty to tolerate
Section 913Payment of periodical payments for encroachment
Section 914Priority, registration and extinction of periodical payments
Section 915Purchase
Section 916Adverse effect on heritable building right or servitude
Section 917Right of way of necessity
Section 918Exclusion of the right of way of necessity
Section 919Boundary marking
Section 920Confusion of boundaries
Section 921Joint use of boundary installations
Section 922Manner of use and maintenance
Section 923Boundary tree
Section 924Neighbour-law claims not subject to the statute of limitations
Title 2
Acquisition and loss of ownership of plots of land
Section 925Declaration of conveyance
Section 925aDocument of land transaction
Section 926Accessories of the plot of land
Section 927Judicial call procedure
Section 928Relinquishment of ownership, appropriation by fiscal authority
Title 3
Acquisition and loss of ownership of movable things
Subtitle 1
Transfer
Section 929Agreement and delivery
Section 929aAgreement with regard to unregistered ship
Section 930Constructive delivery
Section 931Assignment of claim to surrender
Section 932Good faith acquisition from a person not entitled
Section 932aGood faith acquisition of unregistered ships
Section 933Good faith acquisition on constructive delivery
Section 934Good faith acquisition on assignment of claim to surrender
Section 935No good faith acquisition of lost things
Section 936Extinction of third party rights
Subtitle 2
Acquisition by prescription
Section 937Prerequisites, exclusion in the case of knowledge
Section 938Presumption of proprietary possession
Section 939Suspension of prescription
Section 940Interruption by loss of possession
Section 941Interruption by act of execution
Section 942Effect of interruption
Section 943Acquisition by prescription and succession in title
Section 944Possessor of an inheritance
Section 945Extinction of third party rights
Subtitle 3
Combination, intermixture, processing
Section 946Combination with a plot of land
Section 947Combination with movable things
Section 948Intermixture
Section 949Extinction of third party rights
Section 950Processing
Section 951Compensation for loss of rights
Section 952Ownership of documents of debt
Subtitle 4
Acquisition of products and other components of a thing
Section 953Ownership of separated products and components
Section 954Acquisition by person entitled in rem
Section 955Acquisition by proprietary possessor in good faith
Section 956Acquisition by person entitled in personam
Section 957Permission by the person not entitled
Subtitle 5
Appropriation
Section 958Acquisition of ownership of ownerless movable things
Section 959Abandonment of ownership
Section 960Wild animals
Section 961Loss of ownership of bee swarms
Section 962Right of pursuit of the owner
Section 963Merging of bee swarms
Section 964Intermixture of bee swarms
Subtitle 6
Finding
Section 965Duty of the finder to notify
Section 966Duty of safekeeping
Section 967Duty to deliver
Section 968Extent of liability
Section 969Surrender to the loser
Section 970Reimbursement of expenses
Section 971Finder’s reward
Section 972Right of retention of the finder
Section 973Acquisition of ownership by the finder
Section 974Acquisition of ownership after concealment
Section 975Rights of the finder after delivery
Section 976Acquisition of ownership by the municipality
Section 977Claim in enrichment
Section 978Finding in public authority or transport agency
Section 979Sale; authorisation to issue an ordinance
Section 980Notice by publication of the finding
Section 981Receipt of the proceeds of auction
Section 982Provisions for implementation
Section 983Undeliverable things in the possession of authorities
Section 984Treasure trove
Title 4
Claims arising from ownership
Section 985Claim to surrender
Section 986Objections of the possessor
Section 987Emoluments after litigation is pending
Section 988Emoluments of the possessor who makes no payment
Section 989Damages after litigation is pending
Section 990Liability of possessor with knowledge
Section 991Liability of intermediary possessor in the case of indirect possession
Section 992Liability of the wrongful possessor
Section 993Liability of the possessor in good faith
Section 994Necessary outlays
Section 995Charges
Section 996Useful outlays
Section 997Right of removal
Section 998Farming costs for agricultural plot of land
Section 999Reimbursement of outlays of the predecessor in title
Section 1000Right of retention of the possessor
Section 1001Action for reimbursement of outlays
Section 1002Extinction of the claim for outlays
Section 1003Right to satisfaction of the possessor
Section 1004Claim for removal and injunction
Section 1005Right of pursuit
Section 1006Presumption of ownership for possessor
Section 1007Claims of the former possessor, exclusion in the case of knowledge
Title 5
Co-ownership
Section 1008Co-ownership by fractional shares
Section 1009Encumbrance to the benefit of a co-owner
Section 1010Successor in interest of a co-owner
Section 1011Claims arising from co-ownership
Sections 1012 - 1017(repealed)
Division 4
Servitudes
Title 1
Easements
Section 1018Statutory definition of easement
Section 1019Benefit of the dominant plot of land
Section 1020Considerate use
Section 1021Agreed duty of maintenance
Section 1022Installations on building structures
Section 1023Moving the use
Section 1024Coincidence of more than one right of use
Section 1025Division of the dominant plot of land
Section 1026Division of the servient plot of land
Section 1027Interference with easement
Section 1028Limitation
Section 1029Protection of possession of the lawful possessor
Title 2
Usufruct
Subtitle 1
Usufruct in things
Section 1030Statutory definition of usufruct in things
Section 1031Application to accessories
Section 1032Creation of usufruct in movable things
Section 1033Acquisition by prescription
Section 1034Determination of the condition
Section 1035Usufruct in aggregate of things; list
Section 1036Right of possession; exercise of usufruct
Section 1037Transformation
Section 1038Economic plan for forests and mines
Section 1039Excessive taking of fruits
Section 1040Treasure
Section 1041Upkeep of the thing
Section 1042Duty of notification by the usufructuary
Section 1043Repair or replacement
Section 1044Toleration of repairs
Section 1045Obligation of the usufructuary to insure
Section 1046Usufruct in an insurance claim
Section 1047Bearing of charges
Section 1048Usufruct in plot of land with inventory
Section 1049Reimbursement of outlays
Section 1050Wear and tear
Section 1051Provision of security
Section 1052Judicial administration in the absence of security
Section 1053Application for a prohibitory injunction in the case of unauthorised use
Section 1054Judicial administration on the basis of breach of duty
Section 1055Duty of return of the usufructuary
Section 1056Leases and usufructuary leases at the end of the usufruct
Section 1057Limitation of compensation claims
Section 1058Grantor as owner
Section 1059Non-transferability; ceding the exercise
Section 1059aTransferability in the case of a legal person or of a partnership having legal personality
Section 1059bNon-distrainability
Section 1059cDevolution or transfer of usufruct
Section 1059dLeases and usufructuary leases on the transfer of the usufruct
Section 1059eClaim to grant of the usufruct
Section 1060Coincidence of more than one right of use
Section 1061Death of the usufructuary
Section 1062Extension of cancellation to accessories
Section 1063Coincidence with ownership
Section 1064Cancellation of usufruct in movable things
Section 1065Adverse effect on right of usufruct
Section 1066Usufruct in the share of a co-owner
Section 1067Usufruct in consumable things
Subtitle 2
Usufruct in rights
Section 1068Statutory definition of usufruct in rights
Section 1069Creation
Section 1070Usufruct in a right to performance
Section 1071Cancellation or alteration of the encumbered right
Section 1072Termination of usufruct
Section 1073Usufruct in a life annuity
Section 1074Usufruct in a claim; notice and collection
Section 1075Effect of performance
Section 1076Usufruct in claim bearing interest
Section 1077Notice of termination and payment
Section 1078Cooperation in collection
Section 1079Investment of the capital
Section 1080Usufruct in a land charge or annuity land charge
Section 1081Usufruct in bearer instruments or instruments made out to order
Section 1082Deposit
Section 1083Cooperation in collection
Section 1084Consumable things
Subtitle 3
Usufruct in assets
Section 1085Creation of usufruct in assets
Section 1086Rights of the creditors of the grantor
Section 1087Relationship between usufructuary and grantor
Section 1088Liability of the usufructuary
Section 1089Usufruct in an inheritance
Title 3
Restricted personal easements
Section 1090Statutory definition of the restricted personal easement
Section 1091Scope
Section 1092Non-transferability; ceding the exercise
Section 1093Right of residence
Division 5
Right of preemption
Section 1094Statutory contents of the in-rem right of preemption
Section 1095Encumbrance of a fraction
Section 1096Application to accessories
Section 1097Creation for one or more cases of sale
Section 1098Effect of a right of preemption
Section 1099Notifications
Section 1100Rights of the purchaser
Section 1101Release of the person entitled
Section 1102Release of the purchaser
Section 1103Subjective in-rem right of preemption and personal right of preemption
Section 1104Exclusion of unknown entitled persons
Division 6
Charges on land
Section 1105Statutory contents of the charge on land
Section 1106Encumbrance of a fraction
Section 1107Individual payments
Section 1108Personal liability of the owner
Section 1109Division of the dominant plot of land
Section 1110Subjective in-rem charge on land
Section 1111Personal charge on land
Section 1112Exclusion of unknown entitled persons
Division 7
Mortgage, land charge, annuity land charge
Title 1
Mortgage
Section 1113Statutory contents of the mortgage
Section 1114Encumbrance of a fraction
Section 1115Entry of the mortgage
Section 1116Certificated and uncertificated mortgage
Section 1117Acquisition of the certificated mortgage
Section 1118Liability for incidental claims
Section 1119Extension of liability for interest
Section 1120Extension to products, parts and accessories
Section 1121Release from liability through alienation and removal
Section 1122Release from liability without alienation
Section 1123Extension to claim for rent or for usufructuary rent
Section 1124Advance disposition over the rent or usufructuary rent
Section 1125Set-off against rent or usufructuary rent
Section 1126Extension to recurring acts of performance
Section 1127Extension to insurance claim
Section 1128Insurance on buildings
Section 1129Other insurance against damage
Section 1130Replacement clause
Section 1131Addition of a plot of land
Section 1132Blanket mortgage
Section 1133Danger to the security of the mortgage
Section 1134Application for an injunction
Section 1135Deterioration of accessories
Section 1136Restraint on disposition by legal transaction
Section 1137Defences of the owner
Section 1138Presumption of legal force of the contents of the Land Register
Section 1139Objection with regard to an uncertificated mortgage for a loan
Section 1140Mortgage certificate and inaccuracy of the Land Register
Section 1141Notice of termination of the mortgage
Section 1142Owner’s right to provide satisfaction
Section 1143Devolution of claim
Section 1144Handover of documents
Section 1145Partial satisfaction
Section 1146Default interest
Section 1147Satisfaction by compulsory enforcement
Section 1148Fiction of ownership
Section 1149Prohibited agreements on satisfaction
Section 1150Right of redemption of third parties
Section 1151Change of priority for partial mortgages
Section 1152Partial mortgage certificate
Section 1153Transfer of mortgage and claim
Section 1154Assignment of the claim
Section 1155Presumption of legal force of certified declarations of assignment
Section 1156Legal relationship between the owner and the new creditor
Section 1157Continuation of defences against the mortgage
Section 1158Future collateral performance
Section 1159Arrears of collateral performance
Section 1160Enforcement of a certificated mortgage
Section 1161Enforcement of the claim
Section 1162Judicial call with regard to the mortgage certificate
Section 1163Owner mortgage
Section 1164Devolution of the mortgage to the debtor
Section 1165Discharge of the debtor
Section 1166Notification of the debtor
Section 1167Delivery of correction documents
Section 1168Waiver of the mortgage
Section 1169Defence with a negative effect on a right
Section 1170Exclusion of unknown creditors
Section 1171Exclusion by deposit
Section 1172Owner blanket mortgage
Section 1173Satisfaction by one of the owners
Section 1174Satisfaction by the personal debtor
Section 1175Waiver of the blanket mortgage
Section 1176Owner partial mortgage; conflict clause
Section 1177Owner land charge, owner mortgage
Section 1178Mortgage for collateral performance and costs
Section 1179Priority notice of right to deletion
Section 1179aClaim to deletion in the case of third party rights
Section 1179bClaim to deletion based on one’s own right
Section 1180Substitution for the claim
Section 1181Extinction by satisfaction from the plot of land
Section 1182Transfer in the case of satisfaction from the blanket mortgage
Section 1183Cancellation of the mortgage
Section 1184Debt-securing mortgage
Section 1185Uncertificated mortgage; inapplicable provisions
Section 1186Permitted conversions
Section 1187Debt-securing mortgage for bearer instruments and instruments made out to order
Section 1188Special provision for bearer bonds
Section 1189Appointment of a Land Register representative
Section 1190Maximum amount mortgage
Title 2
Land charge, annuity land charge
Subtitle 1
Land charge
Section 1191Statutory contents of the land charge
Section 1192Applicable provisions
Section 1193Termination
Section 1194Place of payment
Section 1195Bearer land charge
Section 1196Owner land charge
Section 1197Deviations from third party land charge
Section 1198Permitted conversions
Subtitle 2
Annuity land charge
Section 1199Statutory contents of the annuity land charge
Section 1200Applicable provisions
Section 1201Right of redemption
Section 1202Termination
Section 1203Permitted conversions
Division 8
Pledge of movable things and over rights
Title 1
Pledge of movable things
Section 1204Statutory contents of the pledge of movable things
Section 1205Creation
Section 1206Replacement of delivery by granting joint possession
Section 1207Pledging by an unauthorised person
Section 1208Acquisition of priority of rank in good faith
Section 1209Priority of the pledge
Section 1210Extent of liability of the pledge
Section 1211Defences of the pledgor
Section 1212Extension to separated products
Section 1213Pledge of emoluments
Section 1214Duties of the pledgee entitled to emoluments
Section 1215Duty of safekeeping
Section 1216Reimbursement of outlays
Section 1217Violation of rights by the pledgee
Section 1218Rights of the pledgor in the case of imminent spoilage
Section 1219Rights of the pledgee in the case of imminent spoilage
Section 1220Warning of auction
Section 1221Sale by private agreement
Section 1222Pledge of more than one thing
Section 1223Duty to return the pledged item; right to redeem the pledged item
Section 1224Satisfaction by deposit or set-off
Section 1225Devolution of claim to the pledgor
Section 1226Limitation of compensation claims
Section 1227Protection of the pledge
Section 1228Satisfaction by sale of the pledged item
Section 1229Prohibition of a forfeiture agreement
Section 1230Selection of pledged item from more than one pledged item
Section 1231Surrender of pledged item for sale
Section 1232Lower-ranking pledgees
Section 1233Execution of the sale
Section 1234Warning of sale; waiting period
Section 1235Public auction
Section 1236Place of auction
Section 1237Notice by publication
Section 1238Conditions of sale
Section 1239Bidding by creditor and owner
Section 1240Things made of gold or silver
Section 1241Notification of the owner
Section 1242Effects of the lawful alienation
Section 1243Unlawful alienation
Section 1244Acquisition in good faith
Section 1245Deviating agreements
Section 1246Deviation for reasons of equity
Section 1247Proceeds of the pledged item
Section 1248Presumption of ownership
Section 1249Right of redemption
Section 1250Transfer of claim
Section 1251Effect of the devolution of the pledge
Section 1252Extinction with the claim
Section 1253Extinction by return
Section 1254Claim for return
Section 1255Cancellation of the pledge
Section 1256Coincidence of pledge and ownership
Section 1257Pledge by operation of law
Section 1258Pledge of the share of a co-owner
Section 1259Realisation of a commercial pledged item
Sections 1260 - 1272(repealed)
Title 2
Pledge of rights
Section 1273Statutory contents of the pledge of rights
Section 1274Creation
Section 1275Pledge of right to performance
Section 1276Cancellation or alteration of the pledged right
Section 1277Satisfaction by compulsory enforcement
Section 1278Extinction by return
Section 1279Pledge of a claim
Section 1280Notification of the debtor
Section 1281Performance before the due date
Section 1282Performance after the due date
Section 1283Termination
Section 1284Deviating agreements
Section 1285Cooperation in collection
Section 1286Duty of termination in the case of danger
Section 1287Effect of performance
Section 1288Investment of collected money
Section 1289Extension to the interest
Section 1290Collection in the case of multiple pledges
Section 1291Pledge of land charge or annuity land charge
Section 1292Pledging of instruments made out to order
Section 1293Pledge of bearer instruments
Section 1294Collection and notice of termination
Section 1295Private sale of instruments made out to order
Section 1296Extension to interest coupons
Book 4
Family law
Division 1
Civil marriage
Title 1
Engagement
Section 1297No petition for a marriage to be entered into, nullity of a promise to pay a penalty
Section 1298Duty of compensation in the case of withdrawal
Section 1299Withdrawal by reason of fault of the other party
Section 1300(repealed)
Section 1301Return of the presents
Section 1302Limitation
Title 2
Entering into marriage
Subtitle 1
Capacity to marry
Section 1303Marriageable age
Section 1304Incapacity to contract
Section 1305(repealed)
Subtitle 2
Impediments to marriage
Section 1306Existing marriage or life partnership
Section 1307Relationship by blood
Section 1308Adoption
Subtitle 3
Certificate of no impediment
Section 1309Certificate of no impediment for foreigners
Subtitle 4
Marriage
Section 1310Competence of the registrar of births, deaths and marriages, curing defective marriages
Section 1311Personal declaration
Section 1312Marriage ceremony
Title 3
Annulment of marriage
Section 1313Annulment by judicial decision
Section 1314Grounds of annulment
Section 1315Exclusion of annulment
Section 1316Entitlement to petition
Section 1317Period for filing the petition
Section 1318Consequences of annulment
Title 4
Remarriage after declaration of death
Section 1319Annulment of the previous marriage
Section 1320Annulment of the new marriage
Sections 1321 - 1352(repealed)
Title 5
Effects of marriage in general
Section 1353Conjugal union
Section 1354(repealed)
Section 1355Family name
Section 1356Household management, gainful employment
Section 1357Transactions to provide the necessities of life
Section 1358(repealed)
Section 1359Scope of duty of care
Section 1360Duty of family maintenance
Section 1360aScope of the obligation to maintain
Section 1360bOverpayment
Section 1361Maintenance when spouses are living apart
Section 1361aAllocation of household effects when spouses are living apart
Section 1361bMatrimonial residence when spouses are living apart
Section 1362Presumption of ownership
Title 6
Matrimonial property regime
Subtitle 1
Statutory property regime
Section 1363Community of accrued gains
Section 1364Management of assets
Section 1365Disposition over assets as a whole
Section 1366Ratification of contracts
Section 1367Unilateral legal transactions
Section 1368Asserting the ineffectiveness
Section 1369Dispositions over household objects
Section 1370(repealed)
Section 1371Equalisation of accrued gains in the case of death
Section 1372Equalisation of accrued gains in other cases
Section 1373Accrued gains
Section 1374Initial assets
Section 1375Final assets
Section 1376Ascertainment of the value of the initial and final assets
Section 1377List of initial assets
Section 1378Equalisation claim
Section 1379Duty of information
Section 1380Set-off of advancements
Section 1381Refusal of satisfaction for gross inequity
Section 1382Deferment
Section 1383Transfer of assets
Section 1384Cut-off date for computing the accrued gains and the amount of the equalisation claim in the case of divorce
Section 1385Premature equalisation of accrued gains of the spouse entitled to an equalisation claim in case of premature cancellation of the community of accrued gains
Section 1386Premature suspension of the community of accrued gains
Section 1387Cut-off date for computing the accrued gains and amount of the equalisation claim in the case of premature equalisation or premature suspension
Section 1388Occurrence of separation of property
Section 1389(repealed)
Section 1390Claims against third parties of the person entitled to equalisation
Sections 1391 - 1407(repealed)
Subtitle 2
Contractual property regime
Chapter 1
General provisions
Section 1408Marriage contract, freedom of contract
Section 1409Restriction of freedom of contract
Section 1410Form
Section 1411Marriage contracts of persons placed under the care of a custodian
Section 1412Effect in relation to third parties
Section 1413Revocation of permission to manage assets
Chapter 2
Separation of property
Section 1414Commencement of separation of property
Chapter 3
Community of property
Subchapter 1
General provisions
Section 1415Agreement by marriage contract
Section 1416Common matrimonial property
Section 1417Separate property
Section 1418Reserved property
Section 1419Joint ownership
Section 1420Use for maintenance
Section 1421Management of the common matrimonial property
Subchapter 2
Management of the common matrimonial property by one spouse
Section 1422Subject matter of right of management
Section 1423Disposition over the common matrimonial property as a whole
Section 1424Disposition over plots of land, ships or ships under construction
Section 1425Donations
Section 1426Substitution of the approval of the other spouse
Section 1427Legal consequences of lack of consent
Section 1428Dispositions without approval
Section 1429Emergency right of management
Section 1430Substitution of the approval of the managing spouse
Section 1431Independent trade or business
Section 1432Acceptance of an inheritance; refusal of offer to enter into contract or of donation
Section 1433Continuation of a legal dispute
Section 1434Unjust enrichment of the common matrimonial property
Section 1435Duties of the managing spouse
Section 1436Managing spouse under custodianship
Section 1437Obligations of the common matrimonial property; personal liability
Section 1438Liability of the common matrimonial property
Section 1439No liability on acquisition of an inheritance
Section 1440Liability for reserved or separate property
Section 1441Liability as between the spouses
Section 1442Obligations of the separate property and of a trade or business
Section 1443Costs of litigation
Section 1444Costs of the advancement of a child
Section 1445Equalisation between reserved property, separate property and common matrimonial property
Section 1446Due date of the equalisation claim
Section 1447Petition of the non-managing spouse for termination
Section 1448Petition of the managing spouse for termination
Section 1449Effect of the judicial termination decision
Subchapter 3
Joint management of the common matrimonial property by the spouses
Section 1450Joint management by the spouses
Section 1451Duty of both spouses to cooperate
Section 1452Substitution of approval
Section 1453Disposition without consent
Section 1454Emergency right of management
Section 1455Acts of management without the cooperation of the other spouse
Section 1456Independent trade or business
Section 1457Unjust enrichment of the common matrimonial property
Section 1458(repealed)
Section 1459Obligations of the common matrimonial property; personal liability
Section 1460Liability of the common matrimonial property
Section 1461No liability on acquisition of an inheritance
Section 1462Liability for reserved or separate property
Section 1463Liability as between the spouses
Section 1464Obligations of the separate property and of a trade or business
Section 1465Costs of litigation
Section 1466Costs of the advancement of a child that is not a child of the spouses
Section 1467Equalisation between reserved property, separate property and common matrimonial property
Section 1468Due date of the equalisation claim
Section 1469Petition for termination
Section 1470Effect of the judicial termination decision
Subchapter 4
Partitioning of the common matrimonial property
Section 1471Beginning of the partitioning
Section 1472Joint management of the common matrimonial property
Section 1473Direct substitution
Section 1474Implementation of the partitioning
Section 1475Discharge of the obligations of the common matrimonial property
Section 1476Division of the surplus
Section 1477Implementation of the division
Section 1478Partitioning after divorce
Section 1479Partitioning after judicial termination decision
Section 1480Liability to third parties after the division
Section 1481Liability of the spouses to each other
Section 1482Dissolution of marriage by death
Subchapter 5
Continued community of property
Section 1483Occurrence of continued community of property
Section 1484Refusal of continued community of property
Section 1485Common matrimonial property
Section 1486Reserved property; separate property
Section 1487Legal position of the spouse and the descendants
Section 1488Obligations of the common matrimonial property
Section 1489Personal liability for the obligations of the common matrimonial property
Section 1490Death of a descendant
Section 1491Waiver by a descendant
Section 1492Termination by the surviving spouse
Section 1493Remarriage or establishment of a life partnership by the surviving spouse
Section 1494Death of the surviving spouse
Section 1495Petition of a descendant for termination
Section 1496Effect of the judicial termination decision
Section 1497Legal relationship until partitioning
Section 1498Implementation of the partitioning
Section 1499Obligations borne by the surviving spouse
Section 1500Obligations borne by the descendants
Section 1501Set-off of lump sum payments
Section 1502Right of surviving spouse to assume assets
Section 1503Division among the descendants
Section 1504Adjustment of liability between descendants
Section 1505Supplementation of the share of a descendant
Section 1506Unworthiness to receive a share
Section 1507Certificate on continuation of the community of property
Section 1508(repealed)
Section 1509Exclusion of the continued community of property by testamentary disposition
Section 1510Effect of exclusion
Section 1511Exclusion of a descendant
Section 1512Reduction of the share
Section 1513Deprivation of the share
Section 1514Disposition of the amount withheld
Section 1515Right of a descendant and of the spouse to assume assets
Section 1516Approval of the other spouse
Section 1517Waiver of their share by a descendant
Section 1518Mandatory law
Chapter 4
Optional Regime of the Community of Accrued Gains
Section 1519Agreement by marriage contract
Section 1520 to 1557(repealed)
Subtitle 3
Matrimonial property register
Section 1558Competent court of registration
Section 1559Change of habitual residence
Section 1560Application for entry
Section 1561Requirements for application
Section 1562Notice by publication
Section 1563Inspection of the register; application of Regulation (EU) 2016/679 in registry proceedings
Title 7
Divorce
Subtitle 1
Grounds of divorce
Section 1564Divorce by judicial decision
Section 1565Breakdown of marriage
Section 1566Presumption of breakdown
Section 1567Living apart
Section 1568Hardship clause
Subtitle 1a
Treatment of the matrimonial residence and of the household objects on the occasion of divorce
Section 1568aMatrimonial residence
Section 1568bHousehold objects
Subtitle 2
Maintenance of the divorced spouse
Chapter 1
Principle
Section 1569Principle of personal responsibility
Chapter 2
Entitlement to maintenance
Section 1570Maintenance to care for a child
Section 1571Maintenance by reason of old age
Section 1572Maintenance for illness or infirmity
Section 1573Maintenance for unemployment and topping-up maintenance
Section 1574Appropriate gainful employment
Section 1575Training, further training or retraining
Section 1576Maintenance for reasons of equity
Section 1577Indigence
Section 1578Amount of maintenance
Section 1578aPresumption of cover in the case of additional expenditure resulting from injury
Section 1578bReduction and time limitation of maintenance on grounds of inequity
Section 1579Restriction or refusal of maintenance for gross inequity
Section 1580Duty of information
Chapter 3
Ability to pay and priority
Section 1581Ability to pay
Section 1582Priority of the divorced spouse where more than one person is entitled to maintenance
Section 1583Influence of the matrimonial property regime
Section 1584Priority of more than one person liable for maintenance
Chapter 4
Form of the maintenance claim
Section 1585Nature of maintenance payment
Section 1585aProvision of security
Section 1585bMaintenance for the past
Section 1585cAgreements on maintenance
Chapter 5
End of the maintenance claim
Section 1586Remarriage, establishment of a life partnership or death of the person entitled
Section 1586aRevival of the maintenance claim
Section 1586bObligation not extinguished on death of the person obliged
Subtitle 3
Equalisation of pension rights
Section 1587Reference to the Equalisation of Pension Rights Act (Versorgungsausgleichsgesetz)
Title 8
Church duties
Section 1588(no heading)
Division 2
Relationship
Title 1
General provisions
Section 1589Relationship by blood
Section 1590Relationship by marriage
Title 2
Descent
Section 1591Maternity
Section 1592Paternity
Section 1593Paternity in the case of dissolution of the marriage by death
Section 1594Acknowledgement of paternity
Section 1595Need for approval of the acknowledgement
Section 1596Acknowledgement and approval in the case of lack of capacity to contract or limited capacity to contract
Section 1597Formal requirements; revocation
Section 1597aProhibition of wrongful acknowledgment of paternity
Section 1598Ineffectiveness of acknowledgement, approval and revocation
Section 1598aClaim to consent to a genetic examination to clarify natural parentage
Section 1599Non-existence of paternity
Section 1600Persons entitled to contest
Section 1600aPersonal contestation; contestation in the case of lack of capacity to contract or limited capacity to contract
Section 1600bContestation periods
Section 1600cPresumption of paternity in contestation proceedings
Section 1600dCourt determination of paternity
Title 3
Obligation to maintain
Subtitle 1
General provisions
Section 1601Persons with an obligation to maintain
Section 1602Indigence
Section 1603Ability to pay
Section 1604Influence of the matrimonial property regime
Section 1605Duty of information
Section 1606Order of priority of more than one person obliged
Section 1607Substituted liability and statutory devolution of claim
Section 1608Liability of the spouse or life partner
Section 1609Priority of more than person entitled to maintenance
Section 1610Amount of maintenance
Section 1610aPresumption of cover in the case of additional expenditure resulting from injury
Section 1611Restriction or end of obligation
Section 1612Nature of maintenance payment
Section 1612aMinimum maintenance of minor children; authorisation to issue statutory instruments
Section 1612bMeeting cash requirements through child benefit
Section 1612cSet-off of other child-related payments
Section 1613Maintenance for the past
Section 1614Waiver of maintenance claim; advance performance
Section 1615Extinction of the maintenance claim
Subtitle 2
Special provisions for the child and its parents who are not married to each other
Section 1615aApplicable provisions
Sections 1615b to 1615k(repealed)
Section 1615lMaintenance claim of mother and father by reason of the birth
Section 1615mFuneral costs for the mother
Section 1615nNo expiry on the death of the father or stillbirth
Title 4
Legal relationship between the parents and the child in general
Section 1616Birth name in the case of parents with family name
Section 1617Birth name in the case of parents without family name and with joint parental custody
Section 1617aBirth name in the case of parents without family name and with sole parental custody
Section 1617bName in the case of subsequent joint parental custody or ostensible paternity
Section 1617cName in the case of change of name by the parents
Section 1618Bringing a child under a family name
Section 1618aDuty of assistance and respect
Section 1619Services in house and business
Section 1620Outlays of the child for the household of its parents
Sections 1621 - 1623(repealed)
Section 1624Advancement from the parental assets
Section 1625Advancement from the assets of the child
Title 5
Parental custody
Section 1626Parental custody, principles
Section 1626aParental custody of parents who are not married to one another; declarations of parental custody
Section 1626bSpecial prerequisites for the effectiveness of the declaration of parental custody
Section 1626cDeclaring in person; parent with limited capacity to contract
Section 1626dForm; duty of notification
Section 1626eIneffectiveness
Section 1627Exercise of parental custody
Section 1628Court decision in the case of differences of opinion between the parents
Section 1629Representation of the child
Section 1629aRestriction of liability of minors
Section 1630Parental custody in the case of appointment of a curator or of foster care
Section 1631Contents and limits of care for the person of the child
Section 1631aTraining and profession
Section 1631bPlacement involving deprivation of liberty and measures involving deprivation of liberty
Section 1631cProhibition of sterilisation
Section 1631dCircumcision of the male child
Section 1631eTreatment of children with variants of sexual development
Section 1632Surrender of the child; determination of contact; order that child remains in foster care
Section 1633(repealed)
Sections 1634 - 1637(repealed)
Section 1638Restriction of care for the assets of the child
Section 1639Directions of the testator or donor
Section 1640Inventory of assets
Section 1641Prohibition of donation
Section 1642Investment of money
Section 1643Legal transactions subject to approval
Section 1644Making available assets to the child
Section 1645New trade or business
Section 1646Acquisition with funds of the child
Section 1647(repealed)
Section 1648Reimbursement of outlays
Section 1649Use of the income from the assets of the child
Sections 1650 - 1663(repealed)
Section 1664Limited liability of the parents
Section 1665(repealed)
Section 1666Court measures in the case of endangerment of the best interests of the child
Section 1666aPrinciple of proportionality; priority of public support measures
Section 1667Court measures in the case of endangerment of the assets of the child
Sections 1668 - 1670(repealed)
Section 1671Transfer of sole custody where the parents live apart
Section 1672(repealed)
Section 1673Suspension of parental custody in the case of a legal impediment
Section 1674Suspension of parental custody in the case of a factual impediment
Section 1674aSuspension of the mother’s parental custody for a child delivered by confidential birth
Section 1675Effect of the suspension
Section 1676(repealed)
Section 1677Termination of parental custody by declaration of death
Section 1678Consequences for the other parent of the actual prevention or of the suspension
Section 1679(repealed)
Section 1680Death of a parent or removal of the parental custody
Section 1681Declaration of death of a parent
Section 1682Order that the child remains with persons to whom it relates
Section 1683(repealed)
Section 1684Contact of the child with its parents
Section 1685Contact of the child with other persons to whom it relates
Section 1686Information on the personal circumstances of the child
Section 1686aRights of the biological but not legal father
Section 1687Exercise of joint parental custody when the parents live apart
Section 1687aPower to make decision of the parent without parental custody
Section 1687bParental custody powers of the spouse
Section 1688Decisions of the foster carer
Sections 1689 - 1692(repealed)
Section 1693Court measures where the parents are prevented
Sections 1694, 1695(repealed)
Section 1696Amendment of judicial decisions and of court-approved settlements
Section 1697(repealed)
Section 1697aPrinciple of best interests of child
Section 1698Surrender of the assets of the child; rendering accounts
Section 1698aContinuation of transactions in ignorance that parental custody has ended
Section 1698bContinuation of urgent transactions after the death of the child
Sections 1699 - 1711(repealed)
Title 6
Legal advisership
Section 1712Youth welfare office as legal adviser; tasks
Section 1713Persons entitled to apply
Section 1714Occurrence of legal advisership
Section 1715Termination of legal advisership
Section 1716Effects of legal advisership
Section 1717Requirement of habitual residence on domestic territory
Sections 1718 - 1740(repealed)
Title 7
Adoption
Subtitle 1
Adoption of minors
Section 1741Admissibility of the adoption
Section 1742Adoption only as child of the spouses
Section 1743Minimum age
Section 1744Probationary period
Section 1745Prohibition of adoption
Section 1746Consent of the child
Section 1747Consent of the parents of the child
Section 1748Substitution of the consent of a parent
Section 1749Consent of the spouse
Section 1750Declaration of consent
Section 1751Effect of parental consent, maintenance obligation
Section 1752Order of the family court, application
Section 1753Adoption after death
Section 1754Effect of adoption
Section 1755Extinction of relationships
Section 1756Continuation of relationships
Section 1757Name of the child
Section 1758Prohibition on disclosure and exploratory questioning
Section 1759Cancellation of the adoption relationship
Section 1760Setting aside for lack of declarations
Section 1761Impediments preventing cancellation
Section 1762Entitlement to apply; period for filing application, form
Section 1763Cancellation by the court of its own motion
Section 1764Effect of cancellation
Section 1765Name of the child after the cancellation
Section 1766Marriage between adoptive parent and child
Section 1766aAdoption of children of a partner who is not a spouse
Subtitle 2
Adoption of persons of full age
Section 1767Admissibility of adoption, applicable provisions
Section 1768Application
Section 1769Prohibition of adoption
Section 1770Effect of adoption
Section 1771Cancellation of the adoption relationship
Section 1772Adoption with the effects of the adoption of a minor
Division 3
Guardianship, legal curatorship, custodianship
Title 1
Guardianship
Subtitle 1
Creation of guardianship
Section 1773Prerequisites
Section 1774Order by the court of its own motion
Section 1775More than one guardian
Section 1776Right of the parents to name the guardian
Section 1777Prerequisites for the right to name the guardian
Section 1778Passing over the guardian named
Section 1779Selection by the family court
Section 1780Lack of capacity to be a guardian
Section 1781Unsuitability to be a guardian
Section 1782Exclusion by the parents
Section 1783(repealed)
Section 1784Official or church officer as guardian
Section 1785Duty to assume guardianship
Section 1786Right to refuse
Section 1787Consequences of unjustified refusal
Section 1788Coercive fine
Section 1789Appointment by the family court
Section 1790Appointment subject to a reservation
Section 1791Certificate of appointment
Section 1791aGuardianship by association
Section 1791bOfficial guardianship of the Youth Welfare Office by appointment
Section 1791cStatutory official guardianship of the Youth Welfare Office
Section 1792Supervisory guardian
Subtitle 2
Conducting of the guardianship
Section 1793Duties of the guardian, liability of the ward
Section 1794Restriction as a result of curatorship
Section 1795Exclusion of power of agency
Section 1796Revocation of power of agency
Section 1797More than one guardian
Section 1798Differences of opinion
Section 1799Duties and rights of the supervisory guardian
Section 1800Scope of care for the person
Section 1801Religious education
Section 1802Inventory of assets
Section 1803Management of assets in the case of inheritance or donation
Section 1804Donations made by the guardian
Section 1805Use for the guardian
Section 1806Investment of money held in trust for a ward
Section 1807Nature of investment
Section 1808(repealed)
Section 1809Investment with blocking note
Section 1810Cooperation of supervisory guardian or family court
Section 1811Other investment
Section 1812Dispositions over claims and securities
Section 1813Transactions not requiring approval
Section 1814Deposit of bearer instruments
Section 1815Change of registration and conversion of bearer instruments
Section 1816Blocking of book-entry securities
Section 1817Exemption
Section 1818Order of deposit
Section 1819Approval in the case of deposit
Section 1820Approval after change of registration and conversion
Section 1821Approval of transactions relating to plots of land, ships or ships under construction
Section 1822Approval for other transactions
Section 1823Approval where the ward has a trade or business
Section 1824Approval for making available objects to the ward for their use
Section 1825General authorisation
Section 1826Hearing of the supervisory guardian before giving the approval
Section 1827(repealed)
Section 1828Pronouncement of approval
Section 1829Subsequent approval
Section 1830Right of revocation of the other party
Section 1831Unilateral legal transaction without approval
Section 1832Ratification by the supervisory guardian
Section 1833Liability of the guardian
Section 1834Duty to pay interest
Section 1835Reimbursement of outlays
Section 1835aReimbursement for expenses
Section 1836Payment of the guardian
Sections 1836a and 1836b(repealed)
Section 1836cFunds to be applied by the ward
Section 1836dDestitution of the ward
Section 1836eStatutory devolution of claim
Subtitle 3
Care and supervision of the family court
Section 1837Advice and supervision
Section 1838(repealed)
Section 1839Duty of information of the guardian
Section 1840Report and rendering of account
Section 1841Contents of the accounts rendered
Section 1842Cooperation of the supervisory guardian
Section 1843Examination by the family court
Section 1844(repealed)
Section 1845(repealed)
Section 1846Interim measures of the family court
Section 1847Hearing of the relatives
Section 1848(repealed)
Subtitle 4
Cooperation of the Youth Welfare Office
Sections 1849, 1850(repealed)
Section 1851Duties of notification
Subtitle 5
Exempted guardianship
Section 1852Exemption by the father
Section 1853Exemption from deposit and blocking
Section 1854Exemption from duty to render accounts
Section 1855Exemption by the mother
Section 1856Prerequisites for exemption
Section 1857Cancellation of the exemption by the family court
Section 1857aExemption of the Youth Welfare Office and the association
Sections 1858 - 1881(repealed)
Subtitle 6
Termination of the guardianship
Section 1882Cessation of the prerequisites
Section 1883(repealed)
Section 1884Ward missing and declaration of death of the ward
Section 1885(repealed)
Section 1886Removal of the sole guardian
Section 1887Removal of the Youth Welfare Office or association
Section 1888Removal of officials and church officers
Section 1889Removal on application by the guardian
Section 1890Surrender of assets and rendering accounts
Section 1891Cooperation of the supervisory guardian
Section 1892Examination and approval of the account
Section 1893Continuation of transactions after the termination of the guardianship, return of certificates
Section 1894Notification on death of the guardian
Section 1895Termination of office of the supervisory guardian
Title 2
Legal custodianship
Section 1896Prerequisites
Section 1897Appointment of a natural person
Section 1898Duty to assume custodianship
Section 1899More than one custodian
Section 1900Custodianship by association or public authority
Section 1901Scope of the custodianship, duties of the custodian
Section 1901aLiving will
Section 1901bDiscussion to ascertain the patient’s will
Section 1901cWishes in writing with regard to custodianship, enduring power of attorney
Section 1902Representation of the person under custodianship
Section 1903Reservation of consent
Section 1904Ratification by the custodianship court in the case of medical treatment
Section 1905Sterilisation
Section 1906Ratification by the custodianship court in the case of placement involving deprivation of liberty and in the case of measures involving deprivation of liberty
Section 1906aRatification by the custodianship court in the case of coercive measures by physicians
Section 1907Ratification by the custodianship court in the case of the abandonment of rented residence
Section 1908Ratification by the custodianship court with regard to advancement
Section 1908aPrecautionary appointment of a custodian and order of reservation of consent for minors
Section 1908bRemoval of the custodian
Section 1908cAppointment of a new custodian
Section 1908dCancellation or alteration of custodianship and reservation of consent
Section 1908e(repealed)
Section 1908fRecognition as custodianship association
Section 1908gPublic authority custodian
Section 1908h(repealed)
Section 1908iProvisions applicable accordingly
Section 1908k(repealed)
Title 3
Curatorship
Section 1909Supplementary curatorship
Section 1910(repealed)
Section 1911Curatorship of absentees
Section 1912Curatorship for an unborn child
Section 1913Curatorship for unknown persons involved
Section 1914Curatorship for collected assets
Section 1915Application of guardianship law
Section 1916Designation as supplementary curator
Section 1917Naming of the supplementary curator by testator and third parties
Section 1918Termination of the curatorship by operation of law
Section 1919Cancellation of the curatorship on cessation of reason
Section 1920(repealed)
Section 1921Cancellation of the curatorship of absentees
Book 5
Law of succession
Division 1
Succession
Section 1922Universal succession
Section 1923Capacity to inherit
Section 1924Heirs on intestacy of the first degree
Section 1925Heirs on intestacy of the second degree
Section 1926Heirs on intestacy of the third degree
Section 1927More than one share of the inheritance in the case of multiple relationship
Section 1928Heirs on intestacy of the fourth degree
Section 1929More distant degrees
Section 1930Priority of the degrees
Section 1931Right of intestate succession of the spouse
Section 1932Preferential benefit of the spouse
Section 1933Exclusion of the right of succession of the spouse
Section 1934Right of succession of spouse who is a relative
Section 1935Consequences of increase of share of the inheritance
Section 1936Right of intestate succession of the State
Section 1937Appointment of heir by testamentary disposition
Section 1938Disinheritance without appointment of an heir
Section 1939Legacy
Section 1940Testamentary burden
Section 1941Contract of inheritance
Division 2
Legal position of the heir
Title 1
Acceptance and disclaimer of the inheritance; supervision of the probate court
Section 1942Devolution and disclaimer of the inheritance
Section 1943Acceptance and disclaimer of the inheritance
Section 1944Period for disclaimer
Section 1945Form of disclaimer
Section 1946Date for acceptance or disclaimer
Section 1947Condition and stipulation as to time
Section 1948More than one ground of entitlement
Section 1949Mistake as to the ground of entitlement
Section 1950Partial acceptance; partial disclaimer
Section 1951More than one share of the inheritance
Section 1952Inheritability of the right of disclaimer
Section 1953Effect of disclaimer
Section 1954Period of avoidance
Section 1955Form of avoidance
Section 1956Avoidance of failure to disclaim in good time
Section 1957Effect of avoidance
Section 1958Judicial assertion of claims against the heir
Section 1959Management before the disclaimer
Section 1960Securing the estate; curator of the estate
Section 1961Curatorship of the estate on application
Section 1962Jurisdiction of the probate court
Section 1963Maintenance for the mother-to-be of an heir
Section 1964Presumption that the treasury is heir
Section 1965Public invitation to register the rights of succession
Section 1966Legal position of the treasury before determination
Title 2
Liability of the heir for the obligations of the estate
Subtitle 1
Obligations of the estate
Section 1967Liability of heir, obligations of the estate
Section 1968Costs of funeral
Section 1969Maintenance for 30 days
Subtitle 2
Judicial call for the creditors of the estate
Section 1970Notification of the claims
Section 1971Creditors not affected
Section 1972Rights not affected
Section 1973Exclusion of creditors of the estate
Section 1974Defence of withheld information
Subtitle 3
Restriction of the liability of the heir
Section 1975Administration of estate; estate insolvency
Section 1976Effect on legal relationships extinguished by merger
Section 1977Effect on a set-off
Section 1978Responsibility of the heir for previous administration, reimbursement of expenses
Section 1979Discharge of obligations of the estate
Section 1980Application for opening of estate insolvency proceedings
Section 1981Order of administration of the estate
Section 1982Refusal to order administration of the estate for insufficiency of assets
Section 1983Notice by publication
Section 1984Effect of the order
Section 1985Duties and liability of the administrator of the estate
Section 1986Surrender of the estate
Section 1987Payment of the administrator of the estate
Section 1988End and cancellation of administration of the estate
Section 1989Defence by the heir of exhaustion of assets
Section 1990Defence by the heir as to insufficiency of assets
Section 1991Consequences of defence as to insufficiency of assets
Section 1992Over-indebtedness as a result of legacies and testamentary burdens
Subtitle 4
Filing of an inventory, unlimited liability of the heir
Section 1993Filing of an inventory
Section 1994Inventory period
Section 1995Length of the period
Section 1996Fixing a new period
Section 1997Suspension of the expiry of the period
Section 1998Death of the heir before expiry of the period
Section 1999Notice to the court
Section 2000Ineffectiveness of the fixing of the period
Section 2001Contents of the inventory
Section 2002Preparation of the inventory by the heir
Section 2003Official preparation of the inventory
Section 2004Reference to an existing inventory
Section 2005Unlimited liability of the heir if the inventory is incorrect
Section 2006Declaration in lieu of an oath
Section 2007Liability in the case of more than one share of the inheritance
Section 2008Inventory for an inheritance that is part of common matrimonial property
Section 2009Effect of filing of inventory
Section 2010Inspection of the inventory
Section 2011No inventory period for the treasury as heir
Section 2012No inventory period for the curator and administrator of the estate
Section 2013Consequences of the unlimited liability of the heir
Subtitle 5
Suspensive defences
Section 2014Defence within three months
Section 2015Defence of judicial call procedure
Section 2016Exclusion of defences in the case of unlimited liability of the heir
Section 2017Beginning of the period of time in the case of curatorship of the estate
Title 3
Claim to inheritance
Section 2018Duty to surrender of the possessor of the inheritance
Section 2019Direct substitution
Section 2020Emoluments and fruits
Section 2021Duty to surrender under principles of unjust enrichment
Section 2022Reimbursement of outlays and expenses
Section 2023Liability after litigation is pending and for emoluments and outlays
Section 2024Liability with knowledge
Section 2025Liability in the case of tort
Section 2026No reliance on acquisition by prescription
Section 2027Duty of information of the possessor of the inheritance
Section 2028Duty of information of occupant of house
Section 2029Liability in the case of individual claims by the heir
Section 2030Legal position of the acquirer of the inheritance
Section 2031Claim to surrender of a person declared dead
Title 4
More than one heir
Subtitle 1
Legal relationship of the heirs between themselves
Section 2032Community of heirs
Section 2033Right of disposition of the co-heir
Section 2034Right of preemption as against seller
Section 2035Right of preemption as against buyer
Section 2036Liability of buyer of share of the inheritance
Section 2037Onward alienation of the share of the inheritance
Section 2038Joint management of the estate
Section 2039Estate claims
Section 2040Alienation of objects of the estate, set-off
Section 2041Direct substitution
Section 2042Partitioning
Section 2043Postponement of partitioning
Section 2044Exclusion of partitioning
Section 2045Postponement of partitioning
Section 2046Discharge of obligations of the estate
Section 2047Distribution of the surplus
Section 2048Directions by the deceased for partitioning
Section 2049Taking over of a farm
Section 2050Duty to adjust advancements for descendants as heirs on intestacy
Section 2051Duty to adjust advancements if a descendant does not inherit
Section 2052Duty to adjust advancements for descendants as heirs by will
Section 2053Gift to more remote or adopted descendant
Section 2054Gift from the common matrimonial property
Section 2055Carrying out the adjustment
Section 2056Excess gifts
Section 2057Duty of information
Section 2057aDuty to adjust advancements in the case of special payments by one descendant
Subtitle 2
Legal relationship between the heirs and the creditors of the estate
Section 2058Joint and several liability
Section 2059Liability until division
Section 2060Liability after division
Section 2061Judicial call for the creditors of the estate
Section 2062Application for administration of the estate
Section 2063Filing of an inventory, limitation of liability
Division 3
Will
Title 1
General provisions
Section 2064Made in person
Section 2065Determination by third parties
Section 2066Heirs on intestacy of the testator
Section 2067Relatives of the testator
Section 2068Children of the testator
Section 2069Descendants of the testator
Section 2070Descendants of a third party
Section 2071Group of persons
Section 2072The poor
Section 2073Ambiguous designation
Section 2074Condition precedent
Section 2075Condition subsequent
Section 2076Condition for the benefit of a third party
Section 2077Ineffectiveness of testamentary dispositions on dissolution of marriage or engagement
Section 2078Avoidance for mistake or duress
Section 2079Avoidance for omission of a person entitled to a compulsory portion
Section 2080Person entitled to avoid
Section 2081Declaration of avoidance
Section 2082Period of avoidance
Section 2083Defence of voidability
Section 2084Interpretation favouring effectiveness
Section 2085Partial ineffectiveness
Section 2086Reservation of right to make addition
Title 2
Appointment of heirs
Section 2087Gift of assets, of fraction of assets or of individual objects
Section 2088Appointment to fractions
Section 2089Increase of the fractions
Section 2090Decrease of fractions
Section 2091Undetermined fractions
Section 2092Partial appointment to fractions
Section 2093Joint share of the inheritance
Section 2094Accrual
Section 2095Accrued share of the inheritance
Section 2096Substitute heir
Section 2097Rule of interpretation in the case of substitute heir
Section 2098Mutual appointment as substitute heir
Section 2099Substitute heir and accrual
Title 3
Appointment of a reversionary heir
Section 2100Reversionary heir
Section 2101Reversionary heir not yet conceived
Section 2102Reversionary heir and substitute heir
Section 2103Order to surrender the inheritance
Section 2104Heirs on intestacy as reversionary heirs
Section 2105Heirs on intestacy as provisional heirs
Section 2106Occurrence of reversionary succession
Section 2107Childless provisional heir
Section 2108Capacity to inherit; inheritability of the reversionary succession
Section 2109End of effectiveness of reversionary succession
Section 2110Scope of the right of reversionary succession
Section 2111Direct substitution
Section 2112Right of alienation of the provisional heir
Section 2113Dispositions of plots of land, ships and ships under construction; gifts
Section 2114Dispositions of mortgage claims, land charges and annuity land charges
Section 2115Dispositions of compulsory enforcement against provisional heir
Section 2116Deposit of securities
Section 2117Change of registration; conversion
Section 2118Blocking note in debt ledger
Section 2119Investment of money
Section 2120Duty of reversionary heir to consent
Section 2121List of objects of inheritance
Section 2122Determination of the condition of the inheritance
Section 2123Economic plan
Section 2124Costs of maintenance
Section 2125Outlays; right to remove
Section 2126Extraordinary burdens
Section 2127Right to information of reversionary heir
Section 2128Provision of security
Section 2129Effect of deprivation of management
Section 2130Duty to surrender after the occurrence of reversionary succession, duty to render accounts
Section 2131Scope of duty of care
Section 2132No liability for ordinary wear and tear
Section 2133Improper or excessive taking of fruits
Section 2134Own use
Section 2135Lease and usufructuary lease in reversionary succession
Section 2136Release of the provisional heir
Section 2137Rule of interpretation for the release
Section 2138Restricted duty to surrender
Section 2139Effect of occurrence of reversionary succession
Section 2140Dispositions of the provisional heir after occurrence of reversionary succession
Section 2141Maintenance for the mother-to-be of a reversionary heir
Section 2142Disclaimer of reversionary succession
Section 2143Restoration of extinguished legal relationships
Section 2144Liability of the reversionary heir for the obligations of the estate
Section 2145Liability of the provisional heir for the obligations of the estate
Section 2146Duty of provisional heir to notify creditors of the estate
Title 4
Legacies
Section 2147Person charged with a legacy
Section 2148More than one person charged with a legacy
Section 2149Legacy for heirs on intestacy
Section 2150Preferential legacy
Section 2151Right to decide of the person charged or of a third person in the event of more than one person provided for
Section 2152Choice of persons provided for
Section 2153Determination of shares
Section 2154Optional legacy
Section 2155General legacy
Section 2156Legacy for a special purpose
Section 2157Joint legacy
Section 2158Accrual
Section 2159Independence of the accrual
Section 2160Prior death of person provided for
Section 2161Where the person charged does not inherit
Section 2162Thirty-year period for a suspended legacy
Section 2163Exceptions to the thirty-year period
Section 2164Extension to accessories and claims to compensation
Section 2165Charges
Section 2166Charge with a mortgage
Section 2167Charge with a blanket mortgage
Section 2168Charge with a blanket land charge
Section 2168aApplication to ships, ships under construction and ship mortgages
Section 2169Legacy of foreign objects
Section 2170Legacy to be procured
Section 2171Impossibility, statutory prohibition
Section 2172Combination, intermixture, mingling of the bequeathed thing
Section 2173Claim as a legacy
Section 2174Claim arising under a legacy
Section 2175Restoration of extinguished legal relationships
Section 2176Devolution of the legacy
Section 2177Devolution in the event of a condition or a time limit
Section 2178Devolution in the event of a person provided for not yet conceived or determined
Section 2179Period pending fulfilment
Section 2180Acceptance and disclaimer
Section 2181Discretionary due date
Section 2182Liability for defects of title
Section 2183Liability for material defects
Section 2184Fruits and emoluments
Section 2185Reimbursement of outlays and expenses
Section 2186Due date of sublegacy or testamentary burden
Section 2187Liability of the main legatee
Section 2188Reduction of the charges
Section 2189Directions concerning priority
Section 2190Substitute legatee
Section 2191Subsequent legatee
Title 5
Testamentary burden
Section 2192Applicable provisions
Section 2193Appointment of the beneficiary, period for fulfilment
Section 2194Claim for fulfilment
Section 2195Relationship between testamentary burden and gift
Section 2196Impossibility of fulfilment
Title 6
Executor
Section 2197Appointment of an executor
Section 2198Determination of the executor by a third person
Section 2199Appointment of co-executor or successor
Section 2200Appointment by the probate court
Section 2201Ineffectiveness of the appointment
Section 2202Acceptance and refusal of office
Section 2203Task of the executor
Section 2204Partitioning of the estate between co-heirs
Section 2205Administration of the estate, power of alienation
Section 2206Incurring obligations
Section 2207Extended authority
Section 2208Limitation of the rights of the executor, execution by the heir
Section 2209Permanent execution
Section 2210Thirty-year period for permanent execution
Section 2211Limitation on dispositions of the heir
Section 2212Assertion in court of the rights subject to the execution of the will
Section 2213Assertion in court of claims against the estate
Section 2214Creditors of the heir
Section 2215Inventory of the estate
Section 2216Proper administration of the estate, compliance with directions
Section 2217Making available objects of the estate
Section 2218Legal relationship with the heir; rendering of accounts
Section 2219Liability of the executor
Section 2220Mandatory law
Section 2221Remuneration of the executor
Section 2222Executor for the reversionary heir
Section 2223Executor of a legacy
Section 2224More than one executor
Section 2225Expiry of the office of the executor
Section 2226Notice of termination by the executor
Section 2227Dismissal of the executor
Section 2228Inspection of records
Title 7
The making and revocation of a will
Section 2229Testamentary capacity of minors, lack of testamentary capacity
Section 2230(repealed)
Section 2231Regular wills
Section 2232Public will
Section 2233Special cases
Sections 2234 - 2246(repealed)
Section 2247Holographic will
Section 2248Custody of a holographic will
Section 2249Emergency will made before the mayor
Section 2250Emergency will before three witnesses
Section 2251Emergency will made at sea
Section 2252Period of validity of emergency wills
Section 2253Revocation of the will
Section 2254Revocation by will
Section 2255Revocation by destruction or changes
Section 2256Revocation by the revocation of the will from official custody
Section 2257Revocation of the revocation
Section 2258Revocation by a later will
Section 2258a(repealed)
Section 2258b(repealed)
Section 2259Obligation to deliver
Section 2260(repealed)
Section 2261(repealed)
Section 2262(repealed)
Section 2263Voidness of a prohibition on opening the will
Section 2263a, 2264(repealed)
Title 8
Joint will
Section 2265Joint will made by spouses
Section 2266Joint emergency will
Section 2267Joint holographic will
Section 2268Effect of nullity or dissolution of marriage
Section 2269Reciprocal appointment
Section 2270Reciprocal dispositions
Section 2271Revocation of reciprocal dispositions
Section 2272Revocation of official custody
Section 2273(repealed)
Division 4
Contract of inheritance
Section 2274Entering into contract in person
Section 2275Prerequisites
Section 2276Form
Section 2277(repealed)
Section 2278Permissible contractual dispositions
Section 2279Contractual gifts and burdens, application of section 2077
Section 2280Application of section 2269
Section 2281Avoidance by the testator
Section 2282Representation, form of the avoidance
Section 2283Period of avoidance
Section 2284Confirmation
Section 2285Avoidance by third parties
Section 2286Dispositions inter vivos
Section 2287Gifts adversely affecting the contractual heir
Section 2288Prejudice to the legatee
Section 2289Effect of the contract of inheritance on testamentary dispositions; application of section 2338
Section 2290Cancellation by contract
Section 2291Cancellation by will
Section 2292Cancellation by joint will
Section 2293Revocation in the event of reservation
Section 2294Revocation in the event of the misconduct of the person provided for
Section 2295Revocation in the event of the extinction of a mutual obligation
Section 2296Representation, form of revocation
Section 2297Revocation by will
Section 2298Mutual contract of inheritance
Section 2299Unilateral dispositions
Section 2300Application of sections 2259 and 2263; removal from official or notarial custody
Section 2300a(repealed)
Section 2301Promise of donation mortis causa
Section 2302Unlimited testamentary freedom
Division 5
Compulsory share
Section 2303Person entitled to a compulsory share of the estate; amount of the share
Section 2304Rules of interpretation
Section 2305Additional compulsory share
Section 2306Limitations and charges
Section 2307Bequest of a legacy
Section 2308Avoidance of the disclaimer
Section 2309Right of parents and remoter descendants to a compulsory share
Section 2310Determination of the share of the inheritance for the calculation of the compulsory share
Section 2311Value of the estate
Section 2312Value of a farm
Section 2313Taking account of conditional, uncertain or unsecured rights; duty of determination of the heir
Section 2314Duty of the heir to provide information
Section 2315Counting gifts towards the compulsory share
Section 2316Duty to adjust advancements
Section 2317Creation and transferability of the claim to a compulsory share
Section 2318Burden of the compulsory share in the case of legacies and testamentary burdens
Section 2319Person entitled to a compulsory share as co-heir
Section 2320Compulsory share burden on the heir taking the place of the person entitled to a compulsory share
Section 2321Compulsory share burden in the event of a disclaimer of a legacy
Section 2322Reduction of legacies and testamentary burdens
Section 2323Heir not charged with a compulsory share
Section 2324Deviating directions by the testator concerning the compulsory share burden
Section 2325Claim for the augmentation of compulsory shares in the event of gifts
Section 2326Augmentation to more than half of the intestate portion
Section 2327Receipt of gift by a person entitled to a compulsory share
Section 2328Heir as person entitled to a compulsory share
Section 2329Claim against the recipient of a gift
Section 2330Gift arising from a moral duty
Section 2331Gifts made from common matrimonial property
Section 2331aDeferral
Section 2332Limitation
Section 2333Deprivation of a compulsory share
Section 2334(repealed)
Section 2335(repealed)
Section 2336Form, burden of proof and ineffectiveness of deprivation
Section 2337Forgiveness
Section 2338Limitation of the compulsory share
Division 6
Unworthiness to inherit
Section 2339Grounds for unworthiness to inherit
Section 2340Enforcement of the unworthiness to inherit by avoidance
Section 2341Persons entitled to avoid
Section 2342Action for avoidance
Section 2343Forgiveness
Section 2344Effect of a declaration of unworthiness to inherit
Section 2345Unworthiness to receive a legacy; unworthiness to receive a compulsory share
Division 7
Renunciation of inheritance
Section 2346Effect of the renunciation of inheritance, possibility of limitation
Section 2347Personal requirements, representation
Section 2348Form
Section 2349Extension to descendants
Section 2350Renunciation to the benefit of another
Section 2351Revocation of a renunciation of the inheritance
Section 2352Renunciation of gifts
Division 8
Certificate of inheritance
Section 2353Competence of the probate court, application
Sections 2354 to 2359(repealed)
Section 2360(repealed)
Section 2361Revocation or declaration of invalidity of an inaccurate certificate of inheritance
Section 2362Claim to surrender of the true heir and claim to information
Section 2363Claim to surrender of the reversionary heir and of the executor
Section 2364(repealed)
Section 2365Presumption of legitimacy of the certificate of inheritance
Section 2366Presumption of legal force of a certificate of inheritance
Section 2367Performance for the person named as heir in the certificate of inheritance
Section 2368Executor’s certificate
Section 2369(repealed)
Section 2370Presumption of legal force of a declaration of death
Division 9
Purchase of an inheritance
Section 2371Form
Section 2372Advantages due to purchaser
Section 2373Parts remaining for the seller
Section 2374Duty to surrender
Section 2375Duty to compensate
Section 2376Liability of the seller
Section 2377Restoration of extinguished legal relationships
Section 2378Obligations of the estate
Section 2379Emoluments and charges prior to the sale
Section 2380Devolution of the risk, emoluments and charges after the sale
Section 2381Reimbursement of outlays and expenses
Section 2382Liability of the purchaser in relation to the creditors of the estate
Section 2383Scope of liability of the purchaser
Section 2384The duty of notification of the seller towards the creditors of the estate, right of inspection
Section 2385Application to similar contracts
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German Civil Code
BGB

Full text in format:   HTML  PDF   text in German

Übersetzung durch den Langenscheidt Übersetzungsservice, aktualisiert durch Neil Mussett. Zuletzt aktualisiert und bearbeitet durch Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Translation provided by Langenscheidt Übersetzungsservice, updated by Neil Mussett. The translation has most recently been revised and updated by Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Stand: Die Übersetzung berücksichtigt die Änderung(en) des Gesetzes durch Artikel 1 des Gesetzes vom 10. August 2021 (BGBl. I S. 3515).
Der Stand der deutschsprachigen Dokumentation kann aktueller sein. Vergleichen Sie dazu bitte http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Version information: The translation includes the amendment(s) to the Act by Article 1 of the Act of 10 August 2021 (Federal Law Gazette I p. 3515).
Translations may not be updated at the same time as the German legal provisions displayed on this website. To compare with the current status of the German version, see http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Zur Nutzung dieser Übersetzung lesen Sie bitte den Hinweis unter "Translations".

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Book 1
General part
Division 1
Persons
Title 1
Natural persons, consumers, traders
Section 1Beginning of legal capacity
Section 2Beginning of majority
Sections 3 – 6(repealed)
Section 7Residence; establishment and termination
Section 8Residence of persons who lack full capacity to contract
Section 9Residence of a soldier
Section 10(repealed)
Section 11Residence of a child
Section 12Right to a name
Section 13Consumer
Section 14Trader
Sections 15 - 20(repealed)
Title 2
Legal persons
Subtitle 1
Associations
Chapter 1
General provisions
Section 21Non-commercial association
Section 22Commercial association
Section 23(repealed)
Section 24Seat
Section 25Constitution
Section 26Board and representation
Section 27Appointment of and management by the board
Section 28Passing of resolutions by the board
Section 29Emergency appointment by local court
Section 30Special representatives
Section 31Liability of an association for organs
Section 31aLiability of members of organs and special representatives
Section 31bLiability of members of the association
Section 32General meeting; passing of resolutions
Section 33Amendment of articles of association
Section 34Exclusion from voting
Section 35Special rights
Section 36Convening the general meeting
Section 37Convening a meeting at the request of a minority
Section 38Membership
Section 39Leaving the association
Section 40Flexible provisions
Section 41Dissolution of the association
Section 42Insolvency
Section 43Deprivation of legal personality
Section 44Jurisdiction and procedure
Section 45Devolution of the assets of the association
Section 46Devolution on the treasury
Section 47Liquidation
Section 48Liquidators
Section 49Duties of the liquidators
Section 50Notice by publication of the association in liquidation
Section 50aNewspaper for notices
Section 51One-year waiting period
Section 52Security for creditors
Section 53Liability in damages of the liquidators
Section 54Associations without legal personality
Chapter 2
Registered associations
Section 55Jurisdiction over entry in the register
Section 55aElectronic register of associations
Section 56Minimum number of members of the association
Section 57Minimum requirements of the articles of association
Section 58Recommended contents of the articles of association
Section 59Application for registration
Section 60Rejection of the application
Sections 61 - 63(repealed)
Section 64Contents of the entry in the register of associations
Section 65Addition to name
Section 66Notice by publication of the entry and safekeeping of documents
Section 67Changes to the board
Section 68Protection of public confidence by the register of associations
Section 69Documentary proof of composition of the board
Section 70Protection of public confidence in case of entries on power of agency
Section 71Amendments of the articles of association
Section 72Certificate on number of members
Section 73Decrease to below the minimum number of members
Section 74Dissolution
Section 75Entries in the case of insolvency
Section 76Register entries in the event of liquidation
Section 77Parties obliged to apply for entry in the register and form of applications
Section 78Assessment of coercive fines
Section 79Inspection of the register of associations
Section 79aApplication of Regulation (EU) 2016/679 to registration proceedings
Subtitle 2
Foundations
Section 80Formation of a foundation having legal personality
Section 81Endowment transaction
Section 82Duty of founder to make transfers
Section 83Testamentary foundation
Section 84Recognition after the death of the founder
Section 85Constitution of foundation
Section 86Application of law on associations
Section 87Change of objects; termination
Section 88Devolution of assets
Subtitle 3
Legal persons under public law
Section 89Liability for organs; insolvency
Division 2
Things and animals
Section 90Concept of the thing
Section 90aAnimals
Section 91Fungible things
Section 92Consumable things
Section 93Essential parts of a thing
Section 94Essential parts of a plot of land or a building
Section 95Merely temporary purpose
Section 96Rights as parts of a plot of land
Section 97Accessories
Section 98Commercial and agricultural inventory
Section 99Fruits
Section 100Emoluments
Section 101Division of fruits
Section 102Reimbursement of costs of production
Section 103Allocation of charges
Division 3
Legal transactions
Title 1
Capacity to contract
Section 104Incapacity to contract
Section 105Voidness of declaration of intent
Section 105aEveryday transactions
Section 106Limited capacity for minors to contract
Section 107Consent of legal representative
Section 108Entry into a contract without consent
Section 109Right of withdrawal by the other party
Section 110Performance effected with means of the minor’s own
Section 111Unilateral legal transactions
Section 112Independent operation of a trade or business
Section 113Service or employment relationship
Sections 114, 115(repealed)
Title 2
Declaration of intent
Section 116Mental reservation
Section 117Sham transaction
Section 118Lack of seriousness
Section 119Voidability for mistake
Section 120Voidability for incorrect transmission
Section 121Period for avoidance
Section 122Liability in damages of the person avoiding a declaration
Section 123Voidability on the grounds of deceit or duress
Section 124Period of time for avoidance
Section 125Voidness resulting from a defect of form
Section 126Written form
Section 126aElectronic form
Section 126bText form
Section 127Agreed form
Section 127aCourt settlement
Section 128Notarial recording
Section 129Official certification
Section 130Effectiveness of a declaration of intent to absent parties
Section 131Effectiveness in relation to persons without full capacity to contract
Section 132Substitution of service for receipt
Section 133Interpretation of a declaration of intent
Section 134Statutory prohibition
Section 135Statutory prohibition of alienation
Section 136Official prohibition of alienation
Section 137Prohibition of dispositions in a legal transaction
Section 138Legal transaction offending common decency; usury
Section 139Partial invalidity
Section 140Re-interpretation
Section 141Confirmation of a void legal transaction
Section 142Effect of avoidance
Section 143Declaration of avoidance
Section 144Confirmation of a voidable legal transaction
Title 3
Contract
Section 145Binding effect of an offer
Section 146Expiry of an offer
Section 147Period for acceptance
Section 148Fixing a period for acceptance
Section 149Late receipt of a declaration of acceptance
Section 150Late acceptance and acceptance altering the offer
Section 151Acceptance without declaration to the offeror
Section 152Acceptance in the case of notarial recording
Section 153Death of the offeror or offeror’s incapacity to contract
Section 154Overt lack of agreement; lack of notarial recording
Section 155Hidden lack of agreement
Section 156Entry into contracts at auctions
Section 157Interpretation of contracts
Title 4
Conditions and specification of time
Section 158Conditions precedent and subsequent
Section 159Retroactive effect
Section 160Liability during the period pending fulfilment of the condition
Section 161Ineffectiveness of dispositions in the period pending fulfilment of the condition
Section 162Prevention of or bringing about the satisfaction of the condition
Section 163Specification of time
Title 5
Agency and authority
Section 164Effect of a declaration made by the agent
Section 165Agent with limited capacity to contract
Section 166Vitiation of intent; imputed knowledge
Section 167Conferment of authority
Section 168Expiry of authority
Section 169Authority of the authorised representative and the managing partner
Section 170Period of effectiveness of the authority
Section 171Period of effectiveness in the case of announcement
Section 172Letter of authorisation
Section 173Period of effectiveness in the case of knowledge and negligent lack of knowledge
Section 174Unilateral legal transaction by an authorised representative
Section 175Return of the letter of authorisation
Section 176Declaration of invalidity of the letter of authorisation
Section 177Entry into contract by a representative having no power of agency
Section 178Right of revocation of the other party
Section 179Liability of a representative having no power of agency
Section 180Unilateral legal transactions
Section 181Contracting with oneself
Title 6
Consent and ratification
Section 182Approval
Section 183Revocability of consent
Section 184Retroactive effect of ratification
Section 185Disposition by an unauthorised person
Division 4
Periods of time and fixed dates
Section 186Scope of applicability
Section 187Beginning of a period of time
Section 188End of a period of time
Section 189Calculation of individual periods of time
Section 190Extension of a period of time
Section 191Calculation of periods of time
Section 192Beginning, middle and end of a month
Section 193Sundays and holidays; Saturdays
Division 5
Limitation
Title 1
Subject-matter and duration of limitation
Section 194Subject-matter of limitation
Section 195Standard limitation period
Section 196Limitation period for rights to a plot of land
Section 197Thirty-year limitation period
Section 198Limitation in the case of a successor in title
Section 199Commencement of the standard limitation period and maximum limitation periods
Section 200Commencement of other limitation periods
Section 201Commencement of the limitation period for recognised claims
Section 202Inadmissibility of agreements on limitation
Title 2
Suspension, suspension of expiry and recommencement of the limitation period
Section 203Suspension of limitation in the case of negotiations
Section 204Suspension of limitation as a result of prosecution of rights
Section 205Suspension of limitation in the case of a right to refuse performance
Section 206Suspension of limitation in case of force majeure
Section 207Suspension of limitation for reasons of family relationship and similar reasons
Section 208Suspension of limitation in the case of claims for infringement of the right to sexual self-determination
Section 209Effect of suspension
Section 210Suspension of expiry of the limitation period in the case of persons without full capacity to contract
Section 211Suspension of expiry of the limitation period in matters relating to estates
Section 212Recommencement of the limitation period
Section 213Suspension, suspension of expiry of the limitation period and recommencement of limitation in the case of other claims
Title 3
Legal consequences of limitation
Section 214Effect of limitation
Section 215Set-off and right of retention after a claim is statute-barred
Section 216Effect of limitation in the case of secured claims
Section 217Limitation of collateral performance
Section 218Ineffectiveness of rescission
Sections 219 to 225(repealed)
Division 6
Exercise of rights, self-defence, self-help
Section 226Prohibition of chicanery
Section 227Self-defence against persons
Section 228Necessity
Section 229Self-help
Section 230Limits of self-help
Section 231Self-help by mistake
Division 7
Provision of security
Section 232Types
Section 233Effect of deposit
Section 234Suitable securities
Section 235Right to exchange
Section 236Book-entry securities
Section 237Movable things
Section 238Mortgages, land charges and annuity land charges
Section 239Surety
Section 240Duty to supplement security
Book 2
Law of obligations
Division 1
Subject matter of obligations
Title 1
Duty to render performance
Section 241Duties arising from an obligation
Section 241aUnsolicited performance
Section 242Performance in good faith
Section 243Obligation described by class
Section 244Foreign currency obligation
Section 245Obligation payable in a specific denomination of money
Section 246Statutory interest rate
Section 247Basic rate of interest
Section 248Compound interest
Section 249Nature and extent of compensation of damages
Section 250Damages in money after the specification of a period of time
Section 251Damages in money without the specification of a period of time
Section 252Lost profits
Section 253Intangible damage
Section 254Contributory negligence
Section 255Assignment of claims to compensation
Section 256Payment of interest on expenses
Section 257Claim to release
Section 258Right of removal
Section 259Extent of duty to render accounts
Section 260Duties when surrendering objects or providing information on an aggregate of objects
Section 261Modification of a declaration in lieu of an oath; costs
Section 262Alternative obligation; right of choice
Section 263Exercise of the right of choice; effect
Section 264Default by the person entitled to the right of choice
Section 265Impossibility in case of alternative obligations
Section 266Part performance
Section 267Performance by third parties
Section 268Right of redemption of a third party
Section 269Place of performance
Section 270Place of payment
Section 270aAgreements on fees for the use of non-cash means of payment
Section 271Time of performance
Section 271aAgreements on payment deadlines, verification periods or periods for acceptance
Section 272Interim interest
Section 273Right of retention
Section 274Effects of the right of retention
Section 275Exclusion of the duty of performance
Section 276Responsibility of the obligor
Section 277Standard of care in one’s own affairs
Section 278Responsibility of the obligor for third parties
Section 279(repealed)
Section 280Damages for breach of duty
Section 281Damages in lieu of performance for non-performance or failure to render performance as owed
Section 282Damages in lieu of performance for breach of a duty under section 241 (2)
Section 283Damages in lieu of performance where the duty of performance is excluded
Section 284Reimbursement of futile expenses
Section 285Surrender of substitute benefit
Section 286Default of the obligor
Section 287Responsibility during default
Section 288Default interest and other damage caused by default *)
Section 289Prohibition of compound interest
Section 290Interest on compensation for value
Section 291Interest during legal proceedings
Section 292Liability in the case of a duty to surrender
Title 2
Default by the obligee
Section 293Default in acceptance
Section 294Actual offer
Section 295Verbal offer
Section 296Dispensability of the offer
Section 297Inability of the obligor
Section 298Concurrent performance
Section 299Temporary prevention of acceptance
Section 300Effects of default by the obligee
Section 301Cessation of interest
Section 302Emoluments
Section 303Right to abandon possession
Section 304Compensation for extra expenses
Division 2
Drafting contractual obligations by means of standard business terms
Section 305Incorporation of standard business terms into the contract
Section 305aIncorporation in special cases
Section 305bPriority of individually agreed terms
Section 305cSurprising and ambiguous clauses
Section 306Legal consequences of non-incorporation and ineffectiveness
Section 306aProhibition of circumvention
Section 307Test of reasonableness of contents
Section 308Prohibited clauses with the possibility of valuation
Section 309Prohibited clauses without the possibility of valuation
Section 310Scope of application
Division 3
Contractual obligations
Title 1
Creation, subject matter and termination
Subtitle 1
Creation
Section 311Obligations created by legal transaction and obligations similar to legal transactions
Section 311aImpediment preventing performance at conclusion of contract
Section 311bContracts on plots of land, assets and an estate
Section 311cApplication to accessories
Subtitle 2
Principles applying to consumer contracts; particular types of sale
Chapter 1
Scope of application and principles applying to consumer contracts
Section 312Scope of application
Section 312aGeneral obligations and principles applying to consumer contracts; limits to the agreement of remuneration
Chapter 2
Off-premises contracts and distance contracts
Section 312bOff-premises contracts
Section 312cDistance contracts
Section 312dObligations to provide information
Section 312eViolation of information obligations as to costs
Section 312fCopies and confirmations
Section 312gRight of withdrawal
Section 312hTermination and authorisation to terminate
Chapter 3
Contracts concluded in electronic commerce
Section 312iGeneral obligations in electronic commerce
Section 312jSpecial obligations vis-à-vis consumers in electronic commerce
Chapter 4
Deviating agreements and burden of proof
Section 312kDeviating agreements and burden of proof
Subtitle 3
Adaptation and ending of contracts
Section 313Interference with the basis of the transaction
Section 314Termination, for a compelling reason, of contracts for the performance of a continuing obligation
Subtitle 4
Unilateral rights to specify performance
Section 315Specification of performance by one party
Section 316Specification of consideration
Section 317Specification of performance by a third party
Section 318Avoidance of specification
Section 319Ineffectiveness of the specification; substitution
Title 2
Reciprocal contract
Section 320Defence of unperformed contract
Section 321Defence of uncertainty
Section 322Order to perform in return for, and concurrently with, performance
Section 323Rescission for non-performance or for performance not as contractually agreed
Section 324Rescission for breach of a duty under section 241 (2)
Section 325Damages and revocation
Section 326Release from consideration and rescission where the duty of performance is excluded
Title 2a
Contracts on digital products
Subtitle 1
Consumer contracts on digital products
Section 327Scope of application
Section 327aApplication to bundle contracts and contracts relating to things with digital elements
Section 327bSupply of digital products
Section 327cRights in the case of failure to effect supply
Section 327dConformity of digital products
Section 327eProduct deficiency
Section 327fUpdates
Section 327gDefect of title
Section 327hDeviating agreements on product features
Section 327iRights of the consumer in the case of deficiencies
Section 327jLimitation
Section 327kShifting the burden of proof
Section 327lCure
Section 327mTermination of the contract and compensation of damages
Section 327nAbatement
Section 327oDeclaration of termination of contract and its legal consequences
Section 327pContinued use following termination of the contract
Section 327qConsequences under contract law of declarations governed by data protection law made by the consumer
Section 327rModifications of digital products
Section 327sDeviating agreements
Subtitle 2
Special provisions on contracts on digital products between traders
Section 327tScope of application
Section 327uRecourse of the trader
Title 3
Promise of performance to a third party
Section 328Contract for the benefit of third parties
Section 329Interpretation rule where there is an assumption of the duty to perform
Section 330Interpretation rule in the case of life annuity contracts
Section 331Performance after death
Section 332Modification by disposition mortis causa in case of reservation
Section 333Rejection of the right by the third party
Section 334Objections of the obligor in relation to the third party
Section 335Right of the promisee to make demands
Title 4
Earnest, penalty for breach of contract
Section 336Interpretation of earnest
Section 337Crediting or return of the earnest
Section 338Earnest in case of impossibility of performance for which the giver of earnest is responsible
Section 339Payability of penalty for breach of contract
Section 340Promise to pay a penalty for non-performance
Section 341Promise of a penalty for improper performance
Section 342Alternatives to monetary penalty
Section 343Reduction of the penalty
Section 344Ineffective promise of a penalty
Section 345Burden of proof
Title 5
Revocation; right of withdrawal in consumer contracts
Subtitle 1
Rescission
Section 346Effects of rescission
Section 347Emoluments and outlays after rescission
Section 348Satisfaction of obligations in return for, and concurrently with, performance
Section 349Declaration of rescission
Section 350Expiry of the right of rescission after a period of time has been specified
Section 351Indivisibility of the right of rescission
Section 352Set-off after non-performance
Section 353Rescission in return for forfeit money
Section 354Forfeiture of rights
Subtitle 2
Right of withdrawal in the case of consumer contracts
Section 355Right of withdrawal in the case of consumer contracts
Section 356Right of withdrawal in the case of off-premises contracts and distance contracts
Section 356aRight of withdrawal in the case of timeshare contracts, long-term holiday product contracts, brokerage contracts, and exchange system contracts
Section 356bRight of withdrawal in the case of consumer credit agreements
Section 356cRight of withdrawal in the case of contracts for delivery by instalments
Section 356dWithdrawal right of the consumer in the case of credit agreements for a gratuitous loan and in the case of gratuitous financial accommodation
Section 356eRight of withdrawal in the case of construction contracts with consumers
Section 357Legal consequences of the withdrawal from off-premises contracts and distance contracts, to the exception of contracts relating to financial services
Section 357aLegal consequences of the withdrawal from contracts relating to financial services
Section 357bLegal consequences of the withdrawal from timeshare, long-term holiday product, brokerage contracts, and exchange system contracts
Section 357cLegal consequences of the withdrawal from contracts for delivery by instalments that are neither distance contracts nor off-premises contracts
Section 357dLegal consequences of the withdrawal from a construction contract with a consumer
Section 358Contracts linked to the contract from which the consumer has withdrawn
Section 359Objections in the case of linked contracts
Section 360Related contracts
Section 361Further claims, deviating agreements and burden of proof
Division 4
Extinction of obligations
Title 1
Performance
Section 362Extinction by performance
Section 363Burden of proof in the case of acceptance as performance of contract
Section 364Acceptance in lieu of performance of contract
Section 365Warranty in the case of handover in lieu of performance of contract
Section 366Crediting of performance to more than one claim
Section 367Crediting to interest and costs
Section 368Receipt
Section 369Costs of the receipt
Section 370Performance to the bringer of the receipt
Section 371Return of the certificate of indebtedness
Title 2
Deposit
Section 372Prerequisites
Section 373Concurrent performance
Section 374Place of deposit; duty to notify
Section 375Retroactive effect with dispatch by mail
Section 376Right to take back
Section 377Unpledgeability of the right to take back
Section 378Effect of deposit where taking back is excluded
Section 379Effect of deposit where taking back is not excluded
Section 380Proof of entitlement to receive
Section 381Costs of deposit
Section 382Extinction of the right of the obligee
Section 383Auction of things not capable of deposit
Section 384Warning of auction
Section 385Sale by private agreement
Section 386Costs of the auction
Title 3
Set-off
Section 387Prerequisites
Section 388Declaration of set-off
Section 389Effect of set-off
Section 390No set-off against a claim subject to a defence
Section 391Set-off in the case of different places of performance
Section 392Set-off against a seized claim
Section 393No set-off against a claim in tort
Section 394No set-off against an unpledgeable claim
Section 395Set-off against claims of public-law corporations
Section 396More than one claim
Title 4
Forgiveness
Section 397Contract of forgiveness, acknowledgement of non-indebtedness
Division 5
Transfer of a claim
Section 398Assignment
Section 399Exclusion of assignment in case of change of content or by agreement
Section 400Exclusion in case of unpledgeable claims
Section 401Devolution of accessory rights and preferential rights
Section 402Duty to provide information; provision of documents
Section 403Duty of notarial recording
Section 404Objections by the obligor
Section 405Assignment with presentation of documents
Section 406Set-off in relation to the new obligee
Section 407Legal acts in relation to the previous obligee
Section 408Multiple assignments
Section 409Notice of assignment
Section 410Delivery of the assignment document
Section 411Assignment of salary
Section 412Statutory devolution of claims
Section 413Transfer of other rights
Division 6
Assumption of debt
Section 414Contract between obligee and transferee
Section 415Contract between obligor and transferee
Section 416Assumption of a mortgage debt
Section 417Objections of the transferee
Section 418Extinction of security rights and preferential rights
Section 419(repealed)
Division 7
More than one obligor and obligee
Section 420Divisible performance
Section 421Joint and several debtors
Section 422Effect of performance
Section 423Effect of forgiveness
Section 424Effect of default by the obligee
Section 425Effect of other facts
Section 426Duty to adjust advancements, devolution of claim
Section 427Joint contractual duty
Section 428Joint and several obligees
Section 429Effect of changes
Section 430Duty of the joint and several obligees to adjust advancements
Section 431More than one obligor of indivisible performance
Section 432More than one obligee of indivisible performance
Division 8
Particular types of obligations
Title 1
Purchase, exchange
Subtitle 1
General provisions
Section 433Contractual duties typical for a purchase agreement
Section 434Material defects
Section 435Defects of title
Section 436Public charges on plots of land
Section 437Rights of buyer in the case of defects
Section 438Limitation of claims for defects
Section 439Cure
Section 440Special provisions on rescission and damages
Section 441Abatement of price
Section 442Knowledge of the buyer
Section 443Guarantee
Section 444Exclusion of liability
Section 445Limitation of liability in the case of public auctions
Section 445aRecourse of the seller
Section 445bLimitation of recourse claims
Section 445cRecourse in the case of contracts on digital products
Section 446Devolution of risk and of charges
Section 447Devolution of risk in the case of sales shipment
Section 448Costs of delivery and comparable costs
Section 449Retention of title
Section 450Excluded buyers in the case of certain sales
Section 451Purchase by excluded buyer
Section 452Purchase of a ship
Section 453Purchase of rights, consumer contract on the purchase of digital content
Subtitle 2
Special types of purchase
Chapter 1
Purchase on approval
Section 454Coming into existence of the purchase agreement
Section 455Approval period
Chapter 2
Repurchase
Section 456Coming into existence of the repurchase agreement
Section 457Liability of the reseller
Section 458Removal of third-party rights
Section 459Reimbursement of outlays
Section 460Repurchase at estimated value
Section 461More than one person entitled to repurchase
Section 462Cut-off period
Chapter 3
Preemption
Section 463Prerequisites for exercise
Section 464Exercise of the right of preemption
Section 465Ineffective agreements
Section 466Collateral performance
Section 467Total price
Section 468Deferral of the purchase price
Section 469Duty to notify, exercise period
Section 470Sale to heir on intestacy
Section 471Sale in case of compulsory enforcement or insolvency
Section 472More than one person with a right of preemption
Section 473Non-transferability
Subtitle 3
Purchase of consumer goods
Section 474Purchase of consumer goods
Section 475Applicable provisions
Section 475aContract for the sale of consumer goods relating to digital products
Section 475bMaterial defect of a good with digital elements
Section 475cMaterial defect of a good with digital elements where the digital elements are supplied on a continuous basis
Section 475dSpecial provisions on rescission and compensation of damages
Section 475eSpecial provisions on limitation
Section 476Deviating agreements
Section 477Shifting the burden of proof
Section 478Special provisions concerning recourse by the trader
Section 479Special provisions for guarantees
Subtitle 4
Exchange
Section 480Exchange
Title 2
Timeshare contracts, long-term holiday product contracts, brokerage contracts and exchange system contracts
Section 481Time share contracts
Section 481aLong-term holiday product contract
Section 481bFacilitation contract, exchange system contract
Section 482Preliminary contract information, advertising and prohibition of sale as an investment
Section 482aInstructions on the right of withdrawal
Section 483Language of the contract and of the pre-contractual information
Section 484Form and content of the contract
Section 485Right of withdrawal
Section 486Prohibition of down payment
Section 486aSpecial provisions for long-term holiday product contracts
Section 487Deviating agreements
Title 3
Loan contract; financial accommodation and contracts for delivery by instalments between a trader and a consumer
Subtitle 1
Loan contract
Chapter 1
General provisions
Section 488Contractual duties typical for a credit agreement
Section 489Right of the borrower to give notice of termination in accordance with usual procedure
Section 490Right to terminate for cause
Chapter 2
Special provisions for consumer credit agreements
Section 491Consumer credit agreement
Section 491aPreliminary contract information obligations with consumer credit agreements
Section 492Written form, contents of the contract
Section 492aTying practices in the case of consumer credit agreements relating to immovable property
Section 492bPermissible tying practices
Section 493Information during the contractual relationship
Section 494Legal consequences of defects of form
Section 495Right of withdrawal; reflection period
Section 496Waiver of objections, prohibition of bills of exchange and cheques
Section 497Default of the borrower
Section 498Calling in entire loan in the case of loans repayable in instalments
Section 499Right of the lender to terminate; right to refuse performance
Section 500Termination right of the borrower; early repayment
Section 501Cost reduction in the case of early repayment and in the case of termination
Section 502Compensation for early repayment of a loan
Section 503Conversion to an alternative currency of a foreign-currency consumer credit agreement relating to immovable property
Section 504Granted overdraft
Section 504aObligation to provide advisory services where the overdraft facility is used
Section 505Tolerated overdraft
Section 505aObligation to perform a creditworthiness assessment for consumer credit agreements
Section 505bBasis of the creditworthiness assessment in the case of consumer credit agreements
Section 505cFurther obligations in the case of consumer credit agreements relating to immovable property secured by a mortgage or by a charge on land
Section 505dBreach of the obligation to conduct an assessment of creditworthiness
Section 505eAuthorisation to issue statutory instruments
Subtitle 2
Financial accommodation between a trader and a consumer
Section 506Deferment of payment, other financial accommodation
Section 507Instalment payment transactions
Section 508Revocation with regard to instalment payment transactions
Section 509(repealed)
Subtitle 3
Contracts for delivery by instalments between a trader and a consumer
Section 510Contracts for delivery by instalments
Subtitle 4
Advisory services provided in the case of consumer credit agreements relating to immovable property
Section 511Advisory services provided in the case of consumer credit agreements relating to immovable property
Subtitle 5
Mandatory nature, application to founders of new businesses
Section 512Deviating agreements
Section 513Application to founders of new businesses
Subtitle 6
Gratuitous credit agreements and gratuitous financial accommodation between a trader and a consumer
Section 514Gratuitous credit agreements
Section 515Gratuitous financial accommodation
Title 4
Donation
Section 516Concept of donation
Section 516aConsumer contract on the donation of digital products
Section 517Failure to acquire assets
Section 518Form of promise of donation
Section 519Defence of paying for necessaries
Section 520Expiry of the promise of an annuity
Section 521Liability of the donor
Section 522No default interest
Section 523Liability for defects of title
Section 524Liability for material defects
Section 525Donation subject to conditions
Section 526Refusal to fulfil the condition
Section 527Non-fulfilment of the condition
Section 528Claim for return due to impoverishment of the donor
Section 529Exclusion of claim for return
Section 530Revocation of donation
Section 531Declaration of revocation
Section 532Exclusion of revocation
Section 533Waiver of the right of revocation
Section 534Donations for duty and decency
Title 5
Lease, usufructuary lease
Subtitle 1
General provisions for leases
Section 535Contents and primary duties of the lease agreement
Section 536Abatement of the rent for material defects and defects of title
Section 536aClaim of lessee for damages and reimbursement of expenses due to a defect
Section 536bLessee knows of the defect at conclusion of the contract or upon acceptance
Section 536cDefects occurring during the lease period; notice of defect by the lessee
Section 536dContractual exclusion of rights of lessee with regard to defects
Section 537Payment of rent when the lessee is unable to be present in person
Section 538Wear and tear on the leased property from contractually agreed use
Section 539Reimbursement of other expenses and right of removal of the lessee
Section 540Making available the leased property for use use by third parties
Section 541Application for prohibitory injunction in the case of use in breach of contract
Section 542End of the lease
Section 543Termination for cause without notice for a compelling reason
Section 544Lease for more than 30 years
Section 545Tacit extension of the lease
Section 546Duty of lessee to return
Section 546aCompensation of the lessor in the case of late return
Section 547Reimbursement of rent paid in advance
Section 548Limitation of compensation claims and of the right of removal
Section 548aLease of digital products
Subtitle 2
Leases for residential space
Chapter 1
General provisions
Section 549Provisions applicable to leases of residential space
Section 550Form of the lease agreement
Section 551Restriction and investment of rent security deposits
Section 552Warding off the right of removal of the lessee
Section 553Making residential space available for use by third parties
Section 554Improved accessibility, e-mobility and burglary protection
Section 555Ineffectiveness of a penalty for breach of contract
Chapter 1a
Structural maintenance and modernisation measures
Section 555aStructural maintenance measures
Section 555bModernisation measures
Section 555cAnnouncement of modernisation measures
Section 555dToleration of modernisation measures, time limit
Section 555eSpecial right of termination of the lessee in case of modernisation measures
Section 555fAgreements on structural maintenance or modernisation measures
Chapter 2
Rent
Subchapter 1
Agreements on rent
Section 556Agreements on operating costs
Section 556aAccounting criterion for operating costs
Section 556bDue date of rent, right to set-off and right of retention
Section 556cCosts of heat supply as operating costs, authorisation to issue statutory instruments
Subchapter 1a
Agreements on the rent amount at commencement of the lease in areas in which the housing market is under pressure
Section 556dPermissible rent amount at commencement of the lease; authorisation to issue statutory instruments
Section 556eConsideration of the rent paid previously, or of modernisation work done
Section 556fExceptions
Section 556gLegal consequences; information on the rent
Subchapter 2
Provisions on the rent amount
Section 557Increases in rent by agreement or law
Section 557aStepped rent
Section 557bIndexed rent
Section 558Increase in rent up to the reference rent customary in the locality
Section 558aForm and justification of the rent increase
Section 558bApproval of a rent increase
Section 558cList of representative rents
Section 558dExpert list of representative rents
Section 558eRent database
Section 559Rent increase after modernisation measures
Section 559aCrediting of third-party funds
Section 559bAssertion of an increase; effect of declaration of increase
Section 559cSimplified procedure
Section 559dBreaches of duty in announcing or implementing structural changes
Section 560Changes in operating costs
Section 561Special right of termination of the lessee following a rent increase
Chapter 3
Security right of the lessor
Section 562Extent of the security right of the lessor
Section 562aExtinction of the security right of the lessor
Section 562bSelf-help; claim to surrender
Section 562cWarding off the security right by provision of security
Section 562dAttachment by a third party
Chapter 4
Change of contractual parties
Section 563Right of accession upon death of the lessee
Section 563aContinuation with surviving lessees
Section 563bLiability in the case of accession or continuation
Section 564Continuation of the lease with the heir; termination for cause
Section 565Commercial subletting
Section 566Purchase is subject to existing leases
Section 566aRent security deposit
Section 566bAdvance disposition over the rent
Section 566cAgreement between lessee and lessor on the rent
Section 566dSet-off by the lessee
Section 566eNotification by the lessor of the devolution of ownership
Section 567Encumbrance of the residential space by the lessor
Section 567aAlienation or encumbrance prior to residential space being made available for use
Section 567bOnward alienation or encumbrance by the acquirer
Chapter 5
Termination of the lease
Subchapter 1
General provisions
Section 568Form and contents of the notice of termination
Section 569Termination for cause without notice for a compelling reason
Section 570Exclusion of the right of retention
Section 571Further compensation of damages for late return of residential space
Section 572Agreement on right of rescission; lease subject to condition subsequent
Subchapter 2
Leases for an indefinite period of time
Section 573Notice of termination by the lessor in accordance with usual procedure
Section 573aEased termination by the lessor
Section 573bPartial termination by the lessor
Section 573cPeriods of time to be observed in giving notice of termination in accordance with usual procedure
Section 573dTermination for cause observing the statutory notice period
Section 574Objection of lessee to termination
Section 574aContinuation of lease after objection
Section 574bRequirements as to form and period of time for objection
Section 574cFurther continuation of the lease in the case of unforeseen circumstances
Subchapter 3
Leases for a specified period of time
Section 575Fixed-term lease
Section 575aTermination for cause observing the statutory notice period
Subchapter 4
Tied dwellings
Section 576Periods of time to be observed in giving notice of termination in accordance with usual procedure in the case of tied leased dwellings
Section 576aSpecial features of the right to raise an objection in the case of tied leased dwellings
Section 576bApplication of landlord and tenant law accordingly in connection with tied dwellings
Chapter 6
Special features when creating title to leased residences
Section 577Lessee’s right of preemption
Section 577aRestriction of termination in connection with conversion of the dwelling
Subtitle 3
Leases of other things and digital products
Section 578Leases of plots of land and premises
Section 578aLease of registered ships
Section 578bContracts on the lease of digital products
Section 579Due date of the rent
Section 580Notice of termination for cause in the case of the death of the lessee
Section 580aNotice periods
Subtitle 4
Usufructuary lease
Section 581Contractual duties typical for a usufructuary lease
Section 582Maintenance of inventory
Section 582aAssumption of inventory at its estimated value
Section 583Security right of usufructuary lessee over inventory
Section 583aRestrictions on disposition over inventory
Section 584Period of notice
Section 584aExclusion of certain rights of termination under landlord and tenant law
Section 584bLate return
Subtitle 5
Farm lease
Section 585Concept of farm lease
Section 585aForm of a farm lease
Section 585bDescription of the leased property
Section 586Contractual duties typical for a farm lease
Section 586aEncumbrances on the leased property
Section 587Due date of rent; payment of rent where the usufructuary lessee is personally prevented
Section 588Measures of maintenance or improvement
Section 589Making available the leased property to third parties for their use
Section 590Change of agricultural purpose or of previous use
Section 590aUse in breach of contract
Section 590bNecessary outlays
Section 591Outlays that increase value
Section 591aRemoval of installations
Section 591bLimitation of compensation claims
Section 592Security right of the usufructuary lessor
Section 593Amendment of farm leases
Section 593aTransfer of a business
Section 593bAlienation or encumbrance of the leased property
Section 594Termination and extension of the lease
Section 594aNotice periods
Section 594bLease for more than 30 years
Section 594cTermination in the case of occupational disability of the usufructuary lessee
Section 594dDeath of the usufructuary lessee
Section 594eTermination for cause without notice for a compelling reason
Section 594fWritten form of termination
Section 595Continuation of the lease
Section 595aEarly notice of termination of farm leases
Section 596Return of the leased property
Section 596aDuty to compensate for early termination of lease
Section 596bDuty to leave behind
Section 597Late return
Title 6
Gratuitous loan
Section 598Contractual duties typical for the case of a gratuitous loan
Section 599Liability of the lender
Section 600Liability for defects
Section 601Reimbursement of outlays
Section 602Wear and tear on the thing
Section 603Contractually agreed use
Section 604Duty to return
Section 605Right of termination
Section 606Short limitation period
Title 7
Contract for the loan of a thing
Section 607Contractual duties typical for a contract for the loan of a thing
Section 608Termination
Section 609Payment
Section 610(repealed)
Title 8
Service contract and similar contracts
Subtitle 1
Service contract
Section 611Contractual duties typical for a service contract
Section 611aEmployment contract
Section 611b(repealed)
Section 612Remuneration
Section 612aProhibition of victimisation
Section 613Non-transferability
Section 613aRights and duties in the case of transfer of business
Section 614Due date of remuneration
Section 615Remuneration in the case of default in acceptance and business risk
Section 616Temporary prevention from performing services
Section 617Duty of medical care
Section 618Duty to take protective measures
Section 619Absolute nature of welfare duties
Section 619aBurden of proof when the employee is liable
Section 620End of services relationship
Section 621Periods of notice for service relationships
Section 622Notice periods in the case of employment relationships
Section 623Written form of termination
Section 624Notice period in the case of contracts lasting longer than five years
Section 625Tacit extension
Section 626Termination without notice for a compelling reason
Section 627Termination without notice in the case of a position of trust
Section 628Partial remuneration and damages in case of termination without notice
Section 629Time off for search for employment
Section 630Duty to provide a reference
Subtitle 2
Treatment contract
Section 630aContractual duties typical for a treatment contract
Section 630bApplicable provisions
Section 630cCooperation between the contracting parties; obligations to provide information
Section 630dConsent
Section 630eObligations to provide information
Section 630fDocumentation of the treatment
Section 630gInspection of the medical records
Section 630hBurden of proof in case of liability for malpractice and errors in providing information
Title 9
Contract to produce a work and similar contracts
Subtitle 1
Contract to produce a work
Chapter 1
General provisions
Section 631Contractual duties typical for a contract to produce a work
Section 632Remuneration
Section 632aPart payments
Section 633Material defects and defects of title
Section 634Rights of the customer in the case of defects
Section 634aLimitation of claims for defects
Section 635Cure
Section 636Special provisions on rescission and damages
Section 637Self-help
Section 638Abatement of price
Section 639Exclusion of liability
Section 640Acceptance
Section 641Due date of remuneration
Section 641a(repealed)
Section 642Cooperation by the customer
Section 643Termination for failure to collaborate
Section 644Allocation of risk
Section 645Responsibility of the customer
Section 646Completion in lieu of acceptance
Section 647Security right of the contractor
Section 647aMortgage of the owner of a shipyard
Section 648Right of termination of the customer
Section 648aTermination for a compelling reason
Section 649Cost estimate
Section 650Contract for work and materials; consumer contract on the production of digital products
Chapter 2
Construction contract
Section 650aConstruction contract
Section 650bAmendment of the contract; right of the customer to issue orders
Section 650cAdjustment of remuneration in case of orders pursuant to section 650b (2)
Section 650dInjunction
Section 650eMortgage of a building contractor
Section 650fBuilder’s security
Section 650gDetermination of the status in the case of acceptance being refused; final invoice
Section 650hWritten form of the termination
Chapter 3
Construction contract with a consumer
Section 650iConstruction contract with a consumer
Section 650jSpecifications
Section 650kSubject matter of the contract
Section 650lRight of withdrawal
Section 650mPart payments; security for the claim to remuneration
Section 650nPreparation of documents and surrender
Chapter 4
Mandatory nature
Section 650oDeviating agreements
Subtitle 2
Contract for architectural services and contract for engineering services
Section 650pContractual duties typical for contracts for architectural and for engineering services
Section 650qApplicable provisions
Section 650rSpecial right of termination
Section 650sPartial acceptance
Section 650tJoint and several liability with the contractor executing the construction work
Subtitle 3
Developer contract
Section 650uDeveloper contract; applicable provisions
Section 650vPart payments
Subtitle 4
Package travel contract, brokerage of travel contracts and brokerage of linked travel arrangements
Section 651aContractual duties typical for a package travel contract
Section 651bDelimitation from brokerage
Section 651cLinked online booking processes
Section 651dObligations to provide information; contents of the contract
Section 651eTransfer of contract
Section 651fReservations of the right to modify; price reduction
Section 651gSignificant amendments of the contract
Section 651hRescission before the start of the package
Section 651iRights of the traveller in the case of a lack of conformity of the package
Section 651jLimitation
Section 651kRemedy
Section 651lTermination
Section 651mAbatement of the price
Section 651nDamages
Section 651oNotification by the traveller of a lack of conformity
Section 651pAdmissible limitation of liability; set-off
Section 651qOrganiser’s obligation to provide assistance
Section 651rInsolvency protection; security certificate
Section 651sInsolvency protection of the organisers established in the European Economic Area
Section 651tRepatriation, prepayments
Section 651uExchange student stays
Section 651vFacilitation of travel
Section 651wFacilitation of linked travel arrangements
Section 651xLiability for booking errors
Section 651yDeviating agreements
Title 10
Brokerage contract
Subtitle 1
General provisions
Section 652Accrual of fee claim
Section 653Brokerage fee
Section 654Forfeiture of the fee claim
Section 655Reduction of the brokerage fee
Subtitle 2
Intermediation of consumer credit agreements and non-gratuitous financial accommodation
Section 655aCredit intermediation contract
Section 655bWritten form in the case of a contract with a consumer
Section 655cRemuneration
Section 655dAncillary payment
Section 655eDeviating agreements, application to founders of new businesses
Subtitle 3
Marriage broking
Section 656Marriage broking
Subtitle 4
Brokerage of purchase contracts for flats and single family houses
Section 656aText form
Section 656bPersonal scope of sections 656c and 656d
Section 656cFee claim in the case of the broker working for both parties
Section 656dAgreements on the broker’s costs
Title 11
Promise of a reward
Section 657Binding promise
Section 658Revocation
Section 659Act undertaken more than once
Section 660Collaboration by more than one person
Section 661Prize competition
Section 661aPromises of prizes
Title 12
Mandate, contract for the management of the affairs of another and payment services
Subtitle 1
Mandate
Section 662Contractual duties typical for a mandate
Section 663Duty to notify in the case of rejection
Section 664Non-transferability; liability for assistants
Section 665Deviation from instructions
Section 666Duty of information and duty to render accounts
Section 667Duty to surrender
Section 668Interest on money used
Section 669Duty of advance payment
Section 670Reimbursement of expenses
Section 671Withdrawal; termination
Section 672Death or incapacity to contract of the mandator
Section 673Death of the mandatary
Section 674Legal construct of continuation
Subtitle 2
Contract for the management of the affairs of another
Section 675Non-gratuitous management of the affairs of another
Section 675aDuties to provide information
Section 675bOrders to transfer securities in systems
Subtitle 3
Payment services
Chapter 1
General provisions
Section 675cPayment services and e-money
Section 675dInformation on payment services
Section 675eDeviating agreements
Chapter 2
Payment services contract
Section 675fPayment services contract
Section 675gAmendment of the framework contract on payment services
Section 675hNotice of termination in accordance with usual procedure of a framework contract on payment services
Section 675iExceptions for low-value payment instruments and e-money
Chapter 3
Provision and use of payment services
Subchapter 1
Authorisation of payment transactions; payment instruments; refusal of access to the payment account
Section 675jConsent and withdrawal of consent
Section 675kRestrictions on the use of a payment instrument; refusal of access to the payment account
Section 675lObligations of the payment service user with regard to payment instruments
Section 675mObligations of the payment service provider with regard to payment instruments; risk of dispatch
Subchapter 2
Execution of payment transactions
Section 675nReceipt of payment orders
Section 675oRefusal of payment orders
Section 675pIrrevocability of a payment order
Section 675qCharges for payment transactions
Section 675rExecution of a payment transaction using unique identifiers
Section 675sExecution deadline for payment transactions
Section 675tValue date and availability of funds; blocking available funds
Subchapter 3
Liability
Section 675uLiability of the payment service provider for unauthorised payment transactions
Section 675vLiability of the payer in case of misappropriation of a payment instrument
Section 675wProof of authentication
Section 675xRefund claim in case of an authorised payment transaction initiated by or through the payee
Section 675yLiability of the payment service provider in case of non-execution, defective or late execution of a payment order; obligation to make enquiries
Section 675zOther claims in case of non-execution, defective or late execution of a payment order or in case of an unauthorised payment transaction
Section 676Proof of execution of payment transactions
Section 676aEqualisation claim
Section 676bNotification of unauthorised or incorrectly executed payment transactions
Section 676cDisclaimer
Title 13
Voluntary agency without specific authorisation
Section 677Duties of the voluntary agent
Section 678Agency contrary to the will of the principal
Section 679Irrelevance of the contrary will of the principal
Section 680Agency of necessity
Section 681Ancillary duties of the voluntary agent
Section 682Lack of capacity to contract on the part of the voluntary agent
Section 683Reimbursement of expenses
Section 684Surrender of enrichment
Section 685Intention to donate
Section 686Error as to the identity of the principal
Section 687False voluntary agency without specific authorisation
Title 14
Safekeeping
Section 688Contractual duties typical for safekeeping
Section 689Remuneration
Section 690Liability for gratuitous safekeeping
Section 691Deposit with third parties
Section 692Change of safekeeping
Section 693Reimbursement of expenses
Section 694Liability in damages of the depositor
Section 695Right of the depositor to demand return
Section 696Claim of depositary for repossession of the thing deposited
Section 697Place for return
Section 698Interest on money used
Section 699Due date of remuneration
Section 700Irregular safekeeping contract
Title 15
Bringing things onto the premises of innkeepers
Section 701Liability of the innkeeper
Section 702Limitation of liability; valuables
Section 702aRelease from liability
Section 703Extinction of the claim for damages
Section 704Security right of the innkeeper
Title 16
Partnership
Section 705Contents of partnership agreement
Section 706Contributions of the partners
Section 707Increase of the agreed contribution
Section 707a to 707c(will enter into force at a future time)
Section 707dAuthorisation to issue statutory instruments
Section 708Liability of the partners
Section 709Joint management
Section 710Transfer of management
Section 711Right to object
Section 712Revocation and dismissal of management
Section 713Rights and duties of managing partners
Section 714Power of agency
Section 715Revocation of the power of agency
Section 716Right of control of the partners
Section 717Non-transferability of partner rights
Section 718Partnership assets
Section 719Joint assets
Section 720Protection of good-faith debtor
Section 721Distribution of profits and losses
Section 722Shares in profits and losses
Section 723Termination by partner
Section 724Notice of termination in the case of a partnership for life or a continuing partnership
Section 725Termination by attachment creditors
Section 726Dissolution due to achievement or impossibility of its object
Section 727Dissolution due to the death of a partner
Section 728Dissolution due to insolvency of the partnership or one of its partners
Section 729Continuation of authority to manage
Section 730Winding-up of the partnership; management
Section 731Procedure for winding-up of the partnership
Section 732Return of objects
Section 733Discharge of partnership debts; reimbursement of capital contributions
Section 734Distribution of the surplus
Section 735Duty to make subsequent contributions in case of loss
Section 736Retirement of a partner; continuing liability
Section 737Exclusion of a partner
Section 738Winding-up of the partnership on retirement
Section 739Liability for deficit
Section 740Sharing in the financial results of pending transactions
Title 17
Co-ownership
Section 741Co-ownership by defined shares
Section 742Equal shares
Section 743Share in the fruits; authority to use
Section 744Joint administration
Section 745Administration and use by resolution
Section 746Effect in relation to successors in interest
Section 747Disposition over a share and joint objects
Section 748Bearing of charges and costs
Section 749Claim to dissolution
Section 750Exclusion of dissolution in case of death
Section 751Exclusion of dissolution and successors in interest
Section 752Division in kind
Section 753Division by sale
Section 754Sale of joint claims
Section 755Discharge of a joint debt
Section 756Discharge of the debt of a part owner
Section 757Warranty upon allocation to a part owner
Section 758Claim to dissolution not subject to the statute of limitations
Title 18
Life annuity
Section 759Duration and amount of the annuity
Section 760Advance payment
Section 761Form of life annuity commitment
Title 19
Imperfect obligations
Section 762Gaming, betting
Section 763Lottery contracts and gaming contracts
Section 764(repealed)
Title 20
Suretyship
Section 765Contractual duties typical for suretyship
Section 766Written form of the declaration of suretyship
Section 767Extent of the suretyship debt
Section 768Defences of a surety
Section 769Co-suretyship
Section 770Defences of voidability and set-off
Section 771Defence of failure to pursue remedies
Section 772Duty of creditor of enforcement and realisation
Section 773Exclusion of defence of failure to pursue remedies
Section 774Statutory devolution of claims
Section 775Claim to release of the surety
Section 776Waiver of a security
Section 777Temporary suretyship
Section 778Credit mandate
Title 21
Settlement
Section 779Concept of settlement; mistake as to the basis of the settlement
Title 22
Promise to fulfil an obligation; acknowledgement of debt
Section 780Promise to fulfil an obligation
Section 781Acknowledgement of a debt
Section 782No requirements as to form for settlement
Title 23
Order
Section 783Rights derived from instruction
Section 784Acceptance of the instruction
Section 785Handover of the instruction
Section 786(repealed)
Section 787Instruction to assume debt
Section 788Underlying debt relationship
Section 789Duty of recipient of the document setting out the instruction to notify
Section 790Revocation of the instruction
Section 791Death or incapacity to contract of a party involved
Section 792Transfer of the instruction
Title 24
Bearer bond
Section 793Rights under a bearer bond
Section 794Liability of the issuer
Section 795(repealed)
Section 796Objections of the issuer
Section 797Duty to render performance only in return for handover
Section 798Replacement instrument
Section 799Declaration of invalidity
Section 800Effect of the declaration of invalidity
Section 801Extinction; prescription
Section 802Blockage of payment
Section 803Interest coupons
Section 804Loss of interest coupons or similar coupons
Section 805New interest coupons and annuity coupons
Section 806Reregistration under name
Section 807Bearer tickets and stamps
Section 808Registered securities with bearer clause
Title 25
Presentation of things
Section 809Inspection of a thing
Section 810Right to inspect instruments
Section 811Place of presentation, risk and costs
Title 26
Unjust enrichment
Section 812Claim to surrender
Section 813Performance notwithstanding defence
Section 814Knowledge that debt is not owed
Section 815Non-occurrence of result
Section 816Disposition by an unauthorised person
Section 817Breach of law or act offending common decency
Section 818Scope of the claim to enrichment
Section 819Increased liability in case of knowledge and in cases of breaches of law or acts offending common decency
Section 820Increased liability where the result is uncertain
Section 821Enrichment defence
Section 822Duty to surrender of third parties
Title 27
Torts
Section 823Liability in damages
Section 824Endangering credit
Section 825Inducing others to sexual acts
Section 826Intentional damage inflicted in a manner offending common decency
Section 827Exclusion and reduction of responsibility
Section 828Minors
Section 829Liability in damages for reasons of equity
Section 830Joint tortfeasors and persons involved
Section 831Liability for vicarious agents
Section 832Liability of a person with a duty of supervision
Section 833Liability of animal keeper
Section 834Liability of animal minder
Section 835(repealed)
Section 836Liability of the owner of a plot of land
Section 837Liability of building possessor
Section 838Liability of the person with a duty of upkeep regarding a building
Section 839Liability in case of breach of official duty
Section 839aLiability of court-appointed expert
Section 840Liability of more than one person
Section 841Compensation for liability of a public official
Section 842Extent of liability in damages in case of injury of a person
Section 843Annuity in money or lump sum settlement
Section 844Third-party compensation claims in the case of death
Section 845Compensation claims for lost services
Section 846Contributory negligence of the injured person
Section 847(repealed)
Section 848Liability for chance in the case of deprivation of a thing
Section 849Interest on the compensation sum
Section 850Reimbursement of outlays
Section 851Compensation payment to unauthorised parties
Section 852Claim to surrender after end of limitation period
Section 853Defence of bad faith
Book 3
Law of property
Division 1
Possession
Section 854Acquisition of possession
Section 855Agent in possession
Section 856Ending of possession
Section 857Inheritability
Section 858Prohibited interference with possession
Section 859Self-help by the possessor
Section 860Self-help by the agent in possession
Section 861Claim on account of deprivation of possession
Section 862Claim on account of interference with possession
Section 863Objections of the party depriving of possession or of the disturber
Section 864Extinction of claims to possession
Section 865Part possession
Section 866Co-possession
Section 867Possessor’s right of pursuit
Section 868Indirect possession
Section 869Claims of the indirect possessor
Section 870Transfer of indirect possession
Section 871Multilevel indirect possession
Section 872Proprietary possession
Division 2
General provisions on rights in land
Section 873Acquisition by agreement and registration
Section 874Reference to approval of registration
Section 875Cancellation of a right
Section 876Cancellation of an encumbered right
Section 877Alterations of rights
Section 878Subsequent restrictions on disposition
Section 879Order of priority of more than one right
Section 880Change of priority
Section 881Reservation of priority
Section 882Maximum amount of compensation for lost value
Section 883Prerequisites and effect of priority notice
Section 884Effect in relation to heirs
Section 885Prerequisite for the entry of the priority notice
Section 886Claim for removal
Section 887Judicial call of the priority notice claimant
Section 888Claim to approval of the person entitled to the priority notice
Section 889Exclusion of merger for rights in rem
Section 890Union of plots of land; addition
Section 891Statutory presumption
Section 892Presumption of legal force of the contents of the Land Register
Section 893Legal transaction with the person entered in the Land Register
Section 894Correction of the Land Register
Section 895Prior entry of the person obliged
Section 896Submission of certificate
Section 897Costs of correction
Section 898Claims to correction not subject to the statute of limitations
Section 899Entry of an objection
Section 899aProvisos for civil-law partnerships
Section 900Acquisition by prescription following entry in the Land Register
Section 901Extinction of rights not entered in the Land Register
Section 902Rights entered in the Land Register not subject to the statute of limitations
Division 3
Ownership
Title 1
Subject matter of ownership
Section 903Powers of the owner
Section 904Necessity
Section 905Restriction of ownership
Section 906Introduction of imponderable substances
Section 907Facilities threatening danger
Section 908Imminent collapse of building
Section 909Excavation
Section 910Overhang
Section 911Falling fruit
Section 912Encroachment; duty to tolerate
Section 913Payment of periodical payments for encroachment
Section 914Priority, registration and extinction of periodical payments
Section 915Purchase
Section 916Adverse effect on heritable building right or servitude
Section 917Right of way of necessity
Section 918Exclusion of the right of way of necessity
Section 919Boundary marking
Section 920Confusion of boundaries
Section 921Joint use of boundary installations
Section 922Manner of use and maintenance
Section 923Boundary tree
Section 924Neighbour-law claims not subject to the statute of limitations
Title 2
Acquisition and loss of ownership of plots of land
Section 925Declaration of conveyance
Section 925aDocument of land transaction
Section 926Accessories of the plot of land
Section 927Judicial call procedure
Section 928Relinquishment of ownership, appropriation by fiscal authority
Title 3
Acquisition and loss of ownership of movable things
Subtitle 1
Transfer
Section 929Agreement and delivery
Section 929aAgreement with regard to unregistered ship
Section 930Constructive delivery
Section 931Assignment of claim to surrender
Section 932Good faith acquisition from a person not entitled
Section 932aGood faith acquisition of unregistered ships
Section 933Good faith acquisition on constructive delivery
Section 934Good faith acquisition on assignment of claim to surrender
Section 935No good faith acquisition of lost things
Section 936Extinction of third party rights
Subtitle 2
Acquisition by prescription
Section 937Prerequisites, exclusion in the case of knowledge
Section 938Presumption of proprietary possession
Section 939Suspension of prescription
Section 940Interruption by loss of possession
Section 941Interruption by act of execution
Section 942Effect of interruption
Section 943Acquisition by prescription and succession in title
Section 944Possessor of an inheritance
Section 945Extinction of third party rights
Subtitle 3
Combination, intermixture, processing
Section 946Combination with a plot of land
Section 947Combination with movable things
Section 948Intermixture
Section 949Extinction of third party rights
Section 950Processing
Section 951Compensation for loss of rights
Section 952Ownership of documents of debt
Subtitle 4
Acquisition of products and other components of a thing
Section 953Ownership of separated products and components
Section 954Acquisition by person entitled in rem
Section 955Acquisition by proprietary possessor in good faith
Section 956Acquisition by person entitled in personam
Section 957Permission by the person not entitled
Subtitle 5
Appropriation
Section 958Acquisition of ownership of ownerless movable things
Section 959Abandonment of ownership
Section 960Wild animals
Section 961Loss of ownership of bee swarms
Section 962Right of pursuit of the owner
Section 963Merging of bee swarms
Section 964Intermixture of bee swarms
Subtitle 6
Finding
Section 965Duty of the finder to notify
Section 966Duty of safekeeping
Section 967Duty to deliver
Section 968Extent of liability
Section 969Surrender to the loser
Section 970Reimbursement of expenses
Section 971Finder’s reward
Section 972Right of retention of the finder
Section 973Acquisition of ownership by the finder
Section 974Acquisition of ownership after concealment
Section 975Rights of the finder after delivery
Section 976Acquisition of ownership by the municipality
Section 977Claim in enrichment
Section 978Finding in public authority or transport agency
Section 979Sale; authorisation to issue an ordinance
Section 980Notice by publication of the finding
Section 981Receipt of the proceeds of auction
Section 982Provisions for implementation
Section 983Undeliverable things in the possession of authorities
Section 984Treasure trove
Title 4
Claims arising from ownership
Section 985Claim to surrender
Section 986Objections of the possessor
Section 987Emoluments after litigation is pending
Section 988Emoluments of the possessor who makes no payment
Section 989Damages after litigation is pending
Section 990Liability of possessor with knowledge
Section 991Liability of intermediary possessor in the case of indirect possession
Section 992Liability of the wrongful possessor
Section 993Liability of the possessor in good faith
Section 994Necessary outlays
Section 995Charges
Section 996Useful outlays
Section 997Right of removal
Section 998Farming costs for agricultural plot of land
Section 999Reimbursement of outlays of the predecessor in title
Section 1000Right of retention of the possessor
Section 1001Action for reimbursement of outlays
Section 1002Extinction of the claim for outlays
Section 1003Right to satisfaction of the possessor
Section 1004Claim for removal and injunction
Section 1005Right of pursuit
Section 1006Presumption of ownership for possessor
Section 1007Claims of the former possessor, exclusion in the case of knowledge
Title 5
Co-ownership
Section 1008Co-ownership by fractional shares
Section 1009Encumbrance to the benefit of a co-owner
Section 1010Successor in interest of a co-owner
Section 1011Claims arising from co-ownership
Sections 1012 - 1017(repealed)
Division 4
Servitudes
Title 1
Easements
Section 1018Statutory definition of easement
Section 1019Benefit of the dominant plot of land
Section 1020Considerate use
Section 1021Agreed duty of maintenance
Section 1022Installations on building structures
Section 1023Moving the use
Section 1024Coincidence of more than one right of use
Section 1025Division of the dominant plot of land
Section 1026Division of the servient plot of land
Section 1027Interference with easement
Section 1028Limitation
Section 1029Protection of possession of the lawful possessor
Title 2
Usufruct
Subtitle 1
Usufruct in things
Section 1030Statutory definition of usufruct in things
Section 1031Application to accessories
Section 1032Creation of usufruct in movable things
Section 1033Acquisition by prescription
Section 1034Determination of the condition
Section 1035Usufruct in aggregate of things; list
Section 1036Right of possession; exercise of usufruct
Section 1037Transformation
Section 1038Economic plan for forests and mines
Section 1039Excessive taking of fruits
Section 1040Treasure
Section 1041Upkeep of the thing
Section 1042Duty of notification by the usufructuary
Section 1043Repair or replacement
Section 1044Toleration of repairs
Section 1045Obligation of the usufructuary to insure
Section 1046Usufruct in an insurance claim
Section 1047Bearing of charges
Section 1048Usufruct in plot of land with inventory
Section 1049Reimbursement of outlays
Section 1050Wear and tear
Section 1051Provision of security
Section 1052Judicial administration in the absence of security
Section 1053Application for a prohibitory injunction in the case of unauthorised use
Section 1054Judicial administration on the basis of breach of duty
Section 1055Duty of return of the usufructuary
Section 1056Leases and usufructuary leases at the end of the usufruct
Section 1057Limitation of compensation claims
Section 1058Grantor as owner
Section 1059Non-transferability; ceding the exercise
Section 1059aTransferability in the case of a legal person or of a partnership having legal personality
Section 1059bNon-distrainability
Section 1059cDevolution or transfer of usufruct
Section 1059dLeases and usufructuary leases on the transfer of the usufruct
Section 1059eClaim to grant of the usufruct
Section 1060Coincidence of more than one right of use
Section 1061Death of the usufructuary
Section 1062Extension of cancellation to accessories
Section 1063Coincidence with ownership
Section 1064Cancellation of usufruct in movable things
Section 1065Adverse effect on right of usufruct
Section 1066Usufruct in the share of a co-owner
Section 1067Usufruct in consumable things
Subtitle 2
Usufruct in rights
Section 1068Statutory definition of usufruct in rights
Section 1069Creation
Section 1070Usufruct in a right to performance
Section 1071Cancellation or alteration of the encumbered right
Section 1072Termination of usufruct
Section 1073Usufruct in a life annuity
Section 1074Usufruct in a claim; notice and collection
Section 1075Effect of performance
Section 1076Usufruct in claim bearing interest
Section 1077Notice of termination and payment
Section 1078Cooperation in collection
Section 1079Investment of the capital
Section 1080Usufruct in a land charge or annuity land charge
Section 1081Usufruct in bearer instruments or instruments made out to order
Section 1082Deposit
Section 1083Cooperation in collection
Section 1084Consumable things
Subtitle 3
Usufruct in assets
Section 1085Creation of usufruct in assets
Section 1086Rights of the creditors of the grantor
Section 1087Relationship between usufructuary and grantor
Section 1088Liability of the usufructuary
Section 1089Usufruct in an inheritance
Title 3
Restricted personal easements
Section 1090Statutory definition of the restricted personal easement
Section 1091Scope
Section 1092Non-transferability; ceding the exercise
Section 1093Right of residence
Division 5
Right of preemption
Section 1094Statutory contents of the in-rem right of preemption
Section 1095Encumbrance of a fraction
Section 1096Application to accessories
Section 1097Creation for one or more cases of sale
Section 1098Effect of a right of preemption
Section 1099Notifications
Section 1100Rights of the purchaser
Section 1101Release of the person entitled
Section 1102Release of the purchaser
Section 1103Subjective in-rem right of preemption and personal right of preemption
Section 1104Exclusion of unknown entitled persons
Division 6
Charges on land
Section 1105Statutory contents of the charge on land
Section 1106Encumbrance of a fraction
Section 1107Individual payments
Section 1108Personal liability of the owner
Section 1109Division of the dominant plot of land
Section 1110Subjective in-rem charge on land
Section 1111Personal charge on land
Section 1112Exclusion of unknown entitled persons
Division 7
Mortgage, land charge, annuity land charge
Title 1
Mortgage
Section 1113Statutory contents of the mortgage
Section 1114Encumbrance of a fraction
Section 1115Entry of the mortgage
Section 1116Certificated and uncertificated mortgage
Section 1117Acquisition of the certificated mortgage
Section 1118Liability for incidental claims
Section 1119Extension of liability for interest
Section 1120Extension to products, parts and accessories
Section 1121Release from liability through alienation and removal
Section 1122Release from liability without alienation
Section 1123Extension to claim for rent or for usufructuary rent
Section 1124Advance disposition over the rent or usufructuary rent
Section 1125Set-off against rent or usufructuary rent
Section 1126Extension to recurring acts of performance
Section 1127Extension to insurance claim
Section 1128Insurance on buildings
Section 1129Other insurance against damage
Section 1130Replacement clause
Section 1131Addition of a plot of land
Section 1132Blanket mortgage
Section 1133Danger to the security of the mortgage
Section 1134Application for an injunction
Section 1135Deterioration of accessories
Section 1136Restraint on disposition by legal transaction
Section 1137Defences of the owner
Section 1138Presumption of legal force of the contents of the Land Register
Section 1139Objection with regard to an uncertificated mortgage for a loan
Section 1140Mortgage certificate and inaccuracy of the Land Register
Section 1141Notice of termination of the mortgage
Section 1142Owner’s right to provide satisfaction
Section 1143Devolution of claim
Section 1144Handover of documents
Section 1145Partial satisfaction
Section 1146Default interest
Section 1147Satisfaction by compulsory enforcement
Section 1148Fiction of ownership
Section 1149Prohibited agreements on satisfaction
Section 1150Right of redemption of third parties
Section 1151Change of priority for partial mortgages
Section 1152Partial mortgage certificate
Section 1153Transfer of mortgage and claim
Section 1154Assignment of the claim
Section 1155Presumption of legal force of certified declarations of assignment
Section 1156Legal relationship between the owner and the new creditor
Section 1157Continuation of defences against the mortgage
Section 1158Future collateral performance
Section 1159Arrears of collateral performance
Section 1160Enforcement of a certificated mortgage
Section 1161Enforcement of the claim
Section 1162Judicial call with regard to the mortgage certificate
Section 1163Owner mortgage
Section 1164Devolution of the mortgage to the debtor
Section 1165Discharge of the debtor
Section 1166Notification of the debtor
Section 1167Delivery of correction documents
Section 1168Waiver of the mortgage
Section 1169Defence with a negative effect on a right
Section 1170Exclusion of unknown creditors
Section 1171Exclusion by deposit
Section 1172Owner blanket mortgage
Section 1173Satisfaction by one of the owners
Section 1174Satisfaction by the personal debtor
Section 1175Waiver of the blanket mortgage
Section 1176Owner partial mortgage; conflict clause
Section 1177Owner land charge, owner mortgage
Section 1178Mortgage for collateral performance and costs
Section 1179Priority notice of right to deletion
Section 1179aClaim to deletion in the case of third party rights
Section 1179bClaim to deletion based on one’s own right
Section 1180Substitution for the claim
Section 1181Extinction by satisfaction from the plot of land
Section 1182Transfer in the case of satisfaction from the blanket mortgage
Section 1183Cancellation of the mortgage
Section 1184Debt-securing mortgage
Section 1185Uncertificated mortgage; inapplicable provisions
Section 1186Permitted conversions
Section 1187Debt-securing mortgage for bearer instruments and instruments made out to order
Section 1188Special provision for bearer bonds
Section 1189Appointment of a Land Register representative
Section 1190Maximum amount mortgage
Title 2
Land charge, annuity land charge
Subtitle 1
Land charge
Section 1191Statutory contents of the land charge
Section 1192Applicable provisions
Section 1193Termination
Section 1194Place of payment
Section 1195Bearer land charge
Section 1196Owner land charge
Section 1197Deviations from third party land charge
Section 1198Permitted conversions
Subtitle 2
Annuity land charge
Section 1199Statutory contents of the annuity land charge
Section 1200Applicable provisions
Section 1201Right of redemption
Section 1202Termination
Section 1203Permitted conversions
Division 8
Pledge of movable things and over rights
Title 1
Pledge of movable things
Section 1204Statutory contents of the pledge of movable things
Section 1205Creation
Section 1206Replacement of delivery by granting joint possession
Section 1207Pledging by an unauthorised person
Section 1208Acquisition of priority of rank in good faith
Section 1209Priority of the pledge
Section 1210Extent of liability of the pledge
Section 1211Defences of the pledgor
Section 1212Extension to separated products
Section 1213Pledge of emoluments
Section 1214Duties of the pledgee entitled to emoluments
Section 1215Duty of safekeeping
Section 1216Reimbursement of outlays
Section 1217Violation of rights by the pledgee
Section 1218Rights of the pledgor in the case of imminent spoilage
Section 1219Rights of the pledgee in the case of imminent spoilage
Section 1220Warning of auction
Section 1221Sale by private agreement
Section 1222Pledge of more than one thing
Section 1223Duty to return the pledged item; right to redeem the pledged item
Section 1224Satisfaction by deposit or set-off
Section 1225Devolution of claim to the pledgor
Section 1226Limitation of compensation claims
Section 1227Protection of the pledge
Section 1228Satisfaction by sale of the pledged item
Section 1229Prohibition of a forfeiture agreement
Section 1230Selection of pledged item from more than one pledged item
Section 1231Surrender of pledged item for sale
Section 1232Lower-ranking pledgees
Section 1233Execution of the sale
Section 1234Warning of sale; waiting period
Section 1235Public auction
Section 1236Place of auction
Section 1237Notice by publication
Section 1238Conditions of sale
Section 1239Bidding by creditor and owner
Section 1240Things made of gold or silver
Section 1241Notification of the owner
Section 1242Effects of the lawful alienation
Section 1243Unlawful alienation
Section 1244Acquisition in good faith
Section 1245Deviating agreements
Section 1246Deviation for reasons of equity
Section 1247Proceeds of the pledged item
Section 1248Presumption of ownership
Section 1249Right of redemption
Section 1250Transfer of claim
Section 1251Effect of the devolution of the pledge
Section 1252Extinction with the claim
Section 1253Extinction by return
Section 1254Claim for return
Section 1255Cancellation of the pledge
Section 1256Coincidence of pledge and ownership
Section 1257Pledge by operation of law
Section 1258Pledge of the share of a co-owner
Section 1259Realisation of a commercial pledged item
Sections 1260 - 1272(repealed)
Title 2
Pledge of rights
Section 1273Statutory contents of the pledge of rights
Section 1274Creation
Section 1275Pledge of right to performance
Section 1276Cancellation or alteration of the pledged right
Section 1277Satisfaction by compulsory enforcement
Section 1278Extinction by return
Section 1279Pledge of a claim
Section 1280Notification of the debtor
Section 1281Performance before the due date
Section 1282Performance after the due date
Section 1283Termination
Section 1284Deviating agreements
Section 1285Cooperation in collection
Section 1286Duty of termination in the case of danger
Section 1287Effect of performance
Section 1288Investment of collected money
Section 1289Extension to the interest
Section 1290Collection in the case of multiple pledges
Section 1291Pledge of land charge or annuity land charge
Section 1292Pledging of instruments made out to order
Section 1293Pledge of bearer instruments
Section 1294Collection and notice of termination
Section 1295Private sale of instruments made out to order
Section 1296Extension to interest coupons
Book 4
Family law
Division 1
Civil marriage
Title 1
Engagement
Section 1297No petition for a marriage to be entered into, nullity of a promise to pay a penalty
Section 1298Duty of compensation in the case of withdrawal
Section 1299Withdrawal by reason of fault of the other party
Section 1300(repealed)
Section 1301Return of the presents
Section 1302Limitation
Title 2
Entering into marriage
Subtitle 1
Capacity to marry
Section 1303Marriageable age
Section 1304Incapacity to contract
Section 1305(repealed)
Subtitle 2
Impediments to marriage
Section 1306Existing marriage or life partnership
Section 1307Relationship by blood
Section 1308Adoption
Subtitle 3
Certificate of no impediment
Section 1309Certificate of no impediment for foreigners
Subtitle 4
Marriage
Section 1310Competence of the registrar of births, deaths and marriages, curing defective marriages
Section 1311Personal declaration
Section 1312Marriage ceremony
Title 3
Annulment of marriage
Section 1313Annulment by judicial decision
Section 1314Grounds of annulment
Section 1315Exclusion of annulment
Section 1316Entitlement to petition
Section 1317Period for filing the petition
Section 1318Consequences of annulment
Title 4
Remarriage after declaration of death
Section 1319Annulment of the previous marriage
Section 1320Annulment of the new marriage
Sections 1321 - 1352(repealed)
Title 5
Effects of marriage in general
Section 1353Conjugal union
Section 1354(repealed)
Section 1355Family name
Section 1356Household management, gainful employment
Section 1357Transactions to provide the necessities of life
Section 1358(repealed)
Section 1359Scope of duty of care
Section 1360Duty of family maintenance
Section 1360aScope of the obligation to maintain
Section 1360bOverpayment
Section 1361Maintenance when spouses are living apart
Section 1361aAllocation of household effects when spouses are living apart
Section 1361bMatrimonial residence when spouses are living apart
Section 1362Presumption of ownership
Title 6
Matrimonial property regime
Subtitle 1
Statutory property regime
Section 1363Community of accrued gains
Section 1364Management of assets
Section 1365Disposition over assets as a whole
Section 1366Ratification of contracts
Section 1367Unilateral legal transactions
Section 1368Asserting the ineffectiveness
Section 1369Dispositions over household objects
Section 1370(repealed)
Section 1371Equalisation of accrued gains in the case of death
Section 1372Equalisation of accrued gains in other cases
Section 1373Accrued gains
Section 1374Initial assets
Section 1375Final assets
Section 1376Ascertainment of the value of the initial and final assets
Section 1377List of initial assets
Section 1378Equalisation claim
Section 1379Duty of information
Section 1380Set-off of advancements
Section 1381Refusal of satisfaction for gross inequity
Section 1382Deferment
Section 1383Transfer of assets
Section 1384Cut-off date for computing the accrued gains and the amount of the equalisation claim in the case of divorce
Section 1385Premature equalisation of accrued gains of the spouse entitled to an equalisation claim in case of premature cancellation of the community of accrued gains
Section 1386Premature suspension of the community of accrued gains
Section 1387Cut-off date for computing the accrued gains and amount of the equalisation claim in the case of premature equalisation or premature suspension
Section 1388Occurrence of separation of property
Section 1389(repealed)
Section 1390Claims against third parties of the person entitled to equalisation
Sections 1391 - 1407(repealed)
Subtitle 2
Contractual property regime
Chapter 1
General provisions
Section 1408Marriage contract, freedom of contract
Section 1409Restriction of freedom of contract
Section 1410Form
Section 1411Marriage contracts of persons placed under the care of a custodian
Section 1412Effect in relation to third parties
Section 1413Revocation of permission to manage assets
Chapter 2
Separation of property
Section 1414Commencement of separation of property
Chapter 3
Community of property
Subchapter 1
General provisions
Section 1415Agreement by marriage contract
Section 1416Common matrimonial property
Section 1417Separate property
Section 1418Reserved property
Section 1419Joint ownership
Section 1420Use for maintenance
Section 1421Management of the common matrimonial property
Subchapter 2
Management of the common matrimonial property by one spouse
Section 1422Subject matter of right of management
Section 1423Disposition over the common matrimonial property as a whole
Section 1424Disposition over plots of land, ships or ships under construction
Section 1425Donations
Section 1426Substitution of the approval of the other spouse
Section 1427Legal consequences of lack of consent
Section 1428Dispositions without approval
Section 1429Emergency right of management
Section 1430Substitution of the approval of the managing spouse
Section 1431Independent trade or business
Section 1432Acceptance of an inheritance; refusal of offer to enter into contract or of donation
Section 1433Continuation of a legal dispute
Section 1434Unjust enrichment of the common matrimonial property
Section 1435Duties of the managing spouse
Section 1436Managing spouse under custodianship
Section 1437Obligations of the common matrimonial property; personal liability
Section 1438Liability of the common matrimonial property
Section 1439No liability on acquisition of an inheritance
Section 1440Liability for reserved or separate property
Section 1441Liability as between the spouses
Section 1442Obligations of the separate property and of a trade or business
Section 1443Costs of litigation
Section 1444Costs of the advancement of a child
Section 1445Equalisation between reserved property, separate property and common matrimonial property
Section 1446Due date of the equalisation claim
Section 1447Petition of the non-managing spouse for termination
Section 1448Petition of the managing spouse for termination
Section 1449Effect of the judicial termination decision
Subchapter 3
Joint management of the common matrimonial property by the spouses
Section 1450Joint management by the spouses
Section 1451Duty of both spouses to cooperate
Section 1452Substitution of approval
Section 1453Disposition without consent
Section 1454Emergency right of management
Section 1455Acts of management without the cooperation of the other spouse
Section 1456Independent trade or business
Section 1457Unjust enrichment of the common matrimonial property
Section 1458(repealed)
Section 1459Obligations of the common matrimonial property; personal liability
Section 1460Liability of the common matrimonial property
Section 1461No liability on acquisition of an inheritance
Section 1462Liability for reserved or separate property
Section 1463Liability as between the spouses
Section 1464Obligations of the separate property and of a trade or business
Section 1465Costs of litigation
Section 1466Costs of the advancement of a child that is not a child of the spouses
Section 1467Equalisation between reserved property, separate property and common matrimonial property
Section 1468Due date of the equalisation claim
Section 1469Petition for termination
Section 1470Effect of the judicial termination decision
Subchapter 4
Partitioning of the common matrimonial property
Section 1471Beginning of the partitioning
Section 1472Joint management of the common matrimonial property
Section 1473Direct substitution
Section 1474Implementation of the partitioning
Section 1475Discharge of the obligations of the common matrimonial property
Section 1476Division of the surplus
Section 1477Implementation of the division
Section 1478Partitioning after divorce
Section 1479Partitioning after judicial termination decision
Section 1480Liability to third parties after the division
Section 1481Liability of the spouses to each other
Section 1482Dissolution of marriage by death
Subchapter 5
Continued community of property
Section 1483Occurrence of continued community of property
Section 1484Refusal of continued community of property
Section 1485Common matrimonial property
Section 1486Reserved property; separate property
Section 1487Legal position of the spouse and the descendants
Section 1488Obligations of the common matrimonial property
Section 1489Personal liability for the obligations of the common matrimonial property
Section 1490Death of a descendant
Section 1491Waiver by a descendant
Section 1492Termination by the surviving spouse
Section 1493Remarriage or establishment of a life partnership by the surviving spouse
Section 1494Death of the surviving spouse
Section 1495Petition of a descendant for termination
Section 1496Effect of the judicial termination decision
Section 1497Legal relationship until partitioning
Section 1498Implementation of the partitioning
Section 1499Obligations borne by the surviving spouse
Section 1500Obligations borne by the descendants
Section 1501Set-off of lump sum payments
Section 1502Right of surviving spouse to assume assets
Section 1503Division among the descendants
Section 1504Adjustment of liability between descendants
Section 1505Supplementation of the share of a descendant
Section 1506Unworthiness to receive a share
Section 1507Certificate on continuation of the community of property
Section 1508(repealed)
Section 1509Exclusion of the continued community of property by testamentary disposition
Section 1510Effect of exclusion
Section 1511Exclusion of a descendant
Section 1512Reduction of the share
Section 1513Deprivation of the share
Section 1514Disposition of the amount withheld
Section 1515Right of a descendant and of the spouse to assume assets
Section 1516Approval of the other spouse
Section 1517Waiver of their share by a descendant
Section 1518Mandatory law
Chapter 4
Optional Regime of the Community of Accrued Gains
Section 1519Agreement by marriage contract
Section 1520 to 1557(repealed)
Subtitle 3
Matrimonial property register
Section 1558Competent court of registration
Section 1559Change of habitual residence
Section 1560Application for entry
Section 1561Requirements for application
Section 1562Notice by publication
Section 1563Inspection of the register; application of Regulation (EU) 2016/679 in registry proceedings
Title 7
Divorce
Subtitle 1
Grounds of divorce
Section 1564Divorce by judicial decision
Section 1565Breakdown of marriage
Section 1566Presumption of breakdown
Section 1567Living apart
Section 1568Hardship clause
Subtitle 1a
Treatment of the matrimonial residence and of the household objects on the occasion of divorce
Section 1568aMatrimonial residence
Section 1568bHousehold objects
Subtitle 2
Maintenance of the divorced spouse
Chapter 1
Principle
Section 1569Principle of personal responsibility
Chapter 2
Entitlement to maintenance
Section 1570Maintenance to care for a child
Section 1571Maintenance by reason of old age
Section 1572Maintenance for illness or infirmity
Section 1573Maintenance for unemployment and topping-up maintenance
Section 1574Appropriate gainful employment
Section 1575Training, further training or retraining
Section 1576Maintenance for reasons of equity
Section 1577Indigence
Section 1578Amount of maintenance
Section 1578aPresumption of cover in the case of additional expenditure resulting from injury
Section 1578bReduction and time limitation of maintenance on grounds of inequity
Section 1579Restriction or refusal of maintenance for gross inequity
Section 1580Duty of information
Chapter 3
Ability to pay and priority
Section 1581Ability to pay
Section 1582Priority of the divorced spouse where more than one person is entitled to maintenance
Section 1583Influence of the matrimonial property regime
Section 1584Priority of more than one person liable for maintenance
Chapter 4
Form of the maintenance claim
Section 1585Nature of maintenance payment
Section 1585aProvision of security
Section 1585bMaintenance for the past
Section 1585cAgreements on maintenance
Chapter 5
End of the maintenance claim
Section 1586Remarriage, establishment of a life partnership or death of the person entitled
Section 1586aRevival of the maintenance claim
Section 1586bObligation not extinguished on death of the person obliged
Subtitle 3
Equalisation of pension rights
Section 1587Reference to the Equalisation of Pension Rights Act (Versorgungsausgleichsgesetz)
Title 8
Church duties
Section 1588(no heading)
Division 2
Relationship
Title 1
General provisions
Section 1589Relationship by blood
Section 1590Relationship by marriage
Title 2
Descent
Section 1591Maternity
Section 1592Paternity
Section 1593Paternity in the case of dissolution of the marriage by death
Section 1594Acknowledgement of paternity
Section 1595Need for approval of the acknowledgement
Section 1596Acknowledgement and approval in the case of lack of capacity to contract or limited capacity to contract
Section 1597Formal requirements; revocation
Section 1597aProhibition of wrongful acknowledgment of paternity
Section 1598Ineffectiveness of acknowledgement, approval and revocation
Section 1598aClaim to consent to a genetic examination to clarify natural parentage
Section 1599Non-existence of paternity
Section 1600Persons entitled to contest
Section 1600aPersonal contestation; contestation in the case of lack of capacity to contract or limited capacity to contract
Section 1600bContestation periods
Section 1600cPresumption of paternity in contestation proceedings
Section 1600dCourt determination of paternity
Title 3
Obligation to maintain
Subtitle 1
General provisions
Section 1601Persons with an obligation to maintain
Section 1602Indigence
Section 1603Ability to pay
Section 1604Influence of the matrimonial property regime
Section 1605Duty of information
Section 1606Order of priority of more than one person obliged
Section 1607Substituted liability and statutory devolution of claim
Section 1608Liability of the spouse or life partner
Section 1609Priority of more than person entitled to maintenance
Section 1610Amount of maintenance
Section 1610aPresumption of cover in the case of additional expenditure resulting from injury
Section 1611Restriction or end of obligation
Section 1612Nature of maintenance payment
Section 1612aMinimum maintenance of minor children; authorisation to issue statutory instruments
Section 1612bMeeting cash requirements through child benefit
Section 1612cSet-off of other child-related payments
Section 1613Maintenance for the past
Section 1614Waiver of maintenance claim; advance performance
Section 1615Extinction of the maintenance claim
Subtitle 2
Special provisions for the child and its parents who are not married to each other
Section 1615aApplicable provisions
Sections 1615b to 1615k(repealed)
Section 1615lMaintenance claim of mother and father by reason of the birth
Section 1615mFuneral costs for the mother
Section 1615nNo expiry on the death of the father or stillbirth
Title 4
Legal relationship between the parents and the child in general
Section 1616Birth name in the case of parents with family name
Section 1617Birth name in the case of parents without family name and with joint parental custody
Section 1617aBirth name in the case of parents without family name and with sole parental custody
Section 1617bName in the case of subsequent joint parental custody or ostensible paternity
Section 1617cName in the case of change of name by the parents
Section 1618Bringing a child under a family name
Section 1618aDuty of assistance and respect
Section 1619Services in house and business
Section 1620Outlays of the child for the household of its parents
Sections 1621 - 1623(repealed)
Section 1624Advancement from the parental assets
Section 1625Advancement from the assets of the child
Title 5
Parental custody
Section 1626Parental custody, principles
Section 1626aParental custody of parents who are not married to one another; declarations of parental custody
Section 1626bSpecial prerequisites for the effectiveness of the declaration of parental custody
Section 1626cDeclaring in person; parent with limited capacity to contract
Section 1626dForm; duty of notification
Section 1626eIneffectiveness
Section 1627Exercise of parental custody
Section 1628Court decision in the case of differences of opinion between the parents
Section 1629Representation of the child
Section 1629aRestriction of liability of minors
Section 1630Parental custody in the case of appointment of a curator or of foster care
Section 1631Contents and limits of care for the person of the child
Section 1631aTraining and profession
Section 1631bPlacement involving deprivation of liberty and measures involving deprivation of liberty
Section 1631cProhibition of sterilisation
Section 1631dCircumcision of the male child
Section 1631eTreatment of children with variants of sexual development
Section 1632Surrender of the child; determination of contact; order that child remains in foster care
Section 1633(repealed)
Sections 1634 - 1637(repealed)
Section 1638Restriction of care for the assets of the child
Section 1639Directions of the testator or donor
Section 1640Inventory of assets
Section 1641Prohibition of donation
Section 1642Investment of money
Section 1643Legal transactions subject to approval
Section 1644Making available assets to the child
Section 1645New trade or business
Section 1646Acquisition with funds of the child
Section 1647(repealed)
Section 1648Reimbursement of outlays
Section 1649Use of the income from the assets of the child
Sections 1650 - 1663(repealed)
Section 1664Limited liability of the parents
Section 1665(repealed)
Section 1666Court measures in the case of endangerment of the best interests of the child
Section 1666aPrinciple of proportionality; priority of public support measures
Section 1667Court measures in the case of endangerment of the assets of the child
Sections 1668 - 1670(repealed)
Section 1671Transfer of sole custody where the parents live apart
Section 1672(repealed)
Section 1673Suspension of parental custody in the case of a legal impediment
Section 1674Suspension of parental custody in the case of a factual impediment
Section 1674aSuspension of the mother’s parental custody for a child delivered by confidential birth
Section 1675Effect of the suspension
Section 1676(repealed)
Section 1677Termination of parental custody by declaration of death
Section 1678Consequences for the other parent of the actual prevention or of the suspension
Section 1679(repealed)
Section 1680Death of a parent or removal of the parental custody
Section 1681Declaration of death of a parent
Section 1682Order that the child remains with persons to whom it relates
Section 1683(repealed)
Section 1684Contact of the child with its parents
Section 1685Contact of the child with other persons to whom it relates
Section 1686Information on the personal circumstances of the child
Section 1686aRights of the biological but not legal father
Section 1687Exercise of joint parental custody when the parents live apart
Section 1687aPower to make decision of the parent without parental custody
Section 1687bParental custody powers of the spouse
Section 1688Decisions of the foster carer
Sections 1689 - 1692(repealed)
Section 1693Court measures where the parents are prevented
Sections 1694, 1695(repealed)
Section 1696Amendment of judicial decisions and of court-approved settlements
Section 1697(repealed)
Section 1697aPrinciple of best interests of child
Section 1698Surrender of the assets of the child; rendering accounts
Section 1698aContinuation of transactions in ignorance that parental custody has ended
Section 1698bContinuation of urgent transactions after the death of the child
Sections 1699 - 1711(repealed)
Title 6
Legal advisership
Section 1712Youth welfare office as legal adviser; tasks
Section 1713Persons entitled to apply
Section 1714Occurrence of legal advisership
Section 1715Termination of legal advisership
Section 1716Effects of legal advisership
Section 1717Requirement of habitual residence on domestic territory
Sections 1718 - 1740(repealed)
Title 7
Adoption
Subtitle 1
Adoption of minors
Section 1741Admissibility of the adoption
Section 1742Adoption only as child of the spouses
Section 1743Minimum age
Section 1744Probationary period
Section 1745Prohibition of adoption
Section 1746Consent of the child
Section 1747Consent of the parents of the child
Section 1748Substitution of the consent of a parent
Section 1749Consent of the spouse
Section 1750Declaration of consent
Section 1751Effect of parental consent, maintenance obligation
Section 1752Order of the family court, application
Section 1753Adoption after death
Section 1754Effect of adoption
Section 1755Extinction of relationships
Section 1756Continuation of relationships
Section 1757Name of the child
Section 1758Prohibition on disclosure and exploratory questioning
Section 1759Cancellation of the adoption relationship
Section 1760Setting aside for lack of declarations
Section 1761Impediments preventing cancellation
Section 1762Entitlement to apply; period for filing application, form
Section 1763Cancellation by the court of its own motion
Section 1764Effect of cancellation
Section 1765Name of the child after the cancellation
Section 1766Marriage between adoptive parent and child
Section 1766aAdoption of children of a partner who is not a spouse
Subtitle 2
Adoption of persons of full age
Section 1767Admissibility of adoption, applicable provisions
Section 1768Application
Section 1769Prohibition of adoption
Section 1770Effect of adoption
Section 1771Cancellation of the adoption relationship
Section 1772Adoption with the effects of the adoption of a minor
Division 3
Guardianship, legal curatorship, custodianship
Title 1
Guardianship
Subtitle 1
Creation of guardianship
Section 1773Prerequisites
Section 1774Order by the court of its own motion
Section 1775More than one guardian
Section 1776Right of the parents to name the guardian
Section 1777Prerequisites for the right to name the guardian
Section 1778Passing over the guardian named
Section 1779Selection by the family court
Section 1780Lack of capacity to be a guardian
Section 1781Unsuitability to be a guardian
Section 1782Exclusion by the parents
Section 1783(repealed)
Section 1784Official or church officer as guardian
Section 1785Duty to assume guardianship
Section 1786Right to refuse
Section 1787Consequences of unjustified refusal
Section 1788Coercive fine
Section 1789Appointment by the family court
Section 1790Appointment subject to a reservation
Section 1791Certificate of appointment
Section 1791aGuardianship by association
Section 1791bOfficial guardianship of the Youth Welfare Office by appointment
Section 1791cStatutory official guardianship of the Youth Welfare Office
Section 1792Supervisory guardian
Subtitle 2
Conducting of the guardianship
Section 1793Duties of the guardian, liability of the ward
Section 1794Restriction as a result of curatorship
Section 1795Exclusion of power of agency
Section 1796Revocation of power of agency
Section 1797More than one guardian
Section 1798Differences of opinion
Section 1799Duties and rights of the supervisory guardian
Section 1800Scope of care for the person
Section 1801Religious education
Section 1802Inventory of assets
Section 1803Management of assets in the case of inheritance or donation
Section 1804Donations made by the guardian
Section 1805Use for the guardian
Section 1806Investment of money held in trust for a ward
Section 1807Nature of investment
Section 1808(repealed)
Section 1809Investment with blocking note
Section 1810Cooperation of supervisory guardian or family court
Section 1811Other investment
Section 1812Dispositions over claims and securities
Section 1813Transactions not requiring approval
Section 1814Deposit of bearer instruments
Section 1815Change of registration and conversion of bearer instruments
Section 1816Blocking of book-entry securities
Section 1817Exemption
Section 1818Order of deposit
Section 1819Approval in the case of deposit
Section 1820Approval after change of registration and conversion
Section 1821Approval of transactions relating to plots of land, ships or ships under construction
Section 1822Approval for other transactions
Section 1823Approval where the ward has a trade or business
Section 1824Approval for making available objects to the ward for their use
Section 1825General authorisation
Section 1826Hearing of the supervisory guardian before giving the approval
Section 1827(repealed)
Section 1828Pronouncement of approval
Section 1829Subsequent approval
Section 1830Right of revocation of the other party
Section 1831Unilateral legal transaction without approval
Section 1832Ratification by the supervisory guardian
Section 1833Liability of the guardian
Section 1834Duty to pay interest
Section 1835Reimbursement of outlays
Section 1835aReimbursement for expenses
Section 1836Payment of the guardian
Sections 1836a and 1836b(repealed)
Section 1836cFunds to be applied by the ward
Section 1836dDestitution of the ward
Section 1836eStatutory devolution of claim
Subtitle 3
Care and supervision of the family court
Section 1837Advice and supervision
Section 1838(repealed)
Section 1839Duty of information of the guardian
Section 1840Report and rendering of account
Section 1841Contents of the accounts rendered
Section 1842Cooperation of the supervisory guardian
Section 1843Examination by the family court
Section 1844(repealed)
Section 1845(repealed)
Section 1846Interim measures of the family court
Section 1847Hearing of the relatives
Section 1848(repealed)
Subtitle 4
Cooperation of the Youth Welfare Office
Sections 1849, 1850(repealed)
Section 1851Duties of notification
Subtitle 5
Exempted guardianship
Section 1852Exemption by the father
Section 1853Exemption from deposit and blocking
Section 1854Exemption from duty to render accounts
Section 1855Exemption by the mother
Section 1856Prerequisites for exemption
Section 1857Cancellation of the exemption by the family court
Section 1857aExemption of the Youth Welfare Office and the association
Sections 1858 - 1881(repealed)
Subtitle 6
Termination of the guardianship
Section 1882Cessation of the prerequisites
Section 1883(repealed)
Section 1884Ward missing and declaration of death of the ward
Section 1885(repealed)
Section 1886Removal of the sole guardian
Section 1887Removal of the Youth Welfare Office or association
Section 1888Removal of officials and church officers
Section 1889Removal on application by the guardian
Section 1890Surrender of assets and rendering accounts
Section 1891Cooperation of the supervisory guardian
Section 1892Examination and approval of the account
Section 1893Continuation of transactions after the termination of the guardianship, return of certificates
Section 1894Notification on death of the guardian
Section 1895Termination of office of the supervisory guardian
Title 2
Legal custodianship
Section 1896Prerequisites
Section 1897Appointment of a natural person
Section 1898Duty to assume custodianship
Section 1899More than one custodian
Section 1900Custodianship by association or public authority
Section 1901Scope of the custodianship, duties of the custodian
Section 1901aLiving will
Section 1901bDiscussion to ascertain the patient’s will
Section 1901cWishes in writing with regard to custodianship, enduring power of attorney
Section 1902Representation of the person under custodianship
Section 1903Reservation of consent
Section 1904Ratification by the custodianship court in the case of medical treatment
Section 1905Sterilisation
Section 1906Ratification by the custodianship court in the case of placement involving deprivation of liberty and in the case of measures involving deprivation of liberty
Section 1906aRatification by the custodianship court in the case of coercive measures by physicians
Section 1907Ratification by the custodianship court in the case of the abandonment of rented residence
Section 1908Ratification by the custodianship court with regard to advancement
Section 1908aPrecautionary appointment of a custodian and order of reservation of consent for minors
Section 1908bRemoval of the custodian
Section 1908cAppointment of a new custodian
Section 1908dCancellation or alteration of custodianship and reservation of consent
Section 1908e(repealed)
Section 1908fRecognition as custodianship association
Section 1908gPublic authority custodian
Section 1908h(repealed)
Section 1908iProvisions applicable accordingly
Section 1908k(repealed)
Title 3
Curatorship
Section 1909Supplementary curatorship
Section 1910(repealed)
Section 1911Curatorship of absentees
Section 1912Curatorship for an unborn child
Section 1913Curatorship for unknown persons involved
Section 1914Curatorship for collected assets
Section 1915Application of guardianship law
Section 1916Designation as supplementary curator
Section 1917Naming of the supplementary curator by testator and third parties
Section 1918Termination of the curatorship by operation of law
Section 1919Cancellation of the curatorship on cessation of reason
Section 1920(repealed)
Section 1921Cancellation of the curatorship of absentees
Book 5
Law of succession
Division 1
Succession
Section 1922Universal succession
Section 1923Capacity to inherit
Section 1924Heirs on intestacy of the first degree
Section 1925Heirs on intestacy of the second degree
Section 1926Heirs on intestacy of the third degree
Section 1927More than one share of the inheritance in the case of multiple relationship
Section 1928Heirs on intestacy of the fourth degree
Section 1929More distant degrees
Section 1930Priority of the degrees
Section 1931Right of intestate succession of the spouse
Section 1932Preferential benefit of the spouse
Section 1933Exclusion of the right of succession of the spouse
Section 1934Right of succession of spouse who is a relative
Section 1935Consequences of increase of share of the inheritance
Section 1936Right of intestate succession of the State
Section 1937Appointment of heir by testamentary disposition
Section 1938Disinheritance without appointment of an heir
Section 1939Legacy
Section 1940Testamentary burden
Section 1941Contract of inheritance
Division 2
Legal position of the heir
Title 1
Acceptance and disclaimer of the inheritance; supervision of the probate court
Section 1942Devolution and disclaimer of the inheritance
Section 1943Acceptance and disclaimer of the inheritance
Section 1944Period for disclaimer
Section 1945Form of disclaimer
Section 1946Date for acceptance or disclaimer
Section 1947Condition and stipulation as to time
Section 1948More than one ground of entitlement
Section 1949Mistake as to the ground of entitlement
Section 1950Partial acceptance; partial disclaimer
Section 1951More than one share of the inheritance
Section 1952Inheritability of the right of disclaimer
Section 1953Effect of disclaimer
Section 1954Period of avoidance
Section 1955Form of avoidance
Section 1956Avoidance of failure to disclaim in good time
Section 1957Effect of avoidance
Section 1958Judicial assertion of claims against the heir
Section 1959Management before the disclaimer
Section 1960Securing the estate; curator of the estate
Section 1961Curatorship of the estate on application
Section 1962Jurisdiction of the probate court
Section 1963Maintenance for the mother-to-be of an heir
Section 1964Presumption that the treasury is heir
Section 1965Public invitation to register the rights of succession
Section 1966Legal position of the treasury before determination
Title 2
Liability of the heir for the obligations of the estate
Subtitle 1
Obligations of the estate
Section 1967Liability of heir, obligations of the estate
Section 1968Costs of funeral
Section 1969Maintenance for 30 days
Subtitle 2
Judicial call for the creditors of the estate
Section 1970Notification of the claims
Section 1971Creditors not affected
Section 1972Rights not affected
Section 1973Exclusion of creditors of the estate
Section 1974Defence of withheld information
Subtitle 3
Restriction of the liability of the heir
Section 1975Administration of estate; estate insolvency
Section 1976Effect on legal relationships extinguished by merger
Section 1977Effect on a set-off
Section 1978Responsibility of the heir for previous administration, reimbursement of expenses
Section 1979Discharge of obligations of the estate
Section 1980Application for opening of estate insolvency proceedings
Section 1981Order of administration of the estate
Section 1982Refusal to order administration of the estate for insufficiency of assets
Section 1983Notice by publication
Section 1984Effect of the order
Section 1985Duties and liability of the administrator of the estate
Section 1986Surrender of the estate
Section 1987Payment of the administrator of the estate
Section 1988End and cancellation of administration of the estate
Section 1989Defence by the heir of exhaustion of assets
Section 1990Defence by the heir as to insufficiency of assets
Section 1991Consequences of defence as to insufficiency of assets
Section 1992Over-indebtedness as a result of legacies and testamentary burdens
Subtitle 4
Filing of an inventory, unlimited liability of the heir
Section 1993Filing of an inventory
Section 1994Inventory period
Section 1995Length of the period
Section 1996Fixing a new period
Section 1997Suspension of the expiry of the period
Section 1998Death of the heir before expiry of the period
Section 1999Notice to the court
Section 2000Ineffectiveness of the fixing of the period
Section 2001Contents of the inventory
Section 2002Preparation of the inventory by the heir
Section 2003Official preparation of the inventory
Section 2004Reference to an existing inventory
Section 2005Unlimited liability of the heir if the inventory is incorrect
Section 2006Declaration in lieu of an oath
Section 2007Liability in the case of more than one share of the inheritance
Section 2008Inventory for an inheritance that is part of common matrimonial property
Section 2009Effect of filing of inventory
Section 2010Inspection of the inventory
Section 2011No inventory period for the treasury as heir
Section 2012No inventory period for the curator and administrator of the estate
Section 2013Consequences of the unlimited liability of the heir
Subtitle 5
Suspensive defences
Section 2014Defence within three months
Section 2015Defence of judicial call procedure
Section 2016Exclusion of defences in the case of unlimited liability of the heir
Section 2017Beginning of the period of time in the case of curatorship of the estate
Title 3
Claim to inheritance
Section 2018Duty to surrender of the possessor of the inheritance
Section 2019Direct substitution
Section 2020Emoluments and fruits
Section 2021Duty to surrender under principles of unjust enrichment
Section 2022Reimbursement of outlays and expenses
Section 2023Liability after litigation is pending and for emoluments and outlays
Section 2024Liability with knowledge
Section 2025Liability in the case of tort
Section 2026No reliance on acquisition by prescription
Section 2027Duty of information of the possessor of the inheritance
Section 2028Duty of information of occupant of house
Section 2029Liability in the case of individual claims by the heir
Section 2030Legal position of the acquirer of the inheritance
Section 2031Claim to surrender of a person declared dead
Title 4
More than one heir
Subtitle 1
Legal relationship of the heirs between themselves
Section 2032Community of heirs
Section 2033Right of disposition of the co-heir
Section 2034Right of preemption as against seller
Section 2035Right of preemption as against buyer
Section 2036Liability of buyer of share of the inheritance
Section 2037Onward alienation of the share of the inheritance
Section 2038Joint management of the estate
Section 2039Estate claims
Section 2040Alienation of objects of the estate, set-off
Section 2041Direct substitution
Section 2042Partitioning
Section 2043Postponement of partitioning
Section 2044Exclusion of partitioning
Section 2045Postponement of partitioning
Section 2046Discharge of obligations of the estate
Section 2047Distribution of the surplus
Section 2048Directions by the deceased for partitioning
Section 2049Taking over of a farm
Section 2050Duty to adjust advancements for descendants as heirs on intestacy
Section 2051Duty to adjust advancements if a descendant does not inherit
Section 2052Duty to adjust advancements for descendants as heirs by will
Section 2053Gift to more remote or adopted descendant
Section 2054Gift from the common matrimonial property
Section 2055Carrying out the adjustment
Section 2056Excess gifts
Section 2057Duty of information
Section 2057aDuty to adjust advancements in the case of special payments by one descendant
Subtitle 2
Legal relationship between the heirs and the creditors of the estate
Section 2058Joint and several liability
Section 2059Liability until division
Section 2060Liability after division
Section 2061Judicial call for the creditors of the estate
Section 2062Application for administration of the estate
Section 2063Filing of an inventory, limitation of liability
Division 3
Will
Title 1
General provisions
Section 2064Made in person
Section 2065Determination by third parties
Section 2066Heirs on intestacy of the testator
Section 2067Relatives of the testator
Section 2068Children of the testator
Section 2069Descendants of the testator
Section 2070Descendants of a third party
Section 2071Group of persons
Section 2072The poor
Section 2073Ambiguous designation
Section 2074Condition precedent
Section 2075Condition subsequent
Section 2076Condition for the benefit of a third party
Section 2077Ineffectiveness of testamentary dispositions on dissolution of marriage or engagement
Section 2078Avoidance for mistake or duress
Section 2079Avoidance for omission of a person entitled to a compulsory portion
Section 2080Person entitled to avoid
Section 2081Declaration of avoidance
Section 2082Period of avoidance
Section 2083Defence of voidability
Section 2084Interpretation favouring effectiveness
Section 2085Partial ineffectiveness
Section 2086Reservation of right to make addition
Title 2
Appointment of heirs
Section 2087Gift of assets, of fraction of assets or of individual objects
Section 2088Appointment to fractions
Section 2089Increase of the fractions
Section 2090Decrease of fractions
Section 2091Undetermined fractions
Section 2092Partial appointment to fractions
Section 2093Joint share of the inheritance
Section 2094Accrual
Section 2095Accrued share of the inheritance
Section 2096Substitute heir
Section 2097Rule of interpretation in the case of substitute heir
Section 2098Mutual appointment as substitute heir
Section 2099Substitute heir and accrual
Title 3
Appointment of a reversionary heir
Section 2100Reversionary heir
Section 2101Reversionary heir not yet conceived
Section 2102Reversionary heir and substitute heir
Section 2103Order to surrender the inheritance
Section 2104Heirs on intestacy as reversionary heirs
Section 2105Heirs on intestacy as provisional heirs
Section 2106Occurrence of reversionary succession
Section 2107Childless provisional heir
Section 2108Capacity to inherit; inheritability of the reversionary succession
Section 2109End of effectiveness of reversionary succession
Section 2110Scope of the right of reversionary succession
Section 2111Direct substitution
Section 2112Right of alienation of the provisional heir
Section 2113Dispositions of plots of land, ships and ships under construction; gifts
Section 2114Dispositions of mortgage claims, land charges and annuity land charges
Section 2115Dispositions of compulsory enforcement against provisional heir
Section 2116Deposit of securities
Section 2117Change of registration; conversion
Section 2118Blocking note in debt ledger
Section 2119Investment of money
Section 2120Duty of reversionary heir to consent
Section 2121List of objects of inheritance
Section 2122Determination of the condition of the inheritance
Section 2123Economic plan
Section 2124Costs of maintenance
Section 2125Outlays; right to remove
Section 2126Extraordinary burdens
Section 2127Right to information of reversionary heir
Section 2128Provision of security
Section 2129Effect of deprivation of management
Section 2130Duty to surrender after the occurrence of reversionary succession, duty to render accounts
Section 2131Scope of duty of care
Section 2132No liability for ordinary wear and tear
Section 2133Improper or excessive taking of fruits
Section 2134Own use
Section 2135Lease and usufructuary lease in reversionary succession
Section 2136Release of the provisional heir
Section 2137Rule of interpretation for the release
Section 2138Restricted duty to surrender
Section 2139Effect of occurrence of reversionary succession
Section 2140Dispositions of the provisional heir after occurrence of reversionary succession
Section 2141Maintenance for the mother-to-be of a reversionary heir
Section 2142Disclaimer of reversionary succession
Section 2143Restoration of extinguished legal relationships
Section 2144Liability of the reversionary heir for the obligations of the estate
Section 2145Liability of the provisional heir for the obligations of the estate
Section 2146Duty of provisional heir to notify creditors of the estate
Title 4
Legacies
Section 2147Person charged with a legacy
Section 2148More than one person charged with a legacy
Section 2149Legacy for heirs on intestacy
Section 2150Preferential legacy
Section 2151Right to decide of the person charged or of a third person in the event of more than one person provided for
Section 2152Choice of persons provided for
Section 2153Determination of shares
Section 2154Optional legacy
Section 2155General legacy
Section 2156Legacy for a special purpose
Section 2157Joint legacy
Section 2158Accrual
Section 2159Independence of the accrual
Section 2160Prior death of person provided for
Section 2161Where the person charged does not inherit
Section 2162Thirty-year period for a suspended legacy
Section 2163Exceptions to the thirty-year period
Section 2164Extension to accessories and claims to compensation
Section 2165Charges
Section 2166Charge with a mortgage
Section 2167Charge with a blanket mortgage
Section 2168Charge with a blanket land charge
Section 2168aApplication to ships, ships under construction and ship mortgages
Section 2169Legacy of foreign objects
Section 2170Legacy to be procured
Section 2171Impossibility, statutory prohibition
Section 2172Combination, intermixture, mingling of the bequeathed thing
Section 2173Claim as a legacy
Section 2174Claim arising under a legacy
Section 2175Restoration of extinguished legal relationships
Section 2176Devolution of the legacy
Section 2177Devolution in the event of a condition or a time limit
Section 2178Devolution in the event of a person provided for not yet conceived or determined
Section 2179Period pending fulfilment
Section 2180Acceptance and disclaimer
Section 2181Discretionary due date
Section 2182Liability for defects of title
Section 2183Liability for material defects
Section 2184Fruits and emoluments
Section 2185Reimbursement of outlays and expenses
Section 2186Due date of sublegacy or testamentary burden
Section 2187Liability of the main legatee
Section 2188Reduction of the charges
Section 2189Directions concerning priority
Section 2190Substitute legatee
Section 2191Subsequent legatee
Title 5
Testamentary burden
Section 2192Applicable provisions
Section 2193Appointment of the beneficiary, period for fulfilment
Section 2194Claim for fulfilment
Section 2195Relationship between testamentary burden and gift
Section 2196Impossibility of fulfilment
Title 6
Executor
Section 2197Appointment of an executor
Section 2198Determination of the executor by a third person
Section 2199Appointment of co-executor or successor
Section 2200Appointment by the probate court
Section 2201Ineffectiveness of the appointment
Section 2202Acceptance and refusal of office
Section 2203Task of the executor
Section 2204Partitioning of the estate between co-heirs
Section 2205Administration of the estate, power of alienation
Section 2206Incurring obligations
Section 2207Extended authority
Section 2208Limitation of the rights of the executor, execution by the heir
Section 2209Permanent execution
Section 2210Thirty-year period for permanent execution
Section 2211Limitation on dispositions of the heir
Section 2212Assertion in court of the rights subject to the execution of the will
Section 2213Assertion in court of claims against the estate
Section 2214Creditors of the heir
Section 2215Inventory of the estate
Section 2216Proper administration of the estate, compliance with directions
Section 2217Making available objects of the estate
Section 2218Legal relationship with the heir; rendering of accounts
Section 2219Liability of the executor
Section 2220Mandatory law
Section 2221Remuneration of the executor
Section 2222Executor for the reversionary heir
Section 2223Executor of a legacy
Section 2224More than one executor
Section 2225Expiry of the office of the executor
Section 2226Notice of termination by the executor
Section 2227Dismissal of the executor
Section 2228Inspection of records
Title 7
The making and revocation of a will
Section 2229Testamentary capacity of minors, lack of testamentary capacity
Section 2230(repealed)
Section 2231Regular wills
Section 2232Public will
Section 2233Special cases
Sections 2234 - 2246(repealed)
Section 2247Holographic will
Section 2248Custody of a holographic will
Section 2249Emergency will made before the mayor
Section 2250Emergency will before three witnesses
Section 2251Emergency will made at sea
Section 2252Period of validity of emergency wills
Section 2253Revocation of the will
Section 2254Revocation by will
Section 2255Revocation by destruction or changes
Section 2256Revocation by the revocation of the will from official custody
Section 2257Revocation of the revocation
Section 2258Revocation by a later will
Section 2258a(repealed)
Section 2258b(repealed)
Section 2259Obligation to deliver
Section 2260(repealed)
Section 2261(repealed)
Section 2262(repealed)
Section 2263Voidness of a prohibition on opening the will
Section 2263a, 2264(repealed)
Title 8
Joint will
Section 2265Joint will made by spouses
Section 2266Joint emergency will
Section 2267Joint holographic will
Section 2268Effect of nullity or dissolution of marriage
Section 2269Reciprocal appointment
Section 2270Reciprocal dispositions
Section 2271Revocation of reciprocal dispositions
Section 2272Revocation of official custody
Section 2273(repealed)
Division 4
Contract of inheritance
Section 2274Entering into contract in person
Section 2275Prerequisites
Section 2276Form
Section 2277(repealed)
Section 2278Permissible contractual dispositions
Section 2279Contractual gifts and burdens, application of section 2077
Section 2280Application of section 2269
Section 2281Avoidance by the testator
Section 2282Representation, form of the avoidance
Section 2283Period of avoidance
Section 2284Confirmation
Section 2285Avoidance by third parties
Section 2286Dispositions inter vivos
Section 2287Gifts adversely affecting the contractual heir
Section 2288Prejudice to the legatee
Section 2289Effect of the contract of inheritance on testamentary dispositions; application of section 2338
Section 2290Cancellation by contract
Section 2291Cancellation by will
Section 2292Cancellation by joint will
Section 2293Revocation in the event of reservation
Section 2294Revocation in the event of the misconduct of the person provided for
Section 2295Revocation in the event of the extinction of a mutual obligation
Section 2296Representation, form of revocation
Section 2297Revocation by will
Section 2298Mutual contract of inheritance
Section 2299Unilateral dispositions
Section 2300Application of sections 2259 and 2263; removal from official or notarial custody
Section 2300a(repealed)
Section 2301Promise of donation mortis causa
Section 2302Unlimited testamentary freedom
Division 5
Compulsory share
Section 2303Person entitled to a compulsory share of the estate; amount of the share
Section 2304Rules of interpretation
Section 2305Additional compulsory share
Section 2306Limitations and charges
Section 2307Bequest of a legacy
Section 2308Avoidance of the disclaimer
Section 2309Right of parents and remoter descendants to a compulsory share
Section 2310Determination of the share of the inheritance for the calculation of the compulsory share
Section 2311Value of the estate
Section 2312Value of a farm
Section 2313Taking account of conditional, uncertain or unsecured rights; duty of determination of the heir
Section 2314Duty of the heir to provide information
Section 2315Counting gifts towards the compulsory share
Section 2316Duty to adjust advancements
Section 2317Creation and transferability of the claim to a compulsory share
Section 2318Burden of the compulsory share in the case of legacies and testamentary burdens
Section 2319Person entitled to a compulsory share as co-heir
Section 2320Compulsory share burden on the heir taking the place of the person entitled to a compulsory share
Section 2321Compulsory share burden in the event of a disclaimer of a legacy
Section 2322Reduction of legacies and testamentary burdens
Section 2323Heir not charged with a compulsory share
Section 2324Deviating directions by the testator concerning the compulsory share burden
Section 2325Claim for the augmentation of compulsory shares in the event of gifts
Section 2326Augmentation to more than half of the intestate portion
Section 2327Receipt of gift by a person entitled to a compulsory share
Section 2328Heir as person entitled to a compulsory share
Section 2329Claim against the recipient of a gift
Section 2330Gift arising from a moral duty
Section 2331Gifts made from common matrimonial property
Section 2331aDeferral
Section 2332Limitation
Section 2333Deprivation of a compulsory share
Section 2334(repealed)
Section 2335(repealed)
Section 2336Form, burden of proof and ineffectiveness of deprivation
Section 2337Forgiveness
Section 2338Limitation of the compulsory share
Division 6
Unworthiness to inherit
Section 2339Grounds for unworthiness to inherit
Section 2340Enforcement of the unworthiness to inherit by avoidance
Section 2341Persons entitled to avoid
Section 2342Action for avoidance
Section 2343Forgiveness
Section 2344Effect of a declaration of unworthiness to inherit
Section 2345Unworthiness to receive a legacy; unworthiness to receive a compulsory share
Division 7
Renunciation of inheritance
Section 2346Effect of the renunciation of inheritance, possibility of limitation
Section 2347Personal requirements, representation
Section 2348Form
Section 2349Extension to descendants
Section 2350Renunciation to the benefit of another
Section 2351Revocation of a renunciation of the inheritance
Section 2352Renunciation of gifts
Division 8
Certificate of inheritance
Section 2353Competence of the probate court, application
Sections 2354 to 2359(repealed)
Section 2360(repealed)
Section 2361Revocation or declaration of invalidity of an inaccurate certificate of inheritance
Section 2362Claim to surrender of the true heir and claim to information
Section 2363Claim to surrender of the reversionary heir and of the executor
Section 2364(repealed)
Section 2365Presumption of legitimacy of the certificate of inheritance
Section 2366Presumption of legal force of a certificate of inheritance
Section 2367Performance for the person named as heir in the certificate of inheritance
Section 2368Executor’s certificate
Section 2369(repealed)
Section 2370Presumption of legal force of a declaration of death
Division 9
Purchase of an inheritance
Section 2371Form
Section 2372Advantages due to purchaser
Section 2373Parts remaining for the seller
Section 2374Duty to surrender
Section 2375Duty to compensate
Section 2376Liability of the seller
Section 2377Restoration of extinguished legal relationships
Section 2378Obligations of the estate
Section 2379Emoluments and charges prior to the sale
Section 2380Devolution of the risk, emoluments and charges after the sale
Section 2381Reimbursement of outlays and expenses
Section 2382Liability of the purchaser in relation to the creditors of the estate
Section 2383Scope of liability of the purchaser
Section 2384The duty of notification of the seller towards the creditors of the estate, right of inspection
Section 2385Application to similar contracts
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German Civil Code
BGB

Full text in format:   HTML  PDF   text in German

Übersetzung durch den Langenscheidt Übersetzungsservice, aktualisiert durch Neil Mussett. Zuletzt aktualisiert und bearbeitet durch Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Translation provided by Langenscheidt Übersetzungsservice, updated by Neil Mussett. The translation has most recently been revised and updated by Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Stand: Die Übersetzung berücksichtigt die Änderung(en) des Gesetzes durch Artikel 1 des Gesetzes vom 10. August 2021 (BGBl. I S. 3515).
Der Stand der deutschsprachigen Dokumentation kann aktueller sein. Vergleichen Sie dazu bitte http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Version information: The translation includes the amendment(s) to the Act by Article 1 of the Act of 10 August 2021 (Federal Law Gazette I p. 3515).
Translations may not be updated at the same time as the German legal provisions displayed on this website. To compare with the current status of the German version, see http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Zur Nutzung dieser Übersetzung lesen Sie bitte den Hinweis unter "Translations".

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Book 1
General part
Division 1
Persons
Title 1
Natural persons, consumers, traders
Section 1Beginning of legal capacity
Section 2Beginning of majority
Sections 3 – 6(repealed)
Section 7Residence; establishment and termination
Section 8Residence of persons who lack full capacity to contract
Section 9Residence of a soldier
Section 10(repealed)
Section 11Residence of a child
Section 12Right to a name
Section 13Consumer
Section 14Trader
Sections 15 - 20(repealed)
Title 2
Legal persons
Subtitle 1
Associations
Chapter 1
General provisions
Section 21Non-commercial association
Section 22Commercial association
Section 23(repealed)
Section 24Seat
Section 25Constitution
Section 26Board and representation
Section 27Appointment of and management by the board
Section 28Passing of resolutions by the board
Section 29Emergency appointment by local court
Section 30Special representatives
Section 31Liability of an association for organs
Section 31aLiability of members of organs and special representatives
Section 31bLiability of members of the association
Section 32General meeting; passing of resolutions
Section 33Amendment of articles of association
Section 34Exclusion from voting
Section 35Special rights
Section 36Convening the general meeting
Section 37Convening a meeting at the request of a minority
Section 38Membership
Section 39Leaving the association
Section 40Flexible provisions
Section 41Dissolution of the association
Section 42Insolvency
Section 43Deprivation of legal personality
Section 44Jurisdiction and procedure
Section 45Devolution of the assets of the association
Section 46Devolution on the treasury
Section 47Liquidation
Section 48Liquidators
Section 49Duties of the liquidators
Section 50Notice by publication of the association in liquidation
Section 50aNewspaper for notices
Section 51One-year waiting period
Section 52Security for creditors
Section 53Liability in damages of the liquidators
Section 54Associations without legal personality
Chapter 2
Registered associations
Section 55Jurisdiction over entry in the register
Section 55aElectronic register of associations
Section 56Minimum number of members of the association
Section 57Minimum requirements of the articles of association
Section 58Recommended contents of the articles of association
Section 59Application for registration
Section 60Rejection of the application
Sections 61 - 63(repealed)
Section 64Contents of the entry in the register of associations
Section 65Addition to name
Section 66Notice by publication of the entry and safekeeping of documents
Section 67Changes to the board
Section 68Protection of public confidence by the register of associations
Section 69Documentary proof of composition of the board
Section 70Protection of public confidence in case of entries on power of agency
Section 71Amendments of the articles of association
Section 72Certificate on number of members
Section 73Decrease to below the minimum number of members
Section 74Dissolution
Section 75Entries in the case of insolvency
Section 76Register entries in the event of liquidation
Section 77Parties obliged to apply for entry in the register and form of applications
Section 78Assessment of coercive fines
Section 79Inspection of the register of associations
Section 79aApplication of Regulation (EU) 2016/679 to registration proceedings
Subtitle 2
Foundations
Section 80Formation of a foundation having legal personality
Section 81Endowment transaction
Section 82Duty of founder to make transfers
Section 83Testamentary foundation
Section 84Recognition after the death of the founder
Section 85Constitution of foundation
Section 86Application of law on associations
Section 87Change of objects; termination
Section 88Devolution of assets
Subtitle 3
Legal persons under public law
Section 89Liability for organs; insolvency
Division 2
Things and animals
Section 90Concept of the thing
Section 90aAnimals
Section 91Fungible things
Section 92Consumable things
Section 93Essential parts of a thing
Section 94Essential parts of a plot of land or a building
Section 95Merely temporary purpose
Section 96Rights as parts of a plot of land
Section 97Accessories
Section 98Commercial and agricultural inventory
Section 99Fruits
Section 100Emoluments
Section 101Division of fruits
Section 102Reimbursement of costs of production
Section 103Allocation of charges
Division 3
Legal transactions
Title 1
Capacity to contract
Section 104Incapacity to contract
Section 105Voidness of declaration of intent
Section 105aEveryday transactions
Section 106Limited capacity for minors to contract
Section 107Consent of legal representative
Section 108Entry into a contract without consent
Section 109Right of withdrawal by the other party
Section 110Performance effected with means of the minor’s own
Section 111Unilateral legal transactions
Section 112Independent operation of a trade or business
Section 113Service or employment relationship
Sections 114, 115(repealed)
Title 2
Declaration of intent
Section 116Mental reservation
Section 117Sham transaction
Section 118Lack of seriousness
Section 119Voidability for mistake
Section 120Voidability for incorrect transmission
Section 121Period for avoidance
Section 122Liability in damages of the person avoiding a declaration
Section 123Voidability on the grounds of deceit or duress
Section 124Period of time for avoidance
Section 125Voidness resulting from a defect of form
Section 126Written form
Section 126aElectronic form
Section 126bText form
Section 127Agreed form
Section 127aCourt settlement
Section 128Notarial recording
Section 129Official certification
Section 130Effectiveness of a declaration of intent to absent parties
Section 131Effectiveness in relation to persons without full capacity to contract
Section 132Substitution of service for receipt
Section 133Interpretation of a declaration of intent
Section 134Statutory prohibition
Section 135Statutory prohibition of alienation
Section 136Official prohibition of alienation
Section 137Prohibition of dispositions in a legal transaction
Section 138Legal transaction offending common decency; usury
Section 139Partial invalidity
Section 140Re-interpretation
Section 141Confirmation of a void legal transaction
Section 142Effect of avoidance
Section 143Declaration of avoidance
Section 144Confirmation of a voidable legal transaction
Title 3
Contract
Section 145Binding effect of an offer
Section 146Expiry of an offer
Section 147Period for acceptance
Section 148Fixing a period for acceptance
Section 149Late receipt of a declaration of acceptance
Section 150Late acceptance and acceptance altering the offer
Section 151Acceptance without declaration to the offeror
Section 152Acceptance in the case of notarial recording
Section 153Death of the offeror or offeror’s incapacity to contract
Section 154Overt lack of agreement; lack of notarial recording
Section 155Hidden lack of agreement
Section 156Entry into contracts at auctions
Section 157Interpretation of contracts
Title 4
Conditions and specification of time
Section 158Conditions precedent and subsequent
Section 159Retroactive effect
Section 160Liability during the period pending fulfilment of the condition
Section 161Ineffectiveness of dispositions in the period pending fulfilment of the condition
Section 162Prevention of or bringing about the satisfaction of the condition
Section 163Specification of time
Title 5
Agency and authority
Section 164Effect of a declaration made by the agent
Section 165Agent with limited capacity to contract
Section 166Vitiation of intent; imputed knowledge
Section 167Conferment of authority
Section 168Expiry of authority
Section 169Authority of the authorised representative and the managing partner
Section 170Period of effectiveness of the authority
Section 171Period of effectiveness in the case of announcement
Section 172Letter of authorisation
Section 173Period of effectiveness in the case of knowledge and negligent lack of knowledge
Section 174Unilateral legal transaction by an authorised representative
Section 175Return of the letter of authorisation
Section 176Declaration of invalidity of the letter of authorisation
Section 177Entry into contract by a representative having no power of agency
Section 178Right of revocation of the other party
Section 179Liability of a representative having no power of agency
Section 180Unilateral legal transactions
Section 181Contracting with oneself
Title 6
Consent and ratification
Section 182Approval
Section 183Revocability of consent
Section 184Retroactive effect of ratification
Section 185Disposition by an unauthorised person
Division 4
Periods of time and fixed dates
Section 186Scope of applicability
Section 187Beginning of a period of time
Section 188End of a period of time
Section 189Calculation of individual periods of time
Section 190Extension of a period of time
Section 191Calculation of periods of time
Section 192Beginning, middle and end of a month
Section 193Sundays and holidays; Saturdays
Division 5
Limitation
Title 1
Subject-matter and duration of limitation
Section 194Subject-matter of limitation
Section 195Standard limitation period
Section 196Limitation period for rights to a plot of land
Section 197Thirty-year limitation period
Section 198Limitation in the case of a successor in title
Section 199Commencement of the standard limitation period and maximum limitation periods
Section 200Commencement of other limitation periods
Section 201Commencement of the limitation period for recognised claims
Section 202Inadmissibility of agreements on limitation
Title 2
Suspension, suspension of expiry and recommencement of the limitation period
Section 203Suspension of limitation in the case of negotiations
Section 204Suspension of limitation as a result of prosecution of rights
Section 205Suspension of limitation in the case of a right to refuse performance
Section 206Suspension of limitation in case of force majeure
Section 207Suspension of limitation for reasons of family relationship and similar reasons
Section 208Suspension of limitation in the case of claims for infringement of the right to sexual self-determination
Section 209Effect of suspension
Section 210Suspension of expiry of the limitation period in the case of persons without full capacity to contract
Section 211Suspension of expiry of the limitation period in matters relating to estates
Section 212Recommencement of the limitation period
Section 213Suspension, suspension of expiry of the limitation period and recommencement of limitation in the case of other claims
Title 3
Legal consequences of limitation
Section 214Effect of limitation
Section 215Set-off and right of retention after a claim is statute-barred
Section 216Effect of limitation in the case of secured claims
Section 217Limitation of collateral performance
Section 218Ineffectiveness of rescission
Sections 219 to 225(repealed)
Division 6
Exercise of rights, self-defence, self-help
Section 226Prohibition of chicanery
Section 227Self-defence against persons
Section 228Necessity
Section 229Self-help
Section 230Limits of self-help
Section 231Self-help by mistake
Division 7
Provision of security
Section 232Types
Section 233Effect of deposit
Section 234Suitable securities
Section 235Right to exchange
Section 236Book-entry securities
Section 237Movable things
Section 238Mortgages, land charges and annuity land charges
Section 239Surety
Section 240Duty to supplement security
Book 2
Law of obligations
Division 1
Subject matter of obligations
Title 1
Duty to render performance
Section 241Duties arising from an obligation
Section 241aUnsolicited performance
Section 242Performance in good faith
Section 243Obligation described by class
Section 244Foreign currency obligation
Section 245Obligation payable in a specific denomination of money
Section 246Statutory interest rate
Section 247Basic rate of interest
Section 248Compound interest
Section 249Nature and extent of compensation of damages
Section 250Damages in money after the specification of a period of time
Section 251Damages in money without the specification of a period of time
Section 252Lost profits
Section 253Intangible damage
Section 254Contributory negligence
Section 255Assignment of claims to compensation
Section 256Payment of interest on expenses
Section 257Claim to release
Section 258Right of removal
Section 259Extent of duty to render accounts
Section 260Duties when surrendering objects or providing information on an aggregate of objects
Section 261Modification of a declaration in lieu of an oath; costs
Section 262Alternative obligation; right of choice
Section 263Exercise of the right of choice; effect
Section 264Default by the person entitled to the right of choice
Section 265Impossibility in case of alternative obligations
Section 266Part performance
Section 267Performance by third parties
Section 268Right of redemption of a third party
Section 269Place of performance
Section 270Place of payment
Section 270aAgreements on fees for the use of non-cash means of payment
Section 271Time of performance
Section 271aAgreements on payment deadlines, verification periods or periods for acceptance
Section 272Interim interest
Section 273Right of retention
Section 274Effects of the right of retention
Section 275Exclusion of the duty of performance
Section 276Responsibility of the obligor
Section 277Standard of care in one’s own affairs
Section 278Responsibility of the obligor for third parties
Section 279(repealed)
Section 280Damages for breach of duty
Section 281Damages in lieu of performance for non-performance or failure to render performance as owed
Section 282Damages in lieu of performance for breach of a duty under section 241 (2)
Section 283Damages in lieu of performance where the duty of performance is excluded
Section 284Reimbursement of futile expenses
Section 285Surrender of substitute benefit
Section 286Default of the obligor
Section 287Responsibility during default
Section 288Default interest and other damage caused by default *)
Section 289Prohibition of compound interest
Section 290Interest on compensation for value
Section 291Interest during legal proceedings
Section 292Liability in the case of a duty to surrender
Title 2
Default by the obligee
Section 293Default in acceptance
Section 294Actual offer
Section 295Verbal offer
Section 296Dispensability of the offer
Section 297Inability of the obligor
Section 298Concurrent performance
Section 299Temporary prevention of acceptance
Section 300Effects of default by the obligee
Section 301Cessation of interest
Section 302Emoluments
Section 303Right to abandon possession
Section 304Compensation for extra expenses
Division 2
Drafting contractual obligations by means of standard business terms
Section 305Incorporation of standard business terms into the contract
Section 305aIncorporation in special cases
Section 305bPriority of individually agreed terms
Section 305cSurprising and ambiguous clauses
Section 306Legal consequences of non-incorporation and ineffectiveness
Section 306aProhibition of circumvention
Section 307Test of reasonableness of contents
Section 308Prohibited clauses with the possibility of valuation
Section 309Prohibited clauses without the possibility of valuation
Section 310Scope of application
Division 3
Contractual obligations
Title 1
Creation, subject matter and termination
Subtitle 1
Creation
Section 311Obligations created by legal transaction and obligations similar to legal transactions
Section 311aImpediment preventing performance at conclusion of contract
Section 311bContracts on plots of land, assets and an estate
Section 311cApplication to accessories
Subtitle 2
Principles applying to consumer contracts; particular types of sale
Chapter 1
Scope of application and principles applying to consumer contracts
Section 312Scope of application
Section 312aGeneral obligations and principles applying to consumer contracts; limits to the agreement of remuneration
Chapter 2
Off-premises contracts and distance contracts
Section 312bOff-premises contracts
Section 312cDistance contracts
Section 312dObligations to provide information
Section 312eViolation of information obligations as to costs
Section 312fCopies and confirmations
Section 312gRight of withdrawal
Section 312hTermination and authorisation to terminate
Chapter 3
Contracts concluded in electronic commerce
Section 312iGeneral obligations in electronic commerce
Section 312jSpecial obligations vis-à-vis consumers in electronic commerce
Chapter 4
Deviating agreements and burden of proof
Section 312kDeviating agreements and burden of proof
Subtitle 3
Adaptation and ending of contracts
Section 313Interference with the basis of the transaction
Section 314Termination, for a compelling reason, of contracts for the performance of a continuing obligation
Subtitle 4
Unilateral rights to specify performance
Section 315Specification of performance by one party
Section 316Specification of consideration
Section 317Specification of performance by a third party
Section 318Avoidance of specification
Section 319Ineffectiveness of the specification; substitution
Title 2
Reciprocal contract
Section 320Defence of unperformed contract
Section 321Defence of uncertainty
Section 322Order to perform in return for, and concurrently with, performance
Section 323Rescission for non-performance or for performance not as contractually agreed
Section 324Rescission for breach of a duty under section 241 (2)
Section 325Damages and revocation
Section 326Release from consideration and rescission where the duty of performance is excluded
Title 2a
Contracts on digital products
Subtitle 1
Consumer contracts on digital products
Section 327Scope of application
Section 327aApplication to bundle contracts and contracts relating to things with digital elements
Section 327bSupply of digital products
Section 327cRights in the case of failure to effect supply
Section 327dConformity of digital products
Section 327eProduct deficiency
Section 327fUpdates
Section 327gDefect of title
Section 327hDeviating agreements on product features
Section 327iRights of the consumer in the case of deficiencies
Section 327jLimitation
Section 327kShifting the burden of proof
Section 327lCure
Section 327mTermination of the contract and compensation of damages
Section 327nAbatement
Section 327oDeclaration of termination of contract and its legal consequences
Section 327pContinued use following termination of the contract
Section 327qConsequences under contract law of declarations governed by data protection law made by the consumer
Section 327rModifications of digital products
Section 327sDeviating agreements
Subtitle 2
Special provisions on contracts on digital products between traders
Section 327tScope of application
Section 327uRecourse of the trader
Title 3
Promise of performance to a third party
Section 328Contract for the benefit of third parties
Section 329Interpretation rule where there is an assumption of the duty to perform
Section 330Interpretation rule in the case of life annuity contracts
Section 331Performance after death
Section 332Modification by disposition mortis causa in case of reservation
Section 333Rejection of the right by the third party
Section 334Objections of the obligor in relation to the third party
Section 335Right of the promisee to make demands
Title 4
Earnest, penalty for breach of contract
Section 336Interpretation of earnest
Section 337Crediting or return of the earnest
Section 338Earnest in case of impossibility of performance for which the giver of earnest is responsible
Section 339Payability of penalty for breach of contract
Section 340Promise to pay a penalty for non-performance
Section 341Promise of a penalty for improper performance
Section 342Alternatives to monetary penalty
Section 343Reduction of the penalty
Section 344Ineffective promise of a penalty
Section 345Burden of proof
Title 5
Revocation; right of withdrawal in consumer contracts
Subtitle 1
Rescission
Section 346Effects of rescission
Section 347Emoluments and outlays after rescission
Section 348Satisfaction of obligations in return for, and concurrently with, performance
Section 349Declaration of rescission
Section 350Expiry of the right of rescission after a period of time has been specified
Section 351Indivisibility of the right of rescission
Section 352Set-off after non-performance
Section 353Rescission in return for forfeit money
Section 354Forfeiture of rights
Subtitle 2
Right of withdrawal in the case of consumer contracts
Section 355Right of withdrawal in the case of consumer contracts
Section 356Right of withdrawal in the case of off-premises contracts and distance contracts
Section 356aRight of withdrawal in the case of timeshare contracts, long-term holiday product contracts, brokerage contracts, and exchange system contracts
Section 356bRight of withdrawal in the case of consumer credit agreements
Section 356cRight of withdrawal in the case of contracts for delivery by instalments
Section 356dWithdrawal right of the consumer in the case of credit agreements for a gratuitous loan and in the case of gratuitous financial accommodation
Section 356eRight of withdrawal in the case of construction contracts with consumers
Section 357Legal consequences of the withdrawal from off-premises contracts and distance contracts, to the exception of contracts relating to financial services
Section 357aLegal consequences of the withdrawal from contracts relating to financial services
Section 357bLegal consequences of the withdrawal from timeshare, long-term holiday product, brokerage contracts, and exchange system contracts
Section 357cLegal consequences of the withdrawal from contracts for delivery by instalments that are neither distance contracts nor off-premises contracts
Section 357dLegal consequences of the withdrawal from a construction contract with a consumer
Section 358Contracts linked to the contract from which the consumer has withdrawn
Section 359Objections in the case of linked contracts
Section 360Related contracts
Section 361Further claims, deviating agreements and burden of proof
Division 4
Extinction of obligations
Title 1
Performance
Section 362Extinction by performance
Section 363Burden of proof in the case of acceptance as performance of contract
Section 364Acceptance in lieu of performance of contract
Section 365Warranty in the case of handover in lieu of performance of contract
Section 366Crediting of performance to more than one claim
Section 367Crediting to interest and costs
Section 368Receipt
Section 369Costs of the receipt
Section 370Performance to the bringer of the receipt
Section 371Return of the certificate of indebtedness
Title 2
Deposit
Section 372Prerequisites
Section 373Concurrent performance
Section 374Place of deposit; duty to notify
Section 375Retroactive effect with dispatch by mail
Section 376Right to take back
Section 377Unpledgeability of the right to take back
Section 378Effect of deposit where taking back is excluded
Section 379Effect of deposit where taking back is not excluded
Section 380Proof of entitlement to receive
Section 381Costs of deposit
Section 382Extinction of the right of the obligee
Section 383Auction of things not capable of deposit
Section 384Warning of auction
Section 385Sale by private agreement
Section 386Costs of the auction
Title 3
Set-off
Section 387Prerequisites
Section 388Declaration of set-off
Section 389Effect of set-off
Section 390No set-off against a claim subject to a defence
Section 391Set-off in the case of different places of performance
Section 392Set-off against a seized claim
Section 393No set-off against a claim in tort
Section 394No set-off against an unpledgeable claim
Section 395Set-off against claims of public-law corporations
Section 396More than one claim
Title 4
Forgiveness
Section 397Contract of forgiveness, acknowledgement of non-indebtedness
Division 5
Transfer of a claim
Section 398Assignment
Section 399Exclusion of assignment in case of change of content or by agreement
Section 400Exclusion in case of unpledgeable claims
Section 401Devolution of accessory rights and preferential rights
Section 402Duty to provide information; provision of documents
Section 403Duty of notarial recording
Section 404Objections by the obligor
Section 405Assignment with presentation of documents
Section 406Set-off in relation to the new obligee
Section 407Legal acts in relation to the previous obligee
Section 408Multiple assignments
Section 409Notice of assignment
Section 410Delivery of the assignment document
Section 411Assignment of salary
Section 412Statutory devolution of claims
Section 413Transfer of other rights
Division 6
Assumption of debt
Section 414Contract between obligee and transferee
Section 415Contract between obligor and transferee
Section 416Assumption of a mortgage debt
Section 417Objections of the transferee
Section 418Extinction of security rights and preferential rights
Section 419(repealed)
Division 7
More than one obligor and obligee
Section 420Divisible performance
Section 421Joint and several debtors
Section 422Effect of performance
Section 423Effect of forgiveness
Section 424Effect of default by the obligee
Section 425Effect of other facts
Section 426Duty to adjust advancements, devolution of claim
Section 427Joint contractual duty
Section 428Joint and several obligees
Section 429Effect of changes
Section 430Duty of the joint and several obligees to adjust advancements
Section 431More than one obligor of indivisible performance
Section 432More than one obligee of indivisible performance
Division 8
Particular types of obligations
Title 1
Purchase, exchange
Subtitle 1
General provisions
Section 433Contractual duties typical for a purchase agreement
Section 434Material defects
Section 435Defects of title
Section 436Public charges on plots of land
Section 437Rights of buyer in the case of defects
Section 438Limitation of claims for defects
Section 439Cure
Section 440Special provisions on rescission and damages
Section 441Abatement of price
Section 442Knowledge of the buyer
Section 443Guarantee
Section 444Exclusion of liability
Section 445Limitation of liability in the case of public auctions
Section 445aRecourse of the seller
Section 445bLimitation of recourse claims
Section 445cRecourse in the case of contracts on digital products
Section 446Devolution of risk and of charges
Section 447Devolution of risk in the case of sales shipment
Section 448Costs of delivery and comparable costs
Section 449Retention of title
Section 450Excluded buyers in the case of certain sales
Section 451Purchase by excluded buyer
Section 452Purchase of a ship
Section 453Purchase of rights, consumer contract on the purchase of digital content
Subtitle 2
Special types of purchase
Chapter 1
Purchase on approval
Section 454Coming into existence of the purchase agreement
Section 455Approval period
Chapter 2
Repurchase
Section 456Coming into existence of the repurchase agreement
Section 457Liability of the reseller
Section 458Removal of third-party rights
Section 459Reimbursement of outlays
Section 460Repurchase at estimated value
Section 461More than one person entitled to repurchase
Section 462Cut-off period
Chapter 3
Preemption
Section 463Prerequisites for exercise
Section 464Exercise of the right of preemption
Section 465Ineffective agreements
Section 466Collateral performance
Section 467Total price
Section 468Deferral of the purchase price
Section 469Duty to notify, exercise period
Section 470Sale to heir on intestacy
Section 471Sale in case of compulsory enforcement or insolvency
Section 472More than one person with a right of preemption
Section 473Non-transferability
Subtitle 3
Purchase of consumer goods
Section 474Purchase of consumer goods
Section 475Applicable provisions
Section 475aContract for the sale of consumer goods relating to digital products
Section 475bMaterial defect of a good with digital elements
Section 475cMaterial defect of a good with digital elements where the digital elements are supplied on a continuous basis
Section 475dSpecial provisions on rescission and compensation of damages
Section 475eSpecial provisions on limitation
Section 476Deviating agreements
Section 477Shifting the burden of proof
Section 478Special provisions concerning recourse by the trader
Section 479Special provisions for guarantees
Subtitle 4
Exchange
Section 480Exchange
Title 2
Timeshare contracts, long-term holiday product contracts, brokerage contracts and exchange system contracts
Section 481Time share contracts
Section 481aLong-term holiday product contract
Section 481bFacilitation contract, exchange system contract
Section 482Preliminary contract information, advertising and prohibition of sale as an investment
Section 482aInstructions on the right of withdrawal
Section 483Language of the contract and of the pre-contractual information
Section 484Form and content of the contract
Section 485Right of withdrawal
Section 486Prohibition of down payment
Section 486aSpecial provisions for long-term holiday product contracts
Section 487Deviating agreements
Title 3
Loan contract; financial accommodation and contracts for delivery by instalments between a trader and a consumer
Subtitle 1
Loan contract
Chapter 1
General provisions
Section 488Contractual duties typical for a credit agreement
Section 489Right of the borrower to give notice of termination in accordance with usual procedure
Section 490Right to terminate for cause
Chapter 2
Special provisions for consumer credit agreements
Section 491Consumer credit agreement
Section 491aPreliminary contract information obligations with consumer credit agreements
Section 492Written form, contents of the contract
Section 492aTying practices in the case of consumer credit agreements relating to immovable property
Section 492bPermissible tying practices
Section 493Information during the contractual relationship
Section 494Legal consequences of defects of form
Section 495Right of withdrawal; reflection period
Section 496Waiver of objections, prohibition of bills of exchange and cheques
Section 497Default of the borrower
Section 498Calling in entire loan in the case of loans repayable in instalments
Section 499Right of the lender to terminate; right to refuse performance
Section 500Termination right of the borrower; early repayment
Section 501Cost reduction in the case of early repayment and in the case of termination
Section 502Compensation for early repayment of a loan
Section 503Conversion to an alternative currency of a foreign-currency consumer credit agreement relating to immovable property
Section 504Granted overdraft
Section 504aObligation to provide advisory services where the overdraft facility is used
Section 505Tolerated overdraft
Section 505aObligation to perform a creditworthiness assessment for consumer credit agreements
Section 505bBasis of the creditworthiness assessment in the case of consumer credit agreements
Section 505cFurther obligations in the case of consumer credit agreements relating to immovable property secured by a mortgage or by a charge on land
Section 505dBreach of the obligation to conduct an assessment of creditworthiness
Section 505eAuthorisation to issue statutory instruments
Subtitle 2
Financial accommodation between a trader and a consumer
Section 506Deferment of payment, other financial accommodation
Section 507Instalment payment transactions
Section 508Revocation with regard to instalment payment transactions
Section 509(repealed)
Subtitle 3
Contracts for delivery by instalments between a trader and a consumer
Section 510Contracts for delivery by instalments
Subtitle 4
Advisory services provided in the case of consumer credit agreements relating to immovable property
Section 511Advisory services provided in the case of consumer credit agreements relating to immovable property
Subtitle 5
Mandatory nature, application to founders of new businesses
Section 512Deviating agreements
Section 513Application to founders of new businesses
Subtitle 6
Gratuitous credit agreements and gratuitous financial accommodation between a trader and a consumer
Section 514Gratuitous credit agreements
Section 515Gratuitous financial accommodation
Title 4
Donation
Section 516Concept of donation
Section 516aConsumer contract on the donation of digital products
Section 517Failure to acquire assets
Section 518Form of promise of donation
Section 519Defence of paying for necessaries
Section 520Expiry of the promise of an annuity
Section 521Liability of the donor
Section 522No default interest
Section 523Liability for defects of title
Section 524Liability for material defects
Section 525Donation subject to conditions
Section 526Refusal to fulfil the condition
Section 527Non-fulfilment of the condition
Section 528Claim for return due to impoverishment of the donor
Section 529Exclusion of claim for return
Section 530Revocation of donation
Section 531Declaration of revocation
Section 532Exclusion of revocation
Section 533Waiver of the right of revocation
Section 534Donations for duty and decency
Title 5
Lease, usufructuary lease
Subtitle 1
General provisions for leases
Section 535Contents and primary duties of the lease agreement
Section 536Abatement of the rent for material defects and defects of title
Section 536aClaim of lessee for damages and reimbursement of expenses due to a defect
Section 536bLessee knows of the defect at conclusion of the contract or upon acceptance
Section 536cDefects occurring during the lease period; notice of defect by the lessee
Section 536dContractual exclusion of rights of lessee with regard to defects
Section 537Payment of rent when the lessee is unable to be present in person
Section 538Wear and tear on the leased property from contractually agreed use
Section 539Reimbursement of other expenses and right of removal of the lessee
Section 540Making available the leased property for use use by third parties
Section 541Application for prohibitory injunction in the case of use in breach of contract
Section 542End of the lease
Section 543Termination for cause without notice for a compelling reason
Section 544Lease for more than 30 years
Section 545Tacit extension of the lease
Section 546Duty of lessee to return
Section 546aCompensation of the lessor in the case of late return
Section 547Reimbursement of rent paid in advance
Section 548Limitation of compensation claims and of the right of removal
Section 548aLease of digital products
Subtitle 2
Leases for residential space
Chapter 1
General provisions
Section 549Provisions applicable to leases of residential space
Section 550Form of the lease agreement
Section 551Restriction and investment of rent security deposits
Section 552Warding off the right of removal of the lessee
Section 553Making residential space available for use by third parties
Section 554Improved accessibility, e-mobility and burglary protection
Section 555Ineffectiveness of a penalty for breach of contract
Chapter 1a
Structural maintenance and modernisation measures
Section 555aStructural maintenance measures
Section 555bModernisation measures
Section 555cAnnouncement of modernisation measures
Section 555dToleration of modernisation measures, time limit
Section 555eSpecial right of termination of the lessee in case of modernisation measures
Section 555fAgreements on structural maintenance or modernisation measures
Chapter 2
Rent
Subchapter 1
Agreements on rent
Section 556Agreements on operating costs
Section 556aAccounting criterion for operating costs
Section 556bDue date of rent, right to set-off and right of retention
Section 556cCosts of heat supply as operating costs, authorisation to issue statutory instruments
Subchapter 1a
Agreements on the rent amount at commencement of the lease in areas in which the housing market is under pressure
Section 556dPermissible rent amount at commencement of the lease; authorisation to issue statutory instruments
Section 556eConsideration of the rent paid previously, or of modernisation work done
Section 556fExceptions
Section 556gLegal consequences; information on the rent
Subchapter 2
Provisions on the rent amount
Section 557Increases in rent by agreement or law
Section 557aStepped rent
Section 557bIndexed rent
Section 558Increase in rent up to the reference rent customary in the locality
Section 558aForm and justification of the rent increase
Section 558bApproval of a rent increase
Section 558cList of representative rents
Section 558dExpert list of representative rents
Section 558eRent database
Section 559Rent increase after modernisation measures
Section 559aCrediting of third-party funds
Section 559bAssertion of an increase; effect of declaration of increase
Section 559cSimplified procedure
Section 559dBreaches of duty in announcing or implementing structural changes
Section 560Changes in operating costs
Section 561Special right of termination of the lessee following a rent increase
Chapter 3
Security right of the lessor
Section 562Extent of the security right of the lessor
Section 562aExtinction of the security right of the lessor
Section 562bSelf-help; claim to surrender
Section 562cWarding off the security right by provision of security
Section 562dAttachment by a third party
Chapter 4
Change of contractual parties
Section 563Right of accession upon death of the lessee
Section 563aContinuation with surviving lessees
Section 563bLiability in the case of accession or continuation
Section 564Continuation of the lease with the heir; termination for cause
Section 565Commercial subletting
Section 566Purchase is subject to existing leases
Section 566aRent security deposit
Section 566bAdvance disposition over the rent
Section 566cAgreement between lessee and lessor on the rent
Section 566dSet-off by the lessee
Section 566eNotification by the lessor of the devolution of ownership
Section 567Encumbrance of the residential space by the lessor
Section 567aAlienation or encumbrance prior to residential space being made available for use
Section 567bOnward alienation or encumbrance by the acquirer
Chapter 5
Termination of the lease
Subchapter 1
General provisions
Section 568Form and contents of the notice of termination
Section 569Termination for cause without notice for a compelling reason
Section 570Exclusion of the right of retention
Section 571Further compensation of damages for late return of residential space
Section 572Agreement on right of rescission; lease subject to condition subsequent
Subchapter 2
Leases for an indefinite period of time
Section 573Notice of termination by the lessor in accordance with usual procedure
Section 573aEased termination by the lessor
Section 573bPartial termination by the lessor
Section 573cPeriods of time to be observed in giving notice of termination in accordance with usual procedure
Section 573dTermination for cause observing the statutory notice period
Section 574Objection of lessee to termination
Section 574aContinuation of lease after objection
Section 574bRequirements as to form and period of time for objection
Section 574cFurther continuation of the lease in the case of unforeseen circumstances
Subchapter 3
Leases for a specified period of time
Section 575Fixed-term lease
Section 575aTermination for cause observing the statutory notice period
Subchapter 4
Tied dwellings
Section 576Periods of time to be observed in giving notice of termination in accordance with usual procedure in the case of tied leased dwellings
Section 576aSpecial features of the right to raise an objection in the case of tied leased dwellings
Section 576bApplication of landlord and tenant law accordingly in connection with tied dwellings
Chapter 6
Special features when creating title to leased residences
Section 577Lessee’s right of preemption
Section 577aRestriction of termination in connection with conversion of the dwelling
Subtitle 3
Leases of other things and digital products
Section 578Leases of plots of land and premises
Section 578aLease of registered ships
Section 578bContracts on the lease of digital products
Section 579Due date of the rent
Section 580Notice of termination for cause in the case of the death of the lessee
Section 580aNotice periods
Subtitle 4
Usufructuary lease
Section 581Contractual duties typical for a usufructuary lease
Section 582Maintenance of inventory
Section 582aAssumption of inventory at its estimated value
Section 583Security right of usufructuary lessee over inventory
Section 583aRestrictions on disposition over inventory
Section 584Period of notice
Section 584aExclusion of certain rights of termination under landlord and tenant law
Section 584bLate return
Subtitle 5
Farm lease
Section 585Concept of farm lease
Section 585aForm of a farm lease
Section 585bDescription of the leased property
Section 586Contractual duties typical for a farm lease
Section 586aEncumbrances on the leased property
Section 587Due date of rent; payment of rent where the usufructuary lessee is personally prevented
Section 588Measures of maintenance or improvement
Section 589Making available the leased property to third parties for their use
Section 590Change of agricultural purpose or of previous use
Section 590aUse in breach of contract
Section 590bNecessary outlays
Section 591Outlays that increase value
Section 591aRemoval of installations
Section 591bLimitation of compensation claims
Section 592Security right of the usufructuary lessor
Section 593Amendment of farm leases
Section 593aTransfer of a business
Section 593bAlienation or encumbrance of the leased property
Section 594Termination and extension of the lease
Section 594aNotice periods
Section 594bLease for more than 30 years
Section 594cTermination in the case of occupational disability of the usufructuary lessee
Section 594dDeath of the usufructuary lessee
Section 594eTermination for cause without notice for a compelling reason
Section 594fWritten form of termination
Section 595Continuation of the lease
Section 595aEarly notice of termination of farm leases
Section 596Return of the leased property
Section 596aDuty to compensate for early termination of lease
Section 596bDuty to leave behind
Section 597Late return
Title 6
Gratuitous loan
Section 598Contractual duties typical for the case of a gratuitous loan
Section 599Liability of the lender
Section 600Liability for defects
Section 601Reimbursement of outlays
Section 602Wear and tear on the thing
Section 603Contractually agreed use
Section 604Duty to return
Section 605Right of termination
Section 606Short limitation period
Title 7
Contract for the loan of a thing
Section 607Contractual duties typical for a contract for the loan of a thing
Section 608Termination
Section 609Payment
Section 610(repealed)
Title 8
Service contract and similar contracts
Subtitle 1
Service contract
Section 611Contractual duties typical for a service contract
Section 611aEmployment contract
Section 611b(repealed)
Section 612Remuneration
Section 612aProhibition of victimisation
Section 613Non-transferability
Section 613aRights and duties in the case of transfer of business
Section 614Due date of remuneration
Section 615Remuneration in the case of default in acceptance and business risk
Section 616Temporary prevention from performing services
Section 617Duty of medical care
Section 618Duty to take protective measures
Section 619Absolute nature of welfare duties
Section 619aBurden of proof when the employee is liable
Section 620End of services relationship
Section 621Periods of notice for service relationships
Section 622Notice periods in the case of employment relationships
Section 623Written form of termination
Section 624Notice period in the case of contracts lasting longer than five years
Section 625Tacit extension
Section 626Termination without notice for a compelling reason
Section 627Termination without notice in the case of a position of trust
Section 628Partial remuneration and damages in case of termination without notice
Section 629Time off for search for employment
Section 630Duty to provide a reference
Subtitle 2
Treatment contract
Section 630aContractual duties typical for a treatment contract
Section 630bApplicable provisions
Section 630cCooperation between the contracting parties; obligations to provide information
Section 630dConsent
Section 630eObligations to provide information
Section 630fDocumentation of the treatment
Section 630gInspection of the medical records
Section 630hBurden of proof in case of liability for malpractice and errors in providing information
Title 9
Contract to produce a work and similar contracts
Subtitle 1
Contract to produce a work
Chapter 1
General provisions
Section 631Contractual duties typical for a contract to produce a work
Section 632Remuneration
Section 632aPart payments
Section 633Material defects and defects of title
Section 634Rights of the customer in the case of defects
Section 634aLimitation of claims for defects
Section 635Cure
Section 636Special provisions on rescission and damages
Section 637Self-help
Section 638Abatement of price
Section 639Exclusion of liability
Section 640Acceptance
Section 641Due date of remuneration
Section 641a(repealed)
Section 642Cooperation by the customer
Section 643Termination for failure to collaborate
Section 644Allocation of risk
Section 645Responsibility of the customer
Section 646Completion in lieu of acceptance
Section 647Security right of the contractor
Section 647aMortgage of the owner of a shipyard
Section 648Right of termination of the customer
Section 648aTermination for a compelling reason
Section 649Cost estimate
Section 650Contract for work and materials; consumer contract on the production of digital products
Chapter 2
Construction contract
Section 650aConstruction contract
Section 650bAmendment of the contract; right of the customer to issue orders
Section 650cAdjustment of remuneration in case of orders pursuant to section 650b (2)
Section 650dInjunction
Section 650eMortgage of a building contractor
Section 650fBuilder’s security
Section 650gDetermination of the status in the case of acceptance being refused; final invoice
Section 650hWritten form of the termination
Chapter 3
Construction contract with a consumer
Section 650iConstruction contract with a consumer
Section 650jSpecifications
Section 650kSubject matter of the contract
Section 650lRight of withdrawal
Section 650mPart payments; security for the claim to remuneration
Section 650nPreparation of documents and surrender
Chapter 4
Mandatory nature
Section 650oDeviating agreements
Subtitle 2
Contract for architectural services and contract for engineering services
Section 650pContractual duties typical for contracts for architectural and for engineering services
Section 650qApplicable provisions
Section 650rSpecial right of termination
Section 650sPartial acceptance
Section 650tJoint and several liability with the contractor executing the construction work
Subtitle 3
Developer contract
Section 650uDeveloper contract; applicable provisions
Section 650vPart payments
Subtitle 4
Package travel contract, brokerage of travel contracts and brokerage of linked travel arrangements
Section 651aContractual duties typical for a package travel contract
Section 651bDelimitation from brokerage
Section 651cLinked online booking processes
Section 651dObligations to provide information; contents of the contract
Section 651eTransfer of contract
Section 651fReservations of the right to modify; price reduction
Section 651gSignificant amendments of the contract
Section 651hRescission before the start of the package
Section 651iRights of the traveller in the case of a lack of conformity of the package
Section 651jLimitation
Section 651kRemedy
Section 651lTermination
Section 651mAbatement of the price
Section 651nDamages
Section 651oNotification by the traveller of a lack of conformity
Section 651pAdmissible limitation of liability; set-off
Section 651qOrganiser’s obligation to provide assistance
Section 651rInsolvency protection; security certificate
Section 651sInsolvency protection of the organisers established in the European Economic Area
Section 651tRepatriation, prepayments
Section 651uExchange student stays
Section 651vFacilitation of travel
Section 651wFacilitation of linked travel arrangements
Section 651xLiability for booking errors
Section 651yDeviating agreements
Title 10
Brokerage contract
Subtitle 1
General provisions
Section 652Accrual of fee claim
Section 653Brokerage fee
Section 654Forfeiture of the fee claim
Section 655Reduction of the brokerage fee
Subtitle 2
Intermediation of consumer credit agreements and non-gratuitous financial accommodation
Section 655aCredit intermediation contract
Section 655bWritten form in the case of a contract with a consumer
Section 655cRemuneration
Section 655dAncillary payment
Section 655eDeviating agreements, application to founders of new businesses
Subtitle 3
Marriage broking
Section 656Marriage broking
Subtitle 4
Brokerage of purchase contracts for flats and single family houses
Section 656aText form
Section 656bPersonal scope of sections 656c and 656d
Section 656cFee claim in the case of the broker working for both parties
Section 656dAgreements on the broker’s costs
Title 11
Promise of a reward
Section 657Binding promise
Section 658Revocation
Section 659Act undertaken more than once
Section 660Collaboration by more than one person
Section 661Prize competition
Section 661aPromises of prizes
Title 12
Mandate, contract for the management of the affairs of another and payment services
Subtitle 1
Mandate
Section 662Contractual duties typical for a mandate
Section 663Duty to notify in the case of rejection
Section 664Non-transferability; liability for assistants
Section 665Deviation from instructions
Section 666Duty of information and duty to render accounts
Section 667Duty to surrender
Section 668Interest on money used
Section 669Duty of advance payment
Section 670Reimbursement of expenses
Section 671Withdrawal; termination
Section 672Death or incapacity to contract of the mandator
Section 673Death of the mandatary
Section 674Legal construct of continuation
Subtitle 2
Contract for the management of the affairs of another
Section 675Non-gratuitous management of the affairs of another
Section 675aDuties to provide information
Section 675bOrders to transfer securities in systems
Subtitle 3
Payment services
Chapter 1
General provisions
Section 675cPayment services and e-money
Section 675dInformation on payment services
Section 675eDeviating agreements
Chapter 2
Payment services contract
Section 675fPayment services contract
Section 675gAmendment of the framework contract on payment services
Section 675hNotice of termination in accordance with usual procedure of a framework contract on payment services
Section 675iExceptions for low-value payment instruments and e-money
Chapter 3
Provision and use of payment services
Subchapter 1
Authorisation of payment transactions; payment instruments; refusal of access to the payment account
Section 675jConsent and withdrawal of consent
Section 675kRestrictions on the use of a payment instrument; refusal of access to the payment account
Section 675lObligations of the payment service user with regard to payment instruments
Section 675mObligations of the payment service provider with regard to payment instruments; risk of dispatch
Subchapter 2
Execution of payment transactions
Section 675nReceipt of payment orders
Section 675oRefusal of payment orders
Section 675pIrrevocability of a payment order
Section 675qCharges for payment transactions
Section 675rExecution of a payment transaction using unique identifiers
Section 675sExecution deadline for payment transactions
Section 675tValue date and availability of funds; blocking available funds
Subchapter 3
Liability
Section 675uLiability of the payment service provider for unauthorised payment transactions
Section 675vLiability of the payer in case of misappropriation of a payment instrument
Section 675wProof of authentication
Section 675xRefund claim in case of an authorised payment transaction initiated by or through the payee
Section 675yLiability of the payment service provider in case of non-execution, defective or late execution of a payment order; obligation to make enquiries
Section 675zOther claims in case of non-execution, defective or late execution of a payment order or in case of an unauthorised payment transaction
Section 676Proof of execution of payment transactions
Section 676aEqualisation claim
Section 676bNotification of unauthorised or incorrectly executed payment transactions
Section 676cDisclaimer
Title 13
Voluntary agency without specific authorisation
Section 677Duties of the voluntary agent
Section 678Agency contrary to the will of the principal
Section 679Irrelevance of the contrary will of the principal
Section 680Agency of necessity
Section 681Ancillary duties of the voluntary agent
Section 682Lack of capacity to contract on the part of the voluntary agent
Section 683Reimbursement of expenses
Section 684Surrender of enrichment
Section 685Intention to donate
Section 686Error as to the identity of the principal
Section 687False voluntary agency without specific authorisation
Title 14
Safekeeping
Section 688Contractual duties typical for safekeeping
Section 689Remuneration
Section 690Liability for gratuitous safekeeping
Section 691Deposit with third parties
Section 692Change of safekeeping
Section 693Reimbursement of expenses
Section 694Liability in damages of the depositor
Section 695Right of the depositor to demand return
Section 696Claim of depositary for repossession of the thing deposited
Section 697Place for return
Section 698Interest on money used
Section 699Due date of remuneration
Section 700Irregular safekeeping contract
Title 15
Bringing things onto the premises of innkeepers
Section 701Liability of the innkeeper
Section 702Limitation of liability; valuables
Section 702aRelease from liability
Section 703Extinction of the claim for damages
Section 704Security right of the innkeeper
Title 16
Partnership
Section 705Contents of partnership agreement
Section 706Contributions of the partners
Section 707Increase of the agreed contribution
Section 707a to 707c(will enter into force at a future time)
Section 707dAuthorisation to issue statutory instruments
Section 708Liability of the partners
Section 709Joint management
Section 710Transfer of management
Section 711Right to object
Section 712Revocation and dismissal of management
Section 713Rights and duties of managing partners
Section 714Power of agency
Section 715Revocation of the power of agency
Section 716Right of control of the partners
Section 717Non-transferability of partner rights
Section 718Partnership assets
Section 719Joint assets
Section 720Protection of good-faith debtor
Section 721Distribution of profits and losses
Section 722Shares in profits and losses
Section 723Termination by partner
Section 724Notice of termination in the case of a partnership for life or a continuing partnership
Section 725Termination by attachment creditors
Section 726Dissolution due to achievement or impossibility of its object
Section 727Dissolution due to the death of a partner
Section 728Dissolution due to insolvency of the partnership or one of its partners
Section 729Continuation of authority to manage
Section 730Winding-up of the partnership; management
Section 731Procedure for winding-up of the partnership
Section 732Return of objects
Section 733Discharge of partnership debts; reimbursement of capital contributions
Section 734Distribution of the surplus
Section 735Duty to make subsequent contributions in case of loss
Section 736Retirement of a partner; continuing liability
Section 737Exclusion of a partner
Section 738Winding-up of the partnership on retirement
Section 739Liability for deficit
Section 740Sharing in the financial results of pending transactions
Title 17
Co-ownership
Section 741Co-ownership by defined shares
Section 742Equal shares
Section 743Share in the fruits; authority to use
Section 744Joint administration
Section 745Administration and use by resolution
Section 746Effect in relation to successors in interest
Section 747Disposition over a share and joint objects
Section 748Bearing of charges and costs
Section 749Claim to dissolution
Section 750Exclusion of dissolution in case of death
Section 751Exclusion of dissolution and successors in interest
Section 752Division in kind
Section 753Division by sale
Section 754Sale of joint claims
Section 755Discharge of a joint debt
Section 756Discharge of the debt of a part owner
Section 757Warranty upon allocation to a part owner
Section 758Claim to dissolution not subject to the statute of limitations
Title 18
Life annuity
Section 759Duration and amount of the annuity
Section 760Advance payment
Section 761Form of life annuity commitment
Title 19
Imperfect obligations
Section 762Gaming, betting
Section 763Lottery contracts and gaming contracts
Section 764(repealed)
Title 20
Suretyship
Section 765Contractual duties typical for suretyship
Section 766Written form of the declaration of suretyship
Section 767Extent of the suretyship debt
Section 768Defences of a surety
Section 769Co-suretyship
Section 770Defences of voidability and set-off
Section 771Defence of failure to pursue remedies
Section 772Duty of creditor of enforcement and realisation
Section 773Exclusion of defence of failure to pursue remedies
Section 774Statutory devolution of claims
Section 775Claim to release of the surety
Section 776Waiver of a security
Section 777Temporary suretyship
Section 778Credit mandate
Title 21
Settlement
Section 779Concept of settlement; mistake as to the basis of the settlement
Title 22
Promise to fulfil an obligation; acknowledgement of debt
Section 780Promise to fulfil an obligation
Section 781Acknowledgement of a debt
Section 782No requirements as to form for settlement
Title 23
Order
Section 783Rights derived from instruction
Section 784Acceptance of the instruction
Section 785Handover of the instruction
Section 786(repealed)
Section 787Instruction to assume debt
Section 788Underlying debt relationship
Section 789Duty of recipient of the document setting out the instruction to notify
Section 790Revocation of the instruction
Section 791Death or incapacity to contract of a party involved
Section 792Transfer of the instruction
Title 24
Bearer bond
Section 793Rights under a bearer bond
Section 794Liability of the issuer
Section 795(repealed)
Section 796Objections of the issuer
Section 797Duty to render performance only in return for handover
Section 798Replacement instrument
Section 799Declaration of invalidity
Section 800Effect of the declaration of invalidity
Section 801Extinction; prescription
Section 802Blockage of payment
Section 803Interest coupons
Section 804Loss of interest coupons or similar coupons
Section 805New interest coupons and annuity coupons
Section 806Reregistration under name
Section 807Bearer tickets and stamps
Section 808Registered securities with bearer clause
Title 25
Presentation of things
Section 809Inspection of a thing
Section 810Right to inspect instruments
Section 811Place of presentation, risk and costs
Title 26
Unjust enrichment
Section 812Claim to surrender
Section 813Performance notwithstanding defence
Section 814Knowledge that debt is not owed
Section 815Non-occurrence of result
Section 816Disposition by an unauthorised person
Section 817Breach of law or act offending common decency
Section 818Scope of the claim to enrichment
Section 819Increased liability in case of knowledge and in cases of breaches of law or acts offending common decency
Section 820Increased liability where the result is uncertain
Section 821Enrichment defence
Section 822Duty to surrender of third parties
Title 27
Torts
Section 823Liability in damages
Section 824Endangering credit
Section 825Inducing others to sexual acts
Section 826Intentional damage inflicted in a manner offending common decency
Section 827Exclusion and reduction of responsibility
Section 828Minors
Section 829Liability in damages for reasons of equity
Section 830Joint tortfeasors and persons involved
Section 831Liability for vicarious agents
Section 832Liability of a person with a duty of supervision
Section 833Liability of animal keeper
Section 834Liability of animal minder
Section 835(repealed)
Section 836Liability of the owner of a plot of land
Section 837Liability of building possessor
Section 838Liability of the person with a duty of upkeep regarding a building
Section 839Liability in case of breach of official duty
Section 839aLiability of court-appointed expert
Section 840Liability of more than one person
Section 841Compensation for liability of a public official
Section 842Extent of liability in damages in case of injury of a person
Section 843Annuity in money or lump sum settlement
Section 844Third-party compensation claims in the case of death
Section 845Compensation claims for lost services
Section 846Contributory negligence of the injured person
Section 847(repealed)
Section 848Liability for chance in the case of deprivation of a thing
Section 849Interest on the compensation sum
Section 850Reimbursement of outlays
Section 851Compensation payment to unauthorised parties
Section 852Claim to surrender after end of limitation period
Section 853Defence of bad faith
Book 3
Law of property
Division 1
Possession
Section 854Acquisition of possession
Section 855Agent in possession
Section 856Ending of possession
Section 857Inheritability
Section 858Prohibited interference with possession
Section 859Self-help by the possessor
Section 860Self-help by the agent in possession
Section 861Claim on account of deprivation of possession
Section 862Claim on account of interference with possession
Section 863Objections of the party depriving of possession or of the disturber
Section 864Extinction of claims to possession
Section 865Part possession
Section 866Co-possession
Section 867Possessor’s right of pursuit
Section 868Indirect possession
Section 869Claims of the indirect possessor
Section 870Transfer of indirect possession
Section 871Multilevel indirect possession
Section 872Proprietary possession
Division 2
General provisions on rights in land
Section 873Acquisition by agreement and registration
Section 874Reference to approval of registration
Section 875Cancellation of a right
Section 876Cancellation of an encumbered right
Section 877Alterations of rights
Section 878Subsequent restrictions on disposition
Section 879Order of priority of more than one right
Section 880Change of priority
Section 881Reservation of priority
Section 882Maximum amount of compensation for lost value
Section 883Prerequisites and effect of priority notice
Section 884Effect in relation to heirs
Section 885Prerequisite for the entry of the priority notice
Section 886Claim for removal
Section 887Judicial call of the priority notice claimant
Section 888Claim to approval of the person entitled to the priority notice
Section 889Exclusion of merger for rights in rem
Section 890Union of plots of land; addition
Section 891Statutory presumption
Section 892Presumption of legal force of the contents of the Land Register
Section 893Legal transaction with the person entered in the Land Register
Section 894Correction of the Land Register
Section 895Prior entry of the person obliged
Section 896Submission of certificate
Section 897Costs of correction
Section 898Claims to correction not subject to the statute of limitations
Section 899Entry of an objection
Section 899aProvisos for civil-law partnerships
Section 900Acquisition by prescription following entry in the Land Register
Section 901Extinction of rights not entered in the Land Register
Section 902Rights entered in the Land Register not subject to the statute of limitations
Division 3
Ownership
Title 1
Subject matter of ownership
Section 903Powers of the owner
Section 904Necessity
Section 905Restriction of ownership
Section 906Introduction of imponderable substances
Section 907Facilities threatening danger
Section 908Imminent collapse of building
Section 909Excavation
Section 910Overhang
Section 911Falling fruit
Section 912Encroachment; duty to tolerate
Section 913Payment of periodical payments for encroachment
Section 914Priority, registration and extinction of periodical payments
Section 915Purchase
Section 916Adverse effect on heritable building right or servitude
Section 917Right of way of necessity
Section 918Exclusion of the right of way of necessity
Section 919Boundary marking
Section 920Confusion of boundaries
Section 921Joint use of boundary installations
Section 922Manner of use and maintenance
Section 923Boundary tree
Section 924Neighbour-law claims not subject to the statute of limitations
Title 2
Acquisition and loss of ownership of plots of land
Section 925Declaration of conveyance
Section 925aDocument of land transaction
Section 926Accessories of the plot of land
Section 927Judicial call procedure
Section 928Relinquishment of ownership, appropriation by fiscal authority
Title 3
Acquisition and loss of ownership of movable things
Subtitle 1
Transfer
Section 929Agreement and delivery
Section 929aAgreement with regard to unregistered ship
Section 930Constructive delivery
Section 931Assignment of claim to surrender
Section 932Good faith acquisition from a person not entitled
Section 932aGood faith acquisition of unregistered ships
Section 933Good faith acquisition on constructive delivery
Section 934Good faith acquisition on assignment of claim to surrender
Section 935No good faith acquisition of lost things
Section 936Extinction of third party rights
Subtitle 2
Acquisition by prescription
Section 937Prerequisites, exclusion in the case of knowledge
Section 938Presumption of proprietary possession
Section 939Suspension of prescription
Section 940Interruption by loss of possession
Section 941Interruption by act of execution
Section 942Effect of interruption
Section 943Acquisition by prescription and succession in title
Section 944Possessor of an inheritance
Section 945Extinction of third party rights
Subtitle 3
Combination, intermixture, processing
Section 946Combination with a plot of land
Section 947Combination with movable things
Section 948Intermixture
Section 949Extinction of third party rights
Section 950Processing
Section 951Compensation for loss of rights
Section 952Ownership of documents of debt
Subtitle 4
Acquisition of products and other components of a thing
Section 953Ownership of separated products and components
Section 954Acquisition by person entitled in rem
Section 955Acquisition by proprietary possessor in good faith
Section 956Acquisition by person entitled in personam
Section 957Permission by the person not entitled
Subtitle 5
Appropriation
Section 958Acquisition of ownership of ownerless movable things
Section 959Abandonment of ownership
Section 960Wild animals
Section 961Loss of ownership of bee swarms
Section 962Right of pursuit of the owner
Section 963Merging of bee swarms
Section 964Intermixture of bee swarms
Subtitle 6
Finding
Section 965Duty of the finder to notify
Section 966Duty of safekeeping
Section 967Duty to deliver
Section 968Extent of liability
Section 969Surrender to the loser
Section 970Reimbursement of expenses
Section 971Finder’s reward
Section 972Right of retention of the finder
Section 973Acquisition of ownership by the finder
Section 974Acquisition of ownership after concealment
Section 975Rights of the finder after delivery
Section 976Acquisition of ownership by the municipality
Section 977Claim in enrichment
Section 978Finding in public authority or transport agency
Section 979Sale; authorisation to issue an ordinance
Section 980Notice by publication of the finding
Section 981Receipt of the proceeds of auction
Section 982Provisions for implementation
Section 983Undeliverable things in the possession of authorities
Section 984Treasure trove
Title 4
Claims arising from ownership
Section 985Claim to surrender
Section 986Objections of the possessor
Section 987Emoluments after litigation is pending
Section 988Emoluments of the possessor who makes no payment
Section 989Damages after litigation is pending
Section 990Liability of possessor with knowledge
Section 991Liability of intermediary possessor in the case of indirect possession
Section 992Liability of the wrongful possessor
Section 993Liability of the possessor in good faith
Section 994Necessary outlays
Section 995Charges
Section 996Useful outlays
Section 997Right of removal
Section 998Farming costs for agricultural plot of land
Section 999Reimbursement of outlays of the predecessor in title
Section 1000Right of retention of the possessor
Section 1001Action for reimbursement of outlays
Section 1002Extinction of the claim for outlays
Section 1003Right to satisfaction of the possessor
Section 1004Claim for removal and injunction
Section 1005Right of pursuit
Section 1006Presumption of ownership for possessor
Section 1007Claims of the former possessor, exclusion in the case of knowledge
Title 5
Co-ownership
Section 1008Co-ownership by fractional shares
Section 1009Encumbrance to the benefit of a co-owner
Section 1010Successor in interest of a co-owner
Section 1011Claims arising from co-ownership
Sections 1012 - 1017(repealed)
Division 4
Servitudes
Title 1
Easements
Section 1018Statutory definition of easement
Section 1019Benefit of the dominant plot of land
Section 1020Considerate use
Section 1021Agreed duty of maintenance
Section 1022Installations on building structures
Section 1023Moving the use
Section 1024Coincidence of more than one right of use
Section 1025Division of the dominant plot of land
Section 1026Division of the servient plot of land
Section 1027Interference with easement
Section 1028Limitation
Section 1029Protection of possession of the lawful possessor
Title 2
Usufruct
Subtitle 1
Usufruct in things
Section 1030Statutory definition of usufruct in things
Section 1031Application to accessories
Section 1032Creation of usufruct in movable things
Section 1033Acquisition by prescription
Section 1034Determination of the condition
Section 1035Usufruct in aggregate of things; list
Section 1036Right of possession; exercise of usufruct
Section 1037Transformation
Section 1038Economic plan for forests and mines
Section 1039Excessive taking of fruits
Section 1040Treasure
Section 1041Upkeep of the thing
Section 1042Duty of notification by the usufructuary
Section 1043Repair or replacement
Section 1044Toleration of repairs
Section 1045Obligation of the usufructuary to insure
Section 1046Usufruct in an insurance claim
Section 1047Bearing of charges
Section 1048Usufruct in plot of land with inventory
Section 1049Reimbursement of outlays
Section 1050Wear and tear
Section 1051Provision of security
Section 1052Judicial administration in the absence of security
Section 1053Application for a prohibitory injunction in the case of unauthorised use
Section 1054Judicial administration on the basis of breach of duty
Section 1055Duty of return of the usufructuary
Section 1056Leases and usufructuary leases at the end of the usufruct
Section 1057Limitation of compensation claims
Section 1058Grantor as owner
Section 1059Non-transferability; ceding the exercise
Section 1059aTransferability in the case of a legal person or of a partnership having legal personality
Section 1059bNon-distrainability
Section 1059cDevolution or transfer of usufruct
Section 1059dLeases and usufructuary leases on the transfer of the usufruct
Section 1059eClaim to grant of the usufruct
Section 1060Coincidence of more than one right of use
Section 1061Death of the usufructuary
Section 1062Extension of cancellation to accessories
Section 1063Coincidence with ownership
Section 1064Cancellation of usufruct in movable things
Section 1065Adverse effect on right of usufruct
Section 1066Usufruct in the share of a co-owner
Section 1067Usufruct in consumable things
Subtitle 2
Usufruct in rights
Section 1068Statutory definition of usufruct in rights
Section 1069Creation
Section 1070Usufruct in a right to performance
Section 1071Cancellation or alteration of the encumbered right
Section 1072Termination of usufruct
Section 1073Usufruct in a life annuity
Section 1074Usufruct in a claim; notice and collection
Section 1075Effect of performance
Section 1076Usufruct in claim bearing interest
Section 1077Notice of termination and payment
Section 1078Cooperation in collection
Section 1079Investment of the capital
Section 1080Usufruct in a land charge or annuity land charge
Section 1081Usufruct in bearer instruments or instruments made out to order
Section 1082Deposit
Section 1083Cooperation in collection
Section 1084Consumable things
Subtitle 3
Usufruct in assets
Section 1085Creation of usufruct in assets
Section 1086Rights of the creditors of the grantor
Section 1087Relationship between usufructuary and grantor
Section 1088Liability of the usufructuary
Section 1089Usufruct in an inheritance
Title 3
Restricted personal easements
Section 1090Statutory definition of the restricted personal easement
Section 1091Scope
Section 1092Non-transferability; ceding the exercise
Section 1093Right of residence
Division 5
Right of preemption
Section 1094Statutory contents of the in-rem right of preemption
Section 1095Encumbrance of a fraction
Section 1096Application to accessories
Section 1097Creation for one or more cases of sale
Section 1098Effect of a right of preemption
Section 1099Notifications
Section 1100Rights of the purchaser
Section 1101Release of the person entitled
Section 1102Release of the purchaser
Section 1103Subjective in-rem right of preemption and personal right of preemption
Section 1104Exclusion of unknown entitled persons
Division 6
Charges on land
Section 1105Statutory contents of the charge on land
Section 1106Encumbrance of a fraction
Section 1107Individual payments
Section 1108Personal liability of the owner
Section 1109Division of the dominant plot of land
Section 1110Subjective in-rem charge on land
Section 1111Personal charge on land
Section 1112Exclusion of unknown entitled persons
Division 7
Mortgage, land charge, annuity land charge
Title 1
Mortgage
Section 1113Statutory contents of the mortgage
Section 1114Encumbrance of a fraction
Section 1115Entry of the mortgage
Section 1116Certificated and uncertificated mortgage
Section 1117Acquisition of the certificated mortgage
Section 1118Liability for incidental claims
Section 1119Extension of liability for interest
Section 1120Extension to products, parts and accessories
Section 1121Release from liability through alienation and removal
Section 1122Release from liability without alienation
Section 1123Extension to claim for rent or for usufructuary rent
Section 1124Advance disposition over the rent or usufructuary rent
Section 1125Set-off against rent or usufructuary rent
Section 1126Extension to recurring acts of performance
Section 1127Extension to insurance claim
Section 1128Insurance on buildings
Section 1129Other insurance against damage
Section 1130Replacement clause
Section 1131Addition of a plot of land
Section 1132Blanket mortgage
Section 1133Danger to the security of the mortgage
Section 1134Application for an injunction
Section 1135Deterioration of accessories
Section 1136Restraint on disposition by legal transaction
Section 1137Defences of the owner
Section 1138Presumption of legal force of the contents of the Land Register
Section 1139Objection with regard to an uncertificated mortgage for a loan
Section 1140Mortgage certificate and inaccuracy of the Land Register
Section 1141Notice of termination of the mortgage
Section 1142Owner’s right to provide satisfaction
Section 1143Devolution of claim
Section 1144Handover of documents
Section 1145Partial satisfaction
Section 1146Default interest
Section 1147Satisfaction by compulsory enforcement
Section 1148Fiction of ownership
Section 1149Prohibited agreements on satisfaction
Section 1150Right of redemption of third parties
Section 1151Change of priority for partial mortgages
Section 1152Partial mortgage certificate
Section 1153Transfer of mortgage and claim
Section 1154Assignment of the claim
Section 1155Presumption of legal force of certified declarations of assignment
Section 1156Legal relationship between the owner and the new creditor
Section 1157Continuation of defences against the mortgage
Section 1158Future collateral performance
Section 1159Arrears of collateral performance
Section 1160Enforcement of a certificated mortgage
Section 1161Enforcement of the claim
Section 1162Judicial call with regard to the mortgage certificate
Section 1163Owner mortgage
Section 1164Devolution of the mortgage to the debtor
Section 1165Discharge of the debtor
Section 1166Notification of the debtor
Section 1167Delivery of correction documents
Section 1168Waiver of the mortgage
Section 1169Defence with a negative effect on a right
Section 1170Exclusion of unknown creditors
Section 1171Exclusion by deposit
Section 1172Owner blanket mortgage
Section 1173Satisfaction by one of the owners
Section 1174Satisfaction by the personal debtor
Section 1175Waiver of the blanket mortgage
Section 1176Owner partial mortgage; conflict clause
Section 1177Owner land charge, owner mortgage
Section 1178Mortgage for collateral performance and costs
Section 1179Priority notice of right to deletion
Section 1179aClaim to deletion in the case of third party rights
Section 1179bClaim to deletion based on one’s own right
Section 1180Substitution for the claim
Section 1181Extinction by satisfaction from the plot of land
Section 1182Transfer in the case of satisfaction from the blanket mortgage
Section 1183Cancellation of the mortgage
Section 1184Debt-securing mortgage
Section 1185Uncertificated mortgage; inapplicable provisions
Section 1186Permitted conversions
Section 1187Debt-securing mortgage for bearer instruments and instruments made out to order
Section 1188Special provision for bearer bonds
Section 1189Appointment of a Land Register representative
Section 1190Maximum amount mortgage
Title 2
Land charge, annuity land charge
Subtitle 1
Land charge
Section 1191Statutory contents of the land charge
Section 1192Applicable provisions
Section 1193Termination
Section 1194Place of payment
Section 1195Bearer land charge
Section 1196Owner land charge
Section 1197Deviations from third party land charge
Section 1198Permitted conversions
Subtitle 2
Annuity land charge
Section 1199Statutory contents of the annuity land charge
Section 1200Applicable provisions
Section 1201Right of redemption
Section 1202Termination
Section 1203Permitted conversions
Division 8
Pledge of movable things and over rights
Title 1
Pledge of movable things
Section 1204Statutory contents of the pledge of movable things
Section 1205Creation
Section 1206Replacement of delivery by granting joint possession
Section 1207Pledging by an unauthorised person
Section 1208Acquisition of priority of rank in good faith
Section 1209Priority of the pledge
Section 1210Extent of liability of the pledge
Section 1211Defences of the pledgor
Section 1212Extension to separated products
Section 1213Pledge of emoluments
Section 1214Duties of the pledgee entitled to emoluments
Section 1215Duty of safekeeping
Section 1216Reimbursement of outlays
Section 1217Violation of rights by the pledgee
Section 1218Rights of the pledgor in the case of imminent spoilage
Section 1219Rights of the pledgee in the case of imminent spoilage
Section 1220Warning of auction
Section 1221Sale by private agreement
Section 1222Pledge of more than one thing
Section 1223Duty to return the pledged item; right to redeem the pledged item
Section 1224Satisfaction by deposit or set-off
Section 1225Devolution of claim to the pledgor
Section 1226Limitation of compensation claims
Section 1227Protection of the pledge
Section 1228Satisfaction by sale of the pledged item
Section 1229Prohibition of a forfeiture agreement
Section 1230Selection of pledged item from more than one pledged item
Section 1231Surrender of pledged item for sale
Section 1232Lower-ranking pledgees
Section 1233Execution of the sale
Section 1234Warning of sale; waiting period
Section 1235Public auction
Section 1236Place of auction
Section 1237Notice by publication
Section 1238Conditions of sale
Section 1239Bidding by creditor and owner
Section 1240Things made of gold or silver
Section 1241Notification of the owner
Section 1242Effects of the lawful alienation
Section 1243Unlawful alienation
Section 1244Acquisition in good faith
Section 1245Deviating agreements
Section 1246Deviation for reasons of equity
Section 1247Proceeds of the pledged item
Section 1248Presumption of ownership
Section 1249Right of redemption
Section 1250Transfer of claim
Section 1251Effect of the devolution of the pledge
Section 1252Extinction with the claim
Section 1253Extinction by return
Section 1254Claim for return
Section 1255Cancellation of the pledge
Section 1256Coincidence of pledge and ownership
Section 1257Pledge by operation of law
Section 1258Pledge of the share of a co-owner
Section 1259Realisation of a commercial pledged item
Sections 1260 - 1272(repealed)
Title 2
Pledge of rights
Section 1273Statutory contents of the pledge of rights
Section 1274Creation
Section 1275Pledge of right to performance
Section 1276Cancellation or alteration of the pledged right
Section 1277Satisfaction by compulsory enforcement
Section 1278Extinction by return
Section 1279Pledge of a claim
Section 1280Notification of the debtor
Section 1281Performance before the due date
Section 1282Performance after the due date
Section 1283Termination
Section 1284Deviating agreements
Section 1285Cooperation in collection
Section 1286Duty of termination in the case of danger
Section 1287Effect of performance
Section 1288Investment of collected money
Section 1289Extension to the interest
Section 1290Collection in the case of multiple pledges
Section 1291Pledge of land charge or annuity land charge
Section 1292Pledging of instruments made out to order
Section 1293Pledge of bearer instruments
Section 1294Collection and notice of termination
Section 1295Private sale of instruments made out to order
Section 1296Extension to interest coupons
Book 4
Family law
Division 1
Civil marriage
Title 1
Engagement
Section 1297No petition for a marriage to be entered into, nullity of a promise to pay a penalty
Section 1298Duty of compensation in the case of withdrawal
Section 1299Withdrawal by reason of fault of the other party
Section 1300(repealed)
Section 1301Return of the presents
Section 1302Limitation
Title 2
Entering into marriage
Subtitle 1
Capacity to marry
Section 1303Marriageable age
Section 1304Incapacity to contract
Section 1305(repealed)
Subtitle 2
Impediments to marriage
Section 1306Existing marriage or life partnership
Section 1307Relationship by blood
Section 1308Adoption
Subtitle 3
Certificate of no impediment
Section 1309Certificate of no impediment for foreigners
Subtitle 4
Marriage
Section 1310Competence of the registrar of births, deaths and marriages, curing defective marriages
Section 1311Personal declaration
Section 1312Marriage ceremony
Title 3
Annulment of marriage
Section 1313Annulment by judicial decision
Section 1314Grounds of annulment
Section 1315Exclusion of annulment
Section 1316Entitlement to petition
Section 1317Period for filing the petition
Section 1318Consequences of annulment
Title 4
Remarriage after declaration of death
Section 1319Annulment of the previous marriage
Section 1320Annulment of the new marriage
Sections 1321 - 1352(repealed)
Title 5
Effects of marriage in general
Section 1353Conjugal union
Section 1354(repealed)
Section 1355Family name
Section 1356Household management, gainful employment
Section 1357Transactions to provide the necessities of life
Section 1358(repealed)
Section 1359Scope of duty of care
Section 1360Duty of family maintenance
Section 1360aScope of the obligation to maintain
Section 1360bOverpayment
Section 1361Maintenance when spouses are living apart
Section 1361aAllocation of household effects when spouses are living apart
Section 1361bMatrimonial residence when spouses are living apart
Section 1362Presumption of ownership
Title 6
Matrimonial property regime
Subtitle 1
Statutory property regime
Section 1363Community of accrued gains
Section 1364Management of assets
Section 1365Disposition over assets as a whole
Section 1366Ratification of contracts
Section 1367Unilateral legal transactions
Section 1368Asserting the ineffectiveness
Section 1369Dispositions over household objects
Section 1370(repealed)
Section 1371Equalisation of accrued gains in the case of death
Section 1372Equalisation of accrued gains in other cases
Section 1373Accrued gains
Section 1374Initial assets
Section 1375Final assets
Section 1376Ascertainment of the value of the initial and final assets
Section 1377List of initial assets
Section 1378Equalisation claim
Section 1379Duty of information
Section 1380Set-off of advancements
Section 1381Refusal of satisfaction for gross inequity
Section 1382Deferment
Section 1383Transfer of assets
Section 1384Cut-off date for computing the accrued gains and the amount of the equalisation claim in the case of divorce
Section 1385Premature equalisation of accrued gains of the spouse entitled to an equalisation claim in case of premature cancellation of the community of accrued gains
Section 1386Premature suspension of the community of accrued gains
Section 1387Cut-off date for computing the accrued gains and amount of the equalisation claim in the case of premature equalisation or premature suspension
Section 1388Occurrence of separation of property
Section 1389(repealed)
Section 1390Claims against third parties of the person entitled to equalisation
Sections 1391 - 1407(repealed)
Subtitle 2
Contractual property regime
Chapter 1
General provisions
Section 1408Marriage contract, freedom of contract
Section 1409Restriction of freedom of contract
Section 1410Form
Section 1411Marriage contracts of persons placed under the care of a custodian
Section 1412Effect in relation to third parties
Section 1413Revocation of permission to manage assets
Chapter 2
Separation of property
Section 1414Commencement of separation of property
Chapter 3
Community of property
Subchapter 1
General provisions
Section 1415Agreement by marriage contract
Section 1416Common matrimonial property
Section 1417Separate property
Section 1418Reserved property
Section 1419Joint ownership
Section 1420Use for maintenance
Section 1421Management of the common matrimonial property
Subchapter 2
Management of the common matrimonial property by one spouse
Section 1422Subject matter of right of management
Section 1423Disposition over the common matrimonial property as a whole
Section 1424Disposition over plots of land, ships or ships under construction
Section 1425Donations
Section 1426Substitution of the approval of the other spouse
Section 1427Legal consequences of lack of consent
Section 1428Dispositions without approval
Section 1429Emergency right of management
Section 1430Substitution of the approval of the managing spouse
Section 1431Independent trade or business
Section 1432Acceptance of an inheritance; refusal of offer to enter into contract or of donation
Section 1433Continuation of a legal dispute
Section 1434Unjust enrichment of the common matrimonial property
Section 1435Duties of the managing spouse
Section 1436Managing spouse under custodianship
Section 1437Obligations of the common matrimonial property; personal liability
Section 1438Liability of the common matrimonial property
Section 1439No liability on acquisition of an inheritance
Section 1440Liability for reserved or separate property
Section 1441Liability as between the spouses
Section 1442Obligations of the separate property and of a trade or business
Section 1443Costs of litigation
Section 1444Costs of the advancement of a child
Section 1445Equalisation between reserved property, separate property and common matrimonial property
Section 1446Due date of the equalisation claim
Section 1447Petition of the non-managing spouse for termination
Section 1448Petition of the managing spouse for termination
Section 1449Effect of the judicial termination decision
Subchapter 3
Joint management of the common matrimonial property by the spouses
Section 1450Joint management by the spouses
Section 1451Duty of both spouses to cooperate
Section 1452Substitution of approval
Section 1453Disposition without consent
Section 1454Emergency right of management
Section 1455Acts of management without the cooperation of the other spouse
Section 1456Independent trade or business
Section 1457Unjust enrichment of the common matrimonial property
Section 1458(repealed)
Section 1459Obligations of the common matrimonial property; personal liability
Section 1460Liability of the common matrimonial property
Section 1461No liability on acquisition of an inheritance
Section 1462Liability for reserved or separate property
Section 1463Liability as between the spouses
Section 1464Obligations of the separate property and of a trade or business
Section 1465Costs of litigation
Section 1466Costs of the advancement of a child that is not a child of the spouses
Section 1467Equalisation between reserved property, separate property and common matrimonial property
Section 1468Due date of the equalisation claim
Section 1469Petition for termination
Section 1470Effect of the judicial termination decision
Subchapter 4
Partitioning of the common matrimonial property
Section 1471Beginning of the partitioning
Section 1472Joint management of the common matrimonial property
Section 1473Direct substitution
Section 1474Implementation of the partitioning
Section 1475Discharge of the obligations of the common matrimonial property
Section 1476Division of the surplus
Section 1477Implementation of the division
Section 1478Partitioning after divorce
Section 1479Partitioning after judicial termination decision
Section 1480Liability to third parties after the division
Section 1481Liability of the spouses to each other
Section 1482Dissolution of marriage by death
Subchapter 5
Continued community of property
Section 1483Occurrence of continued community of property
Section 1484Refusal of continued community of property
Section 1485Common matrimonial property
Section 1486Reserved property; separate property
Section 1487Legal position of the spouse and the descendants
Section 1488Obligations of the common matrimonial property
Section 1489Personal liability for the obligations of the common matrimonial property
Section 1490Death of a descendant
Section 1491Waiver by a descendant
Section 1492Termination by the surviving spouse
Section 1493Remarriage or establishment of a life partnership by the surviving spouse
Section 1494Death of the surviving spouse
Section 1495Petition of a descendant for termination
Section 1496Effect of the judicial termination decision
Section 1497Legal relationship until partitioning
Section 1498Implementation of the partitioning
Section 1499Obligations borne by the surviving spouse
Section 1500Obligations borne by the descendants
Section 1501Set-off of lump sum payments
Section 1502Right of surviving spouse to assume assets
Section 1503Division among the descendants
Section 1504Adjustment of liability between descendants
Section 1505Supplementation of the share of a descendant
Section 1506Unworthiness to receive a share
Section 1507Certificate on continuation of the community of property
Section 1508(repealed)
Section 1509Exclusion of the continued community of property by testamentary disposition
Section 1510Effect of exclusion
Section 1511Exclusion of a descendant
Section 1512Reduction of the share
Section 1513Deprivation of the share
Section 1514Disposition of the amount withheld
Section 1515Right of a descendant and of the spouse to assume assets
Section 1516Approval of the other spouse
Section 1517Waiver of their share by a descendant
Section 1518Mandatory law
Chapter 4
Optional Regime of the Community of Accrued Gains
Section 1519Agreement by marriage contract
Section 1520 to 1557(repealed)
Subtitle 3
Matrimonial property register
Section 1558Competent court of registration
Section 1559Change of habitual residence
Section 1560Application for entry
Section 1561Requirements for application
Section 1562Notice by publication
Section 1563Inspection of the register; application of Regulation (EU) 2016/679 in registry proceedings
Title 7
Divorce
Subtitle 1
Grounds of divorce
Section 1564Divorce by judicial decision
Section 1565Breakdown of marriage
Section 1566Presumption of breakdown
Section 1567Living apart
Section 1568Hardship clause
Subtitle 1a
Treatment of the matrimonial residence and of the household objects on the occasion of divorce
Section 1568aMatrimonial residence
Section 1568bHousehold objects
Subtitle 2
Maintenance of the divorced spouse
Chapter 1
Principle
Section 1569Principle of personal responsibility
Chapter 2
Entitlement to maintenance
Section 1570Maintenance to care for a child
Section 1571Maintenance by reason of old age
Section 1572Maintenance for illness or infirmity
Section 1573Maintenance for unemployment and topping-up maintenance
Section 1574Appropriate gainful employment
Section 1575Training, further training or retraining
Section 1576Maintenance for reasons of equity
Section 1577Indigence
Section 1578Amount of maintenance
Section 1578aPresumption of cover in the case of additional expenditure resulting from injury
Section 1578bReduction and time limitation of maintenance on grounds of inequity
Section 1579Restriction or refusal of maintenance for gross inequity
Section 1580Duty of information
Chapter 3
Ability to pay and priority
Section 1581Ability to pay
Section 1582Priority of the divorced spouse where more than one person is entitled to maintenance
Section 1583Influence of the matrimonial property regime
Section 1584Priority of more than one person liable for maintenance
Chapter 4
Form of the maintenance claim
Section 1585Nature of maintenance payment
Section 1585aProvision of security
Section 1585bMaintenance for the past
Section 1585cAgreements on maintenance
Chapter 5
End of the maintenance claim
Section 1586Remarriage, establishment of a life partnership or death of the person entitled
Section 1586aRevival of the maintenance claim
Section 1586bObligation not extinguished on death of the person obliged
Subtitle 3
Equalisation of pension rights
Section 1587Reference to the Equalisation of Pension Rights Act (Versorgungsausgleichsgesetz)
Title 8
Church duties
Section 1588(no heading)
Division 2
Relationship
Title 1
General provisions
Section 1589Relationship by blood
Section 1590Relationship by marriage
Title 2
Descent
Section 1591Maternity
Section 1592Paternity
Section 1593Paternity in the case of dissolution of the marriage by death
Section 1594Acknowledgement of paternity
Section 1595Need for approval of the acknowledgement
Section 1596Acknowledgement and approval in the case of lack of capacity to contract or limited capacity to contract
Section 1597Formal requirements; revocation
Section 1597aProhibition of wrongful acknowledgment of paternity
Section 1598Ineffectiveness of acknowledgement, approval and revocation
Section 1598aClaim to consent to a genetic examination to clarify natural parentage
Section 1599Non-existence of paternity
Section 1600Persons entitled to contest
Section 1600aPersonal contestation; contestation in the case of lack of capacity to contract or limited capacity to contract
Section 1600bContestation periods
Section 1600cPresumption of paternity in contestation proceedings
Section 1600dCourt determination of paternity
Title 3
Obligation to maintain
Subtitle 1
General provisions
Section 1601Persons with an obligation to maintain
Section 1602Indigence
Section 1603Ability to pay
Section 1604Influence of the matrimonial property regime
Section 1605Duty of information
Section 1606Order of priority of more than one person obliged
Section 1607Substituted liability and statutory devolution of claim
Section 1608Liability of the spouse or life partner
Section 1609Priority of more than person entitled to maintenance
Section 1610Amount of maintenance
Section 1610aPresumption of cover in the case of additional expenditure resulting from injury
Section 1611Restriction or end of obligation
Section 1612Nature of maintenance payment
Section 1612aMinimum maintenance of minor children; authorisation to issue statutory instruments
Section 1612bMeeting cash requirements through child benefit
Section 1612cSet-off of other child-related payments
Section 1613Maintenance for the past
Section 1614Waiver of maintenance claim; advance performance
Section 1615Extinction of the maintenance claim
Subtitle 2
Special provisions for the child and its parents who are not married to each other
Section 1615aApplicable provisions
Sections 1615b to 1615k(repealed)
Section 1615lMaintenance claim of mother and father by reason of the birth
Section 1615mFuneral costs for the mother
Section 1615nNo expiry on the death of the father or stillbirth
Title 4
Legal relationship between the parents and the child in general
Section 1616Birth name in the case of parents with family name
Section 1617Birth name in the case of parents without family name and with joint parental custody
Section 1617aBirth name in the case of parents without family name and with sole parental custody
Section 1617bName in the case of subsequent joint parental custody or ostensible paternity
Section 1617cName in the case of change of name by the parents
Section 1618Bringing a child under a family name
Section 1618aDuty of assistance and respect
Section 1619Services in house and business
Section 1620Outlays of the child for the household of its parents
Sections 1621 - 1623(repealed)
Section 1624Advancement from the parental assets
Section 1625Advancement from the assets of the child
Title 5
Parental custody
Section 1626Parental custody, principles
Section 1626aParental custody of parents who are not married to one another; declarations of parental custody
Section 1626bSpecial prerequisites for the effectiveness of the declaration of parental custody
Section 1626cDeclaring in person; parent with limited capacity to contract
Section 1626dForm; duty of notification
Section 1626eIneffectiveness
Section 1627Exercise of parental custody
Section 1628Court decision in the case of differences of opinion between the parents
Section 1629Representation of the child
Section 1629aRestriction of liability of minors
Section 1630Parental custody in the case of appointment of a curator or of foster care
Section 1631Contents and limits of care for the person of the child
Section 1631aTraining and profession
Section 1631bPlacement involving deprivation of liberty and measures involving deprivation of liberty
Section 1631cProhibition of sterilisation
Section 1631dCircumcision of the male child
Section 1631eTreatment of children with variants of sexual development
Section 1632Surrender of the child; determination of contact; order that child remains in foster care
Section 1633(repealed)
Sections 1634 - 1637(repealed)
Section 1638Restriction of care for the assets of the child
Section 1639Directions of the testator or donor
Section 1640Inventory of assets
Section 1641Prohibition of donation
Section 1642Investment of money
Section 1643Legal transactions subject to approval
Section 1644Making available assets to the child
Section 1645New trade or business
Section 1646Acquisition with funds of the child
Section 1647(repealed)
Section 1648Reimbursement of outlays
Section 1649Use of the income from the assets of the child
Sections 1650 - 1663(repealed)
Section 1664Limited liability of the parents
Section 1665(repealed)
Section 1666Court measures in the case of endangerment of the best interests of the child
Section 1666aPrinciple of proportionality; priority of public support measures
Section 1667Court measures in the case of endangerment of the assets of the child
Sections 1668 - 1670(repealed)
Section 1671Transfer of sole custody where the parents live apart
Section 1672(repealed)
Section 1673Suspension of parental custody in the case of a legal impediment
Section 1674Suspension of parental custody in the case of a factual impediment
Section 1674aSuspension of the mother’s parental custody for a child delivered by confidential birth
Section 1675Effect of the suspension
Section 1676(repealed)
Section 1677Termination of parental custody by declaration of death
Section 1678Consequences for the other parent of the actual prevention or of the suspension
Section 1679(repealed)
Section 1680Death of a parent or removal of the parental custody
Section 1681Declaration of death of a parent
Section 1682Order that the child remains with persons to whom it relates
Section 1683(repealed)
Section 1684Contact of the child with its parents
Section 1685Contact of the child with other persons to whom it relates
Section 1686Information on the personal circumstances of the child
Section 1686aRights of the biological but not legal father
Section 1687Exercise of joint parental custody when the parents live apart
Section 1687aPower to make decision of the parent without parental custody
Section 1687bParental custody powers of the spouse
Section 1688Decisions of the foster carer
Sections 1689 - 1692(repealed)
Section 1693Court measures where the parents are prevented
Sections 1694, 1695(repealed)
Section 1696Amendment of judicial decisions and of court-approved settlements
Section 1697(repealed)
Section 1697aPrinciple of best interests of child
Section 1698Surrender of the assets of the child; rendering accounts
Section 1698aContinuation of transactions in ignorance that parental custody has ended
Section 1698bContinuation of urgent transactions after the death of the child
Sections 1699 - 1711(repealed)
Title 6
Legal advisership
Section 1712Youth welfare office as legal adviser; tasks
Section 1713Persons entitled to apply
Section 1714Occurrence of legal advisership
Section 1715Termination of legal advisership
Section 1716Effects of legal advisership
Section 1717Requirement of habitual residence on domestic territory
Sections 1718 - 1740(repealed)
Title 7
Adoption
Subtitle 1
Adoption of minors
Section 1741Admissibility of the adoption
Section 1742Adoption only as child of the spouses
Section 1743Minimum age
Section 1744Probationary period
Section 1745Prohibition of adoption
Section 1746Consent of the child
Section 1747Consent of the parents of the child
Section 1748Substitution of the consent of a parent
Section 1749Consent of the spouse
Section 1750Declaration of consent
Section 1751Effect of parental consent, maintenance obligation
Section 1752Order of the family court, application
Section 1753Adoption after death
Section 1754Effect of adoption
Section 1755Extinction of relationships
Section 1756Continuation of relationships
Section 1757Name of the child
Section 1758Prohibition on disclosure and exploratory questioning
Section 1759Cancellation of the adoption relationship
Section 1760Setting aside for lack of declarations
Section 1761Impediments preventing cancellation
Section 1762Entitlement to apply; period for filing application, form
Section 1763Cancellation by the court of its own motion
Section 1764Effect of cancellation
Section 1765Name of the child after the cancellation
Section 1766Marriage between adoptive parent and child
Section 1766aAdoption of children of a partner who is not a spouse
Subtitle 2
Adoption of persons of full age
Section 1767Admissibility of adoption, applicable provisions
Section 1768Application
Section 1769Prohibition of adoption
Section 1770Effect of adoption
Section 1771Cancellation of the adoption relationship
Section 1772Adoption with the effects of the adoption of a minor
Division 3
Guardianship, legal curatorship, custodianship
Title 1
Guardianship
Subtitle 1
Creation of guardianship
Section 1773Prerequisites
Section 1774Order by the court of its own motion
Section 1775More than one guardian
Section 1776Right of the parents to name the guardian
Section 1777Prerequisites for the right to name the guardian
Section 1778Passing over the guardian named
Section 1779Selection by the family court
Section 1780Lack of capacity to be a guardian
Section 1781Unsuitability to be a guardian
Section 1782Exclusion by the parents
Section 1783(repealed)
Section 1784Official or church officer as guardian
Section 1785Duty to assume guardianship
Section 1786Right to refuse
Section 1787Consequences of unjustified refusal
Section 1788Coercive fine
Section 1789Appointment by the family court
Section 1790Appointment subject to a reservation
Section 1791Certificate of appointment
Section 1791aGuardianship by association
Section 1791bOfficial guardianship of the Youth Welfare Office by appointment
Section 1791cStatutory official guardianship of the Youth Welfare Office
Section 1792Supervisory guardian
Subtitle 2
Conducting of the guardianship
Section 1793Duties of the guardian, liability of the ward
Section 1794Restriction as a result of curatorship
Section 1795Exclusion of power of agency
Section 1796Revocation of power of agency
Section 1797More than one guardian
Section 1798Differences of opinion
Section 1799Duties and rights of the supervisory guardian
Section 1800Scope of care for the person
Section 1801Religious education
Section 1802Inventory of assets
Section 1803Management of assets in the case of inheritance or donation
Section 1804Donations made by the guardian
Section 1805Use for the guardian
Section 1806Investment of money held in trust for a ward
Section 1807Nature of investment
Section 1808(repealed)
Section 1809Investment with blocking note
Section 1810Cooperation of supervisory guardian or family court
Section 1811Other investment
Section 1812Dispositions over claims and securities
Section 1813Transactions not requiring approval
Section 1814Deposit of bearer instruments
Section 1815Change of registration and conversion of bearer instruments
Section 1816Blocking of book-entry securities
Section 1817Exemption
Section 1818Order of deposit
Section 1819Approval in the case of deposit
Section 1820Approval after change of registration and conversion
Section 1821Approval of transactions relating to plots of land, ships or ships under construction
Section 1822Approval for other transactions
Section 1823Approval where the ward has a trade or business
Section 1824Approval for making available objects to the ward for their use
Section 1825General authorisation
Section 1826Hearing of the supervisory guardian before giving the approval
Section 1827(repealed)
Section 1828Pronouncement of approval
Section 1829Subsequent approval
Section 1830Right of revocation of the other party
Section 1831Unilateral legal transaction without approval
Section 1832Ratification by the supervisory guardian
Section 1833Liability of the guardian
Section 1834Duty to pay interest
Section 1835Reimbursement of outlays
Section 1835aReimbursement for expenses
Section 1836Payment of the guardian
Sections 1836a and 1836b(repealed)
Section 1836cFunds to be applied by the ward
Section 1836dDestitution of the ward
Section 1836eStatutory devolution of claim
Subtitle 3
Care and supervision of the family court
Section 1837Advice and supervision
Section 1838(repealed)
Section 1839Duty of information of the guardian
Section 1840Report and rendering of account
Section 1841Contents of the accounts rendered
Section 1842Cooperation of the supervisory guardian
Section 1843Examination by the family court
Section 1844(repealed)
Section 1845(repealed)
Section 1846Interim measures of the family court
Section 1847Hearing of the relatives
Section 1848(repealed)
Subtitle 4
Cooperation of the Youth Welfare Office
Sections 1849, 1850(repealed)
Section 1851Duties of notification
Subtitle 5
Exempted guardianship
Section 1852Exemption by the father
Section 1853Exemption from deposit and blocking
Section 1854Exemption from duty to render accounts
Section 1855Exemption by the mother
Section 1856Prerequisites for exemption
Section 1857Cancellation of the exemption by the family court
Section 1857aExemption of the Youth Welfare Office and the association
Sections 1858 - 1881(repealed)
Subtitle 6
Termination of the guardianship
Section 1882Cessation of the prerequisites
Section 1883(repealed)
Section 1884Ward missing and declaration of death of the ward
Section 1885(repealed)
Section 1886Removal of the sole guardian
Section 1887Removal of the Youth Welfare Office or association
Section 1888Removal of officials and church officers
Section 1889Removal on application by the guardian
Section 1890Surrender of assets and rendering accounts
Section 1891Cooperation of the supervisory guardian
Section 1892Examination and approval of the account
Section 1893Continuation of transactions after the termination of the guardianship, return of certificates
Section 1894Notification on death of the guardian
Section 1895Termination of office of the supervisory guardian
Title 2
Legal custodianship
Section 1896Prerequisites
Section 1897Appointment of a natural person
Section 1898Duty to assume custodianship
Section 1899More than one custodian
Section 1900Custodianship by association or public authority
Section 1901Scope of the custodianship, duties of the custodian
Section 1901aLiving will
Section 1901bDiscussion to ascertain the patient’s will
Section 1901cWishes in writing with regard to custodianship, enduring power of attorney
Section 1902Representation of the person under custodianship
Section 1903Reservation of consent
Section 1904Ratification by the custodianship court in the case of medical treatment
Section 1905Sterilisation
Section 1906Ratification by the custodianship court in the case of placement involving deprivation of liberty and in the case of measures involving deprivation of liberty
Section 1906aRatification by the custodianship court in the case of coercive measures by physicians
Section 1907Ratification by the custodianship court in the case of the abandonment of rented residence
Section 1908Ratification by the custodianship court with regard to advancement
Section 1908aPrecautionary appointment of a custodian and order of reservation of consent for minors
Section 1908bRemoval of the custodian
Section 1908cAppointment of a new custodian
Section 1908dCancellation or alteration of custodianship and reservation of consent
Section 1908e(repealed)
Section 1908fRecognition as custodianship association
Section 1908gPublic authority custodian
Section 1908h(repealed)
Section 1908iProvisions applicable accordingly
Section 1908k(repealed)
Title 3
Curatorship
Section 1909Supplementary curatorship
Section 1910(repealed)
Section 1911Curatorship of absentees
Section 1912Curatorship for an unborn child
Section 1913Curatorship for unknown persons involved
Section 1914Curatorship for collected assets
Section 1915Application of guardianship law
Section 1916Designation as supplementary curator
Section 1917Naming of the supplementary curator by testator and third parties
Section 1918Termination of the curatorship by operation of law
Section 1919Cancellation of the curatorship on cessation of reason
Section 1920(repealed)
Section 1921Cancellation of the curatorship of absentees
Book 5
Law of succession
Division 1
Succession
Section 1922Universal succession
Section 1923Capacity to inherit
Section 1924Heirs on intestacy of the first degree
Section 1925Heirs on intestacy of the second degree
Section 1926Heirs on intestacy of the third degree
Section 1927More than one share of the inheritance in the case of multiple relationship
Section 1928Heirs on intestacy of the fourth degree
Section 1929More distant degrees
Section 1930Priority of the degrees
Section 1931Right of intestate succession of the spouse
Section 1932Preferential benefit of the spouse
Section 1933Exclusion of the right of succession of the spouse
Section 1934Right of succession of spouse who is a relative
Section 1935Consequences of increase of share of the inheritance
Section 1936Right of intestate succession of the State
Section 1937Appointment of heir by testamentary disposition
Section 1938Disinheritance without appointment of an heir
Section 1939Legacy
Section 1940Testamentary burden
Section 1941Contract of inheritance
Division 2
Legal position of the heir
Title 1
Acceptance and disclaimer of the inheritance; supervision of the probate court
Section 1942Devolution and disclaimer of the inheritance
Section 1943Acceptance and disclaimer of the inheritance
Section 1944Period for disclaimer
Section 1945Form of disclaimer
Section 1946Date for acceptance or disclaimer
Section 1947Condition and stipulation as to time
Section 1948More than one ground of entitlement
Section 1949Mistake as to the ground of entitlement
Section 1950Partial acceptance; partial disclaimer
Section 1951More than one share of the inheritance
Section 1952Inheritability of the right of disclaimer
Section 1953Effect of disclaimer
Section 1954Period of avoidance
Section 1955Form of avoidance
Section 1956Avoidance of failure to disclaim in good time
Section 1957Effect of avoidance
Section 1958Judicial assertion of claims against the heir
Section 1959Management before the disclaimer
Section 1960Securing the estate; curator of the estate
Section 1961Curatorship of the estate on application
Section 1962Jurisdiction of the probate court
Section 1963Maintenance for the mother-to-be of an heir
Section 1964Presumption that the treasury is heir
Section 1965Public invitation to register the rights of succession
Section 1966Legal position of the treasury before determination
Title 2
Liability of the heir for the obligations of the estate
Subtitle 1
Obligations of the estate
Section 1967Liability of heir, obligations of the estate
Section 1968Costs of funeral
Section 1969Maintenance for 30 days
Subtitle 2
Judicial call for the creditors of the estate
Section 1970Notification of the claims
Section 1971Creditors not affected
Section 1972Rights not affected
Section 1973Exclusion of creditors of the estate
Section 1974Defence of withheld information
Subtitle 3
Restriction of the liability of the heir
Section 1975Administration of estate; estate insolvency
Section 1976Effect on legal relationships extinguished by merger
Section 1977Effect on a set-off
Section 1978Responsibility of the heir for previous administration, reimbursement of expenses
Section 1979Discharge of obligations of the estate
Section 1980Application for opening of estate insolvency proceedings
Section 1981Order of administration of the estate
Section 1982Refusal to order administration of the estate for insufficiency of assets
Section 1983Notice by publication
Section 1984Effect of the order
Section 1985Duties and liability of the administrator of the estate
Section 1986Surrender of the estate
Section 1987Payment of the administrator of the estate
Section 1988End and cancellation of administration of the estate
Section 1989Defence by the heir of exhaustion of assets
Section 1990Defence by the heir as to insufficiency of assets
Section 1991Consequences of defence as to insufficiency of assets
Section 1992Over-indebtedness as a result of legacies and testamentary burdens
Subtitle 4
Filing of an inventory, unlimited liability of the heir
Section 1993Filing of an inventory
Section 1994Inventory period
Section 1995Length of the period
Section 1996Fixing a new period
Section 1997Suspension of the expiry of the period
Section 1998Death of the heir before expiry of the period
Section 1999Notice to the court
Section 2000Ineffectiveness of the fixing of the period
Section 2001Contents of the inventory
Section 2002Preparation of the inventory by the heir
Section 2003Official preparation of the inventory
Section 2004Reference to an existing inventory
Section 2005Unlimited liability of the heir if the inventory is incorrect
Section 2006Declaration in lieu of an oath
Section 2007Liability in the case of more than one share of the inheritance
Section 2008Inventory for an inheritance that is part of common matrimonial property
Section 2009Effect of filing of inventory
Section 2010Inspection of the inventory
Section 2011No inventory period for the treasury as heir
Section 2012No inventory period for the curator and administrator of the estate
Section 2013Consequences of the unlimited liability of the heir
Subtitle 5
Suspensive defences
Section 2014Defence within three months
Section 2015Defence of judicial call procedure
Section 2016Exclusion of defences in the case of unlimited liability of the heir
Section 2017Beginning of the period of time in the case of curatorship of the estate
Title 3
Claim to inheritance
Section 2018Duty to surrender of the possessor of the inheritance
Section 2019Direct substitution
Section 2020Emoluments and fruits
Section 2021Duty to surrender under principles of unjust enrichment
Section 2022Reimbursement of outlays and expenses
Section 2023Liability after litigation is pending and for emoluments and outlays
Section 2024Liability with knowledge
Section 2025Liability in the case of tort
Section 2026No reliance on acquisition by prescription
Section 2027Duty of information of the possessor of the inheritance
Section 2028Duty of information of occupant of house
Section 2029Liability in the case of individual claims by the heir
Section 2030Legal position of the acquirer of the inheritance
Section 2031Claim to surrender of a person declared dead
Title 4
More than one heir
Subtitle 1
Legal relationship of the heirs between themselves
Section 2032Community of heirs
Section 2033Right of disposition of the co-heir
Section 2034Right of preemption as against seller
Section 2035Right of preemption as against buyer
Section 2036Liability of buyer of share of the inheritance
Section 2037Onward alienation of the share of the inheritance
Section 2038Joint management of the estate
Section 2039Estate claims
Section 2040Alienation of objects of the estate, set-off
Section 2041Direct substitution
Section 2042Partitioning
Section 2043Postponement of partitioning
Section 2044Exclusion of partitioning
Section 2045Postponement of partitioning
Section 2046Discharge of obligations of the estate
Section 2047Distribution of the surplus
Section 2048Directions by the deceased for partitioning
Section 2049Taking over of a farm
Section 2050Duty to adjust advancements for descendants as heirs on intestacy
Section 2051Duty to adjust advancements if a descendant does not inherit
Section 2052Duty to adjust advancements for descendants as heirs by will
Section 2053Gift to more remote or adopted descendant
Section 2054Gift from the common matrimonial property
Section 2055Carrying out the adjustment
Section 2056Excess gifts
Section 2057Duty of information
Section 2057aDuty to adjust advancements in the case of special payments by one descendant
Subtitle 2
Legal relationship between the heirs and the creditors of the estate
Section 2058Joint and several liability
Section 2059Liability until division
Section 2060Liability after division
Section 2061Judicial call for the creditors of the estate
Section 2062Application for administration of the estate
Section 2063Filing of an inventory, limitation of liability
Division 3
Will
Title 1
General provisions
Section 2064Made in person
Section 2065Determination by third parties
Section 2066Heirs on intestacy of the testator
Section 2067Relatives of the testator
Section 2068Children of the testator
Section 2069Descendants of the testator
Section 2070Descendants of a third party
Section 2071Group of persons
Section 2072The poor
Section 2073Ambiguous designation
Section 2074Condition precedent
Section 2075Condition subsequent
Section 2076Condition for the benefit of a third party
Section 2077Ineffectiveness of testamentary dispositions on dissolution of marriage or engagement
Section 2078Avoidance for mistake or duress
Section 2079Avoidance for omission of a person entitled to a compulsory portion
Section 2080Person entitled to avoid
Section 2081Declaration of avoidance
Section 2082Period of avoidance
Section 2083Defence of voidability
Section 2084Interpretation favouring effectiveness
Section 2085Partial ineffectiveness
Section 2086Reservation of right to make addition
Title 2
Appointment of heirs
Section 2087Gift of assets, of fraction of assets or of individual objects
Section 2088Appointment to fractions
Section 2089Increase of the fractions
Section 2090Decrease of fractions
Section 2091Undetermined fractions
Section 2092Partial appointment to fractions
Section 2093Joint share of the inheritance
Section 2094Accrual
Section 2095Accrued share of the inheritance
Section 2096Substitute heir
Section 2097Rule of interpretation in the case of substitute heir
Section 2098Mutual appointment as substitute heir
Section 2099Substitute heir and accrual
Title 3
Appointment of a reversionary heir
Section 2100Reversionary heir
Section 2101Reversionary heir not yet conceived
Section 2102Reversionary heir and substitute heir
Section 2103Order to surrender the inheritance
Section 2104Heirs on intestacy as reversionary heirs
Section 2105Heirs on intestacy as provisional heirs
Section 2106Occurrence of reversionary succession
Section 2107Childless provisional heir
Section 2108Capacity to inherit; inheritability of the reversionary succession
Section 2109End of effectiveness of reversionary succession
Section 2110Scope of the right of reversionary succession
Section 2111Direct substitution
Section 2112Right of alienation of the provisional heir
Section 2113Dispositions of plots of land, ships and ships under construction; gifts
Section 2114Dispositions of mortgage claims, land charges and annuity land charges
Section 2115Dispositions of compulsory enforcement against provisional heir
Section 2116Deposit of securities
Section 2117Change of registration; conversion
Section 2118Blocking note in debt ledger
Section 2119Investment of money
Section 2120Duty of reversionary heir to consent
Section 2121List of objects of inheritance
Section 2122Determination of the condition of the inheritance
Section 2123Economic plan
Section 2124Costs of maintenance
Section 2125Outlays; right to remove
Section 2126Extraordinary burdens
Section 2127Right to information of reversionary heir
Section 2128Provision of security
Section 2129Effect of deprivation of management
Section 2130Duty to surrender after the occurrence of reversionary succession, duty to render accounts
Section 2131Scope of duty of care
Section 2132No liability for ordinary wear and tear
Section 2133Improper or excessive taking of fruits
Section 2134Own use
Section 2135Lease and usufructuary lease in reversionary succession
Section 2136Release of the provisional heir
Section 2137Rule of interpretation for the release
Section 2138Restricted duty to surrender
Section 2139Effect of occurrence of reversionary succession
Section 2140Dispositions of the provisional heir after occurrence of reversionary succession
Section 2141Maintenance for the mother-to-be of a reversionary heir
Section 2142Disclaimer of reversionary succession
Section 2143Restoration of extinguished legal relationships
Section 2144Liability of the reversionary heir for the obligations of the estate
Section 2145Liability of the provisional heir for the obligations of the estate
Section 2146Duty of provisional heir to notify creditors of the estate
Title 4
Legacies
Section 2147Person charged with a legacy
Section 2148More than one person charged with a legacy
Section 2149Legacy for heirs on intestacy
Section 2150Preferential legacy
Section 2151Right to decide of the person charged or of a third person in the event of more than one person provided for
Section 2152Choice of persons provided for
Section 2153Determination of shares
Section 2154Optional legacy
Section 2155General legacy
Section 2156Legacy for a special purpose
Section 2157Joint legacy
Section 2158Accrual
Section 2159Independence of the accrual
Section 2160Prior death of person provided for
Section 2161Where the person charged does not inherit
Section 2162Thirty-year period for a suspended legacy
Section 2163Exceptions to the thirty-year period
Section 2164Extension to accessories and claims to compensation
Section 2165Charges
Section 2166Charge with a mortgage
Section 2167Charge with a blanket mortgage
Section 2168Charge with a blanket land charge
Section 2168aApplication to ships, ships under construction and ship mortgages
Section 2169Legacy of foreign objects
Section 2170Legacy to be procured
Section 2171Impossibility, statutory prohibition
Section 2172Combination, intermixture, mingling of the bequeathed thing
Section 2173Claim as a legacy
Section 2174Claim arising under a legacy
Section 2175Restoration of extinguished legal relationships
Section 2176Devolution of the legacy
Section 2177Devolution in the event of a condition or a time limit
Section 2178Devolution in the event of a person provided for not yet conceived or determined
Section 2179Period pending fulfilment
Section 2180Acceptance and disclaimer
Section 2181Discretionary due date
Section 2182Liability for defects of title
Section 2183Liability for material defects
Section 2184Fruits and emoluments
Section 2185Reimbursement of outlays and expenses
Section 2186Due date of sublegacy or testamentary burden
Section 2187Liability of the main legatee
Section 2188Reduction of the charges
Section 2189Directions concerning priority
Section 2190Substitute legatee
Section 2191Subsequent legatee
Title 5
Testamentary burden
Section 2192Applicable provisions
Section 2193Appointment of the beneficiary, period for fulfilment
Section 2194Claim for fulfilment
Section 2195Relationship between testamentary burden and gift
Section 2196Impossibility of fulfilment
Title 6
Executor
Section 2197Appointment of an executor
Section 2198Determination of the executor by a third person
Section 2199Appointment of co-executor or successor
Section 2200Appointment by the probate court
Section 2201Ineffectiveness of the appointment
Section 2202Acceptance and refusal of office
Section 2203Task of the executor
Section 2204Partitioning of the estate between co-heirs
Section 2205Administration of the estate, power of alienation
Section 2206Incurring obligations
Section 2207Extended authority
Section 2208Limitation of the rights of the executor, execution by the heir
Section 2209Permanent execution
Section 2210Thirty-year period for permanent execution
Section 2211Limitation on dispositions of the heir
Section 2212Assertion in court of the rights subject to the execution of the will
Section 2213Assertion in court of claims against the estate
Section 2214Creditors of the heir
Section 2215Inventory of the estate
Section 2216Proper administration of the estate, compliance with directions
Section 2217Making available objects of the estate
Section 2218Legal relationship with the heir; rendering of accounts
Section 2219Liability of the executor
Section 2220Mandatory law
Section 2221Remuneration of the executor
Section 2222Executor for the reversionary heir
Section 2223Executor of a legacy
Section 2224More than one executor
Section 2225Expiry of the office of the executor
Section 2226Notice of termination by the executor
Section 2227Dismissal of the executor
Section 2228Inspection of records
Title 7
The making and revocation of a will
Section 2229Testamentary capacity of minors, lack of testamentary capacity
Section 2230(repealed)
Section 2231Regular wills
Section 2232Public will
Section 2233Special cases
Sections 2234 - 2246(repealed)
Section 2247Holographic will
Section 2248Custody of a holographic will
Section 2249Emergency will made before the mayor
Section 2250Emergency will before three witnesses
Section 2251Emergency will made at sea
Section 2252Period of validity of emergency wills
Section 2253Revocation of the will
Section 2254Revocation by will
Section 2255Revocation by destruction or changes
Section 2256Revocation by the revocation of the will from official custody
Section 2257Revocation of the revocation
Section 2258Revocation by a later will
Section 2258a(repealed)
Section 2258b(repealed)
Section 2259Obligation to deliver
Section 2260(repealed)
Section 2261(repealed)
Section 2262(repealed)
Section 2263Voidness of a prohibition on opening the will
Section 2263a, 2264(repealed)
Title 8
Joint will
Section 2265Joint will made by spouses
Section 2266Joint emergency will
Section 2267Joint holographic will
Section 2268Effect of nullity or dissolution of marriage
Section 2269Reciprocal appointment
Section 2270Reciprocal dispositions
Section 2271Revocation of reciprocal dispositions
Section 2272Revocation of official custody
Section 2273(repealed)
Division 4
Contract of inheritance
Section 2274Entering into contract in person
Section 2275Prerequisites
Section 2276Form
Section 2277(repealed)
Section 2278Permissible contractual dispositions
Section 2279Contractual gifts and burdens, application of section 2077
Section 2280Application of section 2269
Section 2281Avoidance by the testator
Section 2282Representation, form of the avoidance
Section 2283Period of avoidance
Section 2284Confirmation
Section 2285Avoidance by third parties
Section 2286Dispositions inter vivos
Section 2287Gifts adversely affecting the contractual heir
Section 2288Prejudice to the legatee
Section 2289Effect of the contract of inheritance on testamentary dispositions; application of section 2338
Section 2290Cancellation by contract
Section 2291Cancellation by will
Section 2292Cancellation by joint will
Section 2293Revocation in the event of reservation
Section 2294Revocation in the event of the misconduct of the person provided for
Section 2295Revocation in the event of the extinction of a mutual obligation
Section 2296Representation, form of revocation
Section 2297Revocation by will
Section 2298Mutual contract of inheritance
Section 2299Unilateral dispositions
Section 2300Application of sections 2259 and 2263; removal from official or notarial custody
Section 2300a(repealed)
Section 2301Promise of donation mortis causa
Section 2302Unlimited testamentary freedom
Division 5
Compulsory share
Section 2303Person entitled to a compulsory share of the estate; amount of the share
Section 2304Rules of interpretation
Section 2305Additional compulsory share
Section 2306Limitations and charges
Section 2307Bequest of a legacy
Section 2308Avoidance of the disclaimer
Section 2309Right of parents and remoter descendants to a compulsory share
Section 2310Determination of the share of the inheritance for the calculation of the compulsory share
Section 2311Value of the estate
Section 2312Value of a farm
Section 2313Taking account of conditional, uncertain or unsecured rights; duty of determination of the heir
Section 2314Duty of the heir to provide information
Section 2315Counting gifts towards the compulsory share
Section 2316Duty to adjust advancements
Section 2317Creation and transferability of the claim to a compulsory share
Section 2318Burden of the compulsory share in the case of legacies and testamentary burdens
Section 2319Person entitled to a compulsory share as co-heir
Section 2320Compulsory share burden on the heir taking the place of the person entitled to a compulsory share
Section 2321Compulsory share burden in the event of a disclaimer of a legacy
Section 2322Reduction of legacies and testamentary burdens
Section 2323Heir not charged with a compulsory share
Section 2324Deviating directions by the testator concerning the compulsory share burden
Section 2325Claim for the augmentation of compulsory shares in the event of gifts
Section 2326Augmentation to more than half of the intestate portion
Section 2327Receipt of gift by a person entitled to a compulsory share
Section 2328Heir as person entitled to a compulsory share
Section 2329Claim against the recipient of a gift
Section 2330Gift arising from a moral duty
Section 2331Gifts made from common matrimonial property
Section 2331aDeferral
Section 2332Limitation
Section 2333Deprivation of a compulsory share
Section 2334(repealed)
Section 2335(repealed)
Section 2336Form, burden of proof and ineffectiveness of deprivation
Section 2337Forgiveness
Section 2338Limitation of the compulsory share
Division 6
Unworthiness to inherit
Section 2339Grounds for unworthiness to inherit
Section 2340Enforcement of the unworthiness to inherit by avoidance
Section 2341Persons entitled to avoid
Section 2342Action for avoidance
Section 2343Forgiveness
Section 2344Effect of a declaration of unworthiness to inherit
Section 2345Unworthiness to receive a legacy; unworthiness to receive a compulsory share
Division 7
Renunciation of inheritance
Section 2346Effect of the renunciation of inheritance, possibility of limitation
Section 2347Personal requirements, representation
Section 2348Form
Section 2349Extension to descendants
Section 2350Renunciation to the benefit of another
Section 2351Revocation of a renunciation of the inheritance
Section 2352Renunciation of gifts
Division 8
Certificate of inheritance
Section 2353Competence of the probate court, application
Sections 2354 to 2359(repealed)
Section 2360(repealed)
Section 2361Revocation or declaration of invalidity of an inaccurate certificate of inheritance
Section 2362Claim to surrender of the true heir and claim to information
Section 2363Claim to surrender of the reversionary heir and of the executor
Section 2364(repealed)
Section 2365Presumption of legitimacy of the certificate of inheritance
Section 2366Presumption of legal force of a certificate of inheritance
Section 2367Performance for the person named as heir in the certificate of inheritance
Section 2368Executor’s certificate
Section 2369(repealed)
Section 2370Presumption of legal force of a declaration of death
Division 9
Purchase of an inheritance
Section 2371Form
Section 2372Advantages due to purchaser
Section 2373Parts remaining for the seller
Section 2374Duty to surrender
Section 2375Duty to compensate
Section 2376Liability of the seller
Section 2377Restoration of extinguished legal relationships
Section 2378Obligations of the estate
Section 2379Emoluments and charges prior to the sale
Section 2380Devolution of the risk, emoluments and charges after the sale
Section 2381Reimbursement of outlays and expenses
Section 2382Liability of the purchaser in relation to the creditors of the estate
Section 2383Scope of liability of the purchaser
Section 2384The duty of notification of the seller towards the creditors of the estate, right of inspection
Section 2385Application to similar contracts
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German Civil Code
BGB

Full text in format:   HTML  PDF   text in German

Übersetzung durch den Langenscheidt Übersetzungsservice, aktualisiert durch Neil Mussett. Zuletzt aktualisiert und bearbeitet durch Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Translation provided by Langenscheidt Übersetzungsservice, updated by Neil Mussett. The translation has most recently been revised and updated by Samson Übersetzungen GmbH, Dr. Carmen v. Schöning.

Stand: Die Übersetzung berücksichtigt die Änderung(en) des Gesetzes durch Artikel 1 des Gesetzes vom 10. August 2021 (BGBl. I S. 3515).
Der Stand der deutschsprachigen Dokumentation kann aktueller sein. Vergleichen Sie dazu bitte http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Version information: The translation includes the amendment(s) to the Act by Article 1 of the Act of 10 August 2021 (Federal Law Gazette I p. 3515).
Translations may not be updated at the same time as the German legal provisions displayed on this website. To compare with the current status of the German version, see http://www.gesetze-im-internet.de/bgb/BJNR001950896.html.

Zur Nutzung dieser Übersetzung lesen Sie bitte den Hinweis unter "Translations".

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Book 1
General part
Division 1
Persons
Title 1
Natural persons, consumers, traders
Section 1Beginning of legal capacity
Section 2Beginning of majority
Sections 3 – 6(repealed)
Section 7Residence; establishment and termination
Section 8Residence of persons who lack full capacity to contract
Section 9Residence of a soldier
Section 10(repealed)
Section 11Residence of a child
Section 12Right to a name
Section 13Consumer
Section 14Trader
Sections 15 - 20(repealed)
Title 2
Legal persons
Subtitle 1
Associations
Chapter 1
General provisions
Section 21Non-commercial association
Section 22Commercial association
Section 23(repealed)
Section 24Seat
Section 25Constitution
Section 26Board and representation
Section 27Appointment of and management by the board
Section 28Passing of resolutions by the board
Section 29Emergency appointment by local court
Section 30Special representatives
Section 31Liability of an association for organs
Section 31aLiability of members of organs and special representatives
Section 31bLiability of members of the association
Section 32General meeting; passing of resolutions
Section 33Amendment of articles of association
Section 34Exclusion from voting
Section 35Special rights
Section 36Convening the general meeting
Section 37Convening a meeting at the request of a minority
Section 38Membership
Section 39Leaving the association
Section 40Flexible provisions
Section 41Dissolution of the association
Section 42Insolvency
Section 43Deprivation of legal personality
Section 44Jurisdiction and procedure
Section 45Devolution of the assets of the association
Section 46Devolution on the treasury
Section 47Liquidation
Section 48Liquidators
Section 49Duties of the liquidators
Section 50Notice by publication of the association in liquidation
Section 50aNewspaper for notices
Section 51One-year waiting period
Section 52Security for creditors
Section 53Liability in damages of the liquidators
Section 54Associations without legal personality
Chapter 2
Registered associations
Section 55Jurisdiction over entry in the register
Section 55aElectronic register of associations
Section 56Minimum number of members of the association
Section 57Minimum requirements of the articles of association
Section 58Recommended contents of the articles of association
Section 59Application for registration
Section 60Rejection of the application
Sections 61 - 63(repealed)
Section 64Contents of the entry in the register of associations
Section 65Addition to name
Section 66Notice by publication of the entry and safekeeping of documents
Section 67Changes to the board
Section 68Protection of public confidence by the register of associations
Section 69Documentary proof of composition of the board
Section 70Protection of public confidence in case of entries on power of agency
Section 71Amendments of the articles of association
Section 72Certificate on number of members
Section 73Decrease to below the minimum number of members
Section 74Dissolution
Section 75Entries in the case of insolvency
Section 76Register entries in the event of liquidation
Section 77Parties obliged to apply for entry in the register and form of applications
Section 78Assessment of coercive fines
Section 79Inspection of the register of associations
Section 79aApplication of Regulation (EU) 2016/679 to registration proceedings
Subtitle 2
Foundations
Section 80Formation of a foundation having legal personality
Section 81Endowment transaction
Section 82Duty of founder to make transfers
Section 83Testamentary foundation
Section 84Recognition after the death of the founder
Section 85Constitution of foundation
Section 86Application of law on associations
Section 87Change of objects; termination
Section 88Devolution of assets
Subtitle 3
Legal persons under public law
Section 89Liability for organs; insolvency
Division 2
Things and animals
Section 90Concept of the thing
Section 90aAnimals
Section 91Fungible things
Section 92Consumable things
Section 93Essential parts of a thing
Section 94Essential parts of a plot of land or a building
Section 95Merely temporary purpose
Section 96Rights as parts of a plot of land
Section 97Accessories
Section 98Commercial and agricultural inventory
Section 99Fruits
Section 100Emoluments
Section 101Division of fruits
Section 102Reimbursement of costs of production
Section 103Allocation of charges
Division 3
Legal transactions
Title 1
Capacity to contract
Section 104Incapacity to contract
Section 105Voidness of declaration of intent
Section 105aEveryday transactions
Section 106Limited capacity for minors to contract
Section 107Consent of legal representative
Section 108Entry into a contract without consent
Section 109Right of withdrawal by the other party
Section 110Performance effected with means of the minor’s own
Section 111Unilateral legal transactions
Section 112Independent operation of a trade or business
Section 113Service or employment relationship
Sections 114, 115(repealed)
Title 2
Declaration of intent
Section 116Mental reservation
Section 117Sham transaction
Section 118Lack of seriousness
Section 119Voidability for mistake
Section 120Voidability for incorrect transmission
Section 121Period for avoidance
Section 122Liability in damages of the person avoiding a declaration
Section 123Voidability on the grounds of deceit or duress
Section 124Period of time for avoidance
Section 125Voidness resulting from a defect of form
Section 126Written form
Section 126aElectronic form
Section 126bText form
Section 127Agreed form
Section 127aCourt settlement
Section 128Notarial recording
Section 129Official certification
Section 130Effectiveness of a declaration of intent to absent parties
Section 131Effectiveness in relation to persons without full capacity to contract
Section 132Substitution of service for receipt
Section 133Interpretation of a declaration of intent
Section 134Statutory prohibition
Section 135Statutory prohibition of alienation
Section 136Official prohibition of alienation
Section 137Prohibition of dispositions in a legal transaction
Section 138Legal transaction offending common decency; usury
Section 139Partial invalidity
Section 140Re-interpretation
Section 141Confirmation of a void legal transaction
Section 142Effect of avoidance
Section 143Declaration of avoidance
Section 144Confirmation of a voidable legal transaction
Title 3
Contract
Section 145Binding effect of an offer
Section 146Expiry of an offer
Section 147Period for acceptance
Section 148Fixing a period for acceptance
Section 149Late receipt of a declaration of acceptance
Section 150Late acceptance and acceptance altering the offer
Section 151Acceptance without declaration to the offeror
Section 152Acceptance in the case of notarial recording
Section 153Death of the offeror or offeror’s incapacity to contract
Section 154Overt lack of agreement; lack of notarial recording
Section 155Hidden lack of agreement
Section 156Entry into contracts at auctions
Section 157Interpretation of contracts
Title 4
Conditions and specification of time
Section 158Conditions precedent and subsequent
Section 159Retroactive effect
Section 160Liability during the period pending fulfilment of the condition
Section 161Ineffectiveness of dispositions in the period pending fulfilment of the condition
Section 162Prevention of or bringing about the satisfaction of the condition
Section 163Specification of time
Title 5
Agency and authority
Section 164Effect of a declaration made by the agent
Section 165Agent with limited capacity to contract
Section 166Vitiation of intent; imputed knowledge
Section 167Conferment of authority
Section 168Expiry of authority
Section 169Authority of the authorised representative and the managing partner
Section 170Period of effectiveness of the authority
Section 171Period of effectiveness in the case of announcement
Section 172Letter of authorisation
Section 173Period of effectiveness in the case of knowledge and negligent lack of knowledge
Section 174Unilateral legal transaction by an authorised representative
Section 175Return of the letter of authorisation
Section 176Declaration of invalidity of the letter of authorisation
Section 177Entry into contract by a representative having no power of agency
Section 178Right of revocation of the other party
Section 179Liability of a representative having no power of agency
Section 180Unilateral legal transactions
Section 181Contracting with oneself
Title 6
Consent and ratification
Section 182Approval
Section 183Revocability of consent
Section 184Retroactive effect of ratification
Section 185Disposition by an unauthorised person
Division 4
Periods of time and fixed dates
Section 186Scope of applicability
Section 187Beginning of a period of time
Section 188End of a period of time
Section 189Calculation of individual periods of time
Section 190Extension of a period of time
Section 191Calculation of periods of time
Section 192Beginning, middle and end of a month
Section 193Sundays and holidays; Saturdays
Division 5
Limitation
Title 1
Subject-matter and duration of limitation
Section 194Subject-matter of limitation
Section 195Standard limitation period
Section 196Limitation period for rights to a plot of land
Section 197Thirty-year limitation period
Section 198Limitation in the case of a successor in title
Section 199Commencement of the standard limitation period and maximum limitation periods
Section 200Commencement of other limitation periods
Section 201Commencement of the limitation period for recognised claims
Section 202Inadmissibility of agreements on limitation
Title 2
Suspension, suspension of expiry and recommencement of the limitation period
Section 203Suspension of limitation in the case of negotiations
Section 204Suspension of limitation as a result of prosecution of rights
Section 205Suspension of limitation in the case of a right to refuse performance
Section 206Suspension of limitation in case of force majeure
Section 207Suspension of limitation for reasons of family relationship and similar reasons
Section 208Suspension of limitation in the case of claims for infringement of the right to sexual self-determination
Section 209Effect of suspension
Section 210Suspension of expiry of the limitation period in the case of persons without full capacity to contract
Section 211Suspension of expiry of the limitation period in matters relating to estates
Section 212Recommencement of the limitation period
Section 213Suspension, suspension of expiry of the limitation period and recommencement of limitation in the case of other claims
Title 3
Legal consequences of limitation
Section 214Effect of limitation
Section 215Set-off and right of retention after a claim is statute-barred
Section 216Effect of limitation in the case of secured claims
Section 217Limitation of collateral performance
Section 218Ineffectiveness of rescission
Sections 219 to 225(repealed)
Division 6
Exercise of rights, self-defence, self-help
Section 226Prohibition of chicanery
Section 227Self-defence against persons
Section 228Necessity
Section 229Self-help
Section 230Limits of self-help
Section 231Self-help by mistake
Division 7
Provision of security
Section 232Types
Section 233Effect of deposit
Section 234Suitable securities
Section 235Right to exchange
Section 236Book-entry securities
Section 237Movable things
Section 238Mortgages, land charges and annuity land charges
Section 239Surety
Section 240Duty to supplement security
Book 2
Law of obligations
Division 1
Subject matter of obligations
Title 1
Duty to render performance
Section 241Duties arising from an obligation
Section 241aUnsolicited performance
Section 242Performance in good faith
Section 243Obligation described by class
Section 244Foreign currency obligation
Section 245Obligation payable in a specific denomination of money
Section 246Statutory interest rate
Section 247Basic rate of interest
Section 248Compound interest
Section 249Nature and extent of compensation of damages
Section 250Damages in money after the specification of a period of time
Section 251Damages in money without the specification of a period of time
Section 252Lost profits
Section 253Intangible damage
Section 254Contributory negligence
Section 255Assignment of claims to compensation
Section 256Payment of interest on expenses
Section 257Claim to release
Section 258Right of removal
Section 259Extent of duty to render accounts
Section 260Duties when surrendering objects or providing information on an aggregate of objects
Section 261Modification of a declaration in lieu of an oath; costs
Section 262Alternative obligation; right of choice
Section 263Exercise of the right of choice; effect
Section 264Default by the person entitled to the right of choice
Section 265Impossibility in case of alternative obligations
Section 266Part performance
Section 267Performance by third parties
Section 268Right of redemption of a third party
Section 269Place of performance
Section 270Place of payment
Section 270aAgreements on fees for the use of non-cash means of payment
Section 271Time of performance
Section 271aAgreements on payment deadlines, verification periods or periods for acceptance
Section 272Interim interest
Section 273Right of retention
Section 274Effects of the right of retention
Section 275Exclusion of the duty of performance
Section 276Responsibility of the obligor
Section 277Standard of care in one’s own affairs
Section 278Responsibility of the obligor for third parties
Section 279(repealed)
Section 280Damages for breach of duty
Section 281Damages in lieu of performance for non-performance or failure to render performance as owed
Section 282Damages in lieu of performance for breach of a duty under section 241 (2)
Section 283Damages in lieu of performance where the duty of performance is excluded
Section 284Reimbursement of futile expenses
Section 285Surrender of substitute benefit
Section 286Default of the obligor
Section 287Responsibility during default
Section 288Default interest and other damage caused by default *)
Section 289Prohibition of compound interest
Section 290Interest on compensation for value
Section 291Interest during legal proceedings
Section 292Liability in the case of a duty to surrender
Title 2
Default by the obligee
Section 293Default in acceptance
Section 294Actual offer
Section 295Verbal offer
Section 296Dispensability of the offer
Section 297Inability of the obligor
Section 298Concurrent performance
Section 299Temporary prevention of acceptance
Section 300Effects of default by the obligee
Section 301Cessation of interest
Section 302Emoluments
Section 303Right to abandon possession
Section 304Compensation for extra expenses
Division 2
Drafting contractual obligations by means of standard business terms
Section 305Incorporation of standard business terms into the contract
Section 305aIncorporation in special cases
Section 305bPriority of individually agreed terms
Section 305cSurprising and ambiguous clauses
Section 306Legal consequences of non-incorporation and ineffectiveness
Section 306aProhibition of circumvention
Section 307Test of reasonableness of contents
Section 308Prohibited clauses with the possibility of valuation
Section 309Prohibited clauses without the possibility of valuation
Section 310Scope of application
Division 3
Contractual obligations
Title 1
Creation, subject matter and termination
Subtitle 1
Creation
Section 311Obligations created by legal transaction and obligations similar to legal transactions
Section 311aImpediment preventing performance at conclusion of contract
Section 311bContracts on plots of land, assets and an estate
Section 311cApplication to accessories
Subtitle 2
Principles applying to consumer contracts; particular types of sale
Chapter 1
Scope of application and principles applying to consumer contracts
Section 312Scope of application
Section 312aGeneral obligations and principles applying to consumer contracts; limits to the agreement of remuneration
Chapter 2
Off-premises contracts and distance contracts
Section 312bOff-premises contracts
Section 312cDistance contracts
Section 312dObligations to provide information
Section 312eViolation of information obligations as to costs
Section 312fCopies and confirmations
Section 312gRight of withdrawal
Section 312hTermination and authorisation to terminate
Chapter 3
Contracts concluded in electronic commerce
Section 312iGeneral obligations in electronic commerce
Section 312jSpecial obligations vis-à-vis consumers in electronic commerce
Chapter 4
Deviating agreements and burden of proof
Section 312kDeviating agreements and burden of proof
Subtitle 3
Adaptation and ending of contracts
Section 313Interference with the basis of the transaction
Section 314Termination, for a compelling reason, of contracts for the performance of a continuing obligation
Subtitle 4
Unilateral rights to specify performance
Section 315Specification of performance by one party
Section 316Specification of consideration
Section 317Specification of performance by a third party
Section 318Avoidance of specification
Section 319Ineffectiveness of the specification; substitution
Title 2
Reciprocal contract
Section 320Defence of unperformed contract
Section 321Defence of uncertainty
Section 322Order to perform in return for, and concurrently with, performance
Section 323Rescission for non-performance or for performance not as contractually agreed
Section 324Rescission for breach of a duty under section 241 (2)
Section 325Damages and revocation
Section 326Release from consideration and rescission where the duty of performance is excluded
Title 2a
Contracts on digital products
Subtitle 1
Consumer contracts on digital products
Section 327Scope of application
Section 327aApplication to bundle contracts and contracts relating to things with digital elements
Section 327bSupply of digital products
Section 327cRights in the case of failure to effect supply
Section 327dConformity of digital products
Section 327eProduct deficiency
Section 327fUpdates
Section 327gDefect of title
Section 327hDeviating agreements on product features
Section 327iRights of the consumer in the case of deficiencies
Section 327jLimitation
Section 327kShifting the burden of proof
Section 327lCure
Section 327mTermination of the contract and compensation of damages
Section 327nAbatement
Section 327oDeclaration of termination of contract and its legal consequences
Section 327pContinued use following termination of the contract
Section 327qConsequences under contract law of declarations governed by data protection law made by the consumer
Section 327rModifications of digital products
Section 327sDeviating agreements
Subtitle 2
Special provisions on contracts on digital products between traders
Section 327tScope of application
Section 327uRecourse of the trader
Title 3
Promise of performance to a third party
Section 328Contract for the benefit of third parties
Section 329Interpretation rule where there is an assumption of the duty to perform
Section 330Interpretation rule in the case of life annuity contracts
Section 331Performance after death
Section 332Modification by disposition mortis causa in case of reservation
Section 333Rejection of the right by the third party
Section 334Objections of the obligor in relation to the third party
Section 335Right of the promisee to make demands
Title 4
Earnest, penalty for breach of contract
Section 336Interpretation of earnest
Section 337Crediting or return of the earnest
Section 338Earnest in case of impossibility of performance for which the giver of earnest is responsible
Section 339Payability of penalty for breach of contract
Section 340Promise to pay a penalty for non-performance
Section 341Promise of a penalty for improper performance
Section 342Alternatives to monetary penalty
Section 343Reduction of the penalty
Section 344Ineffective promise of a penalty
Section 345Burden of proof
Title 5
Revocation; right of withdrawal in consumer contracts
Subtitle 1
Rescission
Section 346Effects of rescission
Section 347Emoluments and outlays after rescission
Section 348Satisfaction of obligations in return for, and concurrently with, performance
Section 349Declaration of rescission
Section 350Expiry of the right of rescission after a period of time has been specified
Section 351Indivisibility of the right of rescission
Section 352Set-off after non-performance
Section 353Rescission in return for forfeit money
Section 354Forfeiture of rights
Subtitle 2
Right of withdrawal in the case of consumer contracts
Section 355Right of withdrawal in the case of consumer contracts
Section 356Right of withdrawal in the case of off-premises contracts and distance contracts
Section 356aRight of withdrawal in the case of timeshare contracts, long-term holiday product contracts, brokerage contracts, and exchange system contracts
Section 356bRight of withdrawal in the case of consumer credit agreements
Section 356cRight of withdrawal in the case of contracts for delivery by instalments
Section 356dWithdrawal right of the consumer in the case of credit agreements for a gratuitous loan and in the case of gratuitous financial accommodation
Section 356eRight of withdrawal in the case of construction contracts with consumers
Section 357Legal consequences of the withdrawal from off-premises contracts and distance contracts, to the exception of contracts relating to financial services
Section 357aLegal consequences of the withdrawal from contracts relating to financial services
Section 357bLegal consequences of the withdrawal from timeshare, long-term holiday product, brokerage contracts, and exchange system contracts
Section 357cLegal consequences of the withdrawal from contracts for delivery by instalments that are neither distance contracts nor off-premises contracts
Section 357dLegal consequences of the withdrawal from a construction contract with a consumer
Section 358Contracts linked to the contract from which the consumer has withdrawn
Section 359Objections in the case of linked contracts
Section 360Related contracts
Section 361Further claims, deviating agreements and burden of proof
Division 4
Extinction of obligations
Title 1
Performance
Section 362Extinction by performance
Section 363Burden of proof in the case of acceptance as performance of contract
Section 364Acceptance in lieu of performance of contract
Section 365Warranty in the case of handover in lieu of performance of contract
Section 366Crediting of performance to more than one claim
Section 367Crediting to interest and costs
Section 368Receipt
Section 369Costs of the receipt
Section 370Performance to the bringer of the receipt
Section 371Return of the certificate of indebtedness
Title 2
Deposit
Section 372Prerequisites
Section 373Concurrent performance
Section 374Place of deposit; duty to notify
Section 375Retroactive effect with dispatch by mail
Section 376Right to take back
Section 377Unpledgeability of the right to take back
Section 378Effect of deposit where taking back is excluded
Section 379Effect of deposit where taking back is not excluded
Section 380Proof of entitlement to receive
Section 381Costs of deposit
Section 382Extinction of the right of the obligee
Section 383Auction of things not capable of deposit
Section 384Warning of auction
Section 385Sale by private agreement
Section 386Costs of the auction
Title 3
Set-off
Section 387Prerequisites
Section 388Declaration of set-off
Section 389Effect of set-off
Section 390No set-off against a claim subject to a defence
Section 391Set-off in the case of different places of performance
Section 392Set-off against a seized claim
Section 393No set-off against a claim in tort
Section 394No set-off against an unpledgeable claim
Section 395Set-off against claims of public-law corporations
Section 396More than one claim
Title 4
Forgiveness
Section 397Contract of forgiveness, acknowledgement of non-indebtedness
Division 5
Transfer of a claim
Section 398Assignment
Section 399Exclusion of assignment in case of change of content or by agreement
Section 400Exclusion in case of unpledgeable claims
Section 401Devolution of accessory rights and preferential rights
Section 402Duty to provide information; provision of documents
Section 403Duty of notarial recording
Section 404Objections by the obligor
Section 405Assignment with presentation of documents
Section 406Set-off in relation to the new obligee
Section 407Legal acts in relation to the previous obligee
Section 408Multiple assignments
Section 409Notice of assignment
Section 410Delivery of the assignment document
Section 411Assignment of salary
Section 412Statutory devolution of claims
Section 413Transfer of other rights
Division 6
Assumption of debt
Section 414Contract between obligee and transferee
Section 415Contract between obligor and transferee
Section 416Assumption of a mortgage debt
Section 417Objections of the transferee
Section 418Extinction of security rights and preferential rights
Section 419(repealed)
Division 7
More than one obligor and obligee
Section 420Divisible performance
Section 421Joint and several debtors
Section 422Effect of performance
Section 423Effect of forgiveness
Section 424Effect of default by the obligee
Section 425Effect of other facts
Section 426Duty to adjust advancements, devolution of claim
Section 427Joint contractual duty
Section 428Joint and several obligees
Section 429Effect of changes
Section 430Duty of the joint and several obligees to adjust advancements
Section 431More than one obligor of indivisible performance
Section 432More than one obligee of indivisible performance
Division 8
Particular types of obligations
Title 1
Purchase, exchange
Subtitle 1
General provisions
Section 433Contractual duties typical for a purchase agreement
Section 434Material defects
Section 435Defects of title
Section 436Public charges on plots of land
Section 437Rights of buyer in the case of defects
Section 438Limitation of claims for defects
Section 439Cure
Section 440Special provisions on rescission and damages
Section 441Abatement of price
Section 442Knowledge of the buyer
Section 443Guarantee
Section 444Exclusion of liability
Section 445Limitation of liability in the case of public auctions
Section 445aRecourse of the seller
Section 445bLimitation of recourse claims
Section 445cRecourse in the case of contracts on digital products
Section 446Devolution of risk and of charges
Section 447Devolution of risk in the case of sales shipment
Section 448Costs of delivery and comparable costs
Section 449Retention of title
Section 450Excluded buyers in the case of certain sales
Section 451Purchase by excluded buyer
Section 452Purchase of a ship
Section 453Purchase of rights, consumer contract on the purchase of digital content
Subtitle 2
Special types of purchase
Chapter 1
Purchase on approval
Section 454Coming into existence of the purchase agreement
Section 455Approval period
Chapter 2
Repurchase
Section 456Coming into existence of the repurchase agreement
Section 457Liability of the reseller
Section 458Removal of third-party rights
Section 459Reimbursement of outlays
Section 460Repurchase at estimated value
Section 461More than one person entitled to repurchase
Section 462Cut-off period
Chapter 3
Preemption
Section 463Prerequisites for exercise
Section 464Exercise of the right of preemption
Section 465Ineffective agreements
Section 466Collateral performance
Section 467Total price
Section 468Deferral of the purchase price
Section 469Duty to notify, exercise period
Section 470Sale to heir on intestacy
Section 471Sale in case of compulsory enforcement or insolvency
Section 472More than one person with a right of preemption
Section 473Non-transferability
Subtitle 3
Purchase of consumer goods
Section 474Purchase of consumer goods
Section 475Applicable provisions
Section 475aContract for the sale of consumer goods relating to digital products
Section 475bMaterial defect of a good with digital elements
Section 475cMaterial defect of a good with digital elements where the digital elements are supplied on a continuous basis
Section 475dSpecial provisions on rescission and compensation of damages
Section 475eSpecial provisions on limitation
Section 476Deviating agreements
Section 477Shifting the burden of proof
Section 478Special provisions concerning recourse by the trader
Section 479Special provisions for guarantees
Subtitle 4
Exchange
Section 480Exchange
Title 2
Timeshare contracts, long-term holiday product contracts, brokerage contracts and exchange system contracts
Section 481Time share contracts
Section 481aLong-term holiday product contract
Section 481bFacilitation contract, exchange system contract
Section 482Preliminary contract information, advertising and prohibition of sale as an investment
Section 482aInstructions on the right of withdrawal
Section 483Language of the contract and of the pre-contractual information
Section 484Form and content of the contract
Section 485Right of withdrawal
Section 486Prohibition of down payment
Section 486aSpecial provisions for long-term holiday product contracts
Section 487Deviating agreements
Title 3
Loan contract; financial accommodation and contracts for delivery by instalments between a trader and a consumer
Subtitle 1
Loan contract
Chapter 1
General provisions
Section 488Contractual duties typical for a credit agreement
Section 489Right of the borrower to give notice of termination in accordance with usual procedure
Section 490Right to terminate for cause
Chapter 2
Special provisions for consumer credit agreements
Section 491Consumer credit agreement
Section 491aPreliminary contract information obligations with consumer credit agreements
Section 492Written form, contents of the contract
Section 492aTying practices in the case of consumer credit agreements relating to immovable property
Section 492bPermissible tying practices
Section 493Information during the contractual relationship
Section 494Legal consequences of defects of form
Section 495Right of withdrawal; reflection period
Section 496Waiver of objections, prohibition of bills of exchange and cheques
Section 497Default of the borrower
Section 498Calling in entire loan in the case of loans repayable in instalments
Section 499Right of the lender to terminate; right to refuse performance
Section 500Termination right of the borrower; early repayment
Section 501Cost reduction in the case of early repayment and in the case of termination
Section 502Compensation for early repayment of a loan
Section 503Conversion to an alternative currency of a foreign-currency consumer credit agreement relating to immovable property
Section 504Granted overdraft
Section 504aObligation to provide advisory services where the overdraft facility is used
Section 505Tolerated overdraft
Section 505aObligation to perform a creditworthiness assessment for consumer credit agreements
Section 505bBasis of the creditworthiness assessment in the case of consumer credit agreements
Section 505cFurther obligations in the case of consumer credit agreements relating to immovable property secured by a mortgage or by a charge on land
Section 505dBreach of the obligation to conduct an assessment of creditworthiness
Section 505eAuthorisation to issue statutory instruments
Subtitle 2
Financial accommodation between a trader and a consumer
Section 506Deferment of payment, other financial accommodation
Section 507Instalment payment transactions
Section 508Revocation with regard to instalment payment transactions
Section 509(repealed)
Subtitle 3
Contracts for delivery by instalments between a trader and a consumer
Section 510Contracts for delivery by instalments
Subtitle 4
Advisory services provided in the case of consumer credit agreements relating to immovable property
Section 511Advisory services provided in the case of consumer credit agreements relating to immovable property
Subtitle 5
Mandatory nature, application to founders of new businesses
Section 512Deviating agreements
Section 513Application to founders of new businesses
Subtitle 6
Gratuitous credit agreements and gratuitous financial accommodation between a trader and a consumer
Section 514Gratuitous credit agreements
Section 515Gratuitous financial accommodation
Title 4
Donation
Section 516Concept of donation
Section 516aConsumer contract on the donation of digital products
Section 517Failure to acquire assets
Section 518Form of promise of donation
Section 519Defence of paying for necessaries
Section 520Expiry of the promise of an annuity
Section 521Liability of the donor
Section 522No default interest
Section 523Liability for defects of title
Section 524Liability for material defects
Section 525Donation subject to conditions
Section 526Refusal to fulfil the condition
Section 527Non-fulfilment of the condition
Section 528Claim for return due to impoverishment of the donor
Section 529Exclusion of claim for return
Section 530Revocation of donation
Section 531Declaration of revocation
Section 532Exclusion of revocation
Section 533Waiver of the right of revocation
Section 534Donations for duty and decency
Title 5
Lease, usufructuary lease
Subtitle 1
General provisions for leases
Section 535Contents and primary duties of the lease agreement
Section 536Abatement of the rent for material defects and defects of title
Section 536aClaim of lessee for damages and reimbursement of expenses due to a defect
Section 536bLessee knows of the defect at conclusion of the contract or upon acceptance
Section 536cDefects occurring during the lease period; notice of defect by the lessee
Section 536dContractual exclusion of rights of lessee with regard to defects
Section 537Payment of rent when the lessee is unable to be present in person
Section 538Wear and tear on the leased property from contractually agreed use
Section 539Reimbursement of other expenses and right of removal of the lessee
Section 540Making available the leased property for use use by third parties
Section 541Application for prohibitory injunction in the case of use in breach of contract
Section 542End of the lease
Section 543Termination for cause without notice for a compelling reason
Section 544Lease for more than 30 years
Section 545Tacit extension of the lease
Section 546Duty of lessee to return
Section 546aCompensation of the lessor in the case of late return
Section 547Reimbursement of rent paid in advance
Section 548Limitation of compensation claims and of the right of removal
Section 548aLease of digital products
Subtitle 2
Leases for residential space
Chapter 1
General provisions
Section 549Provisions applicable to leases of residential space
Section 550Form of the lease agreement
Section 551Restriction and investment of rent security deposits
Section 552Warding off the right of removal of the lessee
Section 553Making residential space available for use by third parties
Section 554Improved accessibility, e-mobility and burglary protection
Section 555Ineffectiveness of a penalty for breach of contract
Chapter 1a
Structural maintenance and modernisation measures
Section 555aStructural maintenance measures
Section 555bModernisation measures
Section 555cAnnouncement of modernisation measures
Section 555dToleration of modernisation measures, time limit
Section 555eSpecial right of termination of the lessee in case of modernisation measures
Section 555fAgreements on structural maintenance or modernisation measures
Chapter 2
Rent
Subchapter 1
Agreements on rent
Section 556Agreements on operating costs
Section 556aAccounting criterion for operating costs
Section 556bDue date of rent, right to set-off and right of retention
Section 556cCosts of heat supply as operating costs, authorisation to issue statutory instruments
Subchapter 1a
Agreements on the rent amount at commencement of the lease in areas in which the housing market is under pressure
Section 556dPermissible rent amount at commencement of the lease; authorisation to issue statutory instruments
Section 556eConsideration of the rent paid previously, or of modernisation work done
Section 556fExceptions
Section 556gLegal consequences; information on the rent
Subchapter 2
Provisions on the rent amount
Section 557Increases in rent by agreement or law
Section 557aStepped rent
Section 557bIndexed rent
Section 558Increase in rent up to the reference rent customary in the locality
Section 558aForm and justification of the rent increase
Section 558bApproval of a rent increase
Section 558cList of representative rents
Section 558dExpert list of representative rents
Section 558eRent database
Section 559Rent increase after modernisation measures
Section 559aCrediting of third-party funds
Section 559bAssertion of an increase; effect of declaration of increase
Section 559cSimplified procedure
Section 559dBreaches of duty in announcing or implementing structural changes
Section 560Changes in operating costs
Section 561Special right of termination of the lessee following a rent increase
Chapter 3
Security right of the lessor
Section 562Extent of the security right of the lessor
Section 562aExtinction of the security right of the lessor
Section 562bSelf-help; claim to surrender
Section 562cWarding off the security right by provision of security
Section 562dAttachment by a third party
Chapter 4
Change of contractual parties
Section 563Right of accession upon death of the lessee
Section 563aContinuation with surviving lessees
Section 563bLiability in the case of accession or continuation
Section 564Continuation of the lease with the heir; termination for cause
Section 565Commercial subletting
Section 566Purchase is subject to existing leases
Section 566aRent security deposit
Section 566bAdvance disposition over the rent
Section 566cAgreement between lessee and lessor on the rent
Section 566dSet-off by the lessee
Section 566eNotification by the lessor of the devolution of ownership
Section 567Encumbrance of the residential space by the lessor
Section 567aAlienation or encumbrance prior to residential space being made available for use
Section 567bOnward alienation or encumbrance by the acquirer
Chapter 5
Termination of the lease
Subchapter 1
General provisions
Section 568Form and contents of the notice of termination
Section 569Termination for cause without notice for a compelling reason
Section 570Exclusion of the right of retention
Section 571Further compensation of damages for late return of residential space
Section 572Agreement on right of rescission; lease subject to condition subsequent
Subchapter 2
Leases for an indefinite period of time
Section 573Notice of termination by the lessor in accordance with usual procedure
Section 573aEased termination by the lessor
Section 573bPartial termination by the lessor
Section 573cPeriods of time to be observed in giving notice of termination in accordance with usual procedure
Section 573dTermination for cause observing the statutory notice period
Section 574Objection of lessee to termination
Section 574aContinuation of lease after objection
Section 574bRequirements as to form and period of time for objection
Section 574cFurther continuation of the lease in the case of unforeseen circumstances
Subchapter 3
Leases for a specified period of time
Section 575Fixed-term lease
Section 575aTermination for cause observing the statutory notice period
Subchapter 4
Tied dwellings
Section 576Periods of time to be observed in giving notice of termination in accordance with usual procedure in the case of tied leased dwellings
Section 576aSpecial features of the right to raise an objection in the case of tied leased dwellings
Section 576bApplication of landlord and tenant law accordingly in connection with tied dwellings
Chapter 6
Special features when creating title to leased residences
Section 577Lessee’s right of preemption
Section 577aRestriction of termination in connection with conversion of the dwelling
Subtitle 3
Leases of other things and digital products
Section 578Leases of plots of land and premises
Section 578aLease of registered ships
Section 578bContracts on the lease of digital products
Section 579Due date of the rent
Section 580Notice of termination for cause in the case of the death of the lessee
Section 580aNotice periods
Subtitle 4
Usufructuary lease
Section 581Contractual duties typical for a usufructuary lease
Section 582Maintenance of inventory
Section 582aAssumption of inventory at its estimated value
Section 583Security right of usufructuary lessee over inventory
Section 583aRestrictions on disposition over inventory
Section 584Period of notice
Section 584aExclusion of certain rights of termination under landlord and tenant law
Section 584bLate return
Subtitle 5
Farm lease
Section 585Concept of farm lease
Section 585aForm of a farm lease
Section 585bDescription of the leased property
Section 586Contractual duties typical for a farm lease
Section 586aEncumbrances on the leased property
Section 587Due date of rent; payment of rent where the usufructuary lessee is personally prevented
Section 588Measures of maintenance or improvement
Section 589Making available the leased property to third parties for their use
Section 590Change of agricultural purpose or of previous use
Section 590aUse in breach of contract
Section 590bNecessary outlays
Section 591Outlays that increase value
Section 591aRemoval of installations
Section 591bLimitation of compensation claims
Section 592Security right of the usufructuary lessor
Section 593Amendment of farm leases
Section 593aTransfer of a business
Section 593bAlienation or encumbrance of the leased property
Section 594Termination and extension of the lease
Section 594aNotice periods
Section 594bLease for more than 30 years
Section 594cTermination in the case of occupational disability of the usufructuary lessee
Section 594dDeath of the usufructuary lessee
Section 594eTermination for cause without notice for a compelling reason
Section 594fWritten form of termination
Section 595Continuation of the lease
Section 595aEarly notice of termination of farm leases
Section 596Return of the leased property
Section 596aDuty to compensate for early termination of lease
Section 596bDuty to leave behind
Section 597Late return
Title 6
Gratuitous loan
Section 598Contractual duties typical for the case of a gratuitous loan
Section 599Liability of the lender
Section 600Liability for defects
Section 601Reimbursement of outlays
Section 602Wear and tear on the thing
Section 603Contractually agreed use
Section 604Duty to return
Section 605Right of termination
Section 606Short limitation period
Title 7
Contract for the loan of a thing
Section 607Contractual duties typical for a contract for the loan of a thing
Section 608Termination
Section 609Payment
Section 610(repealed)
Title 8
Service contract and similar contracts
Subtitle 1
Service contract
Section 611Contractual duties typical for a service contract
Section 611aEmployment contract
Section 611b(repealed)
Section 612Remuneration
Section 612aProhibition of victimisation
Section 613Non-transferability
Section 613aRights and duties in the case of transfer of business
Section 614Due date of remuneration
Section 615Remuneration in the case of default in acceptance and business risk
Section 616Temporary prevention from performing services
Section 617Duty of medical care
Section 618Duty to take protective measures
Section 619Absolute nature of welfare duties
Section 619aBurden of proof when the employee is liable
Section 620End of services relationship
Section 621Periods of notice for service relationships
Section 622Notice periods in the case of employment relationships
Section 623Written form of termination
Section 624Notice period in the case of contracts lasting longer than five years
Section 625Tacit extension
Section 626Termination without notice for a compelling reason
Section 627Termination without notice in the case of a position of trust
Section 628Partial remuneration and damages in case of termination without notice
Section 629Time off for search for employment
Section 630Duty to provide a reference
Subtitle 2
Treatment contract
Section 630aContractual duties typical for a treatment contract
Section 630bApplicable provisions
Section 630cCooperation between the contracting parties; obligations to provide information
Section 630dConsent
Section 630eObligations to provide information
Section 630fDocumentation of the treatment
Section 630gInspection of the medical records
Section 630hBurden of proof in case of liability for malpractice and errors in providing information
Title 9
Contract to produce a work and similar contracts
Subtitle 1
Contract to produce a work
Chapter 1
General provisions
Section 631Contractual duties typical for a contract to produce a work
Section 632Remuneration
Section 632aPart payments
Section 633Material defects and defects of title
Section 634Rights of the customer in the case of defects
Section 634aLimitation of claims for defects
Section 635Cure
Section 636Special provisions on rescission and damages
Section 637Self-help
Section 638Abatement of price
Section 639Exclusion of liability
Section 640Acceptance
Section 641Due date of remuneration
Section 641a(repealed)
Section 642Cooperation by the customer
Section 643Termination for failure to collaborate
Section 644Allocation of risk
Section 645Responsibility of the customer
Section 646Completion in lieu of acceptance
Section 647Security right of the contractor
Section 647aMortgage of the owner of a shipyard
Section 648Right of termination of the customer
Section 648aTermination for a compelling reason
Section 649Cost estimate
Section 650Contract for work and materials; consumer contract on the production of digital products
Chapter 2
Construction contract
Section 650aConstruction contract
Section 650bAmendment of the contract; right of the customer to issue orders
Section 650cAdjustment of remuneration in case of orders pursuant to section 650b (2)
Section 650dInjunction
Section 650eMortgage of a building contractor
Section 650fBuilder’s security
Section 650gDetermination of the status in the case of acceptance being refused; final invoice
Section 650hWritten form of the termination
Chapter 3
Construction contract with a consumer
Section 650iConstruction contract with a consumer
Section 650jSpecifications
Section 650kSubject matter of the contract
Section 650lRight of withdrawal
Section 650mPart payments; security for the claim to remuneration
Section 650nPreparation of documents and surrender
Chapter 4
Mandatory nature
Section 650oDeviating agreements
Subtitle 2
Contract for architectural services and contract for engineering services
Section 650pContractual duties typical for contracts for architectural and for engineering services
Section 650qApplicable provisions
Section 650rSpecial right of termination
Section 650sPartial acceptance
Section 650tJoint and several liability with the contractor executing the construction work
Subtitle 3
Developer contract
Section 650uDeveloper contract; applicable provisions
Section 650vPart payments
Subtitle 4
Package travel contract, brokerage of travel contracts and brokerage of linked travel arrangements
Section 651aContractual duties typical for a package travel contract
Section 651bDelimitation from brokerage
Section 651cLinked online booking processes
Section 651dObligations to provide information; contents of the contract
Section 651eTransfer of contract
Section 651fReservations of the right to modify; price reduction
Section 651gSignificant amendments of the contract
Section 651hRescission before the start of the package
Section 651iRights of the traveller in the case of a lack of conformity of the package
Section 651jLimitation
Section 651kRemedy
Section 651lTermination
Section 651mAbatement of the price
Section 651nDamages
Section 651oNotification by the traveller of a lack of conformity
Section 651pAdmissible limitation of liability; set-off
Section 651qOrganiser’s obligation to provide assistance
Section 651rInsolvency protection; security certificate
Section 651sInsolvency protection of the organisers established in the European Economic Area
Section 651tRepatriation, prepayments
Section 651uExchange student stays
Section 651vFacilitation of travel
Section 651wFacilitation of linked travel arrangements
Section 651xLiability for booking errors
Section 651yDeviating agreements
Title 10
Brokerage contract
Subtitle 1
General provisions
Section 652Accrual of fee claim
Section 653Brokerage fee
Section 654Forfeiture of the fee claim
Section 655Reduction of the brokerage fee
Subtitle 2
Intermediation of consumer credit agreements and non-gratuitous financial accommodation
Section 655aCredit intermediation contract
Section 655bWritten form in the case of a contract with a consumer
Section 655cRemuneration
Section 655dAncillary payment
Section 655eDeviating agreements, application to founders of new businesses
Subtitle 3
Marriage broking
Section 656Marriage broking
Subtitle 4
Brokerage of purchase contracts for flats and single family houses
Section 656aText form
Section 656bPersonal scope of sections 656c and 656d
Section 656cFee claim in the case of the broker working for both parties
Section 656dAgreements on the broker’s costs
Title 11
Promise of a reward
Section 657Binding promise
Section 658Revocation
Section 659Act undertaken more than once
Section 660Collaboration by more than one person
Section 661Prize competition
Section 661aPromises of prizes
Title 12
Mandate, contract for the management of the affairs of another and payment services
Subtitle 1
Mandate
Section 662Contractual duties typical for a mandate
Section 663Duty to notify in the case of rejection
Section 664Non-transferability; liability for assistants
Section 665Deviation from instructions
Section 666Duty of information and duty to render accounts
Section 667Duty to surrender
Section 668Interest on money used
Section 669Duty of advance payment
Section 670Reimbursement of expenses
Section 671Withdrawal; termination
Section 672Death or incapacity to contract of the mandator
Section 673Death of the mandatary
Section 674Legal construct of continuation
Subtitle 2
Contract for the management of the affairs of another
Section 675Non-gratuitous management of the affairs of another
Section 675aDuties to provide information
Section 675bOrders to transfer securities in systems
Subtitle 3
Payment services
Chapter 1
General provisions
Section 675cPayment services and e-money
Section 675dInformation on payment services
Section 675eDeviating agreements
Chapter 2
Payment services contract
Section 675fPayment services contract
Section 675gAmendment of the framework contract on payment services
Section 675hNotice of termination in accordance with usual procedure of a framework contract on payment services
Section 675iExceptions for low-value payment instruments and e-money
Chapter 3
Provision and use of payment services
Subchapter 1
Authorisation of payment transactions; payment instruments; refusal of access to the payment account
Section 675jConsent and withdrawal of consent
Section 675kRestrictions on the use of a payment instrument; refusal of access to the payment account
Section 675lObligations of the payment service user with regard to payment instruments
Section 675mObligations of the payment service provider with regard to payment instruments; risk of dispatch
Subchapter 2
Execution of payment transactions
Section 675nReceipt of payment orders
Section 675oRefusal of payment orders
Section 675pIrrevocability of a payment order
Section 675qCharges for payment transactions
Section 675rExecution of a payment transaction using unique identifiers
Section 675sExecution deadline for payment transactions
Section 675tValue date and availability of funds; blocking available funds
Subchapter 3
Liability
Section 675uLiability of the payment service provider for unauthorised payment transactions
Section 675vLiability of the payer in case of misappropriation of a payment instrument
Section 675wProof of authentication
Section 675xRefund claim in case of an authorised payment transaction initiated by or through the payee
Section 675yLiability of the payment service provider in case of non-execution, defective or late execution of a payment order; obligation to make enquiries
Section 675zOther claims in case of non-execution, defective or late execution of a payment order or in case of an unauthorised payment transaction
Section 676Proof of execution of payment transactions
Section 676aEqualisation claim
Section 676bNotification of unauthorised or incorrectly executed payment transactions
Section 676cDisclaimer
Title 13
Voluntary agency without specific authorisation
Section 677Duties of the voluntary agent
Section 678Agency contrary to the will of the principal
Section 679Irrelevance of the contrary will of the principal
Section 680Agency of necessity
Section 681Ancillary duties of the voluntary agent
Section 682Lack of capacity to contract on the part of the voluntary agent
Section 683Reimbursement of expenses
Section 684Surrender of enrichment
Section 685Intention to donate
Section 686Error as to the identity of the principal
Section 687False voluntary agency without specific authorisation
Title 14
Safekeeping
Section 688Contractual duties typical for safekeeping
Section 689Remuneration
Section 690Liability for gratuitous safekeeping
Section 691Deposit with third parties
Section 692Change of safekeeping
Section 693Reimbursement of expenses
Section 694Liability in damages of the depositor
Section 695Right of the depositor to demand return
Section 696Claim of depositary for repossession of the thing deposited
Section 697Place for return
Section 698Interest on money used
Section 699Due date of remuneration
Section 700Irregular safekeeping contract
Title 15
Bringing things onto the premises of innkeepers
Section 701Liability of the innkeeper
Section 702Limitation of liability; valuables
Section 702aRelease from liability
Section 703Extinction of the claim for damages
Section 704Security right of the innkeeper
Title 16
Partnership
Section 705Contents of partnership agreement
Section 706Contributions of the partners
Section 707Increase of the agreed contribution
Section 707a to 707c(will enter into force at a future time)
Section 707dAuthorisation to issue statutory instruments
Section 708Liability of the partners
Section 709Joint management
Section 710Transfer of management
Section 711Right to object
Section 712Revocation and dismissal of management
Section 713Rights and duties of managing partners
Section 714Power of agency
Section 715Revocation of the power of agency
Section 716Right of control of the partners
Section 717Non-transferability of partner rights
Section 718Partnership assets
Section 719Joint assets
Section 720Protection of good-faith debtor
Section 721Distribution of profits and losses
Section 722Shares in profits and losses
Section 723Termination by partner
Section 724Notice of termination in the case of a partnership for life or a continuing partnership
Section 725Termination by attachment creditors
Section 726Dissolution due to achievement or impossibility of its object
Section 727Dissolution due to the death of a partner
Section 728Dissolution due to insolvency of the partnership or one of its partners
Section 729Continuation of authority to manage
Section 730Winding-up of the partnership; management
Section 731Procedure for winding-up of the partnership
Section 732Return of objects
Section 733Discharge of partnership debts; reimbursement of capital contributions
Section 734Distribution of the surplus
Section 735Duty to make subsequent contributions in case of loss
Section 736Retirement of a partner; continuing liability
Section 737Exclusion of a partner
Section 738Winding-up of the partnership on retirement
Section 739Liability for deficit
Section 740Sharing in the financial results of pending transactions
Title 17
Co-ownership
Section 741Co-ownership by defined shares
Section 742Equal shares
Section 743Share in the fruits; authority to use
Section 744Joint administration
Section 745Administration and use by resolution
Section 746Effect in relation to successors in interest
Section 747Disposition over a share and joint objects
Section 748Bearing of charges and costs
Section 749Claim to dissolution
Section 750Exclusion of dissolution in case of death
Section 751Exclusion of dissolution and successors in interest
Section 752Division in kind
Section 753Division by sale
Section 754Sale of joint claims
Section 755Discharge of a joint debt
Section 756Discharge of the debt of a part owner
Section 757Warranty upon allocation to a part owner
Section 758Claim to dissolution not subject to the statute of limitations
Title 18
Life annuity
Section 759Duration and amount of the annuity
Section 760Advance payment
Section 761Form of life annuity commitment
Title 19
Imperfect obligations
Section 762Gaming, betting
Section 763Lottery contracts and gaming contracts
Section 764(repealed)
Title 20
Suretyship
Section 765Contractual duties typical for suretyship
Section 766Written form of the declaration of suretyship
Section 767Extent of the suretyship debt
Section 768Defences of a surety
Section 769Co-suretyship
Section 770Defences of voidability and set-off
Section 771Defence of failure to pursue remedies
Section 772Duty of creditor of enforcement and realisation
Section 773Exclusion of defence of failure to pursue remedies
Section 774Statutory devolution of claims
Section 775Claim to release of the surety
Section 776Waiver of a security
Section 777Temporary suretyship
Section 778Credit mandate
Title 21
Settlement
Section 779Concept of settlement; mistake as to the basis of the settlement
Title 22
Promise to fulfil an obligation; acknowledgement of debt
Section 780Promise to fulfil an obligation
Section 781Acknowledgement of a debt
Section 782No requirements as to form for settlement
Title 23
Order
Section 783Rights derived from instruction
Section 784Acceptance of the instruction
Section 785Handover of the instruction
Section 786(repealed)
Section 787Instruction to assume debt
Section 788Underlying debt relationship
Section 789Duty of recipient of the document setting out the instruction to notify
Section 790Revocation of the instruction
Section 791Death or incapacity to contract of a party involved
Section 792Transfer of the instruction
Title 24
Bearer bond
Section 793Rights under a bearer bond
Section 794Liability of the issuer
Section 795(repealed)
Section 796Objections of the issuer
Section 797Duty to render performance only in return for handover
Section 798Replacement instrument
Section 799Declaration of invalidity
Section 800Effect of the declaration of invalidity
Section 801Extinction; prescription
Section 802Blockage of payment
Section 803Interest coupons
Section 804Loss of interest coupons or similar coupons
Section 805New interest coupons and annuity coupons
Section 806Reregistration under name
Section 807Bearer tickets and stamps
Section 808Registered securities with bearer clause
Title 25
Presentation of things
Section 809Inspection of a thing
Section 810Right to inspect instruments
Section 811Place of presentation, risk and costs
Title 26
Unjust enrichment
Section 812Claim to surrender
Section 813Performance notwithstanding defence
Section 814Knowledge that debt is not owed
Section 815Non-occurrence of result
Section 816Disposition by an unauthorised person
Section 817Breach of law or act offending common decency
Section 818Scope of the claim to enrichment
Section 819Increased liability in case of knowledge and in cases of breaches of law or acts offending common decency
Section 820Increased liability where the result is uncertain
Section 821Enrichment defence
Section 822Duty to surrender of third parties
Title 27
Torts
Section 823Liability in damages
Section 824Endangering credit
Section 825Inducing others to sexual acts
Section 826Intentional damage inflicted in a manner offending common decency
Section 827Exclusion and reduction of responsibility
Section 828Minors
Section 829Liability in damages for reasons of equity
Section 830Joint tortfeasors and persons involved
Section 831Liability for vicarious agents
Section 832Liability of a person with a duty of supervision
Section 833Liability of animal keeper
Section 834Liability of animal minder
Section 835(repealed)
Section 836Liability of the owner of a plot of land
Section 837Liability of building possessor
Section 838Liability of the person with a duty of upkeep regarding a building
Section 839Liability in case of breach of official duty
Section 839aLiability of court-appointed expert
Section 840Liability of more than one person
Section 841Compensation for liability of a public official
Section 842Extent of liability in damages in case of injury of a person
Section 843Annuity in money or lump sum settlement
Section 844Third-party compensation claims in the case of death
Section 845Compensation claims for lost services
Section 846Contributory negligence of the injured person
Section 847(repealed)
Section 848Liability for chance in the case of deprivation of a thing
Section 849Interest on the compensation sum
Section 850Reimbursement of outlays
Section 851Compensation payment to unauthorised parties
Section 852Claim to surrender after end of limitation period
Section 853Defence of bad faith
Book 3
Law of property
Division 1
Possession
Section 854Acquisition of possession
Section 855Agent in possession
Section 856Ending of possession
Section 857Inheritability
Section 858Prohibited interference with possession
Section 859Self-help by the possessor
Section 860Self-help by the agent in possession
Section 861Claim on account of deprivation of possession
Section 862Claim on account of interference with possession
Section 863Objections of the party depriving of possession or of the disturber
Section 864Extinction of claims to possession
Section 865Part possession
Section 866Co-possession
Section 867Possessor’s right of pursuit
Section 868Indirect possession
Section 869Claims of the indirect possessor
Section 870Transfer of indirect possession
Section 871Multilevel indirect possession
Section 872Proprietary possession
Division 2
General provisions on rights in land
Section 873Acquisition by agreement and registration
Section 874Reference to approval of registration
Section 875Cancellation of a right
Section 876Cancellation of an encumbered right
Section 877Alterations of rights
Section 878Subsequent restrictions on disposition
Section 879Order of priority of more than one right
Section 880Change of priority
Section 881Reservation of priority
Section 882Maximum amount of compensation for lost value
Section 883Prerequisites and effect of priority notice
Section 884Effect in relation to heirs
Section 885Prerequisite for the entry of the priority notice
Section 886Claim for removal
Section 887Judicial call of the priority notice claimant
Section 888Claim to approval of the person entitled to the priority notice
Section 889Exclusion of merger for rights in rem
Section 890Union of plots of land; addition
Section 891Statutory presumption
Section 892Presumption of legal force of the contents of the Land Register
Section 893Legal transaction with the person entered in the Land Register
Section 894Correction of the Land Register
Section 895Prior entry of the person obliged
Section 896Submission of certificate
Section 897Costs of correction
Section 898Claims to correction not subject to the statute of limitations
Section 899Entry of an objection
Section 899aProvisos for civil-law partnerships
Section 900Acquisition by prescription following entry in the Land Register
Section 901Extinction of rights not entered in the Land Register
Section 902Rights entered in the Land Register not subject to the statute of limitations
Division 3
Ownership
Title 1
Subject matter of ownership
Section 903Powers of the owner
Section 904Necessity
Section 905Restriction of ownership
Section 906Introduction of imponderable substances
Section 907Facilities threatening danger
Section 908Imminent collapse of building
Section 909Excavation
Section 910Overhang
Section 911Falling fruit
Section 912Encroachment; duty to tolerate
Section 913Payment of periodical payments for encroachment
Section 914Priority, registration and extinction of periodical payments
Section 915Purchase
Section 916Adverse effect on heritable building right or servitude
Section 917Right of way of necessity
Section 918Exclusion of the right of way of necessity
Section 919Boundary marking
Section 920Confusion of boundaries
Section 921Joint use of boundary installations
Section 922Manner of use and maintenance
Section 923Boundary tree
Section 924Neighbour-law claims not subject to the statute of limitations
Title 2
Acquisition and loss of ownership of plots of land
Section 925Declaration of conveyance
Section 925aDocument of land transaction
Section 926Accessories of the plot of land
Section 927Judicial call procedure
Section 928Relinquishment of ownership, appropriation by fiscal authority
Title 3
Acquisition and loss of ownership of movable things
Subtitle 1
Transfer
Section 929Agreement and delivery
Section 929aAgreement with regard to unregistered ship
Section 930Constructive delivery
Section 931Assignment of claim to surrender
Section 932Good faith acquisition from a person not entitled
Section 932aGood faith acquisition of unregistered ships
Section 933Good faith acquisition on constructive delivery
Section 934Good faith acquisition on assignment of claim to surrender
Section 935No good faith acquisition of lost things
Section 936Extinction of third party rights
Subtitle 2
Acquisition by prescription
Section 937Prerequisites, exclusion in the case of knowledge
Section 938Presumption of proprietary possession
Section 939Suspension of prescription
Section 940Interruption by loss of possession
Section 941Interruption by act of execution
Section 942Effect of interruption
Section 943Acquisition by prescription and succession in title
Section 944Possessor of an inheritance
Section 945Extinction of third party rights
Subtitle 3
Combination, intermixture, processing
Section 946Combination with a plot of land
Section 947Combination with movable things
Section 948Intermixture
Section 949Extinction of third party rights
Section 950Processing
Section 951Compensation for loss of rights
Section 952Ownership of documents of debt
Subtitle 4
Acquisition of products and other components of a thing
Section 953Ownership of separated products and components
Section 954Acquisition by person entitled in rem
Section 955Acquisition by proprietary possessor in good faith
Section 956Acquisition by person entitled in personam
Section 957Permission by the person not entitled
Subtitle 5
Appropriation
Section 958Acquisition of ownership of ownerless movable things
Section 959Abandonment of ownership
Section 960Wild animals
Section 961Loss of ownership of bee swarms
Section 962Right of pursuit of the owner
Section 963Merging of bee swarms
Section 964Intermixture of bee swarms
Subtitle 6
Finding
Section 965Duty of the finder to notify
Section 966Duty of safekeeping
Section 967Duty to deliver
Section 968Extent of liability
Section 969Surrender to the loser
Section 970Reimbursement of expenses
Section 971Finder’s reward
Section 972Right of retention of the finder
Section 973Acquisition of ownership by the finder
Section 974Acquisition of ownership after concealment
Section 975Rights of the finder after delivery
Section 976Acquisition of ownership by the municipality
Section 977Claim in enrichment
Section 978Finding in public authority or transport agency
Section 979Sale; authorisation to issue an ordinance
Section 980Notice by publication of the finding
Section 981Receipt of the proceeds of auction
Section 982Provisions for implementation
Section 983Undeliverable things in the possession of authorities
Section 984Treasure trove
Title 4
Claims arising from ownership
Section 985Claim to surrender
Section 986Objections of the possessor
Section 987Emoluments after litigation is pending
Section 988Emoluments of the possessor who makes no payment
Section 989Damages after litigation is pending
Section 990Liability of possessor with knowledge
Section 991Liability of intermediary possessor in the case of indirect possession
Section 992Liability of the wrongful possessor
Section 993Liability of the possessor in good faith
Section 994Necessary outlays
Section 995Charges
Section 996Useful outlays
Section 997Right of removal
Section 998Farming costs for agricultural plot of land
Section 999Reimbursement of outlays of the predecessor in title
Section 1000Right of retention of the possessor
Section 1001Action for reimbursement of outlays
Section 1002Extinction of the claim for outlays
Section 1003Right to satisfaction of the possessor
Section 1004Claim for removal and injunction
Section 1005Right of pursuit
Section 1006Presumption of ownership for possessor
Section 1007Claims of the former possessor, exclusion in the case of knowledge
Title 5
Co-ownership
Section 1008Co-ownership by fractional shares
Section 1009Encumbrance to the benefit of a co-owner
Section 1010Successor in interest of a co-owner
Section 1011Claims arising from co-ownership
Sections 1012 - 1017(repealed)
Division 4
Servitudes
Title 1
Easements
Section 1018Statutory definition of easement
Section 1019Benefit of the dominant plot of land
Section 1020Considerate use
Section 1021Agreed duty of maintenance
Section 1022Installations on building structures
Section 1023Moving the use
Section 1024Coincidence of more than one right of use
Section 1025Division of the dominant plot of land
Section 1026Division of the servient plot of land
Section 1027Interference with easement
Section 1028Limitation
Section 1029Protection of possession of the lawful possessor
Title 2
Usufruct
Subtitle 1
Usufruct in things
Section 1030Statutory definition of usufruct in things
Section 1031Application to accessories
Section 1032Creation of usufruct in movable things
Section 1033Acquisition by prescription
Section 1034Determination of the condition
Section 1035Usufruct in aggregate of things; list
Section 1036Right of possession; exercise of usufruct
Section 1037Transformation
Section 1038Economic plan for forests and mines
Section 1039Excessive taking of fruits
Section 1040Treasure
Section 1041Upkeep of the thing
Section 1042Duty of notification by the usufructuary
Section 1043Repair or replacement
Section 1044Toleration of repairs
Section 1045Obligation of the usufructuary to insure
Section 1046Usufruct in an insurance claim
Section 1047Bearing of charges
Section 1048Usufruct in plot of land with inventory
Section 1049Reimbursement of outlays
Section 1050Wear and tear
Section 1051Provision of security
Section 1052Judicial administration in the absence of security
Section 1053Application for a prohibitory injunction in the case of unauthorised use
Section 1054Judicial administration on the basis of breach of duty
Section 1055Duty of return of the usufructuary
Section 1056Leases and usufructuary leases at the end of the usufruct
Section 1057Limitation of compensation claims
Section 1058Grantor as owner
Section 1059Non-transferability; ceding the exercise
Section 1059aTransferability in the case of a legal person or of a partnership having legal personality
Section 1059bNon-distrainability
Section 1059cDevolution or transfer of usufruct
Section 1059dLeases and usufructuary leases on the transfer of the usufruct
Section 1059eClaim to grant of the usufruct
Section 1060Coincidence of more than one right of use
Section 1061Death of the usufructuary
Section 1062Extension of cancellation to accessories
Section 1063Coincidence with ownership
Section 1064Cancellation of usufruct in movable things
Section 1065Adverse effect on right of usufruct
Section 1066Usufruct in the share of a co-owner
Section 1067Usufruct in consumable things
Subtitle 2
Usufruct in rights
Section 1068Statutory definition of usufruct in rights
Section 1069Creation
Section 1070Usufruct in a right to performance
Section 1071Cancellation or alteration of the encumbered right
Section 1072Termination of usufruct
Section 1073Usufruct in a life annuity
Section 1074Usufruct in a claim; notice and collection
Section 1075Effect of performance
Section 1076Usufruct in claim bearing interest
Section 1077Notice of termination and payment
Section 1078Cooperation in collection
Section 1079Investment of the capital
Section 1080Usufruct in a land charge or annuity land charge
Section 1081Usufruct in bearer instruments or instruments made out to order
Section 1082Deposit
Section 1083Cooperation in collection
Section 1084Consumable things
Subtitle 3
Usufruct in assets
Section 1085Creation of usufruct in assets
Section 1086Rights of the creditors of the grantor
Section 1087Relationship between usufructuary and grantor
Section 1088Liability of the usufructuary
Section 1089Usufruct in an inheritance
Title 3
Restricted personal easements
Section 1090Statutory definition of the restricted personal easement
Section 1091Scope
Section 1092Non-transferability; ceding the exercise
Section 1093Right of residence
Division 5
Right of preemption
Section 1094Statutory contents of the in-rem right of preemption
Section 1095Encumbrance of a fraction
Section 1096Application to accessories
Section 1097Creation for one or more cases of sale
Section 1098Effect of a right of preemption
Section 1099Notifications
Section 1100Rights of the purchaser
Section 1101Release of the person entitled
Section 1102Release of the purchaser
Section 1103Subjective in-rem right of preemption and personal right of preemption
Section 1104Exclusion of unknown entitled persons
Division 6
Charges on land
Section 1105Statutory contents of the charge on land
Section 1106Encumbrance of a fraction
Section 1107Individual payments
Section 1108Personal liability of the owner
Section 1109Division of the dominant plot of land
Section 1110Subjective in-rem charge on land
Section 1111Personal charge on land
Section 1112Exclusion of unknown entitled persons
Division 7
Mortgage, land charge, annuity land charge
Title 1
Mortgage
Section 1113Statutory contents of the mortgage
Section 1114Encumbrance of a fraction
Section 1115Entry of the mortgage
Section 1116Certificated and uncertificated mortgage
Section 1117Acquisition of the certificated mortgage
Section 1118Liability for incidental claims
Section 1119Extension of liability for interest
Section 1120Extension to products, parts and accessories
Section 1121Release from liability through alienation and removal
Section 1122Release from liability without alienation
Section 1123Extension to claim for rent or for usufructuary rent
Section 1124Advance disposition over the rent or usufructuary rent
Section 1125Set-off against rent or usufructuary rent
Section 1126Extension to recurring acts of performance
Section 1127Extension to insurance claim
Section 1128Insurance on buildings
Section 1129Other insurance against damage
Section 1130Replacement clause
Section 1131Addition of a plot of land
Section 1132Blanket mortgage
Section 1133Danger to the security of the mortgage
Section 1134Application for an injunction
Section 1135Deterioration of accessories
Section 1136Restraint on disposition by legal transaction
Section 1137Defences of the owner
Section 1138Presumption of legal force of the contents of the Land Register
Section 1139Objection with regard to an uncertificated mortgage for a loan
Section 1140Mortgage certificate and inaccuracy of the Land Register
Section 1141Notice of termination of the mortgage
Section 1142Owner’s right to provide satisfaction
Section 1143Devolution of claim
Section 1144Handover of documents
Section 1145Partial satisfaction
Section 1146Default interest
Section 1147Satisfaction by compulsory enforcement
Section 1148Fiction of ownership
Section 1149Prohibited agreements on satisfaction
Section 1150Right of redemption of third parties
Section 1151Change of priority for partial mortgages
Section 1152Partial mortgage certificate
Section 1153Transfer of mortgage and claim
Section 1154Assignment of the claim
Section 1155Presumption of legal force of certified declarations of assignment
Section 1156Legal relationship between the owner and the new creditor
Section 1157Continuation of defences against the mortgage
Section 1158Future collateral performance
Section 1159Arrears of collateral performance
Section 1160Enforcement of a certificated mortgage
Section 1161Enforcement of the claim
Section 1162Judicial call with regard to the mortgage certificate
Section 1163Owner mortgage
Section 1164Devolution of the mortgage to the debtor
Section 1165Discharge of the debtor
Section 1166Notification of the debtor
Section 1167Delivery of correction documents
Section 1168Waiver of the mortgage
Section 1169Defence with a negative effect on a right
Section 1170Exclusion of unknown creditors
Section 1171Exclusion by deposit
Section 1172Owner blanket mortgage
Section 1173Satisfaction by one of the owners
Section 1174Satisfaction by the personal debtor
Section 1175Waiver of the blanket mortgage
Section 1176Owner partial mortgage; conflict clause
Section 1177Owner land charge, owner mortgage
Section 1178Mortgage for collateral performance and costs
Section 1179Priority notice of right to deletion
Section 1179aClaim to deletion in the case of third party rights
Section 1179bClaim to deletion based on one’s own right
Section 1180Substitution for the claim
Section 1181Extinction by satisfaction from the plot of land
Section 1182Transfer in the case of satisfaction from the blanket mortgage
Section 1183Cancellation of the mortgage
Section 1184Debt-securing mortgage
Section 1185Uncertificated mortgage; inapplicable provisions
Section 1186Permitted conversions
Section 1187Debt-securing mortgage for bearer instruments and instruments made out to order
Section 1188Special provision for bearer bonds
Section 1189Appointment of a Land Register representative
Section 1190Maximum amount mortgage
Title 2
Land charge, annuity land charge
Subtitle 1
Land charge
Section 1191Statutory contents of the land charge
Section 1192Applicable provisions
Section 1193Termination
Section 1194Place of payment
Section 1195Bearer land charge
Section 1196Owner land charge
Section 1197Deviations from third party land charge
Section 1198Permitted conversions
Subtitle 2
Annuity land charge
Section 1199Statutory contents of the annuity land charge
Section 1200Applicable provisions
Section 1201Right of redemption
Section 1202Termination
Section 1203Permitted conversions
Division 8
Pledge of movable things and over rights
Title 1
Pledge of movable things
Section 1204Statutory contents of the pledge of movable things
Section 1205Creation
Section 1206Replacement of delivery by granting joint possession
Section 1207Pledging by an unauthorised person
Section 1208Acquisition of priority of rank in good faith
Section 1209Priority of the pledge
Section 1210Extent of liability of the pledge
Section 1211Defences of the pledgor
Section 1212Extension to separated products
Section 1213Pledge of emoluments
Section 1214Duties of the pledgee entitled to emoluments
Section 1215Duty of safekeeping
Section 1216Reimbursement of outlays
Section 1217Violation of rights by the pledgee
Section 1218Rights of the pledgor in the case of imminent spoilage
Section 1219Rights of the pledgee in the case of imminent spoilage
Section 1220Warning of auction
Section 1221Sale by private agreement
Section 1222Pledge of more than one thing
Section 1223Duty to return the pledged item; right to redeem the pledged item
Section 1224Satisfaction by deposit or set-off
Section 1225Devolution of claim to the pledgor
Section 1226Limitation of compensation claims
Section 1227Protection of the pledge
Section 1228Satisfaction by sale of the pledged item
Section 1229Prohibition of a forfeiture agreement
Section 1230Selection of pledged item from more than one pledged item
Section 1231Surrender of pledged item for sale
Section 1232Lower-ranking pledgees
Section 1233Execution of the sale
Section 1234Warning of sale; waiting period
Section 1235Public auction
Section 1236Place of auction
Section 1237Notice by publication
Section 1238Conditions of sale
Section 1239Bidding by creditor and owner
Section 1240Things made of gold or silver
Section 1241Notification of the owner
Section 1242Effects of the lawful alienation
Section 1243Unlawful alienation
Section 1244Acquisition in good faith
Section 1245Deviating agreements
Section 1246Deviation for reasons of equity
Section 1247Proceeds of the pledged item
Section 1248Presumption of ownership
Section 1249Right of redemption
Section 1250Transfer of claim
Section 1251Effect of the devolution of the pledge
Section 1252Extinction with the claim
Section 1253Extinction by return
Section 1254Claim for return
Section 1255Cancellation of the pledge
Section 1256Coincidence of pledge and ownership
Section 1257Pledge by operation of law
Section 1258Pledge of the share of a co-owner
Section 1259Realisation of a commercial pledged item
Sections 1260 - 1272(repealed)
Title 2
Pledge of rights
Section 1273Statutory contents of the pledge of rights
Section 1274Creation
Section 1275Pledge of right to performance
Section 1276Cancellation or alteration of the pledged right
Section 1277Satisfaction by compulsory enforcement
Section 1278Extinction by return
Section 1279Pledge of a claim
Section 1280Notification of the debtor
Section 1281Performance before the due date
Section 1282Performance after the due date
Section 1283Termination
Section 1284Deviating agreements
Section 1285Cooperation in collection
Section 1286Duty of termination in the case of danger
Section 1287Effect of performance
Section 1288Investment of collected money
Section 1289Extension to the interest
Section 1290Collection in the case of multiple pledges
Section 1291Pledge of land charge or annuity land charge
Section 1292Pledging of instruments made out to order
Section 1293Pledge of bearer instruments
Section 1294Collection and notice of termination
Section 1295Private sale of instruments made out to order
Section 1296Extension to interest coupons
Book 4
Family law
Division 1
Civil marriage
Title 1
Engagement
Section 1297No petition for a marriage to be entered into, nullity of a promise to pay a penalty
Section 1298Duty of compensation in the case of withdrawal
Section 1299Withdrawal by reason of fault of the other party
Section 1300(repealed)
Section 1301Return of the presents
Section 1302Limitation
Title 2
Entering into marriage
Subtitle 1
Capacity to marry
Section 1303Marriageable age
Section 1304Incapacity to contract
Section 1305(repealed)
Subtitle 2
Impediments to marriage
Section 1306Existing marriage or life partnership
Section 1307Relationship by blood
Section 1308Adoption
Subtitle 3
Certificate of no impediment
Section 1309Certificate of no impediment for foreigners
Subtitle 4
Marriage
Section 1310Competence of the registrar of births, deaths and marriages, curing defective marriages
Section 1311Personal declaration
Section 1312Marriage ceremony
Title 3
Annulment of marriage
Section 1313Annulment by judicial decision
Section 1314Grounds of annulment
Section 1315Exclusion of annulment
Section 1316Entitlement to petition
Section 1317Period for filing the petition
Section 1318Consequences of annulment
Title 4
Remarriage after declaration of death
Section 1319Annulment of the previous marriage
Section 1320Annulment of the new marriage
Sections 1321 - 1352(repealed)
Title 5
Effects of marriage in general
Section 1353Conjugal union
Section 1354(repealed)
Section 1355Family name
Section 1356Household management, gainful employment
Section 1357Transactions to provide the necessities of life
Section 1358(repealed)
Section 1359Scope of duty of care
Section 1360Duty of family maintenance
Section 1360aScope of the obligation to maintain
Section 1360bOverpayment
Section 1361Maintenance when spouses are living apart
Section 1361aAllocation of household effects when spouses are living apart
Section 1361bMatrimonial residence when spouses are living apart
Section 1362Presumption of ownership
Title 6
Matrimonial property regime
Subtitle 1
Statutory property regime
Section 1363Community of accrued gains
Section 1364Management of assets
Section 1365Disposition over assets as a whole
Section 1366Ratification of contracts
Section 1367Unilateral legal transactions
Section 1368Asserting the ineffectiveness
Section 1369Dispositions over household objects
Section 1370(repealed)
Section 1371Equalisation of accrued gains in the case of death
Section 1372Equalisation of accrued gains in other cases
Section 1373Accrued gains
Section 1374Initial assets
Section 1375Final assets
Section 1376Ascertainment of the value of the initial and final assets
Section 1377List of initial assets
Section 1378Equalisation claim
Section 1379Duty of information
Section 1380Set-off of advancements
Section 1381Refusal of satisfaction for gross inequity
Section 1382Deferment
Section 1383Transfer of assets
Section 1384Cut-off date for computing the accrued gains and the amount of the equalisation claim in the case of divorce
Section 1385Premature equalisation of accrued gains of the spouse entitled to an equalisation claim in case of premature cancellation of the community of accrued gains
Section 1386Premature suspension of the community of accrued gains
Section 1387Cut-off date for computing the accrued gains and amount of the equalisation claim in the case of premature equalisation or premature suspension
Section 1388Occurrence of separation of property
Section 1389(repealed)
Section 1390Claims against third parties of the person entitled to equalisation
Sections 1391 - 1407(repealed)
Subtitle 2
Contractual property regime
Chapter 1
General provisions
Section 1408Marriage contract, freedom of contract
Section 1409Restriction of freedom of contract
Section 1410Form
Section 1411Marriage contracts of persons placed under the care of a custodian
Section 1412Effect in relation to third parties
Section 1413Revocation of permission to manage assets
Chapter 2
Separation of property
Section 1414Commencement of separation of property
Chapter 3
Community of property
Subchapter 1
General provisions
Section 1415Agreement by marriage contract
Section 1416Common matrimonial property
Section 1417Separate property
Section 1418Reserved property
Section 1419Joint ownership
Section 1420Use for maintenance
Section 1421Management of the common matrimonial property
Subchapter 2
Management of the common matrimonial property by one spouse
Section 1422Subject matter of right of management
Section 1423Disposition over the common matrimonial property as a whole
Section 1424Disposition over plots of land, ships or ships under construction
Section 1425Donations
Section 1426Substitution of the approval of the other spouse
Section 1427Legal consequences of lack of consent
Section 1428Dispositions without approval
Section 1429Emergency right of management
Section 1430Substitution of the approval of the managing spouse
Section 1431Independent trade or business
Section 1432Acceptance of an inheritance; refusal of offer to enter into contract or of donation
Section 1433Continuation of a legal dispute
Section 1434Unjust enrichment of the common matrimonial property
Section 1435Duties of the managing spouse
Section 1436Managing spouse under custodianship
Section 1437Obligations of the common matrimonial property; personal liability
Section 1438Liability of the common matrimonial property
Section 1439No liability on acquisition of an inheritance
Section 1440Liability for reserved or separate property
Section 1441Liability as between the spouses
Section 1442Obligations of the separate property and of a trade or business
Section 1443Costs of litigation
Section 1444Costs of the advancement of a child
Section 1445Equalisation between reserved property, separate property and common matrimonial property
Section 1446Due date of the equalisation claim
Section 1447Petition of the non-managing spouse for termination
Section 1448Petition of the managing spouse for termination
Section 1449Effect of the judicial termination decision
Subchapter 3
Joint management of the common matrimonial property by the spouses
Section 1450Joint management by the spouses
Section 1451Duty of both spouses to cooperate
Section 1452Substitution of approval
Section 1453Disposition without consent
Section 1454Emergency right of management
Section 1455Acts of management without the cooperation of the other spouse
Section 1456Independent trade or business
Section 1457Unjust enrichment of the common matrimonial property
Section 1458(repealed)
Section 1459Obligations of the common matrimonial property; personal liability
Section 1460Liability of the common matrimonial property
Section 1461No liability on acquisition of an inheritance
Section 1462Liability for reserved or separate property
Section 1463Liability as between the spouses
Section 1464Obligations of the separate property and of a trade or business
Section 1465Costs of litigation
Section 1466Costs of the advancement of a child that is not a child of the spouses
Section 1467Equalisation between reserved property, separate property and common matrimonial property
Section 1468Due date of the equalisation claim
Section 1469Petition for termination
Section 1470Effect of the judicial termination decision
Subchapter 4
Partitioning of the common matrimonial property
Section 1471Beginning of the partitioning
Section 1472Joint management of the common matrimonial property
Section 1473Direct substitution
Section 1474Implementation of the partitioning
Section 1475Discharge of the obligations of the common matrimonial property
Section 1476Division of the surplus
Section 1477Implementation of the division
Section 1478Partitioning after divorce
Section 1479Partitioning after judicial termination decision
Section 1480Liability to third parties after the division
Section 1481Liability of the spouses to each other
Section 1482Dissolution of marriage by death
Subchapter 5
Continued community of property
Section 1483Occurrence of continued community of property
Section 1484Refusal of continued community of property
Section 1485Common matrimonial property
Section 1486Reserved property; separate property
Section 1487Legal position of the spouse and the descendants
Section 1488Obligations of the common matrimonial property
Section 1489Personal liability for the obligations of the common matrimonial property
Section 1490Death of a descendant
Section 1491Waiver by a descendant
Section 1492Termination by the surviving spouse
Section 1493Remarriage or establishment of a life partnership by the surviving spouse
Section 1494Death of the surviving spouse
Section 1495Petition of a descendant for termination
Section 1496Effect of the judicial termination decision
Section 1497Legal relationship until partitioning
Section 1498Implementation of the partitioning
Section 1499Obligations borne by the surviving spouse
Section 1500Obligations borne by the descendants
Section 1501Set-off of lump sum payments
Section 1502Right of surviving spouse to assume assets
Section 1503Division among the descendants
Section 1504Adjustment of liability between descendants
Section 1505Supplementation of the share of a descendant
Section 1506Unworthiness to receive a share
Section 1507Certificate on continuation of the community of property
Section 1508(repealed)
Section 1509Exclusion of the continued community of property by testamentary disposition
Section 1510Effect of exclusion
Section 1511Exclusion of a descendant
Section 1512Reduction of the share
Section 1513Deprivation of the share
Section 1514Disposition of the amount withheld
Section 1515Right of a descendant and of the spouse to assume assets
Section 1516Approval of the other spouse
Section 1517Waiver of their share by a descendant
Section 1518Mandatory law
Chapter 4
Optional Regime of the Community of Accrued Gains
Section 1519Agreement by marriage contract
Section 1520 to 1557(repealed)
Subtitle 3
Matrimonial property register
Section 1558Competent court of registration
Section 1559Change of habitual residence
Section 1560Application for entry
Section 1561Requirements for application
Section 1562Notice by publication
Section 1563Inspection of the register; application of Regulation (EU) 2016/679 in registry proceedings
Title 7
Divorce
Subtitle 1
Grounds of divorce
Section 1564Divorce by judicial decision
Section 1565Breakdown of marriage
Section 1566Presumption of breakdown
Section 1567Living apart
Section 1568Hardship clause
Subtitle 1a
Treatment of the matrimonial residence and of the household objects on the occasion of divorce
Section 1568aMatrimonial residence
Section 1568bHousehold objects
Subtitle 2
Maintenance of the divorced spouse
Chapter 1
Principle
Section 1569Principle of personal responsibility
Chapter 2
Entitlement to maintenance
Section 1570Maintenance to care for a child
Section 1571Maintenance by reason of old age
Section 1572Maintenance for illness or infirmity
Section 1573Maintenance for unemployment and topping-up maintenance
Section 1574Appropriate gainful employment
Section 1575Training, further training or retraining
Section 1576Maintenance for reasons of equity
Section 1577Indigence
Section 1578Amount of maintenance
Section 1578aPresumption of cover in the case of additional expenditure resulting from injury
Section 1578bReduction and time limitation of maintenance on grounds of inequity
Section 1579Restriction or refusal of maintenance for gross inequity
Section 1580Duty of information
Chapter 3
Ability to pay and priority
Section 1581Ability to pay
Section 1582Priority of the divorced spouse where more than one person is entitled to maintenance
Section 1583Influence of the matrimonial property regime
Section 1584Priority of more than one person liable for maintenance
Chapter 4
Form of the maintenance claim
Section 1585Nature of maintenance payment
Section 1585aProvision of security
Section 1585bMaintenance for the past
Section 1585cAgreements on maintenance
Chapter 5
End of the maintenance claim
Section 1586Remarriage, establishment of a life partnership or death of the person entitled
Section 1586aRevival of the maintenance claim
Section 1586bObligation not extinguished on death of the person obliged
Subtitle 3
Equalisation of pension rights
Section 1587Reference to the Equalisation of Pension Rights Act (Versorgungsausgleichsgesetz)
Title 8
Church duties
Section 1588(no heading)
Division 2
Relationship
Title 1
General provisions
Section 1589Relationship by blood
Section 1590Relationship by marriage
Title 2
Descent
Section 1591Maternity
Section 1592Paternity
Section 1593Paternity in the case of dissolution of the marriage by death
Section 1594Acknowledgement of paternity
Section 1595Need for approval of the acknowledgement
Section 1596Acknowledgement and approval in the case of lack of capacity to contract or limited capacity to contract
Section 1597Formal requirements; revocation
Section 1597aProhibition of wrongful acknowledgment of paternity
Section 1598Ineffectiveness of acknowledgement, approval and revocation
Section 1598aClaim to consent to a genetic examination to clarify natural parentage
Section 1599Non-existence of paternity
Section 1600Persons entitled to contest
Section 1600aPersonal contestation; contestation in the case of lack of capacity to contract or limited capacity to contract
Section 1600bContestation periods
Section 1600cPresumption of paternity in contestation proceedings
Section 1600dCourt determination of paternity
Title 3
Obligation to maintain
Subtitle 1
General provisions
Section 1601Persons with an obligation to maintain
Section 1602Indigence
Section 1603Ability to pay
Section 1604Influence of the matrimonial property regime
Section 1605Duty of information
Section 1606Order of priority of more than one person obliged
Section 1607Substituted liability and statutory devolution of claim
Section 1608Liability of the spouse or life partner
Section 1609Priority of more than person entitled to maintenance
Section 1610Amount of maintenance
Section 1610aPresumption of cover in the case of additional expenditure resulting from injury
Section 1611Restriction or end of obligation
Section 1612Nature of maintenance payment
Section 1612aMinimum maintenance of minor children; authorisation to issue statutory instruments
Section 1612bMeeting cash requirements through child benefit
Section 1612cSet-off of other child-related payments
Section 1613Maintenance for the past
Section 1614Waiver of maintenance claim; advance performance
Section 1615Extinction of the maintenance claim
Subtitle 2
Special provisions for the child and its parents who are not married to each other
Section 1615aApplicable provisions
Sections 1615b to 1615k(repealed)
Section 1615lMaintenance claim of mother and father by reason of the birth
Section 1615mFuneral costs for the mother
Section 1615nNo expiry on the death of the father or stillbirth
Title 4
Legal relationship between the parents and the child in general
Section 1616Birth name in the case of parents with family name
Section 1617Birth name in the case of parents without family name and with joint parental custody
Section 1617aBirth name in the case of parents without family name and with sole parental custody
Section 1617bName in the case of subsequent joint parental custody or ostensible paternity
Section 1617cName in the case of change of name by the parents
Section 1618Bringing a child under a family name
Section 1618aDuty of assistance and respect
Section 1619Services in house and business
Section 1620Outlays of the child for the household of its parents
Sections 1621 - 1623(repealed)
Section 1624Advancement from the parental assets
Section 1625Advancement from the assets of the child
Title 5
Parental custody
Section 1626Parental custody, principles
Section 1626aParental custody of parents who are not married to one another; declarations of parental custody
Section 1626bSpecial prerequisites for the effectiveness of the declaration of parental custody
Section 1626cDeclaring in person; parent with limited capacity to contract
Section 1626dForm; duty of notification
Section 1626eIneffectiveness
Section 1627Exercise of parental custody
Section 1628Court decision in the case of differences of opinion between the parents
Section 1629Representation of the child
Section 1629aRestriction of liability of minors
Section 1630Parental custody in the case of appointment of a curator or of foster care
Section 1631Contents and limits of care for the person of the child
Section 1631aTraining and profession
Section 1631bPlacement involving deprivation of liberty and measures involving deprivation of liberty
Section 1631cProhibition of sterilisation
Section 1631dCircumcision of the male child
Section 1631eTreatment of children with variants of sexual development
Section 1632Surrender of the child; determination of contact; order that child remains in foster care
Section 1633(repealed)
Sections 1634 - 1637(repealed)
Section 1638Restriction of care for the assets of the child
Section 1639Directions of the testator or donor
Section 1640Inventory of assets
Section 1641Prohibition of donation
Section 1642Investment of money
Section 1643Legal transactions subject to approval
Section 1644Making available assets to the child
Section 1645New trade or business
Section 1646Acquisition with funds of the child
Section 1647(repealed)
Section 1648Reimbursement of outlays
Section 1649Use of the income from the assets of the child
Sections 1650 - 1663(repealed)
Section 1664Limited liability of the parents
Section 1665(repealed)
Section 1666Court measures in the case of endangerment of the best interests of the child
Section 1666aPrinciple of proportionality; priority of public support measures
Section 1667Court measures in the case of endangerment of the assets of the child
Sections 1668 - 1670(repealed)
Section 1671Transfer of sole custody where the parents live apart
Section 1672(repealed)
Section 1673Suspension of parental custody in the case of a legal impediment
Section 1674Suspension of parental custody in the case of a factual impediment
Section 1674aSuspension of the mother’s parental custody for a child delivered by confidential birth
Section 1675Effect of the suspension
Section 1676(repealed)
Section 1677Termination of parental custody by declaration of death
Section 1678Consequences for the other parent of the actual prevention or of the suspension
Section 1679(repealed)
Section 1680Death of a parent or removal of the parental custody
Section 1681Declaration of death of a parent
Section 1682Order that the child remains with persons to whom it relates
Section 1683(repealed)
Section 1684Contact of the child with its parents
Section 1685Contact of the child with other persons to whom it relates
Section 1686Information on the personal circumstances of the child
Section 1686aRights of the biological but not legal father
Section 1687Exercise of joint parental custody when the parents live apart
Section 1687aPower to make decision of the parent without parental custody
Section 1687bParental custody powers of the spouse
Section 1688Decisions of the foster carer
Sections 1689 - 1692(repealed)
Section 1693Court measures where the parents are prevented
Sections 1694, 1695(repealed)
Section 1696Amendment of judicial decisions and of court-approved settlements
Section 1697(repealed)
Section 1697aPrinciple of best interests of child
Section 1698Surrender of the assets of the child; rendering accounts
Section 1698aContinuation of transactions in ignorance that parental custody has ended
Section 1698bContinuation of urgent transactions after the death of the child
Sections 1699 - 1711(repealed)
Title 6
Legal advisership
Section 1712Youth welfare office as legal adviser; tasks
Section 1713Persons entitled to apply
Section 1714Occurrence of legal advisership
Section 1715Termination of legal advisership
Section 1716Effects of legal advisership
Section 1717Requirement of habitual residence on domestic territory
Sections 1718 - 1740(repealed)
Title 7
Adoption
Subtitle 1
Adoption of minors
Section 1741Admissibility of the adoption
Section 1742Adoption only as child of the spouses
Section 1743Minimum age
Section 1744Probationary period
Section 1745Prohibition of adoption
Section 1746Consent of the child
Section 1747Consent of the parents of the child
Section 1748Substitution of the consent of a parent
Section 1749Consent of the spouse
Section 1750Declaration of consent
Section 1751Effect of parental consent, maintenance obligation
Section 1752Order of the family court, application
Section 1753Adoption after death
Section 1754Effect of adoption
Section 1755Extinction of relationships
Section 1756Continuation of relationships
Section 1757Name of the child
Section 1758Prohibition on disclosure and exploratory questioning
Section 1759Cancellation of the adoption relationship
Section 1760Setting aside for lack of declarations
Section 1761Impediments preventing cancellation
Section 1762Entitlement to apply; period for filing application, form
Section 1763Cancellation by the court of its own motion
Section 1764Effect of cancellation
Section 1765Name of the child after the cancellation
Section 1766Marriage between adoptive parent and child
Section 1766aAdoption of children of a partner who is not a spouse
Subtitle 2
Adoption of persons of full age
Section 1767Admissibility of adoption, applicable provisions
Section 1768Application
Section 1769Prohibition of adoption
Section 1770Effect of adoption
Section 1771Cancellation of the adoption relationship
Section 1772Adoption with the effects of the adoption of a minor
Division 3
Guardianship, legal curatorship, custodianship
Title 1
Guardianship
Subtitle 1
Creation of guardianship
Section 1773Prerequisites
Section 1774Order by the court of its own motion
Section 1775More than one guardian
Section 1776Right of the parents to name the guardian
Section 1777Prerequisites for the right to name the guardian
Section 1778Passing over the guardian named
Section 1779Selection by the family court
Section 1780Lack of capacity to be a guardian
Section 1781Unsuitability to be a guardian
Section 1782Exclusion by the parents
Section 1783(repealed)
Section 1784Official or church officer as guardian
Section 1785Duty to assume guardianship
Section 1786Right to refuse
Section 1787Consequences of unjustified refusal
Section 1788Coercive fine
Section 1789Appointment by the family court
Section 1790Appointment subject to a reservation
Section 1791Certificate of appointment
Section 1791aGuardianship by association
Section 1791bOfficial guardianship of the Youth Welfare Office by appointment
Section 1791cStatutory official guardianship of the Youth Welfare Office
Section 1792Supervisory guardian
Subtitle 2
Conducting of the guardianship
Section 1793Duties of the guardian, liability of the ward
Section 1794Restriction as a result of curatorship
Section 1795Exclusion of power of agency
Section 1796Revocation of power of agency
Section 1797More than one guardian
Section 1798Differences of opinion
Section 1799Duties and rights of the supervisory guardian
Section 1800Scope of care for the person
Section 1801Religious education
Section 1802Inventory of assets
Section 1803Management of assets in the case of inheritance or donation
Section 1804Donations made by the guardian
Section 1805Use for the guardian
Section 1806Investment of money held in trust for a ward
Section 1807Nature of investment
Section 1808(repealed)
Section 1809Investment with blocking note
Section 1810Cooperation of supervisory guardian or family court
Section 1811Other investment
Section 1812Dispositions over claims and securities
Section 1813Transactions not requiring approval
Section 1814Deposit of bearer instruments
Section 1815Change of registration and conversion of bearer instruments
Section 1816Blocking of book-entry securities
Section 1817Exemption
Section 1818Order of deposit
Section 1819Approval in the case of deposit
Section 1820Approval after change of registration and conversion
Section 1821Approval of transactions relating to plots of land, ships or ships under construction
Section 1822Approval for other transactions
Section 1823Approval where the ward has a trade or business
Section 1824Approval for making available objects to the ward for their use
Section 1825General authorisation
Section 1826Hearing of the supervisory guardian before giving the approval
Section 1827(repealed)
Section 1828Pronouncement of approval
Section 1829Subsequent approval
Section 1830Right of revocation of the other party
Section 1831Unilateral legal transaction without approval
Section 1832Ratification by the supervisory guardian
Section 1833Liability of the guardian
Section 1834Duty to pay interest
Section 1835Reimbursement of outlays
Section 1835aReimbursement for expenses
Section 1836Payment of the guardian
Sections 1836a and 1836b(repealed)
Section 1836cFunds to be applied by the ward
Section 1836dDestitution of the ward
Section 1836eStatutory devolution of claim
Subtitle 3
Care and supervision of the family court
Section 1837Advice and supervision
Section 1838(repealed)
Section 1839Duty of information of the guardian
Section 1840Report and rendering of account
Section 1841Contents of the accounts rendered
Section 1842Cooperation of the supervisory guardian
Section 1843Examination by the family court
Section 1844(repealed)
Section 1845(repealed)
Section 1846Interim measures of the family court
Section 1847Hearing of the relatives
Section 1848(repealed)
Subtitle 4
Cooperation of the Youth Welfare Office
Sections 1849, 1850(repealed)
Section 1851Duties of notification
Subtitle 5
Exempted guardianship
Section 1852Exemption by the father
Section 1853Exemption from deposit and blocking
Section 1854Exemption from duty to render accounts
Section 1855Exemption by the mother
Section 1856Prerequisites for exemption
Section 1857Cancellation of the exemption by the family court
Section 1857aExemption of the Youth Welfare Office and the association
Sections 1858 - 1881(repealed)
Subtitle 6
Termination of the guardianship
Section 1882Cessation of the prerequisites
Section 1883(repealed)
Section 1884Ward missing and declaration of death of the ward
Section 1885(repealed)
Section 1886Removal of the sole guardian
Section 1887Removal of the Youth Welfare Office or association
Section 1888Removal of officials and church officers
Section 1889Removal on application by the guardian
Section 1890Surrender of assets and rendering accounts
Section 1891Cooperation of the supervisory guardian
Section 1892Examination and approval of the account
Section 1893Continuation of transactions after the termination of the guardianship, return of certificates
Section 1894Notification on death of the guardian
Section 1895Termination of office of the supervisory guardian
Title 2
Legal custodianship
Section 1896Prerequisites
Section 1897Appointment of a natural person
Section 1898Duty to assume custodianship
Section 1899More than one custodian
Section 1900Custodianship by association or public authority
Section 1901Scope of the custodianship, duties of the custodian
Section 1901aLiving will
Section 1901bDiscussion to ascertain the patient’s will
Section 1901cWishes in writing with regard to custodianship, enduring power of attorney
Section 1902Representation of the person under custodianship
Section 1903Reservation of consent
Section 1904Ratification by the custodianship court in the case of medical treatment
Section 1905Sterilisation
Section 1906Ratification by the custodianship court in the case of placement involving deprivation of liberty and in the case of measures involving deprivation of liberty
Section 1906aRatification by the custodianship court in the case of coercive measures by physicians
Section 1907Ratification by the custodianship court in the case of the abandonment of rented residence
Section 1908Ratification by the custodianship court with regard to advancement
Section 1908aPrecautionary appointment of a custodian and order of reservation of consent for minors
Section 1908bRemoval of the custodian
Section 1908cAppointment of a new custodian
Section 1908dCancellation or alteration of custodianship and reservation of consent
Section 1908e(repealed)
Section 1908fRecognition as custodianship association
Section 1908gPublic authority custodian
Section 1908h(repealed)
Section 1908iProvisions applicable accordingly
Section 1908k(repealed)
Title 3
Curatorship
Section 1909Supplementary curatorship
Section 1910(repealed)
Section 1911Curatorship of absentees
Section 1912Curatorship for an unborn child
Section 1913Curatorship for unknown persons involved
Section 1914Curatorship for collected assets
Section 1915Application of guardianship law
Section 1916Designation as supplementary curator
Section 1917Naming of the supplementary curator by testator and third parties
Section 1918Termination of the curatorship by operation of law
Section 1919Cancellation of the curatorship on cessation of reason
Section 1920(repealed)
Section 1921Cancellation of the curatorship of absentees
Book 5
Law of succession
Division 1
Succession
Section 1922Universal succession
Section 1923Capacity to inherit
Section 1924Heirs on intestacy of the first degree
Section 1925Heirs on intestacy of the second degree
Section 1926Heirs on intestacy of the third degree
Section 1927More than one share of the inheritance in the case of multiple relationship
Section 1928Heirs on intestacy of the fourth degree
Section 1929More distant degrees
Section 1930Priority of the degrees
Section 1931Right of intestate succession of the spouse
Section 1932Preferential benefit of the spouse
Section 1933Exclusion of the right of succession of the spouse
Section 1934Right of succession of spouse who is a relative
Section 1935Consequences of increase of share of the inheritance
Section 1936Right of intestate succession of the State
Section 1937Appointment of heir by testamentary disposition
Section 1938Disinheritance without appointment of an heir
Section 1939Legacy
Section 1940Testamentary burden
Section 1941Contract of inheritance
Division 2
Legal position of the heir
Title 1
Acceptance and disclaimer of the inheritance; supervision of the probate court
Section 1942Devolution and disclaimer of the inheritance
Section 1943Acceptance and disclaimer of the inheritance
Section 1944Period for disclaimer
Section 1945Form of disclaimer
Section 1946Date for acceptance or disclaimer
Section 1947Condition and stipulation as to time
Section 1948More than one ground of entitlement
Section 1949Mistake as to the ground of entitlement
Section 1950Partial acceptance; partial disclaimer
Section 1951More than one share of the inheritance
Section 1952Inheritability of the right of disclaimer
Section 1953Effect of disclaimer
Section 1954Period of avoidance
Section 1955Form of avoidance
Section 1956Avoidance of failure to disclaim in good time
Section 1957Effect of avoidance
Section 1958Judicial assertion of claims against the heir
Section 1959Management before the disclaimer
Section 1960Securing the estate; curator of the estate
Section 1961Curatorship of the estate on application
Section 1962Jurisdiction of the probate court
Section 1963Maintenance for the mother-to-be of an heir
Section 1964Presumption that the treasury is heir
Section 1965Public invitation to register the rights of succession
Section 1966Legal position of the treasury before determination
Title 2
Liability of the heir for the obligations of the estate
Subtitle 1
Obligations of the estate
Section 1967Liability of heir, obligations of the estate
Section 1968Costs of funeral
Section 1969Maintenance for 30 days
Subtitle 2
Judicial call for the creditors of the estate
Section 1970Notification of the claims
Section 1971Creditors not affected
Section 1972Rights not affected
Section 1973Exclusion of creditors of the estate
Section 1974Defence of withheld information
Subtitle 3
Restriction of the liability of the heir
Section 1975Administration of estate; estate insolvency
Section 1976Effect on legal relationships extinguished by merger
Section 1977Effect on a set-off
Section 1978Responsibility of the heir for previous administration, reimbursement of expenses
Section 1979Discharge of obligations of the estate
Section 1980Application for opening of estate insolvency proceedings
Section 1981Order of administration of the estate
Section 1982Refusal to order administration of the estate for insufficiency of assets
Section 1983Notice by publication
Section 1984Effect of the order
Section 1985Duties and liability of the administrator of the estate
Section 1986Surrender of the estate
Section 1987Payment of the administrator of the estate
Section 1988End and cancellation of administration of the estate
Section 1989Defence by the heir of exhaustion of assets
Section 1990Defence by the heir as to insufficiency of assets
Section 1991Consequences of defence as to insufficiency of assets
Section 1992Over-indebtedness as a result of legacies and testamentary burdens
Subtitle 4
Filing of an inventory, unlimited liability of the heir
Section 1993Filing of an inventory
Section 1994Inventory period
Section 1995Length of the period
Section 1996Fixing a new period
Section 1997Suspension of the expiry of the period
Section 1998Death of the heir before expiry of the period
Section 1999Notice to the court
Section 2000Ineffectiveness of the fixing of the period
Section 2001Contents of the inventory
Section 2002Preparation of the inventory by the heir
Section 2003Official preparation of the inventory
Section 2004Reference to an existing inventory
Section 2005Unlimited liability of the heir if the inventory is incorrect
Section 2006Declaration in lieu of an oath
Section 2007Liability in the case of more than one share of the inheritance
Section 2008Inventory for an inheritance that is part of common matrimonial property
Section 2009Effect of filing of inventory
Section 2010Inspection of the inventory
Section 2011No inventory period for the treasury as heir
Section 2012No inventory period for the curator and administrator of the estate
Section 2013Consequences of the unlimited liability of the heir
Subtitle 5
Suspensive defences
Section 2014Defence within three months
Section 2015Defence of judicial call procedure
Section 2016Exclusion of defences in the case of unlimited liability of the heir
Section 2017Beginning of the period of time in the case of curatorship of the estate
Title 3
Claim to inheritance
Section 2018Duty to surrender of the possessor of the inheritance
Section 2019Direct substitution
Section 2020Emoluments and fruits
Section 2021Duty to surrender under principles of unjust enrichment
Section 2022Reimbursement of outlays and expenses
Section 2023Liability after litigation is pending and for emoluments and outlays
Section 2024Liability with knowledge
Section 2025Liability in the case of tort
Section 2026No reliance on acquisition by prescription
Section 2027Duty of information of the possessor of the inheritance
Section 2028Duty of information of occupant of house
Section 2029Liability in the case of individual claims by the heir
Section 2030Legal position of the acquirer of the inheritance
Section 2031Claim to surrender of a person declared dead
Title 4
More than one heir
Subtitle 1
Legal relationship of the heirs between themselves
Section 2032Community of heirs
Section 2033Right of disposition of the co-heir
Section 2034Right of preemption as against seller
Section 2035Right of preemption as against buyer
Section 2036Liability of buyer of share of the inheritance
Section 2037Onward alienation of the share of the inheritance
Section 2038Joint management of the estate
Section 2039Estate claims
Section 2040Alienation of objects of the estate, set-off
Section 2041Direct substitution
Section 2042Partitioning
Section 2043Postponement of partitioning
Section 2044Exclusion of partitioning
Section 2045Postponement of partitioning
Section 2046Discharge of obligations of the estate
Section 2047Distribution of the surplus
Section 2048Directions by the deceased for partitioning
Section 2049Taking over of a farm
Section 2050Duty to adjust advancements for descendants as heirs on intestacy
Section 2051Duty to adjust advancements if a descendant does not inherit
Section 2052Duty to adjust advancements for descendants as heirs by will
Section 2053Gift to more remote or adopted descendant
Section 2054Gift from the common matrimonial property
Section 2055Carrying out the adjustment
Section 2056Excess gifts
Section 2057Duty of information
Section 2057aDuty to adjust advancements in the case of special payments by one descendant
Subtitle 2
Legal relationship between the heirs and the creditors of the estate
Section 2058Joint and several liability
Section 2059Liability until division
Section 2060Liability after division
Section 2061Judicial call for the creditors of the estate
Section 2062Application for administration of the estate
Section 2063Filing of an inventory, limitation of liability
Division 3
Will
Title 1
General provisions
Section 2064Made in person
Section 2065Determination by third parties
Section 2066Heirs on intestacy of the testator
Section 2067Relatives of the testator
Section 2068Children of the testator
Section 2069Descendants of the testator
Section 2070Descendants of a third party
Section 2071Group of persons
Section 2072The poor
Section 2073Ambiguous designation
Section 2074Condition precedent
Section 2075Condition subsequent
Section 2076Condition for the benefit of a third party
Section 2077Ineffectiveness of testamentary dispositions on dissolution of marriage or engagement
Section 2078Avoidance for mistake or duress
Section 2079Avoidance for omission of a person entitled to a compulsory portion
Section 2080Person entitled to avoid
Section 2081Declaration of avoidance
Section 2082Period of avoidance
Section 2083Defence of voidability
Section 2084Interpretation favouring effectiveness
Section 2085Partial ineffectiveness
Section 2086Reservation of right to make addition
Title 2
Appointment of heirs
Section 2087Gift of assets, of fraction of assets or of individual objects
Section 2088Appointment to fractions
Section 2089Increase of the fractions
Section 2090Decrease of fractions
Section 2091Undetermined fractions
Section 2092Partial appointment to fractions
Section 2093Joint share of the inheritance
Section 2094Accrual
Section 2095Accrued share of the inheritance
Section 2096Substitute heir
Section 2097Rule of interpretation in the case of substitute heir
Section 2098Mutual appointment as substitute heir
Section 2099Substitute heir and accrual
Title 3
Appointment of a reversionary heir
Section 2100Reversionary heir
Section 2101Reversionary heir not yet conceived
Section 2102Reversionary heir and substitute heir
Section 2103Order to surrender the inheritance
Section 2104Heirs on intestacy as reversionary heirs
Section 2105Heirs on intestacy as provisional heirs
Section 2106Occurrence of reversionary succession
Section 2107Childless provisional heir
Section 2108Capacity to inherit; inheritability of the reversionary succession
Section 2109End of effectiveness of reversionary succession
Section 2110Scope of the right of reversionary succession
Section 2111Direct substitution
Section 2112Right of alienation of the provisional heir
Section 2113Dispositions of plots of land, ships and ships under construction; gifts
Section 2114Dispositions of mortgage claims, land charges and annuity land charges
Section 2115Dispositions of compulsory enforcement against provisional heir
Section 2116Deposit of securities
Section 2117Change of registration; conversion
Section 2118Blocking note in debt ledger
Section 2119Investment of money
Section 2120Duty of reversionary heir to consent
Section 2121List of objects of inheritance
Section 2122Determination of the condition of the inheritance
Section 2123Economic plan
Section 2124Costs of maintenance
Section 2125Outlays; right to remove
Section 2126Extraordinary burdens
Section 2127Right to information of reversionary heir
Section 2128Provision of security
Section 2129Effect of deprivation of management
Section 2130Duty to surrender after the occurrence of reversionary succession, duty to render accounts
Section 2131Scope of duty of care
Section 2132No liability for ordinary wear and tear
Section 2133Improper or excessive taking of fruits
Section 2134Own use
Section 2135Lease and usufructuary lease in reversionary succession
Section 2136Release of the provisional heir
Section 2137Rule of interpretation for the release
Section 2138Restricted duty to surrender
Section 2139Effect of occurrence of reversionary succession
Section 2140Dispositions of the provisional heir after occurrence of reversionary succession
Section 2141Maintenance for the mother-to-be of a reversionary heir
Section 2142Disclaimer of reversionary succession
Section 2143Restoration of extinguished legal relationships
Section 2144Liability of the reversionary heir for the obligations of the estate
Section 2145Liability of the provisional heir for the obligations of the estate
Section 2146Duty of provisional heir to notify creditors of the estate
Title 4
Legacies
Section 2147Person charged with a legacy
Section 2148More than one person charged with a legacy
Section 2149Legacy for heirs on intestacy
Section 2150Preferential legacy
Section 2151Right to decide of the person charged or of a third person in the event of more than one person provided for
Section 2152Choice of persons provided for
Section 2153Determination of shares
Section 2154Optional legacy
Section 2155General legacy
Section 2156Legacy for a special purpose
Section 2157Joint legacy
Section 2158Accrual
Section 2159Independence of the accrual
Section 2160Prior death of person provided for
Section 2161Where the person charged does not inherit
Section 2162Thirty-year period for a suspended legacy
Section 2163Exceptions to the thirty-year period
Section 2164Extension to accessories and claims to compensation
Section 2165Charges
Section 2166Charge with a mortgage
Section 2167Charge with a blanket mortgage
Section 2168Charge with a blanket land charge
Section 2168aApplication to ships, ships under construction and ship mortgages
Section 2169Legacy of foreign objects
Section 2170Legacy to be procured
Section 2171Impossibility, statutory prohibition
Section 2172Combination, intermixture, mingling of the bequeathed thing
Section 2173Claim as a legacy
Section 2174Claim arising under a legacy
Section 2175Restoration of extinguished legal relationships
Section 2176Devolution of the legacy
Section 2177Devolution in the event of a condition or a time limit
Section 2178Devolution in the event of a person provided for not yet conceived or determined
Section 2179Period pending fulfilment
Section 2180Acceptance and disclaimer
Section 2181Discretionary due date
Section 2182Liability for defects of title
Section 2183Liability for material defects
Section 2184Fruits and emoluments
Section 2185Reimbursement of outlays and expenses
Section 2186Due date of sublegacy or testamentary burden
Section 2187Liability of the main legatee
Section 2188Reduction of the charges
Section 2189Directions concerning priority
Section 2190Substitute legatee
Section 2191Subsequent legatee
Title 5
Testamentary burden
Section 2192Applicable provisions
Section 2193Appointment of the beneficiary, period for fulfilment
Section 2194Claim for fulfilment
Section 2195Relationship between testamentary burden and gift
Section 2196Impossibility of fulfilment
Title 6
Executor
Section 2197Appointment of an executor
Section 2198Determination of the executor by a third person
Section 2199Appointment of co-executor or successor
Section 2200Appointment by the probate court
Section 2201Ineffectiveness of the appointment
Section 2202Acceptance and refusal of office
Section 2203Task of the executor
Section 2204Partitioning of the estate between co-heirs
Section 2205Administration of the estate, power of alienation
Section 2206Incurring obligations
Section 2207Extended authority
Section 2208Limitation of the rights of the executor, execution by the heir
Section 2209Permanent execution
Section 2210Thirty-year period for permanent execution
Section 2211Limitation on dispositions of the heir
Section 2212Assertion in court of the rights subject to the execution of the will
Section 2213Assertion in court of claims against the estate
Section 2214Creditors of the heir
Section 2215Inventory of the estate
Section 2216Proper administration of the estate, compliance with directions
Section 2217Making available objects of the estate
Section 2218Legal relationship with the heir; rendering of accounts
Section 2219Liability of the executor
Section 2220Mandatory law
Section 2221Remuneration of the executor
Section 2222Executor for the reversionary heir
Section 2223Executor of a legacy
Section 2224More than one executor
Section 2225Expiry of the office of the executor
Section 2226Notice of termination by the executor
Section 2227Dismissal of the executor
Section 2228Inspection of records
Title 7
The making and revocation of a will
Section 2229Testamentary capacity of minors, lack of testamentary capacity
Section 2230(repealed)
Section 2231Regular wills
Section 2232Public will
Section 2233Special cases
Sections 2234 - 2246(repealed)
Section 2247Holographic will
Section 2248Custody of a holographic will
Section 2249Emergency will made before the mayor
Section 2250Emergency will before three witnesses
Section 2251Emergency will made at sea
Section 2252Period of validity of emergency wills
Section 2253Revocation of the will
Section 2254Revocation by will
Section 2255Revocation by destruction or changes
Section 2256Revocation by the revocation of the will from official custody
Section 2257Revocation of the revocation
Section 2258Revocation by a later will
Section 2258a(repealed)
Section 2258b(repealed)
Section 2259Obligation to deliver
Section 2260(repealed)
Section 2261(repealed)
Section 2262(repealed)
Section 2263Voidness of a prohibition on opening the will
Section 2263a, 2264(repealed)
Title 8
Joint will
Section 2265Joint will made by spouses
Section 2266Joint emergency will
Section 2267Joint holographic will
Section 2268Effect of nullity or dissolution of marriage
Section 2269Reciprocal appointment
Section 2270Reciprocal dispositions
Section 2271Revocation of reciprocal dispositions
Section 2272Revocation of official custody
Section 2273(repealed)
Division 4
Contract of inheritance
Section 2274Entering into contract in person
Section 2275Prerequisites
Section 2276Form
Section 2277(repealed)
Section 2278Permissible contractual dispositions
Section 2279Contractual gifts and burdens, application of section 2077
Section 2280Application of section 2269
Section 2281Avoidance by the testator
Section 2282Representation, form of the avoidance
Section 2283Period of avoidance
Section 2284Confirmation
Section 2285Avoidance by third parties
Section 2286Dispositions inter vivos
Section 2287Gifts adversely affecting the contractual heir
Section 2288Prejudice to the legatee
Section 2289Effect of the contract of inheritance on testamentary dispositions; application of section 2338
Section 2290Cancellation by contract
Section 2291Cancellation by will
Section 2292Cancellation by joint will
Section 2293Revocation in the event of reservation
Section 2294Revocation in the event of the misconduct of the person provided for
Section 2295Revocation in the event of the extinction of a mutual obligation
Section 2296Representation, form of revocation
Section 2297Revocation by will
Section 2298Mutual contract of inheritance
Section 2299Unilateral dispositions
Section 2300Application of sections 2259 and 2263; removal from official or notarial custody
Section 2300a(repealed)
Section 2301Promise of donation mortis causa
Section 2302Unlimited testamentary freedom
Division 5
Compulsory share
Section 2303Person entitled to a compulsory share of the estate; amount of the share
Section 2304Rules of interpretation
Section 2305Additional compulsory share
Section 2306Limitations and charges
Section 2307Bequest of a legacy
Section 2308Avoidance of the disclaimer
Section 2309Right of parents and remoter descendants to a compulsory share
Section 2310Determination of the share of the inheritance for the calculation of the compulsory share
Section 2311Value of the estate
Section 2312Value of a farm
Section 2313Taking account of conditional, uncertain or unsecured rights; duty of determination of the heir
Section 2314Duty of the heir to provide information
Section 2315Counting gifts towards the compulsory share
Section 2316Duty to adjust advancements
Section 2317Creation and transferability of the claim to a compulsory share
Section 2318Burden of the compulsory share in the case of legacies and testamentary burdens
Section 2319Person entitled to a compulsory share as co-heir
Section 2320Compulsory share burden on the heir taking the place of the person entitled to a compulsory share
Section 2321Compulsory share burden in the event of a disclaimer of a legacy
Section 2322Reduction of legacies and testamentary burdens
Section 2323Heir not charged with a compulsory share
Section 2324Deviating directions by the testator concerning the compulsory share burden
Section 2325Claim for the augmentation of compulsory shares in the event of gifts
Section 2326Augmentation to more than half of the intestate portion
Section 2327Receipt of gift by a person entitled to a compulsory share
Section 2328Heir as person entitled to a compulsory share
Section 2329Claim against the recipient of a gift
Section 2330Gift arising from a moral duty
Section 2331Gifts made from common matrimonial property
Section 2331aDeferral
Section 2332Limitation
Section 2333Deprivation of a compulsory share
Section 2334(repealed)
Section 2335(repealed)
Section 2336Form, burden of proof and ineffectiveness of deprivation
Section 2337Forgiveness
Section 2338Limitation of the compulsory share
Division 6
Unworthiness to inherit
Section 2339Grounds for unworthiness to inherit
Section 2340Enforcement of the unworthiness to inherit by avoidance
Section 2341Persons entitled to avoid
Section 2342Action for avoidance
Section 2343Forgiveness
Section 2344Effect of a declaration of unworthiness to inherit
Section 2345Unworthiness to receive a legacy; unworthiness to receive a compulsory share
Division 7
Renunciation of inheritance
Section 2346Effect of the renunciation of inheritance, possibility of limitation
Section 2347Personal requirements, representation
Section 2348Form
Section 2349Extension to descendants
Section 2350Renunciation to the benefit of another
Section 2351Revocation of a renunciation of the inheritance
Section 2352Renunciation of gifts
Division 8
Certificate of inheritance
Section 2353Competence of the probate court, application
Sections 2354 to 2359(repealed)
Section 2360(repealed)
Section 2361Revocation or declaration of invalidity of an inaccurate certificate of inheritance
Section 2362Claim to surrender of the true heir and claim to information
Section 2363Claim to surrender of the reversionary heir and of the executor
Section 2364(repealed)
Section 2365Presumption of legitimacy of the certificate of inheritance
Section 2366Presumption of legal force of a certificate of inheritance
Section 2367Performance for the person named as heir in the certificate of inheritance
Section 2368Executor’s certificate
Section 2369(repealed)
Section 2370Presumption of legal force of a declaration of death
Division 9
Purchase of an inheritance
Section 2371Form
Section 2372Advantages due to purchaser
Section 2373Parts remaining for the seller
Section 2374Duty to surrender
Section 2375Duty to compensate
Section 2376Liability of the seller
Section 2377Restoration of extinguished legal relationships
Section 2378Obligations of the estate
Section 2379Emoluments and charges prior to the sale
Section 2380Devolution of the risk, emoluments and charges after the sale
Section 2381Reimbursement of outlays and expenses
Section 2382Liability of the purchaser in relation to the creditors of the estate
Section 2383Scope of liability of the purchaser
Section 2384The duty of notification of the seller towards the creditors of the estate, right of inspection
Section 2385Application to similar contracts
\ No newline at end of file diff --git a/raw/germany/uwg-unfair-competition-business-practices b/raw/germany/uwg-unfair-competition-business-practices new file mode 100644 index 0000000..f9d11cf --- /dev/null +++ b/raw/germany/uwg-unfair-competition-business-practices @@ -0,0 +1,5 @@ +Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb – UWG)
Logo Federal Ministry of Justice and Consumer ProtectionLogo Federal Office of Justice

Act against Unfair Competition
(Gesetz gegen den unlauteren Wettbewerb – UWG)

Full text in format:   HTML  PDF   text in German

Übersetzung durch Brian Duffett und Ute Reusch. Laufende Aktualisierung der Übersetzung durch Ute Reusch

Translation provided by Brian Duffett and Ute Reusch. Translation regularly updated by Ute Reusch

Stand: Die Übersetzung berücksichtigt die Änderung(en) des Gesetzes durch Artikel 21 des Gesetzes vom 6. Mai 2024 (BGBl. 2024 I Nr. 149)
Der Stand der deutschsprachigen Dokumentation kann aktueller sein. Vergleichen Sie dazu bitte http://www.gesetze-im-internet.de/uwg_2004/BJNR141400004.html.

Version information: The translation includes the amendment(s) to the Act by Article 21 of the Act of 6 May 2024 (Federal Law Gazette 2024 I No. 149)
Translations may not be updated at the same time as the German legal provisions displayed on this website. To compare with the current status of the German version, see http://www.gesetze-im-internet.de/uwg_2004/BJNR141400004.html.

Zur Nutzung dieser Übersetzung lesen Sie bitte den Hinweis unter "Translations".

For conditions governing use of this translation, please see the information provided under "Translations".

           
Chapter 1
General provisions
Section 1Purpose of the Act; scope
Section 2Definitions
Section 3Prohibition of unfair commercial practices
Section 3aBreach of law
Section 4Protection of competitors
Section 4aAggressive commercial practices
Section 5Misleading commercial practices
Section 5aMisleading by omission
Section 5bMaterial information
Section 5cProhibited infringement of consumer interests by means of unfair commercial practices
Section 6Comparative advertising
Section 7Unacceptable nuisance
Section 7aConsent to telephone advertising
Chapter 2
Legal consequences
Section 8Elimination; injunctive relief
Section 8aClaimants in case of infringement of Regulation (EU) 2019/1150
Section 8bList of qualified trade associations
Section 8cProhibition of abusive claims; liability
Section 9Compensation for damage
Section 10Confiscation of profits
Section 11Limitation
Chapter 3
Procedural provisions
Section 12Temporary relief; authorisation to publish; reduction of the pecuniary value of the dispute
Section 13Written warning notice; obligation to cease and desist; liability
Section 13aContractual penalty
Section 14Local jurisdiction and competence; authorisation to issue statutory instruments
Section 15Conciliation boards
Section 15aTransitional provision to the Act to Strengthen Fair Competition
Chapter 4
Criminal law provisions and provisions on regulatory offences
Section 16Advertising incurring criminal liability
Sections 17 and 18(repealed)
Section 19Regulatory fines provisions as regards widespread infringement with Union dimension
Section 20Provisions on regulatory offences
Annex (to section 3 (3))
\ No newline at end of file diff --git a/raw/industry/apache-2-0-apache-2-0 b/raw/industry/apache-2-0-apache-2-0 new file mode 100644 index 0000000..d645695 --- /dev/null +++ b/raw/industry/apache-2-0-apache-2-0 @@ -0,0 +1,202 @@ + + Apache License + Version 2.0, January 2004 + http://www.apache.org/licenses/ + + TERMS AND CONDITIONS FOR USE, REPRODUCTION, AND DISTRIBUTION + + 1. Definitions. + + "License" shall mean the terms and conditions for use, reproduction, + and distribution as defined by Sections 1 through 9 of this document. + + "Licensor" shall mean the copyright owner or entity authorized by + the copyright owner that is granting the License. + + "Legal Entity" shall mean the union of the acting entity and all + other entities that control, are controlled by, or are under common + control with that entity. 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To protect your rights, we need to prevent others from denying you +these rights or asking you to surrender the rights. Therefore, you have +certain responsibilities if you distribute copies of the software, or if +you modify it: responsibilities to respect the freedom of others.

+ +

For example, if you distribute copies of such a program, whether +gratis or for a fee, you must pass on to the recipients the same +freedoms that you received. You must make sure that they, too, receive +or can get the source code. And you must show them these terms so they +know their rights.

+ +

Developers that use the GNU GPL protect your rights with two steps: +(1) assert copyright on the software, and (2) offer you this License +giving you legal permission to copy, distribute and/or modify it.

+ +

For the developers' and authors' protection, the GPL clearly explains +that there is no warranty for this free software. For both users' and +authors' sake, the GPL requires that modified versions be marked as +changed, so that their problems will not be attributed erroneously to +authors of previous versions.

+ +

Some devices are designed to deny users access to install or run +modified versions of the software inside them, although the manufacturer +can do so. This is fundamentally incompatible with the aim of +protecting users' freedom to change the software. The systematic +pattern of such abuse occurs in the area of products for individuals to +use, which is precisely where it is most unacceptable. Therefore, we +have designed this version of the GPL to prohibit the practice for those +products. If such problems arise substantially in other domains, we +stand ready to extend this provision to those domains in future versions +of the GPL, as needed to protect the freedom of users.

+ +

Finally, every program is threatened constantly by software patents. +States should not allow patents to restrict development and use of +software on general-purpose computers, but in those that do, we wish to +avoid the special danger that patents applied to a free program could +make it effectively proprietary. To prevent this, the GPL assures that +patents cannot be used to render the program non-free.

+ +

The precise terms and conditions for copying, distribution and +modification follow.

+ +

TERMS AND CONDITIONS

+ +
0. Definitions.
+ +

“This License” refers to version 3 of the GNU General Public License.

+ +

“Copyright” also means copyright-like laws that apply to other kinds of +works, such as semiconductor masks.

+ +

“The Program” refers to any copyrightable work licensed under this +License. Each licensee is addressed as “you”. “Licensees” and +“recipients” may be individuals or organizations.

+ +

To “modify” a work means to copy from or adapt all or part of the work +in a fashion requiring copyright permission, other than the making of an +exact copy. The resulting work is called a “modified version” of the +earlier work or a work “based on” the earlier work.

+ +

A “covered work” means either the unmodified Program or a work based +on the Program.

+ +

To “propagate” a work means to do anything with it that, without +permission, would make you directly or secondarily liable for +infringement under applicable copyright law, except executing it on a +computer or modifying a private copy. Propagation includes copying, +distribution (with or without modification), making available to the +public, and in some countries other activities as well.

+ +

To “convey” a work means any kind of propagation that enables other +parties to make or receive copies. Mere interaction with a user through +a computer network, with no transfer of a copy, is not conveying.

+ +

An interactive user interface displays “Appropriate Legal Notices” +to the extent that it includes a convenient and prominently visible +feature that (1) displays an appropriate copyright notice, and (2) +tells the user that there is no warranty for the work (except to the +extent that warranties are provided), that licensees may convey the +work under this License, and how to view a copy of this License. If +the interface presents a list of user commands or options, such as a +menu, a prominent item in the list meets this criterion.

+ +
1. Source Code.
+ +

The “source code” for a work means the preferred form of the work +for making modifications to it. “Object code” means any non-source +form of a work.

+ +

A “Standard Interface” means an interface that either is an official +standard defined by a recognized standards body, or, in the case of +interfaces specified for a particular programming language, one that +is widely used among developers working in that language.

+ +

The “System Libraries” of an executable work include anything, other +than the work as a whole, that (a) is included in the normal form of +packaging a Major Component, but which is not part of that Major +Component, and (b) serves only to enable use of the work with that +Major Component, or to implement a Standard Interface for which an +implementation is available to the public in source code form. A +“Major Component”, in this context, means a major essential component +(kernel, window system, and so on) of the specific operating system +(if any) on which the executable work runs, or a compiler used to +produce the work, or an object code interpreter used to run it.

+ +

The “Corresponding Source” for a work in object code form means all +the source code needed to generate, install, and (for an executable +work) run the object code and to modify the work, including scripts to +control those activities. However, it does not include the work's +System Libraries, or general-purpose tools or generally available free +programs which are used unmodified in performing those activities but +which are not part of the work. For example, Corresponding Source +includes interface definition files associated with source files for +the work, and the source code for shared libraries and dynamically +linked subprograms that the work is specifically designed to require, +such as by intimate data communication or control flow between those +subprograms and other parts of the work.

+ +

The Corresponding Source need not include anything that users +can regenerate automatically from other parts of the Corresponding +Source.

+ +

The Corresponding Source for a work in source code form is that +same work.

+ +
2. Basic Permissions.
+ +

All rights granted under this License are granted for the term of +copyright on the Program, and are irrevocable provided the stated +conditions are met. This License explicitly affirms your unlimited +permission to run the unmodified Program. The output from running a +covered work is covered by this License only if the output, given its +content, constitutes a covered work. This License acknowledges your +rights of fair use or other equivalent, as provided by copyright law.

+ +

You may make, run and propagate covered works that you do not +convey, without conditions so long as your license otherwise remains +in force. You may convey covered works to others for the sole purpose +of having them make modifications exclusively for you, or provide you +with facilities for running those works, provided that you comply with +the terms of this License in conveying all material for which you do +not control copyright. Those thus making or running the covered works +for you must do so exclusively on your behalf, under your direction +and control, on terms that prohibit them from making any copies of +your copyrighted material outside their relationship with you.

+ +

Conveying under any other circumstances is permitted solely under +the conditions stated below. Sublicensing is not allowed; section 10 +makes it unnecessary.

+ +
3. Protecting Users' Legal Rights From Anti-Circumvention Law.
+ +

No covered work shall be deemed part of an effective technological +measure under any applicable law fulfilling obligations under article +11 of the WIPO copyright treaty adopted on 20 December 1996, or +similar laws prohibiting or restricting circumvention of such +measures.

+ +

When you convey a covered work, you waive any legal power to forbid +circumvention of technological measures to the extent such circumvention +is effected by exercising rights under this License with respect to +the covered work, and you disclaim any intention to limit operation or +modification of the work as a means of enforcing, against the work's +users, your or third parties' legal rights to forbid circumvention of +technological measures.

+ +
4. Conveying Verbatim Copies.
+ +

You may convey verbatim copies of the Program's source code as you +receive it, in any medium, provided that you conspicuously and +appropriately publish on each copy an appropriate copyright notice; +keep intact all notices stating that this License and any +non-permissive terms added in accord with section 7 apply to the code; +keep intact all notices of the absence of any warranty; and give all +recipients a copy of this License along with the Program.

+ +

You may charge any price or no price for each copy that you convey, +and you may offer support or warranty protection for a fee.

+ +
5. Conveying Modified Source Versions.
+ +

You may convey a work based on the Program, or the modifications to +produce it from the Program, in the form of source code under the +terms of section 4, provided that you also meet all of these conditions:

+ +
    +
  • a) The work must carry prominent notices stating that you modified + it, and giving a relevant date.
    • + +
  • b) The work must carry prominent notices stating that it is + released under this License and any conditions added under section + 7. This requirement modifies the requirement in section 4 to + “keep intact all notices”.
    • + +
  • c) You must license the entire work, as a whole, under this + License to anyone who comes into possession of a copy. This + License will therefore apply, along with any applicable section 7 + additional terms, to the whole of the work, and all its parts, + regardless of how they are packaged. This License gives no + permission to license the work in any other way, but it does not + invalidate such permission if you have separately received it.
    • + +
  • d) If the work has interactive user interfaces, each must display + Appropriate Legal Notices; however, if the Program has interactive + interfaces that do not display Appropriate Legal Notices, your + work need not make them do so.
    • +
+ +

A compilation of a covered work with other separate and independent +works, which are not by their nature extensions of the covered work, +and which are not combined with it such as to form a larger program, +in or on a volume of a storage or distribution medium, is called an +“aggregate” if the compilation and its resulting copyright are not +used to limit the access or legal rights of the compilation's users +beyond what the individual works permit. Inclusion of a covered work +in an aggregate does not cause this License to apply to the other +parts of the aggregate.

+ +
6. Conveying Non-Source Forms.
+ +

You may convey a covered work in object code form under the terms +of sections 4 and 5, provided that you also convey the +machine-readable Corresponding Source under the terms of this License, +in one of these ways:

+ +
    +
  • a) Convey the object code in, or embodied in, a physical product + (including a physical distribution medium), accompanied by the + Corresponding Source fixed on a durable physical medium + customarily used for software interchange.
    • + +
  • b) Convey the object code in, or embodied in, a physical product + (including a physical distribution medium), accompanied by a + written offer, valid for at least three years and valid for as + long as you offer spare parts or customer support for that product + model, to give anyone who possesses the object code either (1) a + copy of the Corresponding Source for all the software in the + product that is covered by this License, on a durable physical + medium customarily used for software interchange, for a price no + more than your reasonable cost of physically performing this + conveying of source, or (2) access to copy the + Corresponding Source from a network server at no charge.
    • + +
  • c) Convey individual copies of the object code with a copy of the + written offer to provide the Corresponding Source. This + alternative is allowed only occasionally and noncommercially, and + only if you received the object code with such an offer, in accord + with subsection 6b.
    • + +
  • d) Convey the object code by offering access from a designated + place (gratis or for a charge), and offer equivalent access to the + Corresponding Source in the same way through the same place at no + further charge. You need not require recipients to copy the + Corresponding Source along with the object code. If the place to + copy the object code is a network server, the Corresponding Source + may be on a different server (operated by you or a third party) + that supports equivalent copying facilities, provided you maintain + clear directions next to the object code saying where to find the + Corresponding Source. Regardless of what server hosts the + Corresponding Source, you remain obligated to ensure that it is + available for as long as needed to satisfy these requirements.
    • + +
  • e) Convey the object code using peer-to-peer transmission, provided + you inform other peers where the object code and Corresponding + Source of the work are being offered to the general public at no + charge under subsection 6d.
    • +
+ +

A separable portion of the object code, whose source code is excluded +from the Corresponding Source as a System Library, need not be +included in conveying the object code work.

+ +

A “User Product” is either (1) a “consumer product”, which means any +tangible personal property which is normally used for personal, family, +or household purposes, or (2) anything designed or sold for incorporation +into a dwelling. In determining whether a product is a consumer product, +doubtful cases shall be resolved in favor of coverage. For a particular +product received by a particular user, “normally used” refers to a +typical or common use of that class of product, regardless of the status +of the particular user or of the way in which the particular user +actually uses, or expects or is expected to use, the product. A product +is a consumer product regardless of whether the product has substantial +commercial, industrial or non-consumer uses, unless such uses represent +the only significant mode of use of the product.

+ +

“Installation Information” for a User Product means any methods, +procedures, authorization keys, or other information required to install +and execute modified versions of a covered work in that User Product from +a modified version of its Corresponding Source. The information must +suffice to ensure that the continued functioning of the modified object +code is in no case prevented or interfered with solely because +modification has been made.

+ +

If you convey an object code work under this section in, or with, or +specifically for use in, a User Product, and the conveying occurs as +part of a transaction in which the right of possession and use of the +User Product is transferred to the recipient in perpetuity or for a +fixed term (regardless of how the transaction is characterized), the +Corresponding Source conveyed under this section must be accompanied +by the Installation Information. But this requirement does not apply +if neither you nor any third party retains the ability to install +modified object code on the User Product (for example, the work has +been installed in ROM).

+ +

The requirement to provide Installation Information does not include a +requirement to continue to provide support service, warranty, or updates +for a work that has been modified or installed by the recipient, or for +the User Product in which it has been modified or installed. Access to a +network may be denied when the modification itself materially and +adversely affects the operation of the network or violates the rules and +protocols for communication across the network.

+ +

Corresponding Source conveyed, and Installation Information provided, +in accord with this section must be in a format that is publicly +documented (and with an implementation available to the public in +source code form), and must require no special password or key for +unpacking, reading or copying.

+ +
7. Additional Terms.
+ +

“Additional permissions” are terms that supplement the terms of this +License by making exceptions from one or more of its conditions. +Additional permissions that are applicable to the entire Program shall +be treated as though they were included in this License, to the extent +that they are valid under applicable law. If additional permissions +apply only to part of the Program, that part may be used separately +under those permissions, but the entire Program remains governed by +this License without regard to the additional permissions.

+ +

When you convey a copy of a covered work, you may at your option +remove any additional permissions from that copy, or from any part of +it. (Additional permissions may be written to require their own +removal in certain cases when you modify the work.) You may place +additional permissions on material, added by you to a covered work, +for which you have or can give appropriate copyright permission.

+ +

Notwithstanding any other provision of this License, for material you +add to a covered work, you may (if authorized by the copyright holders of +that material) supplement the terms of this License with terms:

+ +
    +
  • a) Disclaiming warranty or limiting liability differently from the + terms of sections 15 and 16 of this License; or
    • + +
  • b) Requiring preservation of specified reasonable legal notices or + author attributions in that material or in the Appropriate Legal + Notices displayed by works containing it; or
    • + +
  • c) Prohibiting misrepresentation of the origin of that material, or + requiring that modified versions of such material be marked in + reasonable ways as different from the original version; or
    • + +
  • d) Limiting the use for publicity purposes of names of licensors or + authors of the material; or
    • + +
  • e) Declining to grant rights under trademark law for use of some + trade names, trademarks, or service marks; or
    • + +
  • f) Requiring indemnification of licensors and authors of that + material by anyone who conveys the material (or modified versions of + it) with contractual assumptions of liability to the recipient, for + any liability that these contractual assumptions directly impose on + those licensors and authors.
    • +
+ +

All other non-permissive additional terms are considered “further +restrictions” within the meaning of section 10. If the Program as you +received it, or any part of it, contains a notice stating that it is +governed by this License along with a term that is a further +restriction, you may remove that term. If a license document contains +a further restriction but permits relicensing or conveying under this +License, you may add to a covered work material governed by the terms +of that license document, provided that the further restriction does +not survive such relicensing or conveying.

+ +

If you add terms to a covered work in accord with this section, you +must place, in the relevant source files, a statement of the +additional terms that apply to those files, or a notice indicating +where to find the applicable terms.

+ +

Additional terms, permissive or non-permissive, may be stated in the +form of a separately written license, or stated as exceptions; +the above requirements apply either way.

+ +
8. Termination.
+ +

You may not propagate or modify a covered work except as expressly +provided under this License. Any attempt otherwise to propagate or +modify it is void, and will automatically terminate your rights under +this License (including any patent licenses granted under the third +paragraph of section 11).

+ +

However, if you cease all violation of this License, then your +license from a particular copyright holder is reinstated (a) +provisionally, unless and until the copyright holder explicitly and +finally terminates your license, and (b) permanently, if the copyright +holder fails to notify you of the violation by some reasonable means +prior to 60 days after the cessation.

+ +

Moreover, your license from a particular copyright holder is +reinstated permanently if the copyright holder notifies you of the +violation by some reasonable means, this is the first time you have +received notice of violation of this License (for any work) from that +copyright holder, and you cure the violation prior to 30 days after +your receipt of the notice.

+ +

Termination of your rights under this section does not terminate the +licenses of parties who have received copies or rights from you under +this License. If your rights have been terminated and not permanently +reinstated, you do not qualify to receive new licenses for the same +material under section 10.

+ +
9. Acceptance Not Required for Having Copies.
+ +

You are not required to accept this License in order to receive or +run a copy of the Program. Ancillary propagation of a covered work +occurring solely as a consequence of using peer-to-peer transmission +to receive a copy likewise does not require acceptance. However, +nothing other than this License grants you permission to propagate or +modify any covered work. These actions infringe copyright if you do +not accept this License. Therefore, by modifying or propagating a +covered work, you indicate your acceptance of this License to do so.

+ +
10. Automatic Licensing of Downstream Recipients.
+ +

Each time you convey a covered work, the recipient automatically +receives a license from the original licensors, to run, modify and +propagate that work, subject to this License. You are not responsible +for enforcing compliance by third parties with this License.

+ +

An “entity transaction” is a transaction transferring control of an +organization, or substantially all assets of one, or subdividing an +organization, or merging organizations. If propagation of a covered +work results from an entity transaction, each party to that +transaction who receives a copy of the work also receives whatever +licenses to the work the party's predecessor in interest had or could +give under the previous paragraph, plus a right to possession of the +Corresponding Source of the work from the predecessor in interest, if +the predecessor has it or can get it with reasonable efforts.

+ +

You may not impose any further restrictions on the exercise of the +rights granted or affirmed under this License. For example, you may +not impose a license fee, royalty, or other charge for exercise of +rights granted under this License, and you may not initiate litigation +(including a cross-claim or counterclaim in a lawsuit) alleging that +any patent claim is infringed by making, using, selling, offering for +sale, or importing the Program or any portion of it.

+ +
11. Patents.
+ +

A “contributor” is a copyright holder who authorizes use under this +License of the Program or a work on which the Program is based. The +work thus licensed is called the contributor's “contributor version”.

+ +

A contributor's “essential patent claims” are all patent claims +owned or controlled by the contributor, whether already acquired or +hereafter acquired, that would be infringed by some manner, permitted +by this License, of making, using, or selling its contributor version, +but do not include claims that would be infringed only as a +consequence of further modification of the contributor version. For +purposes of this definition, “control” includes the right to grant +patent sublicenses in a manner consistent with the requirements of +this License.

+ +

Each contributor grants you a non-exclusive, worldwide, royalty-free +patent license under the contributor's essential patent claims, to +make, use, sell, offer for sale, import and otherwise run, modify and +propagate the contents of its contributor version.

+ +

In the following three paragraphs, a “patent license” is any express +agreement or commitment, however denominated, not to enforce a patent +(such as an express permission to practice a patent or covenant not to +sue for patent infringement). To “grant” such a patent license to a +party means to make such an agreement or commitment not to enforce a +patent against the party.

+ +

If you convey a covered work, knowingly relying on a patent license, +and the Corresponding Source of the work is not available for anyone +to copy, free of charge and under the terms of this License, through a +publicly available network server or other readily accessible means, +then you must either (1) cause the Corresponding Source to be so +available, or (2) arrange to deprive yourself of the benefit of the +patent license for this particular work, or (3) arrange, in a manner +consistent with the requirements of this License, to extend the patent +license to downstream recipients. “Knowingly relying” means you have +actual knowledge that, but for the patent license, your conveying the +covered work in a country, or your recipient's use of the covered work +in a country, would infringe one or more identifiable patents in that +country that you have reason to believe are valid.

+ +

If, pursuant to or in connection with a single transaction or +arrangement, you convey, or propagate by procuring conveyance of, a +covered work, and grant a patent license to some of the parties +receiving the covered work authorizing them to use, propagate, modify +or convey a specific copy of the covered work, then the patent license +you grant is automatically extended to all recipients of the covered +work and works based on it.

+ +

A patent license is “discriminatory” if it does not include within +the scope of its coverage, prohibits the exercise of, or is +conditioned on the non-exercise of one or more of the rights that are +specifically granted under this License. You may not convey a covered +work if you are a party to an arrangement with a third party that is +in the business of distributing software, under which you make payment +to the third party based on the extent of your activity of conveying +the work, and under which the third party grants, to any of the +parties who would receive the covered work from you, a discriminatory +patent license (a) in connection with copies of the covered work +conveyed by you (or copies made from those copies), or (b) primarily +for and in connection with specific products or compilations that +contain the covered work, unless you entered into that arrangement, +or that patent license was granted, prior to 28 March 2007.

+ +

Nothing in this License shall be construed as excluding or limiting +any implied license or other defenses to infringement that may +otherwise be available to you under applicable patent law.

+ +
12. No Surrender of Others' Freedom.
+ +

If conditions are imposed on you (whether by court order, agreement or +otherwise) that contradict the conditions of this License, they do not +excuse you from the conditions of this License. If you cannot convey a +covered work so as to satisfy simultaneously your obligations under this +License and any other pertinent obligations, then as a consequence you may +not convey it at all. For example, if you agree to terms that obligate you +to collect a royalty for further conveying from those to whom you convey +the Program, the only way you could satisfy both those terms and this +License would be to refrain entirely from conveying the Program.

+ +
13. Use with the GNU Affero General Public License.
+ +

Notwithstanding any other provision of this License, you have +permission to link or combine any covered work with a work licensed +under version 3 of the GNU Affero General Public License into a single +combined work, and to convey the resulting work. The terms of this +License will continue to apply to the part which is the covered work, +but the special requirements of the GNU Affero General Public License, +section 13, concerning interaction through a network will apply to the +combination as such.

+ +
14. Revised Versions of this License.
+ +

The Free Software Foundation may publish revised and/or new versions of +the GNU General Public License from time to time. Such new versions will +be similar in spirit to the present version, but may differ in detail to +address new problems or concerns.

+ +

Each version is given a distinguishing version number. If the +Program specifies that a certain numbered version of the GNU General +Public License “or any later version” applies to it, you have the +option of following the terms and conditions either of that numbered +version or of any later version published by the Free Software +Foundation. If the Program does not specify a version number of the +GNU General Public License, you may choose any version ever published +by the Free Software Foundation.

+ +

If the Program specifies that a proxy can decide which future +versions of the GNU General Public License can be used, that proxy's +public statement of acceptance of a version permanently authorizes you +to choose that version for the Program.

+ +

Later license versions may give you additional or different +permissions. However, no additional obligations are imposed on any +author or copyright holder as a result of your choosing to follow a +later version.

+ +
15. Disclaimer of Warranty.
+ +

THERE IS NO WARRANTY FOR THE PROGRAM, TO THE EXTENT PERMITTED BY +APPLICABLE LAW. EXCEPT WHEN OTHERWISE STATED IN WRITING THE COPYRIGHT +HOLDERS AND/OR OTHER PARTIES PROVIDE THE PROGRAM “AS IS” WITHOUT WARRANTY +OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, +THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR +PURPOSE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE PROGRAM +IS WITH YOU. SHOULD THE PROGRAM PROVE DEFECTIVE, YOU ASSUME THE COST OF +ALL NECESSARY SERVICING, REPAIR OR CORRECTION.

+ +
16. Limitation of Liability.
+ +

IN NO EVENT UNLESS REQUIRED BY APPLICABLE LAW OR AGREED TO IN WRITING +WILL ANY COPYRIGHT HOLDER, OR ANY OTHER PARTY WHO MODIFIES AND/OR CONVEYS +THE PROGRAM AS PERMITTED ABOVE, BE LIABLE TO YOU FOR DAMAGES, INCLUDING ANY +GENERAL, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE +USE OR INABILITY TO USE THE PROGRAM (INCLUDING BUT NOT LIMITED TO LOSS OF +DATA OR DATA BEING RENDERED INACCURATE OR LOSSES SUSTAINED BY YOU OR THIRD +PARTIES OR A FAILURE OF THE PROGRAM TO OPERATE WITH ANY OTHER PROGRAMS), +EVEN IF SUCH HOLDER OR OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF +SUCH DAMAGES.

+ +
17. Interpretation of Sections 15 and 16.
+ +

If the disclaimer of warranty and limitation of liability provided +above cannot be given local legal effect according to their terms, +reviewing courts shall apply local law that most closely approximates +an absolute waiver of all civil liability in connection with the +Program, unless a warranty or assumption of liability accompanies a +copy of the Program in return for a fee.

+ +

END OF TERMS AND CONDITIONS

+ +

How to Apply These Terms to Your New Programs

+ +

If you develop a new program, and you want it to be of the greatest +possible use to the public, the best way to achieve this is to make it +free software which everyone can redistribute and change under these terms.

+ +

To do so, attach the following notices to the program. It is safest +to attach them to the start of each source file to most effectively +state the exclusion of warranty; and each file should have at least +the “copyright” line and a pointer to where the full notice is found.

+ +
    <one line to give the program's name and a brief idea of what it does.>
+    Copyright (C) <year>  <name of author>
+
+    This program is free software: you can redistribute it and/or modify
+    it under the terms of the GNU General Public License as published by
+    the Free Software Foundation, either version 3 of the License, or
+    (at your option) any later version.
+
+    This program is distributed in the hope that it will be useful,
+    but WITHOUT ANY WARRANTY; without even the implied warranty of
+    MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+    GNU General Public License for more details.
+
+    You should have received a copy of the GNU General Public License
+    along with this program.  If not, see <https://www.gnu.org/licenses/>.
+
+ +

Also add information on how to contact you by electronic and paper mail.

+ +

If the program does terminal interaction, make it output a short +notice like this when it starts in an interactive mode:

+ +
    <program>  Copyright (C) <year>  <name of author>
+    This program comes with ABSOLUTELY NO WARRANTY; for details type `show w'.
+    This is free software, and you are welcome to redistribute it
+    under certain conditions; type `show c' for details.
+
+ +

The hypothetical commands `show w' and `show c' should show the appropriate +parts of the General Public License. Of course, your program's commands +might be different; for a GUI interface, you would use an “about box”.

+ +

You should also get your employer (if you work as a programmer) or school, +if any, to sign a “copyright disclaimer” for the program, if necessary. +For more information on this, and how to apply and follow the GNU GPL, see +<https://www.gnu.org/licenses/>.

+ +

The GNU General Public License does not permit incorporating your program +into proprietary programs. If your program is a subroutine library, you +may consider it more useful to permit linking proprietary applications with +the library. If this is what you want to do, use the GNU Lesser General +Public License instead of this License. But first, please read +<https://www.gnu.org/licenses/why-not-lgpl.html>.

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The game development industry stretches across the entire world and is composed of a diverse set of developers, varying in disciplines, identities, and backgrounds. Even with such diversity, there are standards that all game developers, studios, and companies within our industry should uphold. 

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The IGDA is sharing our own standards and definitions for the game development industry. We aim to lead the industry to greater heights to be a fulfilling and sustainable industry for all with these standards. Violation reports of these standards will be tracked by the IGDA and provided upon request on a per company basis to IGDA members and press. If you would like to make a report, please fill out this form and a member of our team will be in touch with you within 7 business days.
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+Know that we are working tirelessly to support all game developers and will be updating and adding to these standards as we continue to move forward. If you have any feedback, additional standard requests, or would like to help translate these standards into additional languages, please contact us.

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Report Handling

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The intention of these reports is to guide companies to best support their employees, contractors, partners, and growth within the industry. Reports will be carefully reviewed to ensure that they are submitted from someone within the game industry who has had interaction with the company to avoid fraudulent reports. The IGDA also understands the importance of protecting those who submit any reports from backlash and will anonymize all reports. The current reporting process is as follows.

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  1. A person submits a report through this form.
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  2. The IGDA verifies that person is within the game industry and has interaction with the company
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  3. The report is anonymized and stored
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  4. The IGDA reaches out to the company about the reports submission, informing them of the IGDA’s industry standards and directing them to resources and support to help correct the reported issues
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  5. The company’s response to the report is stored or a note of no response is stored after one month from initial contact
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Code of Ethics 

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As creators of interactive media, we, the members of the International Game Developers Association (IGDA), recognize the importance of the effect of ideas conveyed through art, especially the effect of ideas presented in an interactive choice-driven format. As professionals, we here establish a code of ethics with the following objectives:

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  1. To promote the growth of our industry and the growth of creative endeavors;
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  2. To ensure a professional standard of workplace environment for all development; and
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  3. To publicly establish and communicate our standards as media professionals.
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https://igda.org/about-us/core-values-and-code-of-ethics/

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Game Crediting Standards

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Employees are often mislabeled, unlabeled, or left off the credits. In fact, a 2006 IGDA Game Writers Special Interest Group survey revealed that 35% of respondents either “don’t ever” or “only sometimes” receive official credit for their efforts.

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The IGDA Developer Credit Special Interest Group formed the IGDA Credit Standards Committee to develop this set of guidelines to assist in the crediting process. The mission of the IGDA is to advance the careers of game developers and we believe that employers effectively and accurately assigning credits are crucial to that process.

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https://igda.org/resources-archive/crediting-standards-guide-ver-9-2-en-jp-2014/

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Crunch, Unsustainable Work, and Management Abuse Definitions and Standards 

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The game industry has struggled with a concept commonly referred to as “crunch”. Crunch is used to describe the act of employees working overtime in order to meet a deadline in the development of a project. Yet, in the game development industry, where we are constantly faced with challenges to balance the creation and tuning of complex coded systems with publisher deadlines and the intangible concept of fun, overtime work frequently occurs. 

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There are varying opinions on what types of overwork falls under the term “crunch”, but regardless of situation dependent definitions of crunch, there are two important, related concepts that can be defined: unsustainable work and management abuse. 

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https://igda.org/resources/crunch-unsustainable-work-and-management-abuse-definitions-and-standards/

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Event Diversity Standards

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The game development community is composed of a wide array of people with different genders, ethnicities, abilities, and other characteristics. Game development events and the leaders speaking at them should reflect the full range of diversity of game developers and players. Diversity, equity, and inclusivity efforts support the growth and strength of the game development industry. 

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The following set of resources and guidelines are intended to enable organizers to reflect upon and improve diversity and representation at their own events, and to empower speakers and event participants with a set of tools to provide constructive feedback to events not meeting these standards. 

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https://igda.org/resources/event-diversity/

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Your monthly guide to NYC game dev news, jobs, and events. View this email in your browser Monday, November 17th 2025 Editors: Mattia Sicuro & Anthony Melendez A monthly publication...

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May 21, 2021

The Ultimate Checklist for Photo Licensing Agreements

Photo by Kelly Sikkema

Photographers license their work instead of selling it because it allows them to keep copyright ownership while earning long-term revenue for their photos. This is essential if you would like to make money and achieve success in the photography business — and the backbone of all that is your photo licensing agreement

.If you’re looking only for exposure as a photographer, you’ll probably be fine with Creative Commons licensing but if you want to protect your rights and get paid for your work in any form, you must get familiar with photo licensing agreements.

What is photo licensing?

Photo licensing is when the copyright owner of the photograph, or agent or rights holder, grants specific rights to someone to use the image. Choosing the right license is crucial as it will determine how your copyrighted work can be distributed. As you will see, there’s a lot to think about in this area, from usage rights to timeframes to geographic locations.

What is a photo licensing agreement?

A photo licensing agreement is a contract between two parties, the licensor (the photographer who owns the copyright and is licensing the rights to use the image) and the licensee (the person or company wanting to and gaining the right to use the image). The agreement describes the scope, conditions and limitations under which the licensee can use the photograph and if they are granted rights to even sub-license it. By agreeing to the photo licensing agreement, the licensee is also required to pay a licensing fee to the licensor (if the terms stipulate this).

The key of a photo licensing agreement is that the photographer, by only licensing the image, will still hold copyright ownership of the visual work — with a few possible exceptions, such as working for hire where the copyright might automatically be transferred to the hiring person or company.

agreement signing
Photo by Scott Graham

Why do you need a photo licensing agreement?

Photo licensing agreements grant protection for both parties, set out the specific terms on how the image can be used, and help to avoid any misunderstanding that may arise regarding the use of the photographer’s work. Some clients may not be familiar with licensing images in the first place, therefore a discussion on the subject can be useful education for them and the whole of the industry in the long term.

‍Photo licensing agreements only have benefits for photographers/rights holder, including:

  • The ability to control how, where and when your work appears in any platform and format
  • A good source of revenue
  • Copyright protection of your work

For licensees, photo licensing agreements are also a good choice as they can:

  • Legally use images without breaching copyright (or committing copyright infringement)
  • Protect their interests through the agreement, just like the licensor photographer
  • Use images that won’t appear in competitors’ materials (if the agreement includes exclusive rights)

To meet the needs and demands of both parties, it’s important to put everything in writing. This will ensure a protective basis for the agreement in case of any disputes later on.

Common image uses in photo licensing agreements

Photo licensing agreements usually regulate the following types of images use:

  • Retail use: retail photography is used for the client’s personal use which can range from portraits to fine art.
  • Commercial use: commercial photography is used to sell and/or promote products, services, business websites, ideas, such as using the image in an advertising campaign.
  • Editorial use: editorial photography is used for editorial purposes, such as including images in a magazine or news (but not for commercial purposes).

Sub-categories of image use include (often restricted to one or more):

  • Print, online, advertising, and/or television/film
  • Local, national, worldwide (or limited to certain geographic regions

These are the main categories of image use but each licensing case might depend on the exact scenario. For instance, if you are hired by a magazine to shoot photos for their own advertising campaign promoting the publication, that is not an editorial but commercial use you have to take into account in your licensing agreement.

What is the difference between retail and commercial photography?

‍Deciding if your client’s photography request falls under retail or commercial use is a common problem in practice. Looking at who is paying and what the subject of the photography is might help.If your work is paid by the individual directly or indirectly who is the subject of the photograph, it is very likely a retail use. If it’s not paid by the subject of the photo, it’s commercial. With that said, photographers must analyze the client’s proposal carefully as there are certainly grey areas between retail and commercial photography. You must use your best judgment to make sure that you get paid a fair amount for the scope of use the client demands.

Types of licenses in photo licensing agreements

The first layer where photo licenses differ from each other is the scope of use for the image in question that the photographer grants to the client or licensee. Let’s see the basic license categories that will likely appear in a photo licensing agreement.

Exclusive & non-exclusive license

When the licensee has an exclusive license, they are the only ones allowed to use the given photograph. This naturally comes with paying a much higher price or premium as the photographer loses other sources of income for the same image which must be compensated.If the license is non-exclusive, the photographer can grant usage of the same work to several parties.

Royalty-free license

Images under a royalty-free license are sold at a flat rate, temporarily, disregarding usage specifications, and based on non-exclusive rights. Royalty-free images are therefore much affordable for the audience but mean less revenue for photographers.

Rights-managed license

In a broader sense, a rights-managed license is when the use of an image is limited in one or more ways, for instance, geographically or regarding the time period. A rights-managed license also typically means that the licensee purchases the license for one-time use and another round of agreement and paying licensing fees will be required if they want to continue using the given image. On the other hand, it’s also common that the client gains exclusive rights for the usage during the license period.

Unlimited use

Unlimited use allows the licensee to use the photograph without restrictions regarding parameters such as the geographic or platform scope but only for the license period. This is very important: unlimited use does not mean that the duration of use is unlimited.

photo lens
Photo by Paul Skorupskas

How to determine photo licensing fees?

Setting a fair price for licensing your photos can be a complex task. Here are a couple of points to think through to help you navigate this:

  1. Remember all your fees: your creative fee is your day rate and your licensing fee should be a separate amount. Make sure to incorporate both, and possibly all of your expenses included in the job.
  2. Think about who is your client: is it an individual or a company, and what type? The size and economic power of your potential licensee should influence your rate.
  3. Determine (knowing the client) the reach of media where your image will be used: an individual’s small Instagram account will have a significantly lower reach than a paid advertising campaign of a big corporation.
  4. Consider the types of use and licenses granted for the licensee: exclusivity always costs more, so do commercial use versus retail.
  5. Don’t forget about the range of limitations: one-time or a geographically restricted use will have to cost lower amounts than a longer timeframe or no spatial restrictions.
  6. Know your market: this includes estimating how the market would pay for licensing your image in general and you can also consider how much the type of client you have would pay for an image and its license like yours. If you can, you may even consider how much income the license would generate for your client.

There are also image licensing fee calculators you can use to help with your estimations or as a starting point:

Checklist for photo licensing agreements

The following are key elements to include and decide about in a photo licensing agreement:

✓ The type of image use

Start with putting down the nature of image use, based on your client’s needs, ranging between editorial and commercial or retail use. Including the type of permitted use (print, online, film/tv, advertising, etc.), and geographic regions.

✓  The type of image license

Decide on exclusivity first but discuss with the client what type of license would fit their goals the best (and yours).

✓ The time frame

Time frames shouldn’t be too long, almost never ranging for 10+ years for instance, as you may not know where your client may end up (2-5 years being industry standard) — a small business today can become a huge brand in a year and your image might worth a lot more than what you asked for its use in the beginning. Plan for the period you potentially see ahead and the client can renew its license any time in the future if you agree with it, too. Be clear that image use past the time frame of the license is not permitted and requires a new/renewed license.

✓  The temporal, spatial and platform limitations

As a licensor, you have to set restrictions regarding the time period in which the licensee is allowed to use your photograph and any geographical constraints as well. Today, the latter is less common due to our highly digital environment but can easily make sense for print editorial photography use. Make sure to cover the subject of the platform as well: digital use is very broad for instance, and should usually be restricted in the agreement per platform unless your client is prepared to pay a higher licensing fee.

✓ The attribution of the photographer

The photographer can decide if they want their names to be indicated when and where the licensee uses their work. It’s common practice to place the photographer’s name next to the image but a photo licensing agreement is also the best place to make sure it happens. As a photographer, exposure is probably as important to you as being paid, so don’t forget to put down your related wishes in writing.

✓ The right to edit

You must agree on the scope of image editing you permit to the client using your image. In some cases, this issue wouldn’t even arise, but the licensee might want modification for a couple of uses. For instance, a print magazine may want to crop your image and do subtle color editing on your image to fit the publication’s visual vibe. Be prepared to discuss all these possibilities with your client and to include them as clearly as possible in the photo licensing agreement.

✓ The right to sublicense

Always cover the subject of sub-licensing in your agreement: is your client authorized to sublicense your photograph and if so, within what scope? If you forbid that, make it clear as well. If you wish to approve any sublicense, ensure that is included in the terms.

✓  The amount of licensing fee

Include the fee your client has to pay for using the image based on the license you agreed upon. Make sure this aligns with the scope of image use and the profile of the client (which influences the potential reach your work will be exposed to).

glasses
Photo by Mari Helin

Legal image protection with Pixsy

You don’t necessarily need a lawyer to write your photo licensing agreements however we advise you to at least have your version checked by someone with legal expertise.

‍Pixsy, as an award-winning image protection platform, is set out to help photographers safeguard their work and get fairly paid for it under all circumstances. If you’d like to know more about your rights as a visual property owner, make a visit to our Pixsy Academy.

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Legislation Crest

Copyright, Designs and Patents Act 1988

1988 CHAPTER 48

An Act to restate the law of copyright, with amendments; to make fresh provision as to the rights of performers and others in performances; to confer a design right in original designs; to amend the Registered Designs Act 1949; to make provision with respect to patent agents and trade mark agents; to confer patents and designs jurisdiction on certain county courts; to amend the law of patents; to make provision with respect to devices designed to circumvent copy-protection of works in electronic form; to make fresh provision penalising the fraudulent reception of transmissions; to make the fraudulent application or use of a trade mark an offence; to make provision for the benefit of the Hospital for Sick Children, Great Ormond Street, London; to enable financial assistance to be given to certain international bodies; and for connected purposes.

[15th November 1988]

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:—

Modifications etc. (not altering text)

C2 +Act: power to amend conferred (24.5.2024 for specified purposes, 1.1.2025 in so far as not already in force) by Digital Markets, Competition and Consumers Act 2024 (c. 13), ss. 138(2)-(7), 339(2)(c); S.I. 2024/1226, regs. 1(2), 2(1)(2) (with Sch. para. 10, 20) +

Part IU.K. Copyright

Modifications etc. (not altering text)

C3Pt. 1 extended (with modifications) by S.I. 1989/988, art. 2(3), 4, 5, Sch. 4 (with art. 6) (which S.I. was revoked by S.I. 1989/1293, Sch. 5)

C4Pt. 1 extended (with modifications) by S.I. 1989/1293, arts. 2(3), 3, 4, 5, Sch. 4 (with art. 6) (which S.I. was revoked by S.I.1993/942, art. 8, Sch. 5)

C5Pt. 1 extended (with modifications) by S.I. 1993/942, arts. 2(3), 4, 5, Sch. 4 (with art. 6) (as amended by S.I.1994/263, art. 2 and S.I. 1995/2987, art. 3) (which S.I. and amending S.Is. were revoked by S.I. 1999/1751, art. 8, Sch. 6)

C6Pt. 1 extended (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(3), 3, 4(3)(5), 5, 7, Schs. 2, 4, 5 (as amended (22.4.2003) by S.I. 2003/774, arts. 2-5) (which S.I. and amending S.I. were revoked (1.5.2005) by S.I. 2005/852, art. 8)

C7Pt. 1 extended in part (with modifications) (coming into force in accordance with art. 1 of the amending S.I.) by The Copyright (Bermuda) Order 2003 (S.I. 2003/1517), art. 2, Sch. (which S.I. was revoked (12.11.2009) by S.I. 2009/2749, arts. 1, 2)

C9Pt. 1 extended (with modifications) (1.5.2005) by The Copyright and Performances (Application to Other Countries) Order 2005 (S.I. 2005/852), arts. 2-5, Sch. (with art. 7) (which S.I. was revoked (6.4.2006) by S.I. 2006/316, art. 1(3))

C10Pt. 1 extended in part (with modifications) (coming into force in accordance with art. 1 of the amending S.I.) by The Copyright (Gibraltar) Order 2005 (S.I. 2005/853), art. 2, Sch. (which S.I. is revoked (coming into force in accordance with art. 1 of the amending S.I.) by S.I. 2006/1039, arts. 1, 2)

C11Pt. 1 extended (with modifications) (6.4.2006) by The Copyright and Performances (Application to Other Countries) Order 2006 (S.I. 2006/316), arts. 2-5, Sch. (with art. 7) (which S.I. was revoked (6.4.2007) by S.I. 2007/273, art. 1(3))

C12Pt. 1 extended (with modifications) (6.4.2007) by The Copyright and Performances (Application to Other Countries) Order 2007 (S.I. 2007/273), arts. 2-5, Sch. (with art. 7) (which S.I. was revoked (6.4.2008) by S.I. 2008/677, art. 1(3))

C13Pt. 1 extended (with modifications) (6.4.2008) by The Copyright and Performances (Application to Other Countries) Order 2008 (S.I. 2008/677), arts. 2-5, Sch. (with art. 7) (which S.I. was revoked (6.4.2012) by S.I. 2012/799, art. 1(3))

C14Pt. 1 extended (with modifications) (6.4.2012) by The Copyright and Performances (Application to Other Countries) Order 2012 (S.I. 2012/799), arts. 1(1), arts. 2-5, Schs. (with art. 8) (which S.I. was revoked (6.4.2013) by S.I. 2013/536), art. 1(3))

C15Pt. 1 extended in part (with modifications) (6.4.2013) by The Copyright and Performances (Application to Other Countries) Order 2013 (S.I. 2013/536), arts. 1(1), 2, 4, 5, Sch. (with art. 8) (as amended (6.4.2015) by S.I. 2015/216, art. 2) (which S.I. and amending S.I. were revoked (6.4.2017) by S.I. 2016/1219, art. 1(3))

C16Pt. 1 extended in part (Cayman Islands) (with modifications) (coming into force in accordance with art. 1 of the amending Order) by The Copyright (Cayman Islands) Order 2015 (S.I. 2015/795), arts. 1, 2, Sch. (as amended by S.I. 2016/370, arts. 1, 2-40)

C18Pt. 1 extended (with modifications) (6.4.2017) by The Copyright and Performances (Application to Other Countries) Order 2016 (S.I. 2016/1219), arts. 1(1), 4, 5, 7, 8, Sch. Pt. 1 (with art. 13) (as amended: (26.6.2021) by S.I. 2021/636, arts. 1, 2(2); (1.12.2021) by S.I. 2021/1258, arts. 1, 2(2); (15.4.2023) by S.I. 2023/296, arts. 1, 2(2); and (15.12.2024) by S.I. 2024/193, arts. 1(2), 5(2)(3) and S.I. 2024/1124, arts. 1(2), 7)

C19Pt. 1: power to extend conferred (27.4.2017) by Digital Economy Act 2017 (c. 30), ss. 118(1), 119(7)(8)(a)

Chapter IU.K. Subsistence, ownership and duration of copyright

Modifications etc. (not altering text)

C20Pt. 1 Ch. 1 applied in part (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

IntroductoryU.K.

1 Copyright and copyright works.U.K.

(1)Copyright is a property right which subsists in accordance with this Part in the following descriptions of work—

(a)original literary, dramatic, musical or artistic works,

(b)sound recordings, films [F1or broadcasts], and

(c)the typographical arrangement of published editions.

(2)In this Part “copyright work” means a work of any of those descriptions in which copyright subsists.

(3)Copyright does not subsist in a work unless the requirements of this Part with respect to qualification for copyright protection are met (see section 153 and the provisions referred to there).

Textual Amendments

2 Rights subsisting in copyright works.U.K.

(1)The owner of the copyright in a work of any description has the exclusive right to do the acts specified in Chapter II as the acts restricted by the copyright in a work of that description.

(2)In relation to certain descriptions of copyright work the following rights conferred by Chapter IV (moral rights) subsist in favour of the author, director or commissioner of the work, whether or not he is the owner of the copyright—

(a)section 77 (right to be identified as author or director),

(b)section 80 (right to object to derogatory treatment of work), and

(c)section 85 (right to privacy of certain photographs and films).

Descriptions of work and related provisionsU.K.

3 Literary, dramatic and musical works.U.K.

(1)In this Part—

  • “literary work” means any work, other than a dramatic or musical work, which is written, spoken or sung, and accordingly includes—

    (a)

    a table or compilation [F2other than a database], F3...

    (b)

    a computer program, F4...

    (c)

    [F5preparatory design material for a computer program] [F6, and

    (d)

    a database];

  • “dramatic work” includes a work of dance or mime; and

  • “musical work” means a work consisting of music, exclusive of any words or action intended to be sung, spoken or performed with the music.

(2)Copyright does not subsist in a literary, dramatic or musical work unless and until it is recorded, in writing or otherwise; and references in this Part to the time at which such a work is made are to the time at which it is so recorded.

(3)It is immaterial for the purposes of subsection (2) whether the work is recorded by or with the permission of the author; and where it is not recorded by the author, nothing in that subsection affects the question whether copyright subsists in the record as distinct from the work recorded.

Textual Amendments

F2Words in s. 3(1)(a) inserted (1.1.1998) by S.I. 1997/3032, reg. 5(a) (with Pt. IV)

F3Word in s. 3(1) omitted (1.1.1993) by virtue of S.I. 1992/3233, reg. 3

F4Word in s. 3(1)(b) left out (1.1.1998) by virtue of S.I. 1997/3032, reg. 5(b) (with Pt. IV)

F5Word and s. 3(1)(c) inserted (1.1.1993) by S.I. 1992/3233, reg. 3

F6S. 3(1)(d) and word preceding it inserted (1.1.1998) by S.I. 1997/3032, reg. 5(c) (with Pt. IV)

[F73A DatabasesU.K.

(1)In this Part “database” means a collection of independent works, data or other materials which—

(a)are arranged in a systematic or methodical way, and

(b)are individually accessible by electronic or other means.

(2)For the purposes of this Part a literary work consisting of a database is original if, and only if, by reason of the selection or arrangement of the contents of the database the database constitutes the author’s own intellectual creation.]

Textual Amendments

F7S. 3A inserted (1.1.1998) by S.I. 1997/3032, reg. 6 (with Pt. IV)

4 Artistic works.U.K.

(1)In this Part “artistic work” means—

(a)a graphic work, photograph, sculpture or collage, irrespective of artistic quality,

(b)a work of architecture being a building or a model for a building, or

(c)a work of artistic craftsmanship.

(2)In this Part—

  • “building” includes any fixed structure, and a part of a building or fixed structure;

  • “graphic work” includes—

(a)any painting, drawing, diagram, map, chart or plan, and

(b)any engraving, etching, lithograph, woodcut or similar work;

  • “photograph” means a recording of light or other radiation on any medium on which an image is produced or from which an image may by any means be produced, and which is not part of a film;

  • “sculpture” includes a cast or model made for purposes of sculpture.

F85 Sound recordings and films.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8Ss. 5A, 5B substituted for s. 5 (1.1.1996) by S.I. 1995/3297, reg. 9(1) (with Pt. III)

[F85A Sound recordings.U.K.

(1)In this Part “sound recording” means—

(a)a recording of sounds, from which the sounds may be reproduced, or

(b)a recording of the whole or any part of a literary, dramatic or musical work, from which sounds reproducing the work or part may be produced,

regardless of the medium on which the recording is made or the method by which the sounds are reproduced or produced.

(2)Copyright does not subsist in a sound recording which is, or to the extent that it is, a copy taken from a previous sound recording.]

Textual Amendments

F8Ss. 5A, 5B substituted for s. 5 (1.1.1996) by S.I. 1995/3297, reg. 9(1) (with Pt. III)

[F95B Films.U.K.

(1)In this Part “film” means a recording on any medium from which a moving image may by any means be produced.

(2)The sound track accompanying a film shall be treated as part of the film for the purposes of this Part.

(3)Without prejudice to the generality of subsection (2), where that subsection applies—

(a)references in this Part to showing a film include playing the film sound track to accompany the film,

[F10(b)references in this Part to playing a sound recording, or to communicating a sound recording to the public, do not include playing or communicating the film sound track to accompany the film,

(c)references in this Part to copying a work, so far as they apply to a sound recording, do not include copying the film sound track to accompany the film, and

(d)references in this Part to the issuing, rental or lending of copies of a work, so far as they apply to a sound recording, do not include the issuing, rental or lending of copies of the sound track to accompany the film.]

(4)Copyright does not subsist in a film which is, or to the extent that it is, a copy taken from a previous film.

(5)Nothing in this section affects any copyright subsisting in a film sound track as a sound recording.]

Textual Amendments

F9Ss. 5A, 5B substituted for s. 5 (1.1.1996) by S.I. 1995/3297, reg. 9(1) (with Pt. III)

F10S. 5B(3)(b)-(d) substituted (1.2.2006) for s. 5B(3)(b) and preceding word by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 2 (with reg. 8)

6 Broadcasts.U.K.

[F11(1)In this Part a “broadcast” means an electronic transmission of visual images, sounds or other information which—

(a)is transmitted for simultaneous reception by members of the public and is capable of being lawfully received by them, or

(b)is transmitted at a time determined solely by the person making the transmission for presentation to members of the public,

and which is not excepted by subsection (1A); and references to broadcasting shall be construed accordingly.

(1A)Excepted from the definition of “broadcast” is any internet transmission unless it is—

(a)a transmission taking place simultaneously on the internet and by other means,

(b)a concurrent transmission of a live event, or

(c)a transmission of recorded moving images or sounds forming part of a programme service offered by the person responsible for making the transmission, being a service in which programmes are transmitted at scheduled times determined by that person.]

(2)An encrypted transmission shall be regarded as capable of being lawfully received by members of the public only if decoding equipment has been made available to members of the public by or with the authority of the person making the transmission or the person providing the contents of the transmission.

(3)References in this Part to the person making a broadcast, [F12or a transmission which is a broadcast] are—

(a)to the person transmitting the programme, if he has responsibility to any extent for its contents, and

(b)to any person providing the programme who makes with the person transmitting it the arrangements necessary for its transmission;

and references in this Part to a programme, in the context of broadcasting, are to any item included in a broadcast.

[F13(4)For the purposes of this Part, the place from which a [F14wireless] broadcast is made is the place where, under the control and responsibility of the person making the broadcast, the programme-carrying signals are introduced into an uninterrupted chain of communication (including, in the case of a satellite transmission, the chain leading to the satellite and down towards the earth).]

F15[(4A)Subsections (3) and (4) have effect subject to section 6A (safeguards in case of certain satellite broadcasts).]

(5)References in this Part to the reception of a broadcast include reception of a broadcast relayed by means of a telecommunications system.

[F16(5A)The relaying of a broadcast by reception and immediate re-transmission shall be regarded for the purposes of this Part as a separate act of broadcasting from the making of the broadcast which is so re-transmitted.]

(6)Copyright does not subsist in a broadcast which infringes, or to the extent that it infringes, the copyright in another broadcast F17. . . .

Textual Amendments

F11S. 6(1)(1A) substituted (31.10.2003) for s. 6(1) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 4(a) (with regs. 31-40)

F13S. 6(4) substituted (1.12.1996 with effect as mentioned in reg. 28 of the amending S.I.) by S.I. 1996/2967, reg. 5

F15S. 6(4A) inserted (1.12.1996 with effect as mentioned in reg. 28 of the amending S.I.) by S.I. 1996/2967, reg. 6(1)

[F186A Safeguards in case of certain satellite broadcasts.U.K.

(1)This section applies where the place from which a broadcast by way of satellite transmission is made is located in a country other than [F19the United Kingdom] and the law of that country fails to provide at least the following level of protection—

(a)exclusive rights in relation to [F20wireless] broadcasting equivalent to those conferred by section 20 ([F21infringement by communication to the public]) on the authors of literary, dramatic, musical and artistic works, films and broadcasts;

(b)a right in relation to live [F22wireless] broadcasting equivalent to that conferred on a performer by section 182(1)(b) (consent required for live broadcast of performance); and

(c)a right for authors of sound recordings and performers to share in a single equitable remuneration in respect of the [F22wireless] broadcasting of sound recordings.

(2)Where the place from which the programme-carrying signals are transmitted to the satellite (“the uplink station”) is located in [F19the United Kingdom] —

(a)[F23the United Kingdom] shall be treated as the place from which the broadcast is made, and

(b)the person operating the uplink station shall be treated as the person making the broadcast.

(3)Where the uplink station is not located in [F19the United Kingdom] but a person who is established in [F19the United Kingdom] has commissioned the making of the broadcast—

(a)that person shall be treated as the person making the broadcast, and

(b)[F24the United Kingdom] shall be treated as the place from which the broadcast is made.]

Textual Amendments

F18S. 6A inserted (1.12.1996 with effect as mentioned in reg. 28 of the amending S.I.) by S.I. 1996/2967, reg. 6(2)

F257 Cable programmes.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

8 Published editions.U.K.

(1)In this Part “published edition”, in the context of copyright in the typographical arrangement of a published edition, means a published edition of the whole or any part of one or more literary, dramatic or musical works.

(2)Copyright does not subsist in the typographical arrangement of a published edition if, or to the extent that, it reproduces the typographical arrangement of a previous edition.

Authorship and ownership of copyrightU.K.

9 Authorship of work.U.K.

(1)In this Part “author”, in relation to a work, means the person who creates it.

(2)That person shall be taken to be—

[F26(aa)in the case of a sound recording, the producer;

(ab)in the case of a film, the producer and the principal director;]

(b)in the case of a broadcast, the person making the broadcast (see section 6(3)) or, in the case of a broadcast which relays another broadcast by reception and immediate re-transmission, the person making that other broadcast;

F27(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)in the case of the typographical arrangement of a published edition, the publisher.

(3)In the case of a literary, dramatic, musical or artistic work which is computer-generated, the author shall be taken to be the person by whom the arrangements necessary for the creation of the work are undertaken.

(4)For the purposes of this Part a work is of “unknown authorship” if the identity of the author is unknown or, in the case of a work of joint authorship, if the identity of none of the authors is known.

(5)For the purposes of this Part the identity of an author shall be regarded as unknown if it is not possible for a person to ascertain his identity by reasonable inquiry; but if his identity is once known it shall not subsequently be regarded as unknown.

Textual Amendments

F26S. 9(2)(aa)(ab) substituted for s. 9(2)(a) (1.12.1996 with effect in relation to films made on or after 1.7.1994) by S.I. 1996/2967, regs. 18(1), 36

10 Works of joint authorship.U.K.

(1)In this Part a “work of joint authorship” means a work produced by the collaboration of two or more authors in which the contribution of each author is not distinct from that of the other author or authors.

[F28(1A)A film shall be treated as a work of joint authorship unless the producer and the principal director are the same person.]

(2)A broadcast shall be treated as a work of joint authorship in any case where more than one person is to be taken as making the broadcast (see section 6(3)).

(3)References in this Part to the author of a work shall, except as otherwise provided, be construed in relation to a work of joint authorship as references to all the authors of the work.

Textual Amendments

F28S. 10(1A) inserted (1.12.1996 with effect in relation to films made on or after 1.7.1994) by S.I. 1996/2967, regs. 18(2), 36

[F2910AWorks of co-authorshipU.K.

(1)In this Part a “work of co-authorship” means a work produced by the collaboration of the author of a musical work and the author of a literary work where the two works are created in order to be used together.

(2)References in this Part to a work or the author of a work shall, except as otherwise provided, be construed in relation to a work of co-authorship as references to each of the separate musical and literary works comprised in the work of co-authorship and to each of the authors of such works.]

Textual Amendments

11 First ownership of copyright.U.K.

(1)The author of a work is the first owner of any copyright in it, subject to the following provisions.

(2)Where a literary, dramatic, musical or artistic work [F30, or a film,] is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary.

(3)This section does not apply to Crown copyright or Parliamentary copyright (see sections 163 and 165) or to copyright which subsists by virtue of section 168 (copyright of certain international organisations).

Textual Amendments

F30Words in s. 11(2) inserted (1.12.1996 with effect in relation to films made on or after 1.7.1994) by S.I. 1996/2967, regs. 18(3), 36

Duration of copyrightU.K.

[F3112 Duration of copyright in literary, dramatic, musical or artistic works.U.K.

(1)The following provisions have effect with respect to the duration of copyright in a literary, dramatic, musical or artistic work.

(2)Copyright expires at the end of the period of 70 years from the end of the calendar year in which the author dies, subject as follows.

(3)If the work is of unknown authorship, copyright expires—

(a)at the end of the period of 70 years from the end of the calendar year in which the work was made, or

(b)if during that period the work is made available to the public, at the end of the period of 70 years from the end of the calendar year in which it is first so made available,

subject as follows.

(4)Subsection (2) applies if the identity of the author becomes known before the end of the period specified in paragraph (a) or (b) of subsection (3).

(5)For the purposes of subsection (3) making available to the public includes—

(a)in the case of a literary, dramatic or musical work—

(i)performance in public, or

[F32(ii)communication to the public;]

(b)in the case of an artistic work—

(i)exhibition in public,

(ii)a film including the work being shown in public, or

[F33(iii)communication to the public;]

but in determining generally for the purposes of that subsection whether a work has been made available to the public no account shall be taken of any unauthorised act.

(6) Where the country of origin of the work is not [F34the United Kingdom] and the author of the work is not a national of [F34the United Kingdom], the duration of copyright is that to which the work is entitled in the country of origin, provided that does not exceed the period which would apply under subsections (2) to (5).

(7)If the work is computer-generated the above provisions do not apply and copyright expires at the end of the period of 50 years from the end of the calendar year in which the work was made.

(8)The provisions of this section are adapted as follows in relation to a work of joint authorship [F35or a work of co-authorship]—

(a)the reference in subsection (2) to the death of the author shall be construed—

(i)if the identity of all the authors is known, as a reference to the death of the last of them to die, and

(ii)if the identity of one or more of the authors is known and the identity of one or more others is not, as a reference to the death of the last whose identity is known;

(b)the reference in subsection (4) to the identity of the author becoming known shall be construed as a reference to the identity of any of the authors becoming known;

(c) the reference in subsection (6) to the author not being a national of [F36the United Kingdom] shall be construed as a reference to none of the authors being a national of [F36the United Kingdom].

(9)This section does not apply to Crown copyright or Parliamentary copyright (see sections 163 to [F37166D]) or to copyright which subsists by virtue of section 168 (copyright of certain international organisations).]

Textual Amendments

F31S. 12 substituted (1.1.1996) by S.I. 1995/3297, reg. 5(1) (with Pt. III)

F37Word in s. 12(9) substituted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 23 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

F3813 Duration of copyright in sound recordings and films.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F38Ss. 13A, 13B substituted for s. 13 (1.1.1996) by S.I. 1995/3297, reg. 6(1) (with Pt. IV)

[F3813A Duration of copyright in sound recordings.U.K.

(1)The following provisions have effect with respect to the duration of copyright in a sound recording.

[F39(2)Subject to subsections (4) and (5) [F40and section 191HA(4)], copyright expires—

(a)at the end of the period of 50 years from the end of the calendar year in which the recording is made, or

(b)if during that period the recording is published, [F4170] years from the end of the calendar year in which it is first published, or

(c)if during that period the recording is not published but is made available to the public by being played in public or communicated to the public, [F4270] years from the end of the calendar year in which it is first so made available,

but in determining whether a sound recording has been published, played in public or communicated to the public, no account shall be taken of any unauthorised act.]

F43(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Where the author of a sound recording is not a national of [F44the United Kingdom], the duration of copyright is that to which the sound recording is entitled in the country of which the author is a national, provided that does not exceed the period which would apply under [F45 subsection (2) ].

(5)If or to the extent that the application of subsection (4) would be at variance with an international obligation to which the United Kingdom became subject prior to 29th October 1993, the duration of copyright shall be as specified in [F45subsection (2)].]

Textual Amendments

F38Ss. 13A, 13B substituted for s. 13 (1.1.1996) by S.I. 1995/3297, reg. 6(1) (with Pt. IV)

F45Words in s. 13A(4)(5) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I.2003/2498), reg. 29(c) (with regs. 31-40)

[F4613B Duration of copyright in films.U.K.

(1)The following provisions have effect with respect to the duration of copyright in a film.

(2)Copyright expires at the end of the period of 70 years from the end of the calendar year in which the death occurs of the last to die of the following persons—

(a)the principal director,

(b)the author of the screenplay,

(c)the author of the dialogue, or

(d)the composer of music specially created for and used in the film;

subject as follows.

(3)If the identity of one or more of the persons referred to in subsection (2)(a) to (d) is known and the identity of one or more others is not, the reference in that subsection to the death of the last of them to die shall be construed as a reference to the death of the last whose identity is known.

(4)If the identity of the persons referred to in subsection (2)(a) to (d) is unknown, copyright expires at—

(a)the end of the period of 70 years from the end of the calendar year in which the film was made, or

(b)if during that period the film is made available to the public, at the end of the period of 70 years from the end of the calendar year in which it is first so made available.

(5)Subsections (2) and (3) apply if the identity of any of those persons becomes known before the end of the period specified in paragraph (a) or (b) of subsection (4).

(6)For the purposes of subsection (4) making available to the public includes—

(a)showing in public, or

[F47(b)communicating to the public;]

but in determining generally for the purposes of that subsection whether a film has been made available to the public no account shall be taken of any unauthorised act.

(7)Where the country of origin is not [F48the United Kingdom] and the author of the film is not a national of [F48the United Kingdom], the duration of copyright is that to which the work is entitled in the country of origin, provided that does not exceed the period which would apply under subsections (2) to (6).

(8)In relation to a film of which there are joint authors, the reference in subsection (7) to the author not being a national of [F49the United Kingdom] shall be construed as a reference to none of the authors being a national of [F49the United Kingdom].

(9)If in any case there is no person falling within paragraphs (a) to (d) of subsection (2), the above provisions do not apply and copyright expires at the end of the period of 50 years from the end of the calendar year in which the film was made.

(10)For the purposes of this section the identity of any of the persons referred to in subsection (2)(a) to (d) shall be regarded as unknown if it is not possible for a person to ascertain his identity by reasonable inquiry; but if the identity of any such person is once known it shall not subsequently be regarded as unknown.]

Textual Amendments

F46Ss. 13A, 13B substituted for s. 13 (1.1.1996) by S.I. 1995/3297, reg. 6(1) (with Pt. IV)

[F5114 Duration of copyright in broadcasts F50. . . .U.K.

(1)The following provisions have effect with respect to the duration of copyright in a broadcast F52. . . .

(2)Copyright in a broadcast F52. . . expires at the end of the period of 50 years from the end of the calendar year in which the broadcast was made F53. . . , subject as follows.

(3)Where the author of the broadcast F52. . . is not a national of [F54the United Kingdom], the duration of copyright in the broadcast F52. . . is that to which it is entitled in the country of which the author is a national, provided that does not exceed the period which would apply under subsection (2).

(4)If or to the extent that the application of subsection (3) would be at variance with an international obligation to which the United Kingdom became subject prior to 29th October 1993, the duration of copyright shall be as specified in subsection (2).

(5)Copyright in a repeat broadcast F52. . . expires at the same time as the copyright in the original broadcast F52. . . ; and accordingly no copyright arises in respect of a repeat broadcast F52. . . which is broadcast F55. . . after the expiry of the copyright in the original broadcast F52. . . .

(6)A repeat broadcast F52. . . means one which is a repeat F56. . . of a broadcast previously made F56. . . .]

Textual Amendments

F51S. 14 substituted (1.1.1996) by S.I. 1995/3297, reg. 7(1) (with Pt. IV)

15 Duration of copyright in typographical arrangement of published editions.U.K.

Copyright in the typographical arrangement of a published edition expires at the end of the period of 25 years from the end of the calendar year in which the edition was first published.

[F5715A Meaning of country of origin.U.K.

(1)For the purposes of the provisions of this Part relating to the duration of copyright the country of origin of a work shall be determined as follows.

(2)If the work is first published in a Berne Convention country and is not simultaneously published elsewhere, the country of origin is that country.

(3)If the work is first published simultaneously in two or more countries only one of which is a Berne Convention country, the country of origin is that country.

(4)If the work is first published simultaneously in two or more countries of which two or more are Berne Convention countries, then—

[F58(a)if the United Kingdom is one of those countries, the country of origin is the United Kingdom; and]

(b)[F59if the United Kingdom is not one of those countries], the country of origin is the Berne Convention country which grants the shorter or shortest period of copyright protection.

(5)If the work is unpublished or is first published in a country which is not a Berne Convention country (and is not simultaneously published in a Berne Convention country), the country of origin is—

(a)if the work is a film and the maker of the film has his headquarters in, or is domiciled or resident in a Berne Convention country, that country;

(b)if the work is—

(i)a work of architecture constructed in a Berne Convention country, or

(ii)an artistic work incorporated in a building or other structure situated in a Berne Convention country,

that country;

(c)in any other case, the country of which the author of the work is a national.

(6)In this section—

(a)a “Berne Convention country” means a country which is a party to any Act of the International Convention for the Protection of Literary and Artistic Works signed at Berne on 9th September 1886; and

(b)references to simultaneous publication are to publication within 30 days of first publication.]

Textual Amendments

F57S. 15A inserted (1.1.1996) by S.I. 1995/3297, reg. 8(1) (with Pt. IV)

Chapter IIU.K. Rights of Copyright Owner

Modifications etc. (not altering text)

C21Pt. 1 Ch. II applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 17(1) (with Pt. III)

The acts restricted by copyrightU.K.

16 The acts restricted by copyright in a work.U.K.

(1)The owner of the copyright in a work has, in accordance with the following provisions of this Chapter, the exclusive right to do the following acts in the United Kingdom—

(a)to copy the work (see section 17);

(b)to issue copies of the work to the public (see section 18);

[F60(ba)to rent or lend the work to the public (see section 18A);]

(c)to perform, show or play the work in public (see section 19);

[F61(d)to communicate the work to the public (see section 20);]

(e)to make an adaptation of the work or do any of the above in relation to an adaptation (see section 21);

and those acts are referred to in this Part as the “acts restricted by the copyright”.

(2)Copyright in a work is infringed by a person who without the licence of the copyright owner does, or authorises another to do, any of the acts restricted by the copyright.

(3)References in this Part to the doing of an act restricted by the copyright in a work are to the doing of it—

(a)in relation to the work as a whole or any substantial part of it, and

(b)either directly or indirectly;

and it is immaterial whether any intervening acts themselves infringe copyright.

(4)This Chapter has effect subject to—

(a)the provisions of Chapter III (acts permitted in relation to copyright works), and

(b)the provisions of Chapter VII (provisions with respect to copyright licensing).

Textual Amendments

F60S. 16(1)(ba) inserted (1.12.1996) by S.I. 1996/2967, reg. 10(1) (with Pt. III)

17 Infringement of copyright by copying.U.K.

(1)The copying of the work is an act restricted by the copyright in every description of copyright work; and references in this Part to copying and copies shall be construed as follows.

(2)Copying in relation to a literary, dramatic, musical or artistic work means reproducing the work in any material form.

This includes storing the work in any medium by electronic means.

(3)In relation to an artistic work copying includes the making of a copy in three dimensions of a two-dimensional work and the making of a copy in two dimensions of a three-dimensional work.

(4)Copying in relation to a film [F62or broadcast] includes making a photograph of the whole or any substantial part of any image forming part of the film [F62or broadcast].

(5)Copying in relation to the typographical arrangement of a published edition means making a facsimile copy of the arrangement.

(6)Copying in relation to any description of work includes the making of copies which are transient or are incidental to some other use of the work.

Textual Amendments

18 Infringement by issue of copies to the public.U.K.

(1)The issue to the public of copies of the work is an act restricted by the copyright in every description of copyright work.

[F63[F64(2)References in this Part to the issue to the public of copies of a work are to the act of putting into circulation in the United Kingdom copies not previously put into circulation in [F65the United Kingdom or] the EEA by or with the consent of the copyright owner.]

(3)References in this Part to the issue to the public of copies of a work do not include—

(a)any subsequent distribution, sale, hiring or loan of copies previously put into circulation (but see section 18A: infringement by rental or lending) F66...

F67(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F68...]

F69[(4)References in this Part to the issue of copies of a work include the issue of the original.]

Textual Amendments

F63S. 18(2)(3) substituted (1.12.1996) by S.I. 1996/2967, reg. 9(2) (with Pt. III)

F69S. 18(4) added (1.12.1996) by S.I. 1996/2967, reg. 9(3) (with Pt. III)

[F7018A Infringement by rental or lending of work to the public.U.K.

(1)The rental or lending of copies of the work to the public is an act restricted by the copyright in—

(a)a literary, dramatic or musical work,

(b)an artistic work, other than—

(i)a work of architecture in the form of a building or a model for a building, or

(ii)a work of applied art, or

(c)a film or a sound recording.

(2)In this Part, subject to the following provisions of this section—

(a)“rental” means making a copy of the work available for use, on terms that it will or may be returned, for direct or indirect economic or commercial advantage, and

(b)“lending” means making a copy of the work available for use, on terms that it will or may be returned, otherwise than for direct or indirect economic or commercial advantage, through an establishment which is accessible to the public.

(3)The expressions “rental” and “lending” do not include—

(a)making available for the purpose of public performance, playing or showing in public [F71or communication to the public];

(b)making available for the purpose of exhibition in public; or

(c)making available for on-the-spot reference use.

(4)The expression “lending” does not include making available between establishments which are accessible to the public.

(5)Where lending by an establishment accessible to the public gives rise to a payment the amount of which does not go beyond what is necessary to cover the operating costs of the establishment, there is no direct or indirect economic or commercial advantage for the purposes of this section.

(6)References in this Part to the rental or lending of copies of a work include the rental or lending of the original.]

Textual Amendments

F70S. 18A inserted (1.12.1996) by S.I. 1996/2967, reg. 10(2) (with Pt. III)

19 Infringement by performance, showing or playing of work in public.U.K.

(1)The performance of the work in public is an act restricted by the copyright in a literary, dramatic or musical work.

(2)In this Part “performance”, in relation to a work—

(a)includes delivery in the case of lectures, addresses, speeches and sermons, and

(b)in general, includes any mode of visual or acoustic presentation, including presentation by means of a sound recording, film [F72or broadcast] of the work.

(3)The playing or showing of the work in public is an act restricted by the copyright in a sound recording, film [F72or broadcast].

(4)Where copyright in a work is infringed by its being performed, played or shown in public by means of apparatus for receiving visual images or sounds conveyed by electronic means, the person by whom the visual images or sounds are sent, and in the case of a performance the performers, shall not be regarded as responsible for the infringement.

Textual Amendments

[F7320Infringement by communication to the publicU.K.

(1)The communication to the public of the work is an act restricted by the copyright in—

(a)a literary, dramatic, musical or artistic work,

(b)a sound recording or film, or

(c)a broadcast.

(2)References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include—

(a)the broadcasting of the work;

(b)the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.]

Textual Amendments

21 Infringement by making adaptation or act done in relation to adaptation.U.K.

(1)The making of an adaptation of the work is an act restricted by the copyright in a literary, dramatic or musical work.

For this purpose an adaptation is made when it is recorded, in writing or otherwise.

(2)The doing of any of the acts specified in sections 17 to 20, or subsection (1) above, in relation to an adaptation of the work is also an act restricted by the copyright in a literary, dramatic or musical work.

For this purpose it is immaterial whether the adaptation has been recorded, in writing or otherwise, at the time the act is done.

(3)In this Part “adaptation”—

(a)in relation to a literary [F74work, [F75other than a computer program or a database, or in relation to a]] dramatic work, means—

(i)a translation of the work;

(ii)a version of a dramatic work in which it is converted into a non-dramatic work or, as the case may be, of a non-dramatic work in which it is converted into a dramatic work;

(iii)a version of the work in which the story or action is conveyed wholly or mainly by means of pictures in a form suitable for reproduction in a book, or in a newspaper, magazine or similar periodical;

[F76(ab)in relation to a computer program, means an arrangement or altered version of the program or a translation of it;]

[F77(ac)in relation to a database, means an arrangement or altered version of the database or a translation of it;]

(b)in relation to a musical work, means an arrangement or transcription of the work.

(4)In relation to a computer program a “translation” includes a version of the program in which it is converted into or out of a computer language or code or into a different computer language or code F78. . .

(5)No inference shall be drawn from this section as to what does or does not amount to copying a work.

Textual Amendments

F74Words in s. 21(3)(a) inserted (1.1.1993) by S.I. 1992/3233, reg. 5(1)

F75Words in s. 21(3)(a) substituted (1.1.1998) by S.I. 1997/3032, reg. 7(a) (with Pt. IV)

F76S. 21(3)(ab) inserted (1.1.1993) by S.I. 1992/3233, reg. 5(2)

F77S. 21(3)(ac) inserted (1.1.1998) by S.I. 1997/3032, reg. 7(b) (with Pt. IV)

F78Words in s. 21(4) omitted (1.1.1993) by virtue of S.I. 1992/3233, reg. 5(3)

Secondary infringement of copyrightU.K.

22 Secondary infringement: importing infringing copy.U.K.

The copyright in a work is infringed by a person who, without the licence of the copyright owner, imports into the United Kingdom, otherwise than for his private and domestic use, an article which is, and which he knows or has reason to believe is, an infringing copy of the work.

23 Secondary infringement: possessing or dealing with infringing copy.U.K.

The copyright in a work is infringed by a person who, without the licence of the copyright owner—

(a)possesses in the course of a business,

(b)sells or lets for hire, or offers or exposes for sale or hire,

(c)in the course of a business exhibits in public or distributes, or

(d)distributes otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,

an article which is, and which he knows or has reason to believe is, an infringing copy of the work.

24 Secondary infringement: providing means for making infringing copies.U.K.

(1)Copyright in a work is infringed by a person who, without the licence of the copyright owner—

(a)makes,

(b)imports into the United Kingdom,

(c)possesses in the course of a business, or

(d)sells or lets for hire, or offers or exposes for sale or hire,

an article specifically designed or adapted for making copies of that work, knowing or having reason to believe that it is to be used to make infringing copies.

(2)Copyright in a work is infringed by a person who without the licence of the copyright owner transmits the work by means of a telecommunications system (otherwise than by [F79communication to the public]), knowing or having reason to believe that infringing copies of the work will be made by means of the reception of the transmission in the United Kingdom or elsewhere.

Textual Amendments

25 Secondary infringement: permitting use of premises for infringing performance.U.K.

(1)Where the copyright in a literary, dramatic or musical work is infringed by a performance at a place of public entertainment, any person who gave permission for that place to be used for the performance is also liable for the infringement unless when he gave permission he believed on reasonable grounds that the performance would not infringe copyright.

(2)In this section “place of public entertainment” includes premises which are occupied mainly for other purposes but are from time to time made available for hire for the purposes of public entertainment.

26 Secondary infringement: provision of apparatus for infringing performance, &c.U.K.

(1)Where copyright in a work is infringed by a public performance of the work, or by the playing or showing of the work in public, by means of apparatus for—

(a)playing sound recordings,

(b)showing films, or

(c)receiving visual images or sounds conveyed by electronic means,

the following persons are also liable for the infringement.

(2)A person who supplied the apparatus, or any substantial part of it, is liable for the infringement if when he supplied the apparatus or part—

(a)he knew or had reason to believe that the apparatus was likely to be so used as to infringe copyright, or

(b)in the case of apparatus whose normal use involves a public performance, playing or showing, he did not believe on reasonable grounds that it would not be so used as to infringe copyright.

(3)An occupier of premises who gave permission for the apparatus to be brought onto the premises is liable for the infringement if when he gave permission he knew or had reason to believe that the apparatus was likely to be so used as to infringe copyright.

(4)A person who supplied a copy of a sound recording or film used to infringe copyright is liable for the infringement if when he supplied it he knew or had reason to believe that what he supplied, or a copy made directly or indirectly from it, was likely to be so used as to infringe copyright.

Infringing copiesU.K.

27 Meaning of “infringing copy”.U.K.

(1)In this Part “infringing copy”, in relation to a copyright work, shall be construed in accordance with this section.

(2)An article is an infringing copy if its making constituted an infringement of the copyright in the work in question.

(3)F80... An article is also an infringing copy if—

(a)it has been or is proposed to be imported into the United Kingdom, and

(b)its making in the United Kingdom would have constituted an infringement of the copyright in the work in question, or a breach of an exclusive licence agreement relating to that work.

F81(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Where in any proceedings the question arises whether an article is an infringing copy and it is shown—

(a)that the article is a copy of the work, and

(b)that copyright subsists in the work or has subsisted at any time,

it shall be presumed until the contrary is proved that the article was made at a time when copyright subsisted in the work.

(5)Nothing in subsection (3) shall be construed as applying to an article which—

[F82(a)may lawfully be imported into the United Kingdom by virtue of anything which forms part of assimilated law as a result of section 3 of the European Union (Withdrawal) Act 2018, or

(b)has been or is proposed to be imported into the United Kingdom after being put into circulation in the EEA by or with the consent of the copyright owner.]

[F83(5A)In subsection (5)(a), the reference to assimilated law is to be read, until the coming into force of paragraph 2(6) of Schedule 2 to the Retained EU Law (Revocation and Reform) Act 2023, as a reference to retained EU law.]

(6)In this Part “infringing copy” includes a copy falling to be treated as an infringing copy by virtue of any of the following provisions —

  • [F84section 29A(3) (copies for text and data analysis for non-commercial research),]

  • [F85section 28B(7) and (9) (personal copies for private use),]

  • [F86section 31A(5) and (6) (disabled persons: copies of works for personal use),]

  • [F87section 31B(11) (making and supply of accessible copies by authorised bodies),]

  • [F84section 35(5) (recording by educational establishments of broadcasts),]

  • [F84section 36(8) (copying and use of extracts of works by educational establishments),]

  • [F84section 42A(5)(b) (copying by librarians: single copies of published works),]

  • [F84section 61(6)(b) (recordings of folksongs),]

  • F88...

  • F89...

  • F89...

  • F89...

  • F89...

  • section 56(2) (further copies, adaptations, &c. of work in electronic form retained on transfer of principal copy),

  • section 63(2) (copies made for purpose of advertising artistic work for sale),

  • section 68(4) (copies made for purpose of broadcast F90 . . . ),

  • [F91section 70(2) (recording for the purposes of time-shifting),

  • section 71(2) (photographs of broadcasts), or]

  • any provision of an order under section 141 (statutory licence for certain reprographic copying by educational establishments).

Textual Amendments

F80Words in s. 27(3) omitted (1.12.1996) by virtue of S.I. 1996/2967, reg. 9(4) (with Pt. III)

F81S. 27(3A) omitted (1.12.1996) by virtue of S.I. 1996/2967, reg. 9(4) (with Pt. III)

F85Words in s. 27(6) inserted (1.10.2014) by The Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (S.I. 2014/2361), regs. 1(1), 4(1) (with reg. 5) (but note that the amending S.I. was quashed with prospective effect by the High Court in the case of R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), 17 July 2015)

F91S. 27(6): entries substituted (31.10.2003) for word "or" appearing at end of entry for s. 68(4) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 20(3) (with regs. 31-40)

Chapter IIIU.K. Acts Permitted in relation to Copyright Works

Modifications etc. (not altering text)

C23Pt. 1 Ch. III applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 17(1)-(3) (with Pt. III)

C24Pt. 1 Ch. III continued (31.10.2003) by virtue of The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 33, (with regs. 31-40)

IntroductoryU.K.

28 Introductory provisions.U.K.

(1)The provisions of this Chapter specify acts which may be done in relation to copyright works notwithstanding the subsistence of copyright; they relate only to the question of infringement of copyright and do not affect any other right or obligation restricting the doing of any of the specified acts.

(2)Where it is provided by this Chapter that an act does not infringe copyright, or may be done without infringing copyright, and no particular description of copyright work is mentioned, the act in question does not infringe the copyright in a work of any description.

(3)No inference shall be drawn from the description of any act which may by virtue of this Chapter be done without infringing copyright as to the scope of the acts restricted by the copyright in any description of work.

(4)The provisions of this Chapter are to be construed independently of each other, so that the fact that an act does not fall within one provision does not mean that it is not covered by another provision.

GeneralU.K.

[F9228AMaking of temporary copiesU.K.

Copyright in a literary work, other than a computer program or a database, or in a dramatic, musical or artistic work, the typographical arrangement of a published edition, a sound recording or a film, is not infringed by the making of a temporary copy which is transient or incidental, which is an integral and essential part of a technological process and the sole purpose of which is to enable—

(a)a transmission of the work in a network between third parties by an intermediary; or

(b)a lawful use of the work;

and which has no independent economic significance.]

Textual Amendments

[F9328BPersonal copies for private useU.K.

(1)The making of a copy of a work, other than a computer program, by an individual does not infringe copyright in the work provided that the copy—

(a)is a copy of—

(i)the individual’s own copy of the work, or

(ii)a personal copy of the work made by the individual,

(b)is made for the individual’s private use, and

(c)is made for ends which are neither directly nor indirectly commercial.

(2)In this section “the individual’s own copy” is a copy which—

(a)has been lawfully acquired by the individual on a permanent basis,

(b)is not an infringing copy, and

(c)has not been made under any provision of this Chapter which permits the making of a copy without infringing copyright.

(3)In this section a “personal copy” means a copy made under this section.

(4)For the purposes of subsection (2)(a), a copy “lawfully acquired on a permanent basis”—

(a)includes a copy which has been purchased, obtained by way of a gift, or acquired by means of a download resulting from a purchase or a gift (other than a download of a kind mentioned in paragraph (b)); and

(b)does not include a copy which has been borrowed, rented, broadcast or streamed, or a copy which has been obtained by means of a download enabling no more than temporary access to the copy.

(5)In subsection (1)(b) “private use” includes private use facilitated by the making of a copy—

(a)as a back up copy,

(b)for the purposes of format-shifting, or

(c)for the purposes of storage, including in an electronic storage area accessed by means of the internet or similar means which is accessible only by the individual (and the person responsible for the storage area).

(6)Copyright in a work is infringed if an individual transfers a personal copy of the work to another person (otherwise than on a private and temporary basis), except where the transfer is authorised by the copyright owner.

(7)If copyright is infringed as set out in subsection (6), a personal copy which has been transferred is for all purposes subsequently treated as an infringing copy.

(8)Copyright in a work is also infringed if an individual, having made a personal copy of the work, transfers the individual’s own copy of the work to another person (otherwise than on a private and temporary basis) and, after that transfer and without the licence of the copyright owner, retains any personal copy.

(9)If copyright is infringed as set out in subsection (8), any retained personal copy is for all purposes subsequently treated as an infringing copy.

(10)To the extent that a term of a contract purports to prevent or restrict the making of a copy which, by virtue of this section, would not infringe copyright, that term is unenforceable.]

Textual Amendments

F93S. 28B inserted (1.10.2014) by The Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (S.I. 2014/2361), regs. 1(1), 3(1) (with reg. 5) (but note that the amending S.I. was quashed with prospective effect by the High Court in the case of R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), 17 July 2015)

29 Research and private study.U.K.

[F94(1)Fair dealing with a F95... work for the purposes of research for a non-commercial purpose does not infringe any copyright in the work provided that it is accompanied by a sufficient acknowledgement.]

[F96(1B)No acknowledgement is required in connection with fair dealing for the purposes mentioned in subsection (1) where this would be impossible for reasons of practicality or otherwise.

(1C)Fair dealing with a F97... work for the purposes of private study does not infringe any copyright in the work.]

F98(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Copying by a person other than the researcher or student himself is not fair dealing if—

[F99(a)in the case of a librarian, or a person acting on behalf of a librarian, that person does anything which is not permitted under section 42A (copying by librarians: single copies of published works), or]

(b)in any other case, the person doing the copying knows or has reason to believe that it will result in copies of substantially the same material being provided to more than one person at substantially the same time and for substantially the same purpose.

[F100(4)It is not fair dealing—

(a)to convert a computer program expressed in a low level language into a version expressed in a higher level language, or

(b)incidentally in the course of so converting the program, to copy it,

(these acts being permitted if done in accordance with section 50B (decompilation)).]

[F101(4A)It is not fair dealing to observe, study or test the functioning of a computer program in order to determine the ideas and principles which underlie any element of the program (these acts being permitted if done in accordance with section 50BA (observing, studying and testing)).]

[F102(4B)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.]

F103(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F94S. 29(1) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 9(a), (with regs 31-40)

F96S. 29(1B)(1C) substituted (31.10.2003) for s. 29(1A) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 9(b) (with regs. 31-40)

F100S. 29(4) inserted (1.1.1993) by S.I. 1992/3233, reg. 7

[F10429A Copies for text and data analysis for non-commercial researchU.K.

(1)The making of a copy of a work by a person who has lawful access to the work does not infringe copyright in the work provided that—

(a)the copy is made in order that a person who has lawful access to the work may carry out a computational analysis of anything recorded in the work for the sole purpose of research for a non-commercial purpose, and

(b)the copy is accompanied by a sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise).

(2)Where a copy of a work has been made under this section, copyright in the work is infringed if—

(a)the copy is transferred to any other person, except where the transfer is authorised by the copyright owner, or

(b)the copy is used for any purpose other than that mentioned in subsection (1)(a), except where the use is authorised by the copyright owner.

(3)If a copy made under this section is subsequently dealt with—

(a)it is to be treated as an infringing copy for the purposes of that dealing, and

(b)if that dealing infringes copyright, it is to be treated as an infringing copy for all subsequent purposes.

(4)In subsection (3) “dealt with” means sold or let for hire, or offered or exposed for sale or hire.

(5)To the extent that a term of a contract purports to prevent or restrict the making of a copy which, by virtue of this section, would not infringe copyright, that term is unenforceable.]

Textual Amendments

30 Criticism, review[F105, quotation] and news reporting.U.K.

(1)Fair dealing with a work for the purpose of criticism or review, of that or another work or of a performance of a work, does not infringe any copyright in the work provided that it is accompanied by a sufficient acknowledgement [F106 (unless this would be impossible for reasons of practicality or otherwise)] [F107 and provided that the work has been made available to the public].

[F108(1ZA)Copyright in a work is not infringed by the use of a quotation from the work (whether for criticism or review or otherwise) provided that—

(a)the work has been made available to the public,

(b)the use of the quotation is fair dealing with the work,

(c)the extent of the quotation is no more than is required by the specific purpose for which it is used, and

(d)the quotation is accompanied by a sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise).]

[F109(1A)For the purposes of [F110subsections (1) and (1ZA)] a work has been made available to the public if it has been made available by any means, including—

(a)the issue of copies to the public;

(b)making the work available by means of an electronic retrieval system;

(c)the rental or lending of copies of the work to the public;

(d)the performance, exhibition, playing or showing of the work in public;

(e)the communication to the public of the work,

but in determining generally for the purposes of [F111those subsections] whether a work has been made available to the public no account shall be taken of any unauthorised act.]

(2)Fair dealing with a work (other than a photograph) for the purpose of reporting current events does not infringe any copyright in the work provided that (subject to subsection (3)) it is accompanied by a sufficient acknowledgement.

(3)No acknowledgement is required in connection with the reporting of current events by means of a sound recording, film [F112 or broadcast where this would be impossible for reasons of practicality or otherwise].

[F113(4)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of subsection (1ZA), would not infringe copyright, that term is unenforceable.]

Textual Amendments

[F11430ACaricature, parody or pasticheU.K.

(1)Fair dealing with a work for the purposes of caricature, parody or pastiche does not infringe copyright in the work.

(2)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.]

Textual Amendments

31 Incidental inclusion of copyright material.U.K.

(1)Copyright in a work is not infringed by its incidental inclusion in an artistic work, sound recording, film [F115or broadcast].

(2)Nor is the copyright infringed by the issue to the public of copies, or the playing, showing [F116or communication to the public], of anything whose making was, by virtue of subsection (1), not an infringement of the copyright.

(3)A musical work, words spoken or sung with music, or so much of a sound recording [F115or broadcast] as includes a musical work or such words, shall not be regarded as incidentally included in another work if it is deliberately included.

Textual Amendments

[F117Disability]U.K.

Textual Amendments

[F11831A Disabled persons: copies of works for personal useU.K.

(1)This section applies if—

(a)a disabled person has lawful [F119access to] a copy of the whole or part of a work, and

(b)the person’s disability prevents the person from enjoying the work to [F120substantially] the same degree as a person who does not have that disability.

(2)The making of an accessible copy of the copy of the work referred to in subsection (1)(a) does not infringe copyright if—

(a)the copy is made by the disabled person or by a person acting on behalf of the disabled person, [F121and]

(b)the copy is made for the disabled person’s personal use F122...

F123(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F124(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Copyright is infringed by the transfer of an accessible copy of a work made under this section to any person other than—

(a)a person by or for whom an accessible copy of the work may be made under this section, or

(b)a person who intends to transfer the copy to a person falling within paragraph (a),

except where the transfer is authorised by the copyright owner.

(5)An accessible copy of a work made under this section is to be treated for all purposes as an infringing copy if it is held by a person at a time when the person does not fall within subsection (4)(a) or (b).

(6)If an accessible copy made under this section is subsequently dealt with—

(a)it is to be treated as an infringing copy for the purposes of that dealing, and

(b)if that dealing infringes copyright, it is to be treated as an infringing copy for all subsequent purposes.

(7)In this section “dealt with” means sold or let for hire or offered or exposed for sale or hire.]

Textual Amendments

[F12531B Making [F126, communicating, making available, distributing or lending] of accessible copies by authorised bodiesU.K.

[F127(1)If—

(a)an authorised body has lawful access to the whole or part of a work which has been published or otherwise made available, and

(b)the body complies with subsection (1A),

the body may, without infringing copyright, make, communicate, make available, distribute or lend accessible copies of the work on a non-profit basis for the personal use of disabled persons in the United Kingdom F128....

(1A)An authorised body complies with this subsection if it—

(a)distributes, communicates, makes available or lends accessible copies only to disabled persons or other authorised bodies,

(b)takes appropriate steps to discourage the unauthorised reproduction, distribution, communication to the public or making available to the public of accessible copies,

(c)demonstrates due care in, and maintains records of, its handling of works and accessible copies, and

(d)publishes and updates, on its website if appropriate, or through other online or offline channels, information on how it complies with the obligations in paragraphs (a), (b) and (c).]

F129(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F129(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F129(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)For the purposes of [F130subsection (1)], [F131to communicate, make available, distribute or lend] “for the personal use of disabled persons” [F132includes to communicate, make available, distribute or lend] to a person acting on behalf of a disabled person.

F133(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F133(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F133(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)An authorised body which has made an accessible copy of a work under this section may [F134communicate, make available, distribute or lend] it to another authorised body [F135established in the United Kingdom F136...] which is entitled to make accessible copies of the work under this section for the purposes of enabling that other body to make accessible copies of the work.

F137(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)If an accessible copy made under this section is subsequently dealt with—

(a)it is to be treated as an infringing copy for the purposes of that dealing, and

(b)if that dealing infringes copyright, it is to be treated as an infringing copy for all subsequent purposes.

(12)In this section “dealt with” means sold or let for hire or offered or exposed for sale or hire.

Textual Amendments

F128Words in s. 31B(1) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 9 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F136Words in s. 31B(9) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 9 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

31BAMaking [F138, communicating, making available, distributing or lending] of intermediate copies by authorised bodiesU.K.

(1)An authorised body which is entitled to make an accessible copy of a work under section 31B may, without infringing copyright, make a copy of the work (“an intermediate copy”) if this is necessary in order to make the accessible copy.

(2)An authorised body which has made an intermediate copy of a work under this section may [F139communicate, make available, distribute or lend it on a non-profit basis] to another authorised body which is entitled to make accessible copies of the work under section 31B for the purposes of enabling that other body to make accessible copies of the work.

(3)Copyright is infringed by the transfer of an intermediate copy made under this section to a person other than another authorised body as permitted by subsection (2), except where the transfer is authorised by the copyright owner.

(4)F140 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

31BBAccessible and intermediate copies: records and notificationU.K.

(1)[F141A person listed in subsection (3) may request an authorised body—

(a)making accessible copies under section 31B, or

(b)making intermediate copies under section 31BA,

to provide the person with the information in subsection (4).

(2)On receipt of a request under subsection (1), an authorised body must provide the information to the person in an accessible way within a reasonable time.

(3)The persons who may make a request under subsection (1) are—

(a)disabled person;

(b)another authorised body;

(c)rightholders.

(4)The information that must be provided by the authorised body is—

(a)the list of works for which it has accessible copies and the available formats, and

(b)the name and contact details of any authorised body established in [F142a] member State of the European Union from which, or to which, it has imported, exported or accessed an accessible copy.]]

Textual Amendments

F142Word in s. 31BB(4)(b) substituted (31.12.2020) by The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 10 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F14331C

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F14331D

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F14331E

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F14431F Sections 31A to 31BB: interpretation and generalU.K.

(1)This section supplements sections 31A to 31BB and includes definitions.

(2)“Disabled person” means a person who has a physical or mental impairment which prevents the person from enjoying a copyright work to [F145substantially] the same degree as a person who does not have that impairment, and “disability” is to be construed accordingly.

(3)But a person is not to be regarded as disabled by reason only of an impairment of visual function which can be improved, [F146for example] by the use of corrective lenses, to a level that is normally acceptable for reading without a special level or kind of light.

(4)An “accessible copy” of a copyright work means a version of the work which enables [F147disabled persons to access the work, including accessing it as feasibly and comfortably as a person who is not a disabled person].

(5)An accessible copy—

(a)may include facilities for navigating around the version of the work, but

(b)must not include any changes to the work which are not necessary to overcome the problems suffered by the disabled persons for whom the accessible copy is intended.

(6)“Authorised body” means—

(a)an educational establishment, or

(b)a body that is not conducted for profit.

F148(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of section [F14927,] 31A, 31B or 31BA, would not infringe copyright, that term is unenforceable.]

Textual Amendments

EducationU.K.

[F15032Illustration for instructionU.K.

(1)Fair dealing with a work for the sole purpose of illustration for instruction does not infringe copyright in the work provided that the dealing is—

(a)for a non-commercial purpose,

(b)by a person giving or receiving instruction (or preparing for giving or receiving instruction), and

(c)accompanied by a sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise).

(2)For the purposes of subsection (1), “giving or receiving instruction” includes setting examination questions, communicating the questions to pupils and answering the questions.

(3)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.]

Textual Amendments

33 Anthologies for educational use.U.K.

(1)The inclusion of a short passage from a published literary or dramatic work in a collection which—

(a)is intended for use in educational establishments and is so described in its title, and in any advertisements issued by or on behalf of the publisher, and

(b)consists mainly of material in which no copyright subsists,

does not infringe the copyright in the work if the work itself is not intended for use in such establishments and the inclusion is accompanied by a sufficient acknowledgement.

(2)Subsection (1) does not authorise the inclusion of more than two excerpts from copyright works by the same author in collections published by the same publisher over any period of five years.

(3)In relation to any given passage the reference in subsection (2) to excerpts from works by the same author—

(a)shall be taken to include excerpts from works by him in collaboration with another, and

(b)if the passage in question is from such a work, shall be taken to include excerpts from works by any of the authors, whether alone or in collaboration with another.

(4)References in this section to the use of a work in an educational establishment are to any use for the educational purposes of such an establishment.

34 Performing, playing or showing work in course of activities of educational establishment.U.K.

(1)The performance of a literary, dramatic or musical work before an audience consisting of teachers and pupils at an educational establishment and other persons directly connected with the activities of the establishment—

(a)by a teacher or pupil in the course of the activities of the establishment, or

(b)at the establishment by any person for the purposes of instruction,

is not a public performance for the purposes of infringement of copyright.

(2)The playing or showing of a sound recording, film [F151or broadcast] before such an audience at an educational establishment for the purposes of instruction is not a playing or showing of the work in public for the purposes of infringement of copyright.

(3)A person is not for this purpose directly connected with the activities of the educational establishment simply because he is the parent of a pupil at the establishment.

Textual Amendments

[F15235Recording by educational establishments of broadcastsU.K.

(1)A recording of a broadcast, or a copy of such a recording, may be made by or on behalf of an educational establishment for the educational purposes of that establishment without infringing copyright in the broadcast, or in any work included in it, provided that—

(a)the educational purposes are non-commercial, and

(b)the recording or copy is accompanied by a sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise).

(2)Copyright is not infringed where a recording of a broadcast or a copy of such a recording, made under subsection (1), is communicated by or on behalf of the educational establishment to its pupils or staff for the non-commercial educational purposes of that establishment.

(3)Subsection (2) only applies to a communication received outside the premises of the establishment if that communication is made by means of a secure electronic network accessible only by the establishment’s pupils and staff.

(4)Acts which would otherwise be permitted by this section are not permitted if, or to the extent that, licences are available authorising the acts in question and the educational establishment responsible for those acts knew or ought to have been aware of that fact.

(5)If a copy made under this section is subsequently dealt with—

(a)it is to be treated as an infringing copy for the purposes of that dealing, and

(b)if that dealing infringes copyright, it is to be treated as an infringing copy for all subsequent purposes.

(6)In this section “dealt with” means—

(a)sold or let for hire,

(b)offered or exposed for sale or hire, or

(c)communicated otherwise than as permitted by subsection (2).]

Textual Amendments

[F15336Copying and use of extracts of works by educational establishmentsU.K.

(1)The copying of extracts of a relevant work by or on behalf of an educational establishment does not infringe copyright in the work, provided that—

(a)the copy is made for the purposes of instruction for a non-commercial purpose, and

(b)the copy is accompanied by a sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise).

(2)Copyright is not infringed where a copy of an extract made under subsection (1) is communicated by or on behalf of the educational establishment to its pupils or staff for the purposes of instruction for a non-commercial purpose.

(3)Subsection (2) only applies to a communication received outside the premises of the establishment if that communication is made by means of a secure electronic network accessible only by the establishment’s pupils and staff.

(4)In this section “relevant work” means a copyright work other than—

(a)a broadcast, or

(b)an artistic work which is not incorporated into another work.

(5)Not more than 5% of a work may be copied under this section by or on behalf of an educational establishment in any period of 12 months, and for these purposes a work which incorporates another work is to be treated as a single work.

(6)Acts which would otherwise be permitted by this section are not permitted if, or to the extent that, licences are available authorising the acts in question and the educational establishment responsible for those acts knew or ought to have been aware of that fact.

(7)The terms of a licence granted to an educational establishment authorising acts permitted by this section are of no effect so far as they purport to restrict the proportion of a work which may be copied (whether on payment or free of charge) to less than that which would be permitted by this section.

(8)If a copy made under this section is subsequently dealt with—

(a)it is to be treated as an infringing copy for the purposes of that dealing, and

(b)if that dealing infringes copyright, it is to be treated as an infringing copy for all subsequent purposes.

(9)In this section “dealt with” means—

(a)sold or let for hire,

(b)offered or exposed for sale or hire, or

(c)communicated otherwise than as permitted by subsection (2).]

Textual Amendments

[F15436A Lending of copies by educational establishmentsU.K.

Copyright in a work is not infringed by the lending of copies of the work by an educational establishment.]

Textual Amendments

F154S. 36A inserted (1.12.1996) by S.I. 1996/2967, reg. 11(1) (with Pt. III)

Libraries and archivesU.K.

F15537Libraries and archives: introductory.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F15538Copying by librarians: articles in periodicals.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F15539Copying by librarians: parts of published works.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F15540Restriction on production of multiple copies of the same material.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F15640A Lending of copies by libraries or archives.U.K.

[F157(1)Copyright in a work of any description is not infringed by the following acts by a public library in relation to a book within the public lending right scheme—

(a)lending the book;

(b)in relation to an audio-book or e-book, copying or issuing a copy of the book as an act incidental to lending it.

[F158(1ZA)Subsection (1) applies to an e-book or an e-audio-book only if—

(a)the book has been lawfully acquired by the library, and

(b)the lending is in compliance with any purchase or licensing terms to which the book is subject.]

(1A)In [F159subsections (1) and (1ZA)] —

(a)“book , “audio-book” and “e-book” have the meanings given in section 5 of the Public Lending Right Act 1979,

[F160(aa)“e-audio-book” means an audio-book (as defined in paragraph (a)) in a form enabling lending of the book by electronic transmission,]

(b)“the public lending right scheme” means the scheme in force under section 1 of that Act,

(c)a book is within the public lending right scheme if it is a book within the meaning of the provisions of the scheme relating to eligibility, whether or not it is in fact eligible, and

(d)“lending” is to be read in accordance with the definition of “lent out” in section 5 of that Act (and section 18A of this Act does not apply). ]

(2) Copyright in a work is not infringed by the lending of copies of the work by a F161 ...library or archive (other than a public library) which is not conducted for profit. ]

Textual Amendments

F156S. 40A inserted (1.12.1996) by S.I. 1996/2967, reg. 11(2) (with Pt. III)

F157S. 40A(1)(1A) substituted (30.6.2014) for s. 40A(1) by Digital Economy Act 2010 (c. 24), ss. 43(7), 47(3)(d); S.I. 2014/1659, art. 2

F158S. 40A(1ZA) inserted (30.6.2018 for E.W.S., 30.6.2021 for N.I.) by Digital Economy Act 2017 (c. 30), ss. 31(3), 118(6); S.I. 2018/690, reg. 2; S.I. 2021/680, reg. 2

F159Words in s. 40A(1A) substituted (30.6.2018 for E.W.S., 30.6.2021 for N.I.) by Digital Economy Act 2017 (c. 30), ss. 31(4)(a), 118(6); S.I. 2018/690, reg. 2; S.I. 2021/680, reg. 2

F160S. 40A(1A)(aa) inserted (30.6.2018 for E.W.S., 30.6.2021 for N.I.) by Digital Economy Act 2017 (c. 30), ss. 31(4)(b), 118(6); S.I. 2018/690, reg. 2; S.I. 2021/680, reg. 2

Modifications etc. (not altering text)

C25S. 40A(2) modified (1.12.1996) by S.I. 1996/2967, reg. 35 (with Pt. III)

[F16240B Libraries and educational establishments etc : making works available through dedicated terminals U.K.

(1)Copyright in a work is not infringed by an institution specified in subsection (2) communicating the work to the public or making it available to the public by means of a dedicated terminal on its premises, if the conditions in subsection (3) are met.

(2)The institutions are—

(a)a library,

(b)an archive,

(c)a museum, and

(d)an educational establishment.

(3)The conditions are that the work or a copy of the work—

(a)has been lawfully acquired by the institution,

(b)is communicated or made available to individual members of the public for the purposes of research or private study, and

(c)is communicated or made available in compliance with any purchase or licensing terms to which the work is subject.]

Textual Amendments

[F16341 Copying by librarians: supply of single copies to other librariesU.K.

(1)A librarian may, if the conditions in subsection (2) are met, make a single copy of the whole or part of a published work and supply it to another library, without infringing copyright in the work.

(2)The conditions are—

(a)the copy is supplied in response to a request from a library which is not conducted for profit, and

(b)at the time of making the copy the librarian does not know, or could not reasonably find out, the name and address of a person entitled to authorise the making of a copy of the work.

(3)The condition in subsection (2)(b) does not apply where the request is for a copy of an article in a periodical.

(4)Where a library makes a charge for supplying a copy under this section, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(5)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.

Textual Amendments

42 Copying by librarians etc : replacement copies of works U.K.

(1)A librarian, archivist or curator of a library, archive or museum may, without infringing copyright, make a copy of an item in that institution’s permanent collection—

(a)in order to preserve or replace that item in that collection, or

(b)where an item in the permanent collection of another library, archive or museum has been lost, destroyed or damaged, in order to replace the item in the collection of that other library, archive or museum,

provided that the conditions in subsections (2) and (3) are met.

(2)The first condition is that the item is—

(a)included in the part of the collection kept wholly or mainly for the purposes of reference on the institution’s premises,

(b)included in a part of the collection not accessible to the public, or

(c)available on loan only to other libraries, archives or museums.

(3)The second condition is that it is not reasonably practicable to purchase a copy of the item to achieve either of the purposes mentioned in subsection (1).

(4)The reference in subsection (1)(b) to a library, archive or museum is to a library, archive or museum which is not conducted for profit.

(5)Where an institution makes a charge for supplying a copy to another library, archive or museum under subsection (1)(b), the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(6)In this section “item” means a work or a copy of a work.

(7)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.

Textual Amendments

42ACopying by librarians: single copies of published worksU.K.

(1)A librarian of a library which is not conducted for profit may, if the conditions in subsection (2) are met, make and supply a single copy of—

(a)one article in any one issue of a periodical, or

(b)a reasonable proportion of any other published work,

without infringing copyright in the work.

(2)The conditions are—

(a)the copy is supplied in response to a request from a person who has provided the librarian with a declaration in writing which includes the information set out in subsection (3), and

(b)the librarian is not aware that the declaration is false in a material particular.

(3)The information which must be included in the declaration is—

(a)the name of the person who requires the copy and the material which that person requires,

(b)a statement that the person has not previously been supplied with a copy of that material by any library,

(c)a statement that the person requires the copy for the purposes of research for a non-commercial purpose or private study, will use it only for those purposes and will not supply the copy to any other person, and

(d)a statement that to the best of the person’s knowledge, no other person with whom the person works or studies has made, or intends to make, at or about the same time as the person’s request, a request for substantially the same material for substantially the same purpose.

(4)Where a library makes a charge for supplying a copy under this section, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(5)Where a person (“P”) makes a declaration under this section that is false in a material particular and is supplied with a copy which would have been an infringing copy if made by P—

(a)P is liable for infringement of copyright as if P had made the copy, and

(b)the copy supplied to P is to be treated as an infringing copy for all purposes.

(6)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.

Textual Amendments

43Copying by librarians or archivists: single copies of unpublished worksU.K.

(1)A librarian or archivist may make and supply a single copy of the whole or part of a work without infringing copyright in the work, provided that—

(a)the copy is supplied in response to a request from a person who has provided the librarian or archivist with a declaration in writing which includes the information set out in subsection (2), and

(b)the librarian or archivist is not aware that the declaration is false in a material particular.

(2)The information which must be included in the declaration is—

(a)the name of the person who requires the copy and the material which that person requires,

(b)a statement that the person has not previously been supplied with a copy of that material by any library or archive, and

(c)a statement that the person requires the copy for the purposes of research for a non-commercial purpose or private study, will use it only for those purposes and will not supply the copy to any other person.

(3)But copyright is infringed if—

(a)the work had been published or communicated to the public before the date it was deposited in the library or archive, or

(b)the copyright owner has prohibited the copying of the work,

and at the time of making the copy the librarian or archivist is, or ought to be, aware of that fact.

(4)Where a library or archive makes a charge for supplying a copy under this section, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(5)Where a person (“P”) makes a declaration under this section that is false in a material particular and is supplied with a copy which would have been an infringing copy if made by P—

(a)P is liable for infringement of copyright as if P had made the copy, and

(b)the copy supplied to P is to be treated as an infringing copy for all purposes.

Textual Amendments

43ASections 40A to 43: interpretationU.K.

(1)The following definitions have effect for the purposes of sections 40A to 43.

(2)“Library” means—

(a)a library which is publicly accessible, or

(b)a library of an educational establishment.

(3)“Museum” includes a gallery.

(4)“Conducted for profit”, in relation to a library, archive or museum, means a body of that kind which is established or conducted for profit or which forms part of, or is administered by, a body established or conducted for profit.

(5)References to a librarian, archivist or curator include a person acting on behalf of a librarian, archivist or curator.]

Textual Amendments

44 Copy of work required to be made as condition of export.U.K.

If an article of cultural or historical importance or interest cannot lawfully be exported from the United Kingdom unless a copy of it is made and deposited in an appropriate library or archive, it is not an infringement of copyright to make that copy.

[F16444ALegal deposit librariesU.K.

(1)Copyright is not infringed by the copying of a work from the internet by a deposit library or person acting on its behalf if—

(a)the work is of a description prescribed by regulations under section 10(5) of the 2003 Act,

(b)its publication on the internet, or a person publishing it there, is connected with the United Kingdom in a manner so prescribed, and

(c)the copying is done in accordance with any conditions so prescribed.

(2)Copyright is not infringed by the doing of anything in relation to relevant material permitted to be done under regulations under section 7 of the 2003 Act.

(3)The Secretary of State may by regulations make provision excluding, in relation to prescribed activities done in relation to relevant material, the application of such of the provisions of this Chapter as are prescribed.

(4)Regulations under subsection (3) may in particular make provision prescribing activities—

(a)done for a prescribed purpose,

(b)done by prescribed descriptions of reader,

(c)done in relation to prescribed descriptions of relevant material,

(d)done other than in accordance with prescribed conditions.

(5)Regulations under this section may make different provision for different purposes.

(6)Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(7)In this section—

(a) “ the 2003 Act ” means the Legal Deposit Libraries Act 2003;

(b) “ deposit library ”, “ reader ” and “ relevant material ” have the same meaning as in section 7 of the 2003 Act;

(c) “ prescribed ” means prescribed by regulations made by the Secretary of State. ]

Textual Amendments

[F165Orphan worksU.K.

Textual Amendments

F16644BPermitted uses of orphan worksU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F166S. 44B omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 11 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

Public administrationU.K.

45 Parliamentary and judicial proceedings.U.K.

(1)Copyright is not infringed by anything done for the purposes of parliamentary or judicial proceedings.

(2)Copyright is not infringed by anything done for the purposes of reporting such proceedings; but this shall not be construed as authorising the copying of a work which is itself a published report of the proceedings.

46 Royal Commissions and statutory inquiries.U.K.

(1)Copyright is not infringed by anything done for the purposes of the proceedings of a Royal Commission or statutory inquiry.

(2)Copyright is not infringed by anything done for the purpose of reporting any such proceedings held in public; but this shall not be construed as authorising the copying of a work which is itself a published report of the proceedings.

(3)Copyright in a work is not infringed by the issue to the public of copies of the report of a Royal Commission or statutory inquiry containing the work or material from it.

(4)In this section—

  • “Royal Commission” includes a Commission appointed for Northern Ireland by the Secretary of State in pursuance of the prerogative powers of Her Majesty delegated to him under section 7(2) of the M1Northern Ireland Constitution Act 1973; and

  • “statutory inquiry” means an inquiry held or investigation conducted in pursuance of a duty imposed or power conferred by or under an enactment.

Marginal Citations

47 Material open to public inspection or on official register.U.K.

(1)Where material is open to public inspection pursuant to a statutory requirement, or is on a statutory register, any copyright in the material as a literary work is not infringed by the copying of so much of the material as contains factual information of any description, by or with the authority of the appropriate person, for a purpose which does not involve the issuing of copies to the public.

[F167(2)Where material is open to public inspection pursuant to a statutory requirement, copyright in the material is not infringed by an act to which subsection (3A) applies provided that—

(a)the act is done by or with the authority of the appropriate person,

(b)the purpose of the act is—

(i)to enable the material to be inspected at a more convenient time or place, or

(ii)to otherwise facilitate the exercise of any right for the purpose of which the statutory requirement is imposed, and

(c)in the case of the act specified in subsection (3A)(c), the material is not commercially available to the public by or with the authority of the copyright owner.

(3)Where material which contains information about matters of general scientific, technical, commercial or economic interest is on a statutory register or is open to public inspection pursuant to a statutory requirement, copyright in the material is not infringed by an act to which subsection (3A) applies provided that—

(a)the act is done by or with the authority of the appropriate person,

(b)the purpose of the act is to disseminate that information, and

(c)in the case of the act specified in subsection (3A)(c), the material is not commercially available to the public by or with the authority of the copyright owner.

(3A)This subsection applies to any of the following acts—

(a)copying the material,

(b)issuing copies of the material to the public, and

(c)making the material (or a copy of it) available to the public by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.]

(4)The Secretary of State may by order provide that subsection (1), (2) or (3) shall, in such cases as may be specified in the order, apply only to copies marked in such manner as may be so specified.

(5)The Secretary of State may by order provide that subsections (1) to (3) apply, to such extent and with such modifications as may be specified in the order—

(a)to material made open to public inspection by—

(i)an international organisation specified in the order, or

(ii)a person so specified who has functions in the United Kingdom under an international agreement to which the United Kingdom is party, or

(b)to a register maintained by an international organisation specified in the order,

as they apply in relation to material open to public inspection pursuant to a statutory requirement or to a statutory register.

(6)In this section—

  • “appropriate person” means the person required to make the material open to public inspection or, as the case may be, the person maintaining the register;

  • “statutory register” means a register maintained in pursuance of a statutory requirement; and

  • “statutory requirement” means a requirement imposed by provision made by or under an enactment.

(7)An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F167S. 47(2)-(3A) substituted for s. 47(2)(3) (1.6.2014) by The Copyright (Public Administration) Regulations 2014 (S.I. 2014/1385), regs. 1, 2(1)

Modifications etc. (not altering text)

C26S. 47(1) extended with modifications by S.I. 1989/1098, art. 2

48 Material communicated to the Crown in the course of public business.U.K.

(1)This section applies where a literary, dramatic, musical or artistic work has in the course of public business been communicated to the Crown for any purpose, by or with the licence of the copyright owner and a document or other material thing recording or embodying the work is owned by or in the custody or control of the Crown.

[F168(2)The Crown may, without infringing copyright in the work, do an act specified in subsection (3) provided that—

(a)the act is done for the purpose for which the work was communicated to the Crown, or any related purpose which could reasonably have been anticipated by the copyright owner, and

(b)the work has not been previously published otherwise than by virtue of this section.]

[F168(3)The acts referred to in subsection (2) are—

(a)copying the work,

(b)issuing copies of the work to the public, and

(c)making the work (or a copy of it) available to the public by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.]

(4)In subsection (1) “public business” includes any activity carried on by the Crown.

(5)This section has effect subject to any agreement to the contrary between the Crown and the copyright owner.

[F169(6) In this section “the Crown” includes a health service body, as defined in section 60(7) of the National Health Service and Community Care Act 1990, [F170NHS England] [F171, an integrated care board established under section 14Z25 of the National Health Service Act 2006,] F172... , the Care Quality Commission F173... [F174, [F175the Health Services Safety Investigations Body,] the Health Research Authority] and a National Health Service trust established under [F176 section 25 of the National Health Service Act 2006, section 18 of the National Health Service (Wales) Act 2006 ] or the National Health Service (Scotland) Act 1978 [F177 and an NHS foundation trust ] [F178 and also includes a health and social services body, as defined in Article 7(6) of the Health and Personal Social Services (Northern Ireland) Order 1991, and a Health and Social Services trust established under that Order ], and the reference in subsection (1) above to public business shall be construed accordingly. ]

Textual Amendments

F174Words in s. 48(6) inserted (1.1.2015) by Care Act 2014 (c. 23), s. 127(1), Sch. 7 para. 25; S.I. 2014/2473, art. 5(m)

Modifications etc. (not altering text)

C29S. 48: functions made exercisable by Local Health Boards (E.W.) (1.10.2009) by The Local Health Boards (Directed Functions) (Wales) Regulations 2009 (S.I. 2009/1511), reg. 4, Sch. (subject to reg. 5)

49 Public records.U.K.

Material which is comprised in public records within the meaning of the M2Public Records Act 1958, the M3Public Records (Scotland) Act 1937 or the M4Public Records Act (Northern Ireland) 1923 [F179, or in Welsh public records (as defined in the [F180the Government of Wales Act 2006]),] which are open to public inspection in pursuance of that Act, may be copied, and a copy may be supplied to any person, by or with the authority of any officer appointed under that Act, without infringement of copyright.

Textual Amendments

F179Words in s. 49 inserted (1.4.1999) by 1998 c. 38, s. 125, Sch. 12 para. 27 (with ss. 139(2), 143(2)); S.I. 1999/782, art. 2

F180Words in s. 49 substituted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 24 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

Marginal Citations

50 Acts done under statutory authority.U.K.

(1)Where the doing of a particular act is specifically authorised by an Act of Parliament, whenever passed, then, unless the Act provides otherwise, the doing of that act does not infringe copyright.

(2)Subsection (1) applies in relation to an enactment contained in Northern Ireland legislation as it applies in relation to an Act of Parliament.

(3)Nothing in this section shall be construed as excluding any defence of statutory authority otherwise available under or by virtue of any enactment.

Modifications etc. (not altering text)

[F181Computer programs: lawful usersU.K.

Textual Amendments

F181Cross-heading and ss. 50A-50C inserted (1.1.1993) by S.I. 1992/3233, reg.8.

F182 50A Back up copies.U.K.

(1)It is not an infringement of copyright for a lawful user of a copy of a computer program to make any back up copy of it which it is necessary for him to have for the purposes of his lawful use.

(2)For the purposes of this section and sections 50B [F183, 50BA] and 50C a person is a lawful user of a computer program if (whether under a licence to do any acts restricted by the copyright in the program or otherwise), he has a right to use the program.

(3)Where an act is permitted under this section, it is irrelevant whether or not there exists any term or condition in an agreement which purports to prohibit or restrict the act (such terms being, by virtue of section 296A, void).

Textual Amendments

F182Ss. 50A-50C inserted (1.1.1993) by S.I. 1992/3233, reg.8.

F184 50B Decompilation.U.K.

(1)It is not an infringement of copyright for a lawful user of a copy of a computer program expressed in a low level language—

(a)to convert it into a version expressed in a higher level language, or

(b)incidentally in the course of so converting the program, to copy it,

(that is, to “decompile” it), provided that the conditions in subsection (2) are met.

(2)The conditions are that—

(a)it is necessary to decompile the program to obtain the information necessary to create an independent program which can be operated with the program decompiled or with another program (“the permitted objective”); and

(b)the information so obtained is not used for any purpose other than the permitted objective.

(3)In particular, the conditions in subsection (2) are not met if the lawful user—

(a)has readily available to him the information necessary to achieve the permitted objective;

(b)does not confine the decompiling to such acts as are necessary to achieve the permitted objective;

(c)supplies the information obtained by the decompiling to any person to whom it is not necessary to supply it in order to achieve the permitted objective; or

(d)uses the information to create a program which is substantially similar in its expression to the program decompiled or to do any act restricted by copyright.

(4)Where an act is permitted under this section, it is irrelevant whether or not there exists any term or condition in an agreement which purports to prohibit or restrict the act (such terms being, by virtue of section 296A, void).

Textual Amendments

F184Ss. 50A-50C inserted (1.1.1993) by S.I. 1992/3233, reg.8.

[F18550BAObserving, studying and testing of computer programsU.K.

(1)It is not an infringement of copyright for a lawful user of a copy of a computer program to observe, study or test the functioning of the program in order to determine the ideas and principles which underlie any element of the program if he does so while performing any of the acts of loading, displaying, running, transmitting or storing the program which he is entitled to do.

(2)Where an act is permitted under this section, it is irrelevant whether or not there exists any term or condition in an agreement which purports to prohibit or restrict the act (such terms being, by virtue of section 296A, void).]

Textual Amendments

F186 50C Other acts permitted to lawful users.U.K.

(1)It is not an infringement of copyright for a lawful user of a copy of a computer program to copy or adapt it, provided that the copying or adapting—

(a)is necessary for his lawful use; and

(b)is not prohibited under any term or condition of an agreement regulating the circumstances in which his use is lawful.

(2)It may, in particular, be necessary for the lawful use of a computer program to copy it or adapt it for the purpose of correcting errors in it.

(3)This section does not apply to any copying or adapting permitted under [F187section 50A, 50B or 50BA].]

Textual Amendments

F186Ss. 50A-50C inserted (1.1.1993) by S.I. 1992/3233, reg.8.

[F188Databases: permitted acts]U.K.

Textual Amendments

F188S. 50D and crossheading inserted (1.1.1998) by S.I. 1997/3032, reg. 9 (with Pt. IV)

50D[F189 Acts permitted in relation to databases.]U.K.

(1)It is not an infringement of copyright in a database for a person who has a right to use the database or any part of the database, (whether under a licence to do any of the acts restricted by the copyright in the database or otherwise) to do, in the exercise of that right, anything which is necessary for the purposes of access to and use of the contents of the database or of that part of the database.

(2)Where an act which would otherwise infringe copyright in a database is permitted under this section, it is irrelevant whether or not there exists any term or condition in any agreement which purports to prohibit or restrict the act (such terms being, by virtue of section 296B, void).

Textual Amendments

F189S. 50D inserted (1.1.1998) by S.I. 1997/3032, reg. 9 (with Pt. IV)

DesignsU.K.

51 Design documents and models.U.K.

(1)It is not an infringement of any copyright in a design document or model recording or embodying a design for anything other than an artistic work or a typeface to make an article to the design or to copy an article made to the design.

(2)Nor is it an infringement of the copyright to issue to the public, or include in a film [F190or communicate to the public], anything the making of which was, by virtue of subsection (1), not an infringement of that copyright.

(3)In this section—

  • “design” means the design of F191...the shape or configuration (whether internal or external) of the whole or part of an article, other than surface decoration; and

  • “design document” means any record of a design, whether in the form of a drawing, a written description, a photograph, data stored in a computer or otherwise.

Textual Amendments

F191Words in s. 51(3) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 1(2), 24(1); S.I. 2014/2330, art. 3, Sch.

F19252 Effect of exploitation of design derived from artistic work. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

53 Things done in reliance on registration of design.U.K.

(1)The copyright in an artistic work is not infringed by anything done—

(a)in pursuance of an assignment or licence made or granted by a person registered [F193—

(i)]under the M5Registered Designs Act 1949 as the proprietor of a corresponding design, and [F194, or

(ii)under the Community Design Regulation as the right holder of a corresponding registered Community design]

(b)in good faith in reliance on the registration and without notice of any proceedings for the cancellation [F195or invalidation] of the registration or [F196, in a case of registration under the 1949 Act,] for rectifying the relevant entry in the register of designs;

and this is so notwithstanding that the person registered as the proprietor was not the proprietor of the design for the purposes of the 1949 Act [F197 or, in a case of registration under the Community Design Regulation, that the person registered as the right holder was not the right holder of the design for the purposes of the Regulation].

(2)In subsection (1) a “corresponding design”, in relation to an artistic work, means a design within the meaning of the 1949 Act which if applied to an article would produce something which would be treated for the purposes of this Part as a copy of the artistic work.

[F198(3)In subsection (1), a “corresponding registered Community design”, in relation to an artistic work, means a design within the meaning of the Community Design Regulation which if applied to an article would produce something which would be treated for the purposes of this Part as a copy of the artistic work. ]

[F199(4)In this section, “the Community Design Regulation” means Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs. ]

Textual Amendments

F194Words in s. 53(1)(a) inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 5(2)(b), 24(1); S.I. 2014/2330, art. 3, Sch.

F195Words in s. 53(1)(b) inserted (9.12.2001) by S.I. 2001/3949, reg. 9(1), Sch. 1 para. 16 (with transitional provisions in regs. 10-14)

F196Words in s. 53(1)(b) inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 5(3), 24(1); S.I. 2014/2330, art. 3, Sch.

Marginal Citations

TypefacesU.K.

54 Use of typeface in ordinary course of printing.U.K.

(1)It is not an infringement of copyright in an artistic work consisting of the design of a typeface—

(a)to use the typeface in the ordinary course of typing, composing text, typesetting or printing,

(b)to possess an article for the purpose of such use, or

(c)to do anything in relation to material produced by such use;

and this is so notwithstanding that an article is used which is an infringing copy of the work.

(2)However, the following provisions of this Part apply in relation to persons making, importing or dealing with articles specifically designed or adapted for producing material in a particular typeface, or possessing such articles for the purpose of dealing with them, as if the production of material as mentioned in subsection (1) did infringe copyright in the artistic work consisting of the design of the typeface—

  • section 24 (secondary infringement: making, importing, possessing or dealing with article for making infringing copy),

  • sections 99 and 100 (order for delivery up and right of seizure),

  • section 107(2) (offence of making or possessing such an article), and

  • section 108 (order for delivery up in criminal proceedings).

(3)The references in subsection (2) to “dealing with” an article are to selling, letting for hire, or offering or exposing for sale or hire, exhibiting in public, or distributing.

55 Articles for producing material in particular typeface.U.K.

(1)This section applies to the copyright in an artistic work consisting of the design of a typeface where articles specifically designed or adapted for producing material in that typeface have been marketed by or with the licence of the copyright owner.

(2)After the period of 25 years from the end of the calendar year in which the first such articles are marketed, the work may be copied by making further such articles, or doing anything for the purpose of making such articles, and anything may be done in relation to articles so made, without infringing copyright in the work.

(3)In subsection (1) “marketed” means sold, let for hire or offered or exposed for sale or hire, in the United Kingdom or elsewhere.

Works in electronic formU.K.

56 Transfers of copies of works in electronic form.U.K.

(1)This section applies where a copy of a work in electronic form has been purchased on terms which, expressly or impliedly or by virtue of any rule of law, allow the purchaser to copy the work, or to adapt it or make copies of an adaptation, in connection with his use of it.

(2)If there are no express terms—

(a)prohibiting the transfer of the copy by the purchaser, imposing obligations which continue after a transfer, prohibiting the assignment of any licence or terminating any licence on a transfer, or

(b)providing for the terms on which a transferee may do the things which the purchaser was permitted to do,

anything which the purchaser was allowed to do may also be done without infringement of copyright by a transferee; but any copy, adaptation or copy of an adaptation made by the purchaser which is not also transferred shall be treated as an infringing copy for all purposes after the transfer.

(3)The same applies where the original purchased copy is no longer usable and what is transferred is a further copy used in its place.

(4)The above provisions also apply on a subsequent transfer, with the substitution for references in subsection (2) to the purchaser of references to the subsequent transferor.

Miscellaneous: literary, dramatic, musical and artistic worksU.K.

57 Anonymous or pseudonymous works: acts permitted on assumptions as to expiry of copyright or death of author.U.K.

(1)Copyright in a literary, dramatic, musical or artistic work is not infringed by an act done at a time when, or in pursuance of arrangements made at a time when—

(a)it is not possible by reasonable inquiry to ascertain the identity of the author, and

(b)it is reasonable to assume—

(i)that copyright has expired, or

(ii)that the author died [F20070 years] or more before the beginning of the calendar year in which the act is done or the arrangements are made.

(2)Subsection (1)(b)(ii) does not apply in relation to—

(a)a work in which Crown copyright subsists, or

(b)a work in which copyright originally vested in an international organisation by virtue of section 168 and in respect of which an Order under that section specifies a copyright period longer than [F20070 years].

(3)In relation to a work of joint authorship—

(a)the reference in subsection (1) to its being possible to ascertain the identity of the author shall be construed as a reference to its being possible to ascertain the identity of any of the authors, and

(b)the reference in subsection (1)(b)(ii) to the author having died shall be construed as a reference to all the authors having died.

Textual Amendments

F200Words in s. 57(1)(b)(ii)(2)(b) substituted (with saving) (1.1.1996) by S.I. 1995/3297, regs. 5(2), 15(2) (with Pt. III)

58 Use of notes or recordings of spoken words in certain cases.U.K.

(1)Where a record of spoken words is made, in writing or otherwise, for the purpose—

(a)of reporting current events, or

(b)of [F201communicating to the public] the whole or part of the work,

it is not an infringement of any copyright in the words as a literary work to use the record or material taken from it (or to copy the record, or any such material, and use the copy) for that purpose, provided the following conditions are met.

(2)The conditions are that—

(a)the record is a direct record of the spoken words and is not taken from a previous record or from a broadcast F202. . . ;

(b)the making of the record was not prohibited by the speaker and, where copyright already subsisted in the work, did not infringe copyright;

(c)the use made of the record or material taken from it is not of a kind prohibited by or on behalf of the speaker or copyright owner before the record was made; and

(d)the use is by or with the authority of a person who is lawfully in possession of the record.

Textual Amendments

59 Public reading or recitation.U.K.

(1)The reading or recitation in public by one person of a reasonable extract from a published literary or dramatic work does not infringe any copyright in the work if it is accompanied by a sufficient acknowledgement.

(2)Copyright in a work is not infringed by the making of a sound recording, or the [F203communication to the public], of a reading or recitation which by virtue of subsection (1) does not infringe copyright in the work, provided that the recording [F204or communication to the public] consists mainly of material in relation to which it is not necessary to rely on that subsection.

Textual Amendments

60 Abstracts of scientific or technical articles.U.K.

(1)Where an article on a scientific or technical subject is published in a periodical accompanied by an abstract indicating the contents of the article, it is not an infringement of copyright in the abstract, or in the article, to copy the abstract or issue copies of it to the public.

(2)This section does not apply if or to the extent that there is a licensing scheme certified for the purposes of this section under section 143 providing for the grant of licences.

61 Recordings of folksongs.U.K.

(1)A sound recording of a performance of a song may be made for the purpose of including it in an archive maintained by a [F205body not established or conducted for profit] without infringing any copyright in the words as a literary work or in the accompanying musical work, provided the conditions in subsection (2) below are met.

(2)The conditions are that—

(a)the words are unpublished and of unknown authorship at the time the recording is made,

(b)the making of the recording does not infringe any other copyright, and

(c)its making is not prohibited by any performer.

[F206(3)A single copy of a sound recording made in reliance on subsection (1) and included in an archive referred to in that subsection may be made and supplied by the archivist without infringing copyright in the recording or the works included in it, provided that—

(a)the copy is supplied in response to a request from a person who has provided the archivist with a declaration in writing which includes the information set out in subsection (4), and

(b)the archivist is not aware that the declaration is false in a material particular.

(4)The information which must be included in the declaration is—

(a)the name of the person who requires the copy and the sound recording which is the subject of the request,

(b)a statement that the person has not previously been supplied with a copy of that sound recording by any archivist, and

(c)a statement that the person requires the copy for the purposes of research for a non-commercial purpose or private study, will use it only for those purposes and will not supply the copy to any other person.

(5)Where an archive makes a charge for supplying a copy under this section, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(6)Where a person (“P”) makes a declaration under this section that is false in a material particular and is supplied with a copy which would have been an infringing copy if made by P—

(a)P is liable for infringement of copyright as if P had made the copy, and

(b)the copy supplied to P is to be treated as an infringing copy for all purposes.

(7)In this section references to an archivist include a person acting on behalf of an archivist.]

Textual Amendments

62 Representation of certain artistic works on public display.U.K.

(1)This section applies to—

(a)buildings, and

(b)sculptures, models for buildings and works of artistic craftsmanship, if permanently situated in a public place or in premises open to the public.

(2)The copyright in such a work is not infringed by—

(a)making a graphic work representing it,

(b)making a photograph or film of it, or

(c)[F207making a broadcast of] a visual image of it.

(3)Nor is the copyright infringed by the issue to the public of copies, or the [F208communication to the public], of anything whose making was, by virtue of this section, not an infringement of the copyright.

Textual Amendments

63 Advertisement of sale of artistic work.U.K.

(1)It is not an infringement of copyright in an artistic work to copy it, or to issue copies to the public, for the purpose of advertising the sale of the work.

(2)Where a copy which would otherwise be an infringing copy is made in accordance with this section but is subsequently dealt with for any other purpose, it shall be treated as an infringing copy for the purposes of that dealing, and if that dealing infringes copyright for all subsequent purposes.

For this purpose “dealt with” means sold or let for hire, offered or exposed for sale or hire, exhibited in public [F209, distributed or communicated to the public].

Textual Amendments

64 Making of subsequent works by same artist.U.K.

Where the author of an artistic work is not the copyright owner, he does not infringe the copyright by copying the work in making another artistic work, provided he does not repeat or imitate the main design of the earlier work.

65 Reconstruction of buildings.U.K.

Anything done for the purposes of reconstructing a building does not infringe any copyright—

(a)in the building, or

(b)in any drawings or plans in accordance with which the building was, by or with the licence of the copyright owner, constructed.

[F210Miscellaneous: lending of works and playing of sound recordings]U.K.

Textual Amendments

F210S. 66 and crossheading substituted (1.12.1996) by S.I. 1996/2967, reg. 11(3) (with Pt. III)

[F21166Lending to public of copies of certain works.U.K.

(1)The Secretary of State may by order provide that in such cases as may be specified in the order the lending to the public of copies of literary, dramatic, musical or artistic works, sound recordings or films shall be treated as licensed by the copyright owner subject only to the payment of such reasonable royalty or other payment as may be agreed or determined in default of agreement by the Copyright Tribunal.

(2)No such order shall apply if, or to the extent that, there is a licensing scheme certified for the purposes of this section under section 143 providing for the grant of licences.

(3)An order may make different provision for different cases and may specify cases by reference to any factor relating to the work, the copies lent, the lender or the circumstances of the lending.

(4)An order shall be made by statutory instrument; and no order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(5)Nothing in this section affects any liability under section 23 (secondary infringement: possessing or dealing with infringing copy) in respect of the lending of infringing copies.]

Textual Amendments

F211S. 66 substituted (1.12.1996) by S.I. 1996/2967, reg. 11(3) (with Pt. III)

[F212MISCellaneous: films and sound recordings]U.K.

Textual Amendments

F212S. 66A and crossheading inserted (1.1.1996) by S.I. 1995/3297, reg. 6(2) (with Pt. III)

[F21366A Films: acts permitted on assumptions as to expiry of copyright, &c.U.K.

(1)Copyright in a film is not infringed by an act done at a time when, or in pursuance of arrangements made at a time when—

(a)it is not possible by reasonable inquiry to ascertain the identity of any of the persons referred to in section 13B(2)(a) to (d) (persons by reference to whose life the copyright period is ascertained), and

(b)it is reasonable to assume—

(i)that copyright has expired, or

(ii)that the last to die of those persons died 70 years or more before the beginning of the calendar year in which the act is done or the arrangements are made.

(2)Subsection (1)(b)(ii) does not apply in relation to—

(a)a film in which Crown copyright subsists, or

(b)a film in which copyright originally vested in an international organisation by virtue of section 168 and in respect of which an Order under that section specifies a copyright period longer than 70 years.]

Textual Amendments

F213S. 66A inserted (1.1.1996) by S.I. 1995/3297, reg. 6(2) (with Pt. III)

F21467 Playing of sound recordings for purposes of club, society, &c.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Miscellaneous: broadcasts F215. . . U.K.

Textual Amendments

F215Words in heading before s. 68 repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(2), Sch. 2 (with regs. 32, 33)

68 Incidental recording for purposes of broadcast F216. . . .U.K.

(1)This section applies where by virtue of a licence or assignment of copyright a person is authorised to broadcast F217. . . —

(a)a literary, dramatic or musical work, or an adaptation of such a work,

(b)an artistic work, or

(c)a sound recording or film.

(2)He shall by virtue of this section be treated as licensed by the owner of the copyright in the work to do or authorise any of the following for the purposes of the broadcast F217. . . —

(a)in the case of a literary, dramatic or musical work, or an adaptation of such a work, to make a sound recording or film of the work or adaptation;

(b)in the case of an artistic work, to take a photograph or make a film of the work;

(c)in the case of a sound recording or film, to make a copy of it.

(3)That licence is subject to the condition that the recording, film, photograph or copy in question—

(a)shall not be used for any other purpose, and

(b)shall be destroyed within 28 days of being first used for broadcasting the work F217. . . .

(4)A recording, film, photograph or copy made in accordance with this section shall be treated as an infringing copy—

(a)for the purposes of any use in breach of the condition mentioned in subsection (3)(a), and

(b)for all purposes after that condition or the condition mentioned in subsection (3)(b) is broken.

Textual Amendments

F217Words in s. 68(1)(2)(3)(b) repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(2), Sch. 2 (with regs. 31-40)

69 Recording for purposes of supervision and control of broadcasts and [F218other services].U.K.

(1)Copyright is not infringed by the making or use by the British Broadcasting Corporation, for the purpose of maintaining supervision and control over programmes broadcast by them [F219or included in any on-demand programme service provided by them], of recordings of those programmes.

F220[F221(2)Copyright is not infringed by anything done in pursuance of—

[F222(a)section 167(1) of the Broadcasting Act 1990, section 115(4) or (6) or 117 of the Broadcasting Act 1996 or paragraph 20 of Schedule 12 to the Communications Act 2003;]

(b)a condition which, [F223by virtue of section 334(1) of the Communications Act 2003], is included in a licence granted under Part I or III of that Act or Part I or II of the Broadcasting Act 1996; F224. . .

(c)a direction given under section 109(2) of the Broadcasting Act 1990 (power of [F225OFCOM] to require production of recordings etc).

[F226(d)section 334(3) [F227, 368O(1) or (3)] of the Communications Act 2003.]

[F221(3)Copyright is not infringed by the use by OFCOM in connection with the performance of any of their functions under the Broadcasting Act 1990, the Broadcasting Act 1996 or the Communications Act 2003 of—

(a)any recording, script or transcript which is provided to them under or by virtue of any provision of those Acts; or

(b)any existing material which is transferred to them by a scheme made under section 30 of the Communications Act 2003.]]

(4)In subsection (3), “existing material” means—

(a)any recording, script or transcript which was provided to the Independent Television Commission or the Radio Authority under or by virtue of any provision of the Broadcasting Act 1990 or the Broadcasting Act 1996; and

(b)any recording or transcript which was provided to the Broadcasting Standards Commission under section 115(4) or (6) or 116(5) of the Broadcasting Act 1996.

[F228(5)Copyright is not infringed by the use by an appropriate regulatory authority designated under section 368B of the Communications Act 2003, in connection with the performance of any of their functions under that Act, of any recording, script or transcript which is provided to them under or by virtue of any provision of that Act.

(6)In this section “on-demand programme service” has the same meaning as in the Communications Act 2003 (see section 368A of that Act).]

Textual Amendments

F220S. 69(2)(3) substituted (1.10.1996 for specified purposes and otherwise 1.4.1997) by 1996 c. 55, s. 148(1), Sch. 10 Pt. III para. 31 (with s. 43(6)); S.I. 1996/2120, art. 4, Sch. 1; S.I. 1997/1005, art. 4

F221S. 69(3)(4) substituted (29.12.2003) for s. 69(3) by Communications Act 2003 (c. 21), ss. 406, 411, Sch. 17 para. 91(3) (with Sch. 18); S.I. 2003/3142, art. 3, Sch. 1 (with art. 11)

F223Words in s. 69(2)(b) substituted (29.12.2003) by Communications Act 2003 (c. 21), ss. 406, 411, Sch. 17 para. 91(2)(b) (with Sch. 18); S.I. 2003/3142, art. 3, Sch. 1 (with art. 11)

F224Word in s. 69(2)(b) repealed (29.12.2003) by Communications Act 2003 (c. 21), ss. 406, 411, Sch. 19(1) (with Sch. 18, Sch. 19(1) Note 1); S.I. 2003/3142, art. 3, Sch. 1 (with art. 11)

F225Words in s. 69(2)(c) substituted (29.12.2003) by Communications Act 2003 (c. 21), ss. 406, 411, Sch. 17 para. 91(2)(c) (with Sch. 18); S.I. 2003/3142, art. 3, Sch. 1 (with art. 11)

Modifications etc. (not altering text)

70 Recording for purposes of time-shifting.U.K.

[F229(1)]The making [F230 in domestic premises] for private and domestic use of a recording of a broadcast F231. . . solely for the purpose of enabling it to be viewed or listened to at a more convenient time does not infringe any copyright in the broadcast F231. . . or in any work included in it.

[F232(2)Where a copy which would otherwise be an infringing copy is made in accordance with this section but is subsequently dealt with—

(a)it shall be treated as an infringing copy for the purposes of that dealing; and

(b)if that dealing infringes copyright, it shall be treated as an infringing copy for all subsequent purposes.

(3) In subsection (2), “ dealt with ” means sold or let for hire, offered or exposed for sale or hire or communicated to the public. ]

Textual Amendments

[F23371Photographs of broadcastsU.K.

(1)The making in domestic premises for private and domestic use of a photograph of the whole or any part of an image forming part of a broadcast, or a copy of such a photograph, does not infringe any copyright in the broadcast or in any film included in it.

(2)Where a copy which would otherwise be an infringing copy is made in accordance with this section but is subsequently dealt with—

(a)it shall be treated as an infringing copy for the purposes of that dealing; and

(b)if that dealing infringes copyright, it shall be treated as an infringing copy for all subsequent purposes.

(3) In subsection (2), “ dealt with ” means sold or let for hire, offered or exposed for sale or hire or communicated to the public. ]

Textual Amendments

72 Free public showing or playing of broadcast F234. . . .U.K.

(1)The showing or playing in public of a broadcast F235. . . to an audience who have not paid for admission to the place where the broadcast F235. . . is to be seen or heard does not infringe any copyright in—

[F236(a)the broadcast; [F237or]

(b)any sound recording (except so far as it is an excepted sound recording) included in it F238...

F239(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F240(1A)For the purposes of this Part an “excepted sound recording” is a sound recording—

(a)whose author is not the author of the broadcast in which it is included; and

(b)which is a recording of music with or without words spoken or sung.

(1B)Where by virtue of subsection (1) the copyright in a broadcast shown or played in public is not infringed, copyright in any [F241film or] excepted sound recording included in it is not infringed if the playing or showing of that broadcast in public—

(a)F242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)is necessary for the purposes of—

(i)repairing equipment for the reception of broadcasts;

(ii)demonstrating that a repair to such equipment has been carried out; or

(iii)demonstrating such equipment which is being sold or let for hire or offered or exposed for sale or hire.]

(2)The audience shall be treated as having paid for admission to a place—

(a)if they have paid for admission to a place of which that place forms part; or

(b)if goods or services are supplied at that place (or a place of which it forms part)—

(i)at prices which are substantially attributable to the facilities afforded for seeing or hearing the broadcast F243. . . , or

(ii)at prices exceeding those usually charged there and which are partly attributable to those facilities.

(3)The following shall not be regarded as having paid for admission to a place—

(a)persons admitted as residents or inmates of the place;

(b)persons admitted as members of a club or society where the payment is only for membership of the club or society and the provision of facilities for seeing or hearing broadcasts F244. . . is only incidental to the main purposes of the club or society.

(4)Where the making of the broadcast F245. . . was an infringement of the copyright in a sound recording or film, the fact that it was heard or seen in public by the reception of the broadcast F245. . . shall be taken into account in assessing the damages for that infringement.

Textual Amendments

F236S. 72(1)(a)-(c) substituted (31.10.2003) for s. 72(1)(a)(b) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 21(1)(a) (with regs. 31-40)

F24673 Reception and re-transmission of wireless broadcast by cable.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F24773A Royalty or other sum payable in pursuance of section 73(4).U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F24874

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F24975Recording of broadcast for archival purposesU.K.

(1)A recording of a broadcast or a copy of such a recording may be made for the purpose of being placed in an archive maintained by a body which is not established or conducted for profit without infringing any copyright in the broadcast or in any work included in it.

(2)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.]

Textual Amendments

AdaptationsU.K.

76 Adaptations.U.K.

An act which by virtue of this Chapter may be done without infringing copyright in a literary, dramatic or musical work does not, where that work is an adaptation, infringe any copyright in the work from which the adaptation was made.

[F250CHAPTER 3AU.K.CERTAIN PERMITTED USES OF ORPHAN WORKS

Textual Amendments

F25176ACertain permitted uses of orphan worksU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F251S. 76A omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 12 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

Chapter IVU.K. Moral Rights

Right to be identified as author or directorU.K.

77 Right to be identified as author or director.U.K.

(1)The author of a copyright literary, dramatic, musical or artistic work, and the director of a copyright film, has the right to be identified as the author or director of the work in the circumstances mentioned in this section; but the right is not infringed unless it has been asserted in accordance with section 78.

(2)The author of a literary work (other than words intended to be sung or spoken with music) or a dramatic work has the right to be identified whenever—

(a)the work is published commercially, performed in public [F252or communicated to the public]; or

(b)copies of a film or sound recording including the work are issued to the public;

and that right includes the right to be identified whenever any of those events occur in relation to an adaptation of the work as the author of the work from which the adaptation was made.

(3)The author of a musical work, or a literary work consisting of words intended to be sung or spoken with music, has the right to be identified whenever—

(a)the work is published commercially;

(b)copies of a sound recording of the work are issued to the public; or

(c)a film of which the sound-track includes the work is shown in public or copies of such a film are issued to the public;

and that right includes the right to be identified whenever any of those events occur in relation to an adaptation of the work as the author of the work from which the adaptation was made.

(4)The author of an artistic work has the right to be identified whenever—

(a)the work is published commercially or exhibited in public, or a visual image of it is [F253communicated to the public];

(b)a film including a visual image of the work is shown in public or copies of such a film are issued to the public; or

(c)in the case of a work of architecture in the form of a building or a model for a building, a sculpture or a work of artistic craftsmanship, copies of a graphic work representing it, or of a photograph of it, are issued to the public.

(5)The author of a work of architecture in the form of a building also has the right to be identified on the building as constructed or, where more than one building is constructed to the design, on the first to be constructed.

(6)The director of a film has the right to be identified whenever the film is shown in public [F252or communicated to the public] or copies of the film are issued to the public.

(7)The right of the author or director under this section is—

(a)in the case of commercial publication or the issue to the public of copies of a film or sound recording, to be identified in or on each copy or, if that is not appropriate, in some other manner likely to bring his identity to the notice of a person acquiring a copy,

(b)in the case of identification on a building, to be identified by appropriate means visible to persons entering or approaching the building, and

(c)in any other case, to be identified in a manner likely to bring his identity to the attention of a person seeing or hearing the performance, exhibition, showing [F254or communication to the public] in question;

and the identification must in each case be clear and reasonably prominent.

(8)If the author or director in asserting his right to be identified specifies a pseudonym, initials or some other particular form of identification, that form shall be used; otherwise any reasonable form of identification may be used.

(9)This section has effect subject to section 79 (exceptions to right).

Textual Amendments

78 Requirement that right be asserted.U.K.

(1)A person does not infringe the right conferred by section 77 (right to be identified as author or director) by doing any of the acts mentioned in that section unless the right has been asserted in accordance with the following provisions so as to bind him in relation to that act.

(2)The right may be asserted generally, or in relation to any specified act or description of acts—

(a)on an assignment of copyright in the work, by including in the instrument effecting the assignment a statement that the author or director asserts in relation to that work his right to be identified, or

(b)by instrument in writing signed by the author or director.

(3)The right may also be asserted in relation to the public exhibition of an artistic work—

(a)by securing that when the author or other first owner of copyright parts with possession of the original, or of a copy made by him or under his direction or control, the author is identified on the original or copy, or on a frame, mount or other thing to which it is attached, or

(b)by including in a licence by which the author or other first owner of copyright authorises the making of copies of the work a statement signed by or on behalf of the person granting the licence that the author asserts his right to be identified in the event of the public exhibition of a copy made in pursuance of the licence.

(4)The persons bound by an assertion of the right under subsection (2) or (3) are—

(a)in the case of an assertion under subsection (2)(a), the assignee and anyone claiming through him, whether or not he has notice of the assertion;

(b)in the case of an assertion under subsection (2)(b), anyone to whose notice the assertion is brought;

(c)in the case of an assertion under subsection (3)(a), anyone into whose hands that original or copy comes, whether or not the identification is still present or visible;

(d)in the case of an assertion under subsection (3)(b), the licensee and anyone into whose hands a copy made in pursuance of the licence comes, whether or not he has notice of the assertion.

(5)In an action for infringement of the right the court shall, in considering remedies, take into account any delay in asserting the right.

79 Exceptions to right.U.K.

(1)The right conferred by section 77 (right to be identified as author or director) is subject to the following exceptions.

(2)The right does not apply in relation to the following descriptions of work—

(a)a computer program;

(b)the design of a typeface;

(c)any computer-generated work.

(3)The right does not apply to anything done by or with the authority of the copyright owner where copyright in the work originally [F255 vested in the author’s or director’s employer by virtue of section 11(2) (works produced in the course of employment).]

(4)The right is not infringed by an act which by virtue of any of the following provisions would not infringe copyright in the work—

(a)section 30 (fair dealing for certain purposes), so far as it relates to the reporting of current events by means of a sound recording, film [F256or broadcast];

(b)section 31 (incidental inclusion of work in an artistic work, sound recording, film [F256or broadcast]);

F257(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)section 45 (parliamentary and judicial proceedings);

(e)section 46(1) or (2) (Royal Commissions and statutory inquiries);

(f)section 51 (use of design documents and models);

F258(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h)[F259section 57 or 66A (acts permitted on assumptions as to expiry of copyright, &c.)];

[F260(4A)The right is also not infringed by any act done for the purposes of an examination which by virtue of any provision of Chapter 3 of Part 1 would not infringe copyright.]

(5)The right does not apply in relation to any work made for the purpose of reporting current events.

(6)The right does not apply in relation to the publication in—

(a)a newspaper, magazine or similar periodical, or

(b)an encyclopaedia, dictionary, yearbook or other collective work of reference,

of a literary, dramatic, musical or artistic work made for the purposes of such publication or made available with the consent of the author for the purposes of such publication.

(7)The right does not apply in relation to—

(a)a work in which Crown copyright or Parliamentary copyright subsists, or

(b)a work in which copyright originally vested in an international organisation by virtue of section 168,

unless the author or director has previously been identified as such in or on published copies of the work.

Textual Amendments

F259Words in s. 79(4) substituted (1.1.1996) by S.I. 1995/3297, reg. 5(3) (with Pt. III)

Right to object to derogatory treatment of workU.K.

80 Right to object to derogatory treatment of work.U.K.

(1)The author of a copyright literary, dramatic, musical or artistic work, and the director of a copyright film, has the right in the circumstances mentioned in this section not to have his work subjected to derogatory treatment.

(2)For the purposes of this section—

(a)“treatment” of a work means any addition to, deletion from or alteration to or adaptation of the work, other than—

(i)a translation of a literary or dramatic work, or

(ii)an arrangement or transcription of a musical work involving no more than a change of key or register; and

(b)the treatment of a work is derogatory if it amounts to distortion or mutilation of the work or is otherwise prejudicial to the honour or reputation of the author or director;

and in the following provisions of this section references to a derogatory treatment of a work shall be construed accordingly.

(3)In the case of a literary, dramatic or musical work the right is infringed by a person who—

(a)publishes commercially, performs in public [F261or communicates to the public] a derogatory treatment of the work; or

(b)issues to the public copies of a film or sound recording of, or including, a derogatory treatment of the work.

(4)In the case of an artistic work the right is infringed by a person who—

(a)publishes commercially or exhibits in public a derogatory treatment of the work, [F262or communicates to the public] a visual image of a derogatory treatment of the work,

(b)shows in public a film including a visual image of a derogatory treatment of the work or issues to the public copies of such a film, or

(c)in the case of—

(i)a work of architecture in the form of a model for a building,

(ii)a sculpture, or

(iii)a work of artistic craftsmanship,

issues to the public copies of a graphic work representing, or of a photograph of, a derogatory treatment of the work.

(5)Subsection (4) does not apply to a work of architecture in the form of a building; but where the author of such a work is identified on the building and it is the subject of derogatory treatment he has the right to require the identification to be removed.

(6)In the case of a film, the right is infringed by a person who—

(a)shows in public [F261or communicates to the public] a derogatory treatment of the film; or

(b)issues to the public copies of a derogatory treatment of the film,

F263. . .

(7)The right conferred by this section extends to the treatment of parts of a work resulting from a previous treatment by a person other than the author or director, if those parts are attributed to, or are likely to be regarded as the work of, the author or director.

(8)This section has effect subject to sections 81 and 82 (exceptions to and qualifications of right).

Textual Amendments

F263Words in s. 80(6) omitted (1.1.1996) by virtue of S.I. 1995/3297, reg. 9(2) (with Pt. III)

81 Exceptions to right.U.K.

(1)The right conferred by section 80 (right to object to derogatory treatment of work) is subject to the following exceptions.

(2)The right does not apply to a computer program or to any computer-generated work.

(3)The right does not apply in relation to any work made for the purpose of reporting current events.

(4)The right does not apply in relation to the publication in—

(a)a newspaper, magazine or similar periodical, or

(b)an encyclopaedia, dictionary, yearbook or other collective work of reference,

of a literary, dramatic, musical or artistic work made for the purposes of such publication or made available with the consent of the author for the purposes of such publication.

Nor does the right apply in relation to any subsequent exploitation elsewhere of such a work without any modification of the published version.

(5)The right is not infringed by an act which by virtue of [F264section 57 or 66A (acts permitted on assumptions as to expiry of copyright, &c.)] would not infringe copyright.

(6)The right is not infringed by anything done for the purpose of—

(a)avoiding the commission of an offence,

(b)complying with a duty imposed by or under an enactment, or

(c)in the case of the British Broadcasting Corporation, avoiding the inclusion in a programme broadcast by them of anything which offends against good taste or decency or which is likely to encourage or incite to crime or to lead to disorder or to be offensive to public feeling,

provided, where the author or director is identified at the time of the relevant act or has previously been identified in or on published copies of the work, that there is a sufficient disclaimer.

Textual Amendments

F264Words in s. 81(5) substituted (1.1.1996) by S.I. 1995/3297, reg. 5(3) (with Pt. III)

82 Qualification of right in certain cases.U.K.

(1)This section applies to—

(a)works in which copyright originally vested in the author’s [F265 or director's] employer by virtue of section 11(2) (works produced in course of employment) F266. . .

(b)works in which Crown copyright or Parliamentary copyright subsists, and

(c)works in which copyright originally vested in an international organisation by virtue of section 168.

(2)The right conferred by section 80 (right to object to derogatory treatment of work) does not apply to anything done in relation to such a work by or with the authority of the copyright owner unless the author or director—

(a)is identified at the time of the relevant act, or

(b)has previously been identified in or on published copies of the work;

and where in such a case the right does apply, it is not infringed if there is a sufficient disclaimer.

Textual Amendments

83 Infringement of right by possessing or dealing with infringing article.U.K.

(1)The right conferred by section 80 (right to object to derogatory treatment of work) is also infringed by a person who—

(a)possesses in the course of a business, or

(b)sells or lets for hire, or offers or exposes for sale or hire, or

(c)in the course of a business exhibits in public or distributes, or

(d)distributes otherwise than in the course of a business so as to affect prejudicially the honour or reputation of the author or director,

an article which is, and which he knows or has reason to believe is, an infringing article.

(2)An “infringing article” means a work or a copy of a work which—

(a)has been subjected to derogatory treatment within the meaning of section 80, and

(b)has been or is likely to be the subject of any of the acts mentioned in that section in circumstances infringing that right.

False attribution of workU.K.

84 False attribution of work.U.K.

(1)A person has the right in the circumstances mentioned in this section—

(a)not to have a literary, dramatic, musical or artistic work falsely attributed to him as author, and

(b)not to have a film falsely attributed to him as director;

and in this section an “attribution”, in relation to such a work, means a statement (express or implied) as to who is the author or director.

(2)The right is infringed by a person who—

(a)issues to the public copies of a work of any of those descriptions in or on which there is a false attribution, or

(b)exhibits in public an artistic work, or a copy of an artistic work, in or on which there is a false attribution.

(3)The right is also infringed by a person who—

(a)in the case of a literary, dramatic or musical work, performs the work in public [F267or communicates it to the public] as being the work of a person, or

(b)in the case of a film, shows it in public [F267or communicates it to the public] as being directed by a person,

knowing or having reason to believe that the attribution is false.

(4)The right is also infringed by the issue to the public or public display of material containing a false attribution in connection with any of the acts mentioned in subsection (2) or (3).

(5)The right is also infringed by a person who in the course of a business—

(a)possesses or deals with a copy of a work of any of the descriptions mentioned in subsection (1) in or on which there is a false attribution, or

(b)in the case of an artistic work, possesses or deals with the work itself when there is a false attribution in or on it,

knowing or having reason to believe that there is such an attribution and that it is false.

(6)In the case of an artistic work the right is also infringed by a person who in the course of a business—

(a)deals with a work which has been altered after the author parted with possession of it as being the unaltered work of the author, or

(b)deals with a copy of such a work as being a copy of the unaltered work of the author,

knowing or having reason to believe that that is not the case.

(7)References in this section to dealing are to selling or letting for hire, offering or exposing for sale or hire, exhibiting in public, or distributing.

(8)This section applies where, contrary to the fact—

(a)a literary, dramatic or musical work is falsely represented as being an adaptation of the work of a person, or

(b)a copy of an artistic work is falsely represented as being a copy made by the author of the artistic work,

as it applies where the work is falsely attributed to a person as author.

Textual Amendments

Right to privacy of certain photographs and filmsU.K.

85 Right to privacy of certain photographs and films.U.K.

(1)A person who for private and domestic purposes commissions the taking of a photograph or the making of a film has, where copyright subsists in the resulting work, the right not to have—

(a) copies of the work issued to the public,

(b) the work exhibited or shown in public, or

(c) the work [F268communicated to the public];

and, except as mentioned in subsection (2), a person who does or authorises the doing of any of those acts infringes that right.

(2)The right is not infringed by an act which by virtue of any of the following provisions would not infringe copyright in the work—

(a)section 31 (incidental inclusion of work in an artistic work, film [F269or broadcast]);

(b)section 45 (parliamentary and judicial proceedings);

(c)section 46 (Royal Commissions and statutory inquiries);

(d)section 50 (acts done under statutory authority);

(e)[F270section 57 or 66A (acts permitted on assumptions as to expiry of copyright, &c.)].

Textual Amendments

F270Words in s. 85(2) substituted (1.1.1996) by S.I. 1995/3297, reg. 6(3) (with Pt. III)

SupplementaryU.K.

86 Duration of rights.U.K.

(1)The rights conferred by section 77 (right to be identified as author or director), section 80 (right to object to derogatory treatment of work) and section 85 (right to privacy of certain photographs and films) continue to subsist so long as copyright subsists in the work.

(2)The right conferred by section 84 (false attribution) continues to subsist until 20 years after a person’s death.

87 Consent and waiver of rights.U.K.

(1)It is not an infringement of any of the rights conferred by this Chapter to do any act to which the person entitled to the right has consented.

(2)Any of those rights may be waived by instrument in writing signed by the person giving up the right.

(3)A waiver—

(a)may relate to a specific work, to works of a specified description or to works generally, and may relate to existing or future works, and

(b)may be conditional or unconditional and may be expressed to be subject to revocation;

and if made in favour of the owner or prospective owner of the copyright in the work or works to which it relates, it shall be presumed to extend to his licensees and successors in title unless a contrary intention is expressed.

(4)Nothing in this Chapter shall be construed as excluding the operation of the general law of contract or estoppel in relation to an informal waiver or other transaction in relation to any of the rights mentioned in subsection (1).

88 Application of provisions to joint works.U.K.

(1)The right conferred by section 77 (right to be identified as author or director) is, in the case of a work of joint authorship, a right of each joint author to be identified as a joint author and must be asserted in accordance with section 78 by each joint author in relation to himself.

(2)The right conferred by section 80 (right to object to derogatory treatment of work) is, in the case of a work of joint authorship, a right of each joint author and his right is satisfied if he consents to the treatment in question.

(3)A waiver under section 87 of those rights by one joint author does not affect the rights of the other joint authors.

(4)The right conferred by section 84 (false attribution) is infringed, in the circumstances mentioned in that section—

(a)by any false statement as to the authorship of a work of joint authorship, and

(b)by the false attribution of joint authorship in relation to a work of sole authorship;

and such a false attribution infringes the right of every person to whom authorship of any description is, whether rightly or wrongly, attributed.

(5)The above provisions also apply (with any necessary adaptations) in relation to a film which was, or is alleged to have been, jointly directed, as they apply to a work which is, or is alleged to be, a work of joint authorship.

A film is “jointly directed” if it is made by the collaboration of two or more directors and the contribution of each director is not distinct from that of the other director or directors.

(6)The right conferred by section 85 (right to privacy of certain photographs and films) is, in the case of a work made in pursuance of a joint commission, a right of each person who commissioned the making of the work, so that—

(a)the right of each is satisfied if he consents to the act in question, and

(b)a waiver under section 87 by one of them does not affect the rights of the others.

89 Application of provisions to parts of works.U.K.

(1)The rights conferred by section 77 (right to be identified as author or director) and section 85 (right to privacy of certain photographs and films) apply in relation to the whole or any substantial part of a work.

(2)The rights conferred by section 80 (right to object to derogatory treatment of work) and section 84 (false attribution) apply in relation to the whole or any part of a work.

Chapter VU.K. Dealings with Rights in Copyright Works

Modifications etc. (not altering text)

C35Pt. 1 Ch. V applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 17(1)-(3) (with Pt. III)

CopyrightU.K.

90 Assignment and licences.U.K.

(1)Copyright is transmissible by assignment, by testamentary disposition or by operation of law, as personal or moveable property.

(2)An assignment or other transmission of copyright may be partial, that is, limited so as to apply—

(a)to one or more, but not all, of the things the copyright owner has the exclusive right to do;

(b)to part, but not the whole, of the period for which the copyright is to subsist.

(3)An assignment of copyright is not effective unless it is in writing signed by or on behalf of the assignor.

(4)A licence granted by a copyright owner is binding on every successor in title to his interest in the copyright, except a purchaser in good faith for valuable consideration and without notice (actual or constructive) of the licence or a person deriving title from such a purchaser; and references in this Part to doing anything with, or without, the licence of the copyright owner shall be construed accordingly.

Modifications etc. (not altering text)

C36Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

91 Prospective ownership of copyright.U.K.

(1)Where by an agreement made in relation to future copyright, and signed by or on behalf of the prospective owner of the copyright, the prospective owner purports to assign the future copyright (wholly or partially) to another person, then if, on the copyright coming into existence, the assignee or another person claiming under him would be entitled as against all other persons to require the copyright to be vested in him, the copyright shall vest in the assignee or his successor in title by virtue of this subsection.

(2)In this Part—

  • “future copyright” means copyright which will or may come into existence in respect of a future work or class of works or on the occurrence of a future event; and

  • “prospective owner” shall be construed accordingly, and includes a person who is prospectively entitled to copyright by virtue of such an agreement as is mentioned in subsection (1).

(3)A licence granted by a prospective owner of copyright is binding on every successor in title to his interest (or prospective interest) in the right, except a purchaser in good faith for valuable consideration and without notice (actual or constructive) of the licence or a person deriving title from such a purchaser; and references in this Part to doing anything with, or without, the licence of the copyright owner shall be construed accordingly.

Modifications etc. (not altering text)

C37Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

92 Exclusive licences.U.K.

(1)In this Part an “exclusive licence” means a licence in writing signed by or on behalf of the copyright owner authorising the licensee to the exclusion of all other persons, including the person granting the licence, to exercise a right which would otherwise be exercisable exclusively by the copyright owner.

(2)The licensee under an exclusive licence has the same rights against a successor in title who is bound by the licence as he has against the person granting the licence.

Modifications etc. (not altering text)

C38Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

93 Copyright to pass under will with unpublished work.U.K.

Where under a bequest (whether specific or general) a person is entitled, beneficially or otherwise, to—

(a)an original document or other material thing recording or embodying a literary, dramatic, musical or artistic work which was not published before the death of the testator, or

(b)an original material thing containing a sound recording or film which was not published before the death of the testator,

the bequest shall, unless a contrary intention is indicated in the testator’s will or a codicil to it, be construed as including the copyright in the work in so far as the testator was the owner of the copyright immediately before his death.

Modifications etc. (not altering text)

C39Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

[F27193A Presumption of transfer of rental right in case of film production agreement.U.K.

(1)Where an agreement concerning film production is concluded between an author and a film producer, the author shall be presumed, unless the agreement provides to the contrary, to have transferred to the film producer any rental right in relation to the film arising by virtue of the inclusion of a copy of the author’s work in the film.

(2)In this section “author” means an author, or prospective author, of a literary, dramatic, musical or artistic work.

(3)Subsection (1) does not apply to any rental right in relation to the film arising by virtue of the inclusion in the film of the screenplay, the dialogue or music specifically created for and used in the film.

(4)Where this section applies, the absence of signature by or on behalf of the author does not exclude the operation of section 91(1) (effect of purported assignment of future copyright).

(5)The reference in subsection (1) to an agreement concluded between an author and a film producer includes any agreement having effect between those persons, whether made by them directly or through intermediaries.

(6)Section 93B (right to equitable remuneration on transfer of rental right) applies where there is a presumed transfer by virtue of this section as in the case of an actual transfer.]

Textual Amendments

F271S. 93A inserted (1.12.1996) by S.I. 1996/2967, reg. 12 (with Pt. III)

Modifications etc. (not altering text)

C40S. 93A applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 32(1) (with Pt. III)

[F272Right to equitable remuneration where rental right transferredU.K.

Textual Amendments

F272S. 93B and crossheading inserted (1.12.1996) by S.I. 1996/2967, reg. 14(1) (with Pt. III)

F27393B Right to equitable remuneration where rental right transferred.U.K.

(1)Where an author to whom this section applies has transferred his rental right concerning a sound recording or a film to the producer of the sound recording or film, he retains the right to equitable remuneration for the rental.

The authors to whom this section applies are—

(a)the author of a literary, dramatic, musical or artistic work, and

(b)the principal director of a film.

(2)The right to equitable remuneration under this section may not be assigned by the author except to a collecting society for the purpose of enabling it to enforce the right on his behalf.

The right is, however, transmissible by testamentary disposition or by operation of law as personal or moveable property; and it may be assigned or further transmitted by any person into whose hands it passes.

(3)Equitable remuneration under this section is payable by the person for the time being entitled to the rental right, that is, the person to whom the right was transferred or any successor in title of his.

(4)The amount payable by way of equitable remuneration is as agreed by or on behalf of the persons by and to whom it is payable, subject to section 93C (reference of amount to Copyright Tribunal).

(5)An agreement is of no effect in so far as it purports to exclude or restrict the right to equitable remuneration under this section.

(6)References in this section to the transfer of rental right by one person to another include any arrangement having that effect, whether made by them directly or through intermediaries.

(7)In this section a “collecting society” means a society or other organisation which has as its main object, or one of its main objects, the exercise of the right to equitable remuneration under this section on behalf of more than one author.

Textual Amendments

F273S. 93B inserted (1.12.1996) by S.I. 1996/2967, reg. 14(1) (with Pt. III)

Modifications etc. (not altering text)

C41S. 93B applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 32(2) (with Pt. III)

C42S. 93B restricted (1.12.1996) by S.I. 1996/2967, reg. 33 (with Pt. III)

F27493C Equitable remuneration: reference of amount to Copyright Tribunal.U.K.

(1)In default of agreement as to the amount payable by way of equitable remuneration under section 93B, the person by or to whom it is payable may apply to the Copyright Tribunal to determine the amount payable.

(2)A person to or by whom equitable remuneration is payable under that section may also apply to the Copyright Tribunal—

(a)to vary any agreement as to the amount payable, or

(b)to vary any previous determination of the Tribunal as to that matter; but except with the special leave of the Tribunal no such application may be made within twelve months from the date of a previous determination.

An order made on an application under this subsection has effect from the date on which it is made or such later date as may be specified by the Tribunal.

(3)On an application under this section the Tribunal shall consider the matter and make such order as to the method of calculating and paying equitable remuneration as it may determine to be reasonable in the circumstances, taking into account the importance of the contribution of the author to the film or sound recording.

(4)Remuneration shall not be considered inequitable merely because it was paid by way of a single payment or at the time of the transfer of the rental right.

(5)An agreement is of no effect in so far as it purports to prevent a person questioning the amount of equitable remuneration or to restrict the powers of the Copyright Tribunal under this section.]

Textual Amendments

F274S. 93C inserted (1.12.1996) by S.I. 1996/2967, reg. 14(1) (with Pt. III)

Moral rightsU.K.

94 Moral rights not assignable.U.K.

The rights conferred by Chapter IV (moral rights) are not assignable.

95 Transmission of moral rights on death.U.K.

(1)On the death of a person entitled to the right conferred by section 77 (right to identification of author or director), section 80 (right to object to derogatory treatment of work) or section 85 (right to privacy of certain photographs and films)—

(a)the right passes to such person as he may by testamentary disposition specifically direct,

(b)if there is no such direction but the copyright in the work in question forms part of his estate, the right passes to the person to whom the copyright passes, and

(c)if or to the extent that the right does not pass under paragraph (a) or (b) it is exercisable by his personal representatives.

(2)Where copyright forming part of a person’s estate passes in part to one person and in part to another, as for example where a bequest is limited so as to apply—

(a)to one or more, but not all, of the things the copyright owner has the exclusive right to do or authorise, or

(b)to part, but not the whole, of the period for which the copyright is to subsist,

any right which passes with the copyright by virtue of subsection (1) is correspondingly divided.

(3)Where by virtue of subsection (1)(a) or (b) a right becomes exercisable by more than one person—

(a)it may, in the case of the right conferred by section 77 (right to identification of author or director), be asserted by any of them;

(b)it is, in the case of the right conferred by section 80 (right to object to derogatory treatment of work) or section 85 (right to privacy of certain photographs and films), a right exercisable by each of them and is satisfied in relation to any of them if he consents to the treatment or act in question; and

(c)any waiver of the right in accordance with section 87 by one of them does not affect the rights of the others.

(4)A consent or waiver previously given or made binds any person to whom a right passes by virtue of subsection (1).

(5)Any infringement after a person’s death of the right conferred by section 84 (false attribution) is actionable by his personal representatives.

(6)Any damages recovered by personal representatives by virtue of this section in respect of an infringement after a person’s death shall devolve as part of his estate as if the right of action had subsisted and been vested in him immediately before his death.

Chapter VIU.K. Remedies for Infringement

Modifications etc. (not altering text)

C43Pt. 1 Ch. VI applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 17 (with Pt. III)

Rights and remedies of copyright ownerU.K.

96 Infringement actionable by copyright owner.U.K.

(1)An infringement of copyright is actionable by the copyright owner.

(2)In an action for infringement of copyright all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right.

(3)This section has effect subject to the following provisions of this Chapter.

Modifications etc. (not altering text)

C44Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

97 Provisions as to damages in infringement action.U.K.

(1)Where in an action for infringement of copyright it is shown that at the time of the infringement the defendant did not know, and had no reason to believe, that copyright subsisted in the work to which the action relates, the plaintiff is not entitled to damages against him, but without prejudice to any other remedy.

(2)The court may in an action for infringement of copyright having regard to all the circumstances, and in particular to—

(a)the flagrancy of the infringement, and

(b)any benefit accruing to the defendant by reason of the infringement,

award such additional damages as the justice of the case may require.

Modifications etc. (not altering text)

C45Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

[F27597AInjunctions against service providersU.K.

(1)The High Court (in Scotland, the Court of Session) shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright.

(2)In determining whether a service provider has actual knowledge for the purpose of this section, a court shall take into account all matters which appear to it in the particular circumstances to be relevant and, amongst other things, shall have regard to—

(a)whether a service provider has received a notice through a means of contact made available in accordance with regulation 6(1)(c) of the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013); and

(b)the extent to which any notice includes—

(i)the full name and address of the sender of the notice;

(ii)details of the infringement in question.

(3) In this section “ service provider ” has the meaning given to it by regulation 2 of the Electronic Commerce ( EC Directive) Regulations 2002. ]

Textual Amendments

98 Undertaking to take licence of right in infringement proceedings.U.K.

(1)If in proceedings for infringement of copyright in respect of which a licence is available as of right under section 144 (powers exercisable in consequence of report of [F276Competition and Markets Authority]) the defendant undertakes to take a licence on such terms as may be agreed or, in default of agreement, settled by the Copyright Tribunal under that section—

(a)no injunction shall be granted against him,

(b)no order for delivery up shall be made under section 99, and

(c)the amount recoverable against him by way of damages or on an account of profits shall not exceed double the amount which would have been payable by him as licensee if such a licence on those terms had been granted before the earliest infringement.

(2)An undertaking may be given at any time before final order in the proceedings, without any admission of liability.

(3)Nothing in this section affects the remedies available in respect of an infringement committed before licences of right were available.

Textual Amendments

Modifications etc. (not altering text)

C46Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

99 Order for delivery up.U.K.

(1)Where a person—

(a)has an infringing copy of a work in his possession, custody or control in the course of a business, or

(b)has in his possession, custody or control an article specifically designed or adapted for making copies of a particular copyright work, knowing or having reason to believe that it has been or is to be used to make infringing copies,

the owner of the copyright in the work may apply to the court for an order that the infringing copy or article be delivered up to him or to such other person as the court may direct.

(2)An application shall not be made after the end of the period specified in section 113 (period after which remedy of delivery up not available); and no order shall be made unless the court also makes, or it appears to the court that there are grounds for making, an order under section 114 (order as to disposal of infringing copy or other article).

(3)A person to whom an infringing copy or other article is delivered up in pursuance of an order under this section shall, if an order under section 114 is not made, retain it pending the making of an order, or the decision not to make an order, under that section.

(4)Nothing in this section affects any other power of the court.

Modifications etc. (not altering text)

C47S. 99 extended by S.I. 1991/724, art. 2(1)(n)

100 Right to seize infringing copies and other articles.U.K.

(1)An infringing copy of a work which is found exposed or otherwise immediately available for sale or hire, and in respect of which the copyright owner would be entitled to apply for an order under section 99, may be seized and detained by him or a person authorised by him.

The right to seize and detain is exercisable subject to the following conditions and is subject to any decision of the court under section 114.

(2)Before anything is seized under this section notice of the time and place of the proposed seizure must be given to a local police station.

(3)A person may for the purpose of exercising the right conferred by this section enter premises to which the public have access but may not seize anything in the possession, custody or control of a person at a permanent or regular place of business of his, and may not use any force.

(4)At the time when anything is seized under this section there shall be left at the place where it was seized a notice in the prescribed form containing the prescribed particulars as to the person by whom or on whose authority the seizure is made and the grounds on which it is made.

(5)In this section—

“premises” includes land, buildings, moveable structures, vehicles, vessels, aircraft and hovercraft; and “prescribed” means prescribed by order of the Secretary of State.

(6)An order of the Secretary of State under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Rights and remedies of exclusive licenseeU.K.

101 Rights and remedies of exclusive licensee.U.K.

(1)An exclusive licensee has, except against the copyright owner, the same rights and remedies in respect of matters occurring after the grant of the licence as if the licence had been an assignment.

(2)His rights and remedies are concurrent with those of the copyright owner; and references in the relevant provisions of this Part to the copyright owner shall be construed accordingly.

(3)In an action brought by an exclusive licensee by virtue of this section a defendant may avail himself of any defence which would have been available to him if the action had been brought by the copyright owner.

Modifications etc. (not altering text)

C48Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

[F277101ACertain infringements actionable by a non-exclusive licenseeU.K.

(1)A non-exclusive licensee may bring an action for infringement of copyright if—

(a)the infringing act was directly connected to a prior licensed act of the licensee; and

(b)the licence—

(i)is in writing and is signed by or on behalf of the copyright owner; and

(ii)expressly grants the non-exclusive licensee a right of action under this section.

(2)In an action brought under this section, the non-exclusive licensee shall have the same rights and remedies available to him as the copyright owner would have had if he had brought the action.

(3)The rights granted under this section are concurrent with those of the copyright owner and references in the relevant provisions of this Part to the copyright owner shall be construed accordingly.

(4)In an action brought by a non-exclusive licensee by virtue of this section a defendant may avail himself of any defence which would have been available to him if the action had been brought by the copyright owner.

(5)Subsections (1) to (4) of section 102 shall apply to a non-exclusive licensee who has a right of action by virtue of this section as it applies to an exclusive licensee.

(6) In this section a “ non-exclusive licensee ” means the holder of a licence authorising the licensee to exercise a right which remains exercisable by the copyright owner. ]

Textual Amendments

102 Exercise of concurrent rights.U.K.

(1)Where an action for infringement of copyright brought by the copyright owner or an exclusive licensee relates (wholly or partly) to an infringement in respect of which they have concurrent rights of action, the copyright owner or, as the case may be, the exclusive licensee may not, without the leave of the court, proceed with the action unless the other is either joined as a plaintiff or added as a defendant.

(2)A copyright owner or exclusive licensee who is added as a defendant in pursuance of subsection (1) is not liable for any costs in the action unless he takes part in the proceedings.

(3)The above provisions do not affect the granting of interlocutory relief on an application by a copyright owner or exclusive licensee alone.

(4)Where an action for infringement of copyright is brought which relates (wholly or partly) to an infringement in respect of which the copyright owner and an exclusive licensee have or had concurrent rights of action—

(a)the court shall in assessing damages take into account—

(i)the terms of the licence, and

(ii)any pecuniary remedy already awarded or available to either of them in respect of the infringement;

(b)no account of profits shall be directed if an award of damages has been made, or an account of profits has been directed, in favour of the other of them in respect of the infringement; and

(c)the court shall if an account of profits is directed apportion the profits between them as the court considers just, subject to any agreement between them;

and these provisions apply whether or not the copyright owner and the exclusive licensee are both parties to the action.

(5)The copyright owner shall notify any exclusive licensee having concurrent rights before applying for an order under section 99 (order for delivery up) or exercising the right conferred by section 100 (right of seizure); and the court may on the application of the licensee make such order under section 99 or, as the case may be, prohibiting or permitting the exercise by the copyright owner of the right conferred by section 100, as it thinks fit having regard to the terms of the licence.

Modifications etc. (not altering text)

C49Ss. 90-93, 96-98, 101, 102 applied (1.1.1998) by S.I. 1997/3032, reg. 23 (with Pt. IV)

C50S. 102(5) extended by S.I.1991/724, art. 2(1)(n)

Remedies for infringement of moral rightsU.K.

103 Remedies for infringement of moral rights.U.K.

(1)An infringement of a right conferred by Chapter IV (moral rights) is actionable as a breach of statutory duty owed to the person entitled to the right.

(2)In proceedings for infringement of the right conferred by section 80 (right to object to derogatory treatment of work) the court may, if it thinks it is an adequate remedy in the circumstances, grant an injunction on terms prohibiting the doing of any act unless a disclaimer is made, in such terms and in such manner as may be approved by the court, dissociating the author or director from the treatment of the work.

PresumptionsU.K.

104 Presumptions relevant to literary, dramatic, musical and artistic works.U.K.

(1)The following presumptions apply in proceedings brought by virtue of this Chapter with respect to a literary, dramatic, musical or artistic work.

(2)Where a name purporting to be that of the author appeared on copies of the work as published or on the work when it was made, the person whose name appeared shall be presumed, until the contrary is proved—

(a)to be the author of the work;

(b)to have made it in circumstances not falling within section 11(2), 163, 165 or 168 (works produced in course of employment, Crown copyright, Parliamentary copyright or copyright of certain international organisations).

(3)In the case of a work alleged to be a work of joint authorship, subsection (2) applies in relation to each person alleged to be one of the authors.

(4)Where no name purporting to be that of the author appeared as mentioned in subsection (2) but—

(a)the work qualifies for copyright protection by virtue of section 155 (qualification by reference to country of first publication), and

(b)a name purporting to be that of the publisher appeared on copies of the work as first published,

the person whose name appeared shall be presumed, until the contrary is proved, to have been the owner of the copyright at the time of publication.

(5)If the author of the work is dead or the identity of the author cannot be ascertained by reasonable inquiry, it shall be presumed, in the absence of evidence to the contrary—

(a)that the work is an original work, and

(b)that the plaintiff’s allegations as to what was the first publication of the work and as to the country of first publication are correct.

105 Presumptions relevant to sound recordings and films.U.K.

(1)In proceedings brought by virtue of this Chapter with respect to a sound recording, where copies of the recording as issued to the public bear a label or other mark stating—

(a)that a named person was the owner of copyright in the recording at the date of issue of the copies, or

(b)that the recording was first published in a specified year or in a specified country,

the label or mark shall be admissible as evidence of the facts stated and shall be presumed to be correct until the contrary is proved.

(2)In proceedings brought by virtue of this Chapter with respect to a film, where copies of the film as issued to the public bear a statement—

(a)that a named person was the [F278director or producer] of the film,

[F279(aa)that a named person was the principal director, the author of the screenplay, the author of the dialogue or the composer of music specifically created for and used in the film,]

(b)that a named person was the owner of copyright in the film at the date of issue of the copies, or

(c)that the film was first published in a specified year or in a specified country,

the statement shall be admissible as evidence of the facts stated and shall be presumed to be correct until the contrary is proved.

(3)In proceedings brought by virtue of this Chapter with respect to a computer program, where copies of the program are issued to the public in electronic form bearing a statement—

(a)that a named person was the owner of copyright in the program at the date of issue of the copies, or

(b)that the program was first published in a specified country or that copies of it were first issued to the public in electronic form in a specified year,

the statement shall be admissible as evidence of the facts stated and shall be presumed to be correct until the contrary is proved.

(4)The above presumptions apply equally in proceedings relating to an infringement alleged to have occurred before the date on which the copies were issued to the public.

(5)In proceedings brought by virtue of this Chapter with respect to a film, where the film as shown in public [F280or communicated to the public] bears a statement—

(a)that a named person was the [F278director or producer] of the film, or

[F281(aa)that a named person was the principal director of the film, the author of the screenplay, the author of the dialogue or the composer of music specifically created for and used in the film, or,]

(b)that a named person was the owner of copyright in the film immediately after it was made,

the statement shall be admissible as evidence of the facts stated and shall be presumed to be correct until the contrary is proved.

This presumption applies equally in proceedings relating to an infringement alleged to have occurred before the date on which the film was shown in public, broadcast or included in a cable programme service.

[F282(6)For the purposes of this section, a statement that a person was the director of a film shall be taken, unless a contrary indication appears, as meaning that he was the principal director of the film.]

Textual Amendments

F278Words in s. 105(2)(a)(5)(a) substituted (1.12.1996 with effect in relation to films made on or after 1.7.1994) by S.I. 1996/2967, regs. 18(4)(a), 36 (with Pt. III)

F279S. 105(2)(aa) inserted (1.1.1996) by S.I. 1995/3297, Pt. II reg. 5(4) (with Pt. III)

F281S. 105(5)(aa) inserted (1.12.1996 with effect in relation to films made on or after 1.7.1994) by S.I. 1996/2967, reg. 18(4)(b) (with Pt. III)

F282S. 105(6) added (1.12.1996 with effect in relation to films made on or after 1.7.1994) by S.I. 1996/2967, reg. 18(4)(c) (with Pt. III)

106 Presumptions relevant to works subject to Crown copyright.U.K.

In proceedings brought by virtue of this Chapter with respect to a literary, dramatic or musical work in which Crown copyright subsists, where there appears on printed copies of the work a statement of the year in which the work was first published commercially, that statement shall be admissible as evidence of the fact stated and shall be presumed to be correct in the absence of evidence to the contrary.

OffencesU.K.

107 Criminal liability for making or dealing with infringing articles, &c.U.K.

(1)A person commits an offence who, without the licence of the copyright owner—

(a)makes for sale or hire, or

(b)imports into the United Kingdom otherwise than for his private and domestic use, or

(c)possesses in the course of a business with a view to committing any act infringing the copyright, or

(d)in the course of a business —

(i)sells or lets for hire, or

(ii)offers or exposes for sale or hire, or

(iii)exhibits in public, or

(iv)distributes, or

(e)distributes otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,

an article which is, and which he knows or has reason to believe is, an infringing copy of a copyright work.

(2)A person commits an offence who—

(a)makes an article specifically designed or adapted for making copies of a particular copyright work, or

(b)has such an article in his possession,

knowing or having reason to believe that it is to be used to make infringing copies for sale or hire or for use in the course of a business.

[F283(2A)A person (“P”) who infringes copyright in a work by communicating the work to the public commits an offence if P—

(a)knows or has reason to believe that P is infringing copyright in the work, and

(b)either—

(i)intends to make a gain for P or another person, or

(ii)knows or has reason to believe that communicating the work to the public will cause loss to the owner of the copyright, or will expose the owner of the copyright to a risk of loss.

(2B)For the purposes of subsection (2A)—

(a)“gain” and “loss”—

(i)extend only to gain or loss in money, and

(ii)include any such gain or loss whether temporary or permanent, and

(b)“loss” includes a loss by not getting what one might get.]

(3)Where copyright is infringed (otherwise than by reception of a [F284communication to the public])—

(a)by the public performance of a literary, dramatic or musical work, or

(b)by the playing or showing in public of a sound recording or film,

any person who caused the work to be so performed, played or shown is guilty of an offence if he knew or had reason to believe that copyright would be infringed.

(4)A person guilty of an offence under subsection (1)(a), (b), (d)(iv) or (e) is liable—

(a)on summary conviction to imprisonment for a term not exceeding six months or [F285a fine], or both;

(b)on conviction on indictment to a fine or imprisonment for a term not exceeding [F286ten] years, or both.

[F287(4A)A person guilty of an offence under subsection (2A) is liable—

(a)on summary conviction to imprisonment for a term not exceeding three months or [F288a fine], or both;

(b)on conviction on indictment to a fine or imprisonment for a term not exceeding [F289ten] years, or both.]

(5)A person guilty of any other offence under this section is liable on summary conviction to imprisonment for a term not exceeding [F290three] months or a fine not exceeding level 5 on the standard scale, or both.

(6)Sections 104 to 106 (presumptions as to various matters connected with copyright) do not apply to proceedings for an offence under this section; but without prejudice to their application in proceedings for an order under section 108 below.

Textual Amendments

F283S. 107(2A)(2B) substituted for s. 107(2A) (1.10.2017) by Digital Economy Act 2017 (c. 30), ss. 32(2), 118(6) (with s. 32(6)); S.I. 2017/765, reg. 3(a)

F286Word in s. 107(4)(b) substituted (20.11.2002) by 2002 c. 25, s. 1(2)(5); S.I. 2002/2749, art. 2

F289Word in s. 107(4A)(b) substituted (1.10.2017) by Digital Economy Act 2017 (c. 30), ss. 32(3), 118(6) (with s. 32(6)); S.I. 2017/765, reg. 3(a)

[F291107A Enforcement by local weights and measures authority.U.K.

(1)It is the duty of every local weights and measures authority to enforce within their area the provisions of section 107.

F292(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Subsection (1) above does not apply in relation to the enforcement of section 107 in Northern Ireland, but it is the duty of the Department of Economic Development to enforce that section in Northern Ireland.

F293...

[F294(3A)For the investigatory powers available to a local weights and measures authority or the Department of Enterprise, Trade and Investment in Northern Ireland for the purposes of the duties in this section, see Schedule 5 to the Consumer Rights Act 2015.]

(4)Any enactment which authorises the disclosure of information for the purpose of facilitating the enforcement of the Trade Descriptions Act 1968 shall apply as if section 107 were contained in that Act and as if the functions of any person in relation to the enforcement of that section were functions under that Act.

(5)Nothing in this section shall be construed as authorising a local weights and measures authority to bring proceedings in Scotland for an offence.]

Textual Amendments

F291S. 107A inserted (6.4.2007) by 1994 c. 33, ss. 165(2), 172(2); S.I. 2007/621, art. 2

F293Words in s. 107A(3) omitted (1.10.2015) by virtue of Consumer Rights Act 2015 (c. 15), s. 100(5), Sch. 6 para. 49(3); S.I. 2015/1630, art. 3(i) (with art. 8)

108 Order for delivery up in criminal proceedings.U.K.

(1)The court before which proceedings are brought against a person for an offence under section 107 may, if satisfied that at the time of his arrest or charge—

(a)he had in his possession, custody or control in the course of a business an infringing copy of a copyright work, or

(b)he had in his possession, custody or control an article specifically designed or adapted for making copies of a particular copyright work, knowing or having reason to believe that it had been or was to be used to make infringing copies,

order that the infringing copy or article be delivered up to the copyright owner or to such other person as the court may direct.

(2)For this purpose a person shall be treated as charged with an offence—

(a)in England, Wales and Northern Ireland, when he is orally charged or is served with a summons or indictment;

(b)in Scotland, when he is cautioned, charged or served with a complaint or indictment.

(3)An order may be made by the court of its own motion or on the application of the prosecutor (or, in Scotland, the Lord Advocate or procurator-fiscal), and may be made whether or not the person is convicted of the offence, but shall not be made—

(a)after the end of the period specified in section 113 (period after which remedy of delivery up not available), or

(b)if it appears to the court unlikely that any order will be made under section 114 (order as to disposal of infringing copy or other article).

(4)An appeal lies from an order made under this section by a magistrates’ court—

(a)in England and Wales, to the Crown Court, and

(b)in Northern Ireland, to the county court;

and in Scotland, where an order has been made under this section, the person from whose possession, custody or control the infringing copy or article has been removed may, without prejudice to any other form of appeal under any rule of law, appeal against that order in the same manner as against sentence.

(5)A person to whom an infringing copy or other article is delivered up in pursuance of an order under this section shall retain it pending the making of an order, or the decision not to make an order, undersection 114.

(6)Nothing in this section affects the powers of the court under [F295section 153 of the Sentencing Code ], [F296Part II of the Proceeds of Crime (Scotland) Act 1995] or [F297Article 11 of the Criminal Justice (Northern Ireland) Order 1994] (general provisions as to forfeiture in criminal proceedings).

Textual Amendments

F296Words in s. 108(6) substituted (1.4.1996) by virtue of 1995 c. 40, ss. 5, 7(2), Sch. 4 para. 70(2)

F297Words in s. 108(6) substituted (9.1.1995) by S.I. 1994/2795 (N.I. 15), art. 26(1), Sch. 2 para. 13; S.R. 1994/446, art. 2

109 Search warrants.U.K.

(1)Where a justice of the peace (in Scotland, a sheriff or justice of the peace) is satisfied by information on oath given by a constable (in Scotland, by evidence on oath) that there are reasonable grounds for believing—

(a)that an offence under [F298section 107(1), (2) or (2A)] has been or is about to be committed in any premises, and

(b)that evidence that such an offence has been or is about to be committed is in those premises,

he may issue a warrant authorising a constable to enter and search the premises, using such reasonable force as is necessary.

(2)The power conferred by subsection (1) does not, in England and Wales, extend to authorising a search for material of the kinds mentioned in section 9(2) of the M6Police and Criminal Evidence Act 1984 (certain classes of personal or confidential material).

(3)A warrant under this section—

(a)may authorise persons to accompany any constable executing the warrant, and

(b)remains in force for [F299three months] from the date of its issue.

(4)In executing a warrant issued under this section a constable may seize an article if he reasonably believes that it is evidence that any offence under [F300section 107(1), (2) or (2A)] has been or is about to be committed.

(5)In this section “premises” includes land, buildings [F301fixed or], moveable structures, vehicles, vessels, aircraft and hovercraft.

Textual Amendments

F301Words in s. 109(5) inserted (20.11.2002) by 2002 c. 25, s. 2(2)(c); S.I. 2002/2749, art. 2

Modifications etc. (not altering text)

C51S. 109(4): power of seizure extended (1.4.2003) by 2001 c. 16, ss. 50, 52-54, 68, 138(2) Sch. 1 Pt. 1 para. 48; S.I. 2003/708, art. 2

S. 109(4) modified (E.W.N.I.) (1.4.2003) by 2001 c. 16, ss. 55, 68, 138(2), Sch. 1 Pt. 3 para. 106 (with s. 57(3)); S.I. 2003/708, art. 2

Marginal Citations

110 Offence by body corporate: liability of officers.U.K.

(1)Where an offence under section 107 committed by a body corporate is proved to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2)In relation to a body corporate whose affairs are managed by its members “director” means a member of the body corporate.

Provision for preventing importation of infringing copiesU.K.

111 Infringing copies may be treated as prohibited goods.U.K.

(1)The owner of the copyright in a published literary, dramatic or musical work may give notice in writing to the Commissioners of Customs and Excise—

(a)that he is the owner of the copyright in the work, and

(b)that he requests the Commissioners, for a period specified in the notice, to treat as prohibited goods printed copies of the work which are infringing copies.

(2)The period specified in a notice under subsection (1) shall not exceed five years and shall not extend beyond the period for which copyright is to subsist.

(3)The owner of the copyright in a sound recording or film may give notice in writing to the Commissioners of Customs and Excise—

(a)that he is the owner of the copyright in the work,

(b)that infringing copies of the work are expected to arrive in the United Kingdom at a time and a place specified in the notice, and

(c)that he requests the Commissioners to treat the copies as prohibited goods.

[F302(3A)The Commissioners may treat as prohibited goods only infringing copies of works which arrive in the United Kingdom—

(a)from outside the European Economic Area, or

(b)from within that Area but not having been entered for free circulation.

[F303(3B)This section does not apply to goods placed in, or expected to be placed in, one of the situations referred to in Article 1(1), in respect of which an application may be made under [F304Article 3 of Regulation (EU) No 608/2013 of the European Parliament and of the Council of 12 June 2013 concerning customs enforcement of intellectual property rights].]]

(4)When a notice is in force under this section the importation of goods to which the notice relates, otherwise than by a person for his private and domestic use, [F305subject to subsections (3A) and (3B), is prohibited]; but a person is not by reason of the prohibition liable to any penalty other than forfeiture of the goods.

Textual Amendments

F302S. 111(3A)(3B) inserted (1.7.1995) by S.I. 1995/1445, reg. 2(2)

F305Words in s. 111(4) substituted (1.7.1995) by S.I. 1995/1445, reg. 2(3)

112 Power of Commissioners of Customs and Excise to make regulations.U.K.

(1)The Commissioners of Customs and Excise may make regulations prescribing the form in which notice is to be given under section 111 and requiring a person giving notice—

(a)to furnish the Commissioners with such evidence as may be specified in the regulations, either on giving notice or when the goods are imported, or at both those times, and

(b)to comply with such other conditions as may be specified in the regulations.

(2)The regulations may, in particular, require a person giving such a notice—

(a)to pay such fees in respect of the notice as may be specified by the regulations;

(b)to give such security as may be so specified in respect of any liability or expense which the Commissioners may incur in consequence of the notice by reason of the detention of any article or anything done to an article detained;

(c)to indemnify the Commissioners against any such liability or expense, whether security has been given or not.

(3)The regulations may make different provision as respects different classes of case to which they apply and may include such incidental and supplementary provisions as the Commissioners consider expedient.

(4)Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5)F306. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

SupplementaryU.K.

113 Period after which remedy of delivery up not available.U.K.

(1)An application for an order under section 99 (order for delivery up in civil proceedings) may not be made after the end of the period of six years from the date on which the infringing copy or article in question was made, subject to the following provisions.

(2)If during the whole or any part of that period the copyright owner—

(a)is under a disability, or

(b)is prevented by fraud or concealment from discovering the facts entitling him to apply for an order,

an application may be made at any time before the end of the period of six years from the date on which he ceased to be under a disability or, as the case may be, could with reasonable diligence have discovered those facts.

(3)In subsection (2) “disability”—

(a)in England and Wales, has the same meaning as in the M7Limitation Act 1980;

(b)in Scotland, means legal disability within the meaning of the M8Prescription and Limitation (Scotland) Act 1973;

(c)in Northern Ireland, has the same meaning as in the M9Statute of Limitations (Northern Ireland) 1958.

(4)An order under section 108 (order for delivery up in criminal proceedings) shall not, in any case, be made after the end of the period of six years from the date on which the infringing copy or article in question was made.

Marginal Citations

114 Order as to disposal of infringing copy or other article.U.K.

(1)An application may be made to the court for an order that an infringing copy or other article delivered up in pursuance of an order under section 99 or 108, or seized and detained in pursuance of the right conferred by section 100, shall be—

(a)forfeited to the copyright owner, or

(b)destroyed or otherwise dealt with as the court may think fit,

or for a decision that no such order should be made.

(2)In considering what order (if any) should be made, the court shall consider whether other remedies available in an action for infringement of copyright would be adequate to compensate the copyright owner and to protect his interests.

(3)Provision shall be made by rules of court as to the service of notice on persons having an interest in the copy or other articles, and any such person is entitled—

(a)to appear in proceedings for an order under this section, whether or not he was served with notice, and

(b)to appeal against any order made, whether or not he appeared;

and an order shall not take effect until the end of the period within which notice of an appeal may be given or, if before the end of that period notice of appeal is duly given, until the final determination or abandonment of the proceedings on the appeal.

(4)Where there is more than one person interested in a copy or other article, the court shall make such order as it thinks just and may (in particular) direct that the article be sold, or otherwise dealt with, and the proceeds divided.

(5)If the court decides that no order should be made under this section, the person in whose possession, custody or control the copy or other article was before being delivered up or seized is entitled to its return.

(6)References in this section to a person having an interest in a copy or other article include any person in whose favour an order could be made in respect of it

[F307(a)under this section or under section 204 or 231 of this Act;

(b)under section 24D of the Registered Designs Act 1949;

(c)under section 19 of Trade Marks Act 1994 F308...; or

(d)under regulation 1C of the Community Design Regulations 2005 (SI 2005/2339).]

Textual Amendments

F308Words in s. 114(6)(c) omitted (31.12.2020) by virtue of The Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/269), reg. 1(1), Sch. 5 para. 2; 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C52S. 114 extended by S.I. 1991/724, art. 2(1)(n)

[F309114A Forfeiture of infringing copies, etc.: England and Wales or Northern IrelandU.K.

(1)In England and Wales or Northern Ireland where there have come into the possession of any person in connection with the investigation or prosecution of a relevant offence—

(a)infringing copies of a copyright work, or

(b)articles specifically designed or adapted for making copies of a particular copyright work,

that person may apply under this section for an order for the forfeiture of the infringing copies or articles.

(2)For the purposes of this section “relevant offence” means—

(a)an offence under [F310section 107(1), (2) or (2A)] (criminal liability for making or dealing with infringing articles, etc.),

(b)an offence under the Trade Descriptions Act 1968 (c. 29),

[F311(ba)an offence under the Business Protection from Misleading Marketing Regulations 2008,

(bb)an offence under [F312Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024], or]

(c)an offence involving dishonesty or deception.

(3)An application under this section may be made—

(a)where proceedings have been brought in any court for a relevant offence relating to some or all of the infringing copies or articles, to that court, or

(b)where no application for the forfeiture of the infringing copies or articles has been made under paragraph (a), by way of complaint to a magistrates’ court.

(4)On an application under this section, the court shall make an order for the forfeiture of any infringing copies or articles only if it is satisfied that a relevant offence has been committed in relation to the infringing copies or articles.

(5)A court may infer for the purposes of this section that such an offence has been committed in relation to any infringing copies or articles if it is satisfied that such an offence has been committed in relation to infringing copies or articles which are representative of the infringing copies or articles in question (whether by reason of being of the same design or part of the same consignment or batch or otherwise).

(6)Any person aggrieved by an order made under this section by a magistrates’ court, or by a decision of such a court not to make such an order, may appeal against that order or decision—

(a)in England and Wales, to the Crown Court, or

(b)in Northern Ireland, to the county court.

(7)An order under this section may contain such provision as appears to the court to be appropriate for delaying the coming into force of the order pending the making and determination of any appeal (including any application under section 111 of the Magistrates’ Courts Act 1980 (c. 43) or Article 146 of the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26)) (statement of case)).

(8)Subject to subsection (9), where any infringing copies or articles are forfeited under this section they shall be destroyed in accordance with such directions as the court may give.

(9)On making an order under this section the court may direct that the infringing copies or articles to which the order relates shall (instead of being destroyed) be forfeited to the owner of the copyright in question or dealt with in such other way as the court considers appropriate.]

Textual Amendments

F309Ss. 114A, 114B inserted (20.11.2002) by 2002 c. 25, s. 3; S.I. 2002/2749, art. 2

F313114B Forfeiture of infringing copies, etc.: ScotlandU.K.

(1)In Scotland the court may make an order under this section for the forfeiture of any—

(a)infringing copies of a copyright work, or

(b)articles specifically designed or adapted for making copies of a particular copyright work.

(2)An order under this section may be made—

(a)on an application by the procurator-fiscal made in the manner specified in section 134 of the Criminal Procedure (Scotland) Act 1995 (c. 46), or

(b)where a person is convicted of a relevant offence, in addition to any other penalty which the court may impose.

(3)On an application under subsection (2)(a), the court shall make an order for the forfeiture of any infringing copies or articles only if it is satisfied that a relevant offence has been committed in relation to the infringing copies or articles.

(4)The court may infer for the purposes of this section that such an offence has been committed in relation to any infringing copies or articles if it is satisfied that such an offence has been committed in relation to infringing copies or articles which are representative of the infringing copies or articles in question (whether by reason of being of the same design or part of the same consignment or batch or otherwise).

(5)The procurator-fiscal making the application under subsection (2)(a) shall serve on any person appearing to him to be the owner of, or otherwise to have an interest in, the infringing copies or articles to which the application relates a copy of the application, together with a notice giving him the opportunity to appear at the hearing of the application to show cause why the infringing copies or articles should not be forfeited.

(6)Service under subsection (5) shall be carried out, and such service may be proved, in the manner specified for citation of an accused in summary proceedings under the Criminal Procedure (Scotland) Act 1995.

(7)Any person upon whom notice is served under subsection (5) and any other person claiming to be the owner of, or otherwise to have an interest in, infringing copies or articles to which an application under this section relates shall be entitled to appear at the hearing of the application to show cause why the infringing copies or articles should not be forfeited.

(8)The court shall not make an order following an application under subsection (2)(a)—

(a)if any person on whom notice is served under subsection (5) does not appear, unless service of the notice on that person is proved, or

(b)if no notice under subsection (5) has been served, unless the court is satisfied that in the circumstances it was reasonable not to serve such notice.

(9)Where an order for the forfeiture of any infringing copies or articles is made following an application under subsection (2)(a), any person who appeared, or was entitled to appear, to show cause why infringing copies or articles should not be forfeited may, within 21 days of the making of the order, appeal to the High Court by Bill of Suspension.

(10)Section 182(5)(a) to (e) of the Criminal Procedure (Scotland) Act 1995 (c. 46) shall apply to an appeal under subsection (9) as it applies to a stated case under Part 2 of that Act.

(11)An order following an application under subsection (2)(a) shall not take effect—

(a)until the end of the period of 21 days beginning with the day after the day on which the order is made, or

(b)if an appeal is made under subsection (9) above within that period, until the appeal is determined or abandoned.

(12)An order under subsection (2)(b) shall not take effect—

(a)until the end of the period within which an appeal against the order could be brought under the Criminal Procedure (Scotland) Act 1995, or

(b)if an appeal is made within that period, until the appeal is determined or abandoned.

(13)Subject to subsection (14), infringing copies or articles forfeited under this section shall be destroyed in accordance with such directions as the court may give.

(14)On making an order under this section the court may direct that the infringing copies or articles to which the order relates shall (instead of being destroyed) be forfeited to the owner of the copyright in question or dealt with in such other way as the court considers appropriate.

(15)For the purposes of this section—

  • [F314“relevant offence” means—

    (a)

    an offence under section 107(1), (2) or (2A) (criminal liability for making or dealing with infringing articles, etc),

    (b)

    an offence under the Trade Descriptions Act 1968,

    (c)

    an offence under the Business Protection from Misleading Marketing Regulations 2008,

    (d)

    an offence under [F315Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024], or

    (e)

    any offence involving dishonesty or deception;]

  • “the court” means—

    (a)

    in relation to an order made on an application under subsection (2)(a), the sheriff, and

    (b)

    in relation to an order made under subsection (2)(b), the court which imposed the penalty.

Textual Amendments

F313Ss. 114A, 114B inserted (20.11.2002) by 2002 c. 25, s. 3; S.I. 2002/2749, art. 2

115 Jurisdiction of county court and sheriff court.U.K.

(1)In England [F316and Wales the county court and in] Northern Ireland a county court may entertain proceedings under—

  • section 99 (order for delivery up of infringing copy or other article),

  • section 102(5) (order as to exercise of rights by copyright owner where exclusive licensee has concurrent rights), or

  • section 114 (order as to disposal of infringing copy or other article),

[F317save that, in Northern Ireland, a county court may entertain such proceedings only] where the value of the infringing copies and other articles in question does not exceed the county court limit for actions in tort.

(2)In Scotland proceedings for an order under any of those provisions may be brought in the sheriff court.

(3)Nothing in this section shall be construed as affecting the jurisdiction of the High Court or, in Scotland, the Court of Session.

Textual Amendments

F316Words in s. 115(1) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 72; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F317Words in s. 115(1) inserted by S.I. 1991/724, art. 2(8), Schedule Pt. I

Chapter VIIU.K. Copyright Licensing

Modifications etc. (not altering text)

C53Pt. 1 Ch. VII applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 17(1)-(3) (with Pt. III)

Licensing schemes and licensing bodiesU.K.

116 Licensing schemes and licensing bodies.U.K.

(1)In this Part a “licensing scheme” means a scheme setting out—

(a)the classes of case in which the operator of the scheme, or the person on whose behalf he acts, is willing to grant copyright licences, and

(b)the terms on which licences would be granted in those classes of case;

and for this purpose a “scheme” includes anything in the nature of a scheme, whether described as a scheme or as a tariff or by any other name.

(2)In this Chapter a “licensing body” means

[F318(a)a society or other organisation which has as its main object, or one of its main objects, the negotiation or granting, either as owner or prospective owner of copyright or as agent for him, of copyright licences, and whose objects include the granting of licences covering works of more than one author] [F319, or,

(b)any other organisation which is a collective management organisation as defined by regulation 2 of the Collective Management of Copyright (EU Directive) Regulations 2016].

(3)In this section “copyright licences” means licences to do, or authorise the doing of, any of the acts restricted by copyright.

(4)References in this Chapter to licences or licensing schemes covering works of more than one author do not include licences or schemes covering only—

(a)a single collective work or collective works of which the authors are the same, or

(b)works made by, or by employees of or commissioned by, a single individual, firm, company or group of companies.

For this purpose a group of companies means a holding company and its subsidiaries, within the meaning of [F320section 1159 of the Companies Act 2006].

[F321(5)Schedule A1 confers powers to provide for the regulation of licensing bodies.]

Textual Amendments

[F322Orphan works licensing and extended collective licensingU.K.

Textual Amendments

F322Ss. 116A-116D and cross-heading inserted (25.4.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 77(3), 103(1)

116APower to provide for licensing of orphan worksU.K.

(1)The Secretary of State may by regulations provide for the grant of licences in respect of works that qualify as orphan works under the regulations.

(2)The regulations may—

(a)specify a person or a description of persons authorised to grant licences, or

(b)provide for a person designated in the regulations to specify a person or a description of persons authorised to grant licences

(3)The regulations must provide that, for a work to qualify as an orphan work, it is a requirement that the owner of copyright in it has not been found after a diligent search made in accordance with the regulations.

(4)The regulations may provide for the granting of licences to do, or authorise the doing of, any act restricted by copyright that would otherwise require the consent of the missing owner.

(5)The regulations must provide for any licence—

(a)to have effect as if granted by the missing owner;

(b)not to give exclusive rights;

(c)not to be granted to a person authorised to grant licences.

(6)The regulations may apply to a work although it is not known whether copyright subsists in it, and references to a missing owner and a right or interest of a missing owner are to be read as including references to a supposed owner and a supposed right or interest.

116BExtended collective licensingU.K.

(1)The Secretary of State may by regulations provide for a licensing body that applies to the Secretary of State under the regulations to be authorised to grant copyright licences in respect of works in which copyright is not owned by the body or a person on whose behalf the body acts.

(2)An authorisation must specify—

(a)the types of work to which it applies, and

(b)the acts restricted by copyright that the licensing body is authorised to license.

(3)The regulations must provide for the copyright owner to have a right to limit or exclude the grant of licences by virtue of the regulations.

(4)The regulations must provide for any licence not to give exclusive rights.

(5) In this section “ copyright licences ” has the same meaning as in section 116.

(6)Nothing in this section applies in relation to Crown copyright or Parliamentary copyright.

116CGeneral provision about licensing under sections 116A and 116BU.K.

(1)This section and section 116D apply to regulations under sections 116A and 116B.

(2)The regulations may provide for a body to be or remain authorised to grant licences only if specified requirements are met, and for a question whether they are met to be determined by a person, and in a manner, specified in the regulations.

(3)The regulations may specify other matters to be taken into account in any decision to be made under the regulations as to whether to authorise a person to grant licences.

(4)The regulations must provide for the treatment of any royalties or other sums paid in respect of a licence, including—

(a)the deduction of administrative costs;

(b)the period for which sums must be held;

(c)the treatment of sums after that period (as bona vacantia or otherwise).

(5)The regulations must provide for circumstances in which an authorisation to grant licences may be withdrawn, and for determining the rights and obligations of any person if an authorisation is withdrawn.

(6)The regulations may include other provision for the purposes of authorisation and licensing, including in particular provision—

(a)for determining the rights and obligations of any person if a work ceases to qualify as an orphan work (or ceases to qualify by reference to any copyright owner), or if a rights owner exercises the right referred to in section 116B(3), while a licence is in force;

(b)about maintenance of registers and access to them;

(c)permitting the use of a work for incidental purposes including an application or search;

(d)for a right conferred by section 77 to be treated as having been asserted in accordance with section 78;

(e)for the payment of fees to cover administrative expenses.

116DRegulations under sections 116A and 116BU.K.

(1)The power to make regulations includes power—

(a)to make incidental, supplementary or consequential provision, including provision extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it;

(b)to make transitional, transitory or saving provision;

(c)to make different provision for different purposes.

(2)Regulations under any provision may amend this Part, or any other enactment or subordinate legislation passed or made before that provision comes into force, for the purpose of making consequential provision or extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it.

(3)Regulations may make provision by reference to guidance issued from time to time by any person.

(4)The power to make regulations is exercisable by statutory instrument.

(5)A statutory instrument containing regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.]

References and applications with respect to licensing schemesU.K.

[F323117 Licensing schemes to which following sections apply.U.K.

Sections 118 to 123 (references and applications with respect to licensing schemes) apply to licensing schemes which are operated by licensing bodies and cover works of more than one author, so far as they relate to licences for—

(a)copying the work,

(b)rental or lending of copies of the work to the public,

(c)performing, showing or playing the work in public, or

[F324(d)communicating the work to the public;]

and references in those sections to a licensing scheme shall be construed accordingly.]

Textual Amendments

F323S. 117 substituted (1.12.1996) by S.I. 1996/2967, reg. 15(2) (with Pt. III)

118 Reference of proposed licensing scheme to tribunal.U.K.

(1)The terms of a licensing scheme proposed to be operated by a licensing body may be referred to the Copyright Tribunal by an organisation claiming to be representative of persons claiming that they require licences in cases of a description to which the scheme would apply, either generally or in relation to any description of case.

(2)The Tribunal shall first decide whether to entertain the reference, and may decline to do so on the ground that the reference is premature.

(3)If the Tribunal decides to entertain the reference it shall considerthe matter referred and make such order, either confirming or varying the proposed scheme, either generally or so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(4)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

119 Reference of licensing scheme to tribunal.U.K.

(1)If while a licensing scheme is in operation a dispute arises between the operator of the scheme and—

(a)a person claiming that he requires a licence in a case of a description to which the scheme applies, or

(b)an organisation claiming to be representative of such persons,

that person or organisation may refer the scheme to the Copyright Tribunal in so far as it relates to cases of that description.

(2)A scheme which has been referred to the Tribunal under this section shall remain in operation until proceedings on the reference are concluded.

(3)The Tribunal shall consider the matter in dispute and make such order, either confirming or varying the scheme so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(4)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

120 Further reference of scheme to tribunal.U.K.

(1)Where the Copyright Tribunal has on a previous reference of a licensing scheme under [F325section 118, 119 or 128A], or under this section, made an order with respect to the scheme, then, while the order remains in force—

(a)the operator of the scheme,

(b)a person claiming that he requires a licence in a case of the description to which the order applies, or

(c)an organisation claiming to be representative of such persons,

may refer the scheme again to the Tribunal so far as it relates to cases of that description.

(2)A licensing scheme shall not, except with the special leave of the Tribunal, be referred again to the Tribunal in respect of the same description of cases—

(a)within twelve months from the date of the order on the previous reference, or

(b)if the order was made so as to be in force for 15 months or less, until the last three months before the expiry of the order.

(3)A scheme which has been referred to the Tribunal under this section shall remain in operation until proceedings on the reference are concluded.

(4)The Tribunal shall consider the matter in dispute and make such order, either confirming, varying or further varying the scheme so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(5)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Textual Amendments

121 Application for grant of licence in connection with licensing scheme.U.K.

(1)A person who claims, in a case covered by a licensing scheme, that the operator of the scheme has refused to grant him or procure the grant to him of a licence in accordance with the scheme, or has failed to do so within a reasonable time after being asked, may apply to the Copyright Tribunal.

(2)A person who claims, in a case excluded from a licensing scheme, that the operator of the scheme either—

(a)has refused to grant him a licence or procure the grant to him of a licence, or has failed to do so within a reasonable time of being asked, and that in the circumstances it is unreasonable that a licence should not be granted, or

(b)proposes terms for a licence which are unreasonable,

may apply to the Copyright Tribunal.

(3)A case shall be regarded as excluded from a licensing scheme for the purposes of subsection (2) if—

(a)the scheme provides for the grant of licences subject to terms excepting matters from the licence and the case falls within such an exception, or

(b)the case is so similar to those in which licences are granted under the scheme that it is unreasonable that it should not be dealt with in the same way.

(4)If the Tribunal is satisfied that the claim is well-founded, it shall make an order declaring that, in respect of the matters specified in the order, the applicant is entitled to a licence on such terms as the Tribunal may determine to be applicable in accordance with the scheme or, as the case may be, to be reasonable in the circumstances.

(5)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

122 Application for review of order as to entitlement to licence.U.K.

(1)Where the Copyright Tribunal has made an order under section 121 that a person is entitled to a licence under a licensing scheme, the operator of the scheme or the original applicant may apply to the Tribunal to review its order.

(2)An application shall not be made, except with the special leave of the Tribunal—

(a)within twelve months from the date of the order, or of the decision on a previous application under this section, or

(b)if the order was made so as to be in force for 15 months or less, or as a result of the decision on a previous application under this section is due to expire within 15 months of that decision, until the last three months before the expiry date.

(3)The Tribunal shall on an application for review confirm or vary its order as the Tribunal may determine to be reasonable having regard to the terms applicable in accordance with the licensing scheme or, as the case may be, the circumstances of the case.

123 Effect of order of tribunal as to licensing scheme.U.K.

(1)A licensing scheme which has been confirmed or varied by the Copyright Tribunal—

(a)under section 118 (reference of terms of proposed scheme), or

(b)under section 119 or 120 (reference of existing scheme to Tribunal),

shall be in force or, as the case may be, remain in operation, so far as it relates to the description of case in respect of which the order was made, so long as the order remains in force.

(2)While the order is in force a person who in a case of a class to which the order applies—

(a)pays to the operator of the scheme any charges payable under the scheme in respect of a licence covering the case in question or, if the amount cannot be ascertained, gives an undertaking to the operator to pay them when ascertained, and

(b)complies with the other terms applicable to such a licence under the scheme,

shall be in the same position as regards infringement of copyright as if he had at all material times been the holder of a licence granted by the owner of the copyright in question in accordance with the scheme.

(3)The Tribunal may direct that the order, so far as it varies the amount of charges payable, has effect from a date before that on which it is made, but not earlier than the date on which the reference was made or, if later, on which the scheme came into operation.

If such a direction is made—

(a)any necessary repayments, or further payments, shall be made in respect of charges already paid, and

(b)the reference in subsection (2)(a) to the charges payable under the scheme shall be construed as a reference to the charges so payable by virtue of the order.

No such direction may be made where subsection (4) below applies.

(4)An order of the Tribunal under section 119 or 120 made with respect to a scheme which is certified for any purpose under section 143 has effect, so far as it varies the scheme by reducing the charges payable for licences, from the date on which the reference was made to the Tribunal.

(5)Where the Tribunal has made an order under section 121 (order as to entitlement to licence under licensing scheme) and the order remains in force, the person in whose favour the order is made shall if he—

(a)pays to the operator of the scheme any charges payable in accordance with the order or, if the amount cannot be ascertained, gives an undertaking to pay the charges when ascertained, and

(b)complies with the other terms specified in the order,

be in the same position as regards infringement of copyright as if he had at all material times been the holder of a licence granted by the owner of the copyright in question on the terms specified in the order.

References and applications with respect to licensing by licensing bodiesU.K.

[F326124 Licences to which following sections apply.U.K.

Sections 125 to 128 (references and applications with respect to licensing by licensing bodies) apply to licences which are granted by a licensing body otherwise than in pursuance of a licensing scheme and cover works of more than one author, so far as they authorise—

(a)copying the work,

(b)rental or lending of copies of the work to the public,

(c)performing, showing or playing the work in public, or

[F327(d)communicating the work to the public;]

and references in those sections to a licence shall be construed accordingly.]

Textual Amendments

F326S. 124 substituted (1.12.1996) by S.I. 1996/2967, reg. 15(3) (with Pt. III)

125 Reference to tribunal of proposed licence.U.K.

(1)The terms on which a licensing body proposes to grant a licence may be referred to the Copyright Tribunal by the prospective licensee.

(2)The Tribunal shall first decide whether to entertain the reference, and may decline to do so on the ground that the reference is premature.

(3)If the Tribunal decides to entertain the reference it shall consider the terms of the proposed licence and make such order, either confirming or varying the terms, as it may determine to be reasonable in the circumstances.

(4)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

126 Reference to tribunal of expiring licence.U.K.

(1)A licensee under a licence which is due to expire, by effluxion of time or as a result of notice given by the licensing body, may apply to the Copyright Tribunal on the ground that it is unreasonable in the circumstances that the licence should cease to be in force.

(2)Such an application may not be made until the last three months before the licence is due to expire.

(3)A licence in respect of which a reference has been made to the Tribunal shall remain in operation until proceedings on the reference are concluded.

(4)If the Tribunal finds the application well-founded, it shall make an order declaring that the licensee shall continue to be entitled to the benefit of the licence on such terms as the Tribunal may determine to be reasonable in the circumstances.

(5)An order of the Tribunal under this section may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

127 Application for review of order as to licence.U.K.

(1)Where the Copyright Tribunal has made an order under [F328section 125, 126 or 128B (where that order did not relate to a licensing scheme)], the licensing body or the person entitled to the benefit of the order may apply to the Tribunal to review its order.

(2)An application shall not be made, except with the special leave of the Tribunal—

(a)within twelve months from the date of the order or of the decision on a previous application under this section, or

(b)if the order was made so as to be in force for 15 months or less, or as a result of the decision on a previous application under this section is due to expire within 15 months of that decision, until the last three months before the expiry date.

(3)The Tribunal shall on an application for review confirm or vary its order as the Tribunal may determine to be reasonable in the circumstances.

Textual Amendments

128 Effect of order of tribunal as to licence.U.K.

(1)Where the Copyright Tribunal has made an order under section 125 or 126 and the order remains in force, the person entitled to the benefit of the order shall if he—

(a)pays to the licensing body any charges payable in accordance with the order or, if the amount cannot be ascertained, gives an undertaking to pay the charges when ascertained, and

(b)complies with the other terms specified in the order,

be in the same position as regards infringement of copyright as if he had at all material times been the holder of a licence granted by the owner of the copyright in question on the terms specified in the order.

(2)The benefit of the order may be assigned—

(a)in the case of an order under section 125, if assignment is not prohibited under the terms of the Tribunal’s order; and

(b)in the case of an order under section 126, if assignment was not prohibited under the terms of the original licence.

(3)The Tribunal may direct that an order under section 125 or 126, or an order under section 127 varying such an order, so far as it varies the amount of charges payable, has effect from a date before that on which it is made, but not earlier than the date on which the reference or application was made or, if later, on which the licence was granted or, as the case may be, was due to expire.

If such a direction is made—

(a)any necessary repayments, or further payments, shall be made in respect of charges already paid, and

(b)the reference in subsection (1)(a) to the charges payable in accordance with the order shall be construed, where the order is varied by a later order, as a reference to the charges so payable by virtue of the later order.

[F329128ANotification of licence or licensing scheme for excepted sound recordingsU.K.

F330 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

128BReferences to the Tribunal by the Secretary of State under section 128AU.K.

F331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

Textual Amendments

Factors to be taken into account in certain classes of caseU.K.

129 General considerations: unreasonable discrimination.U.K.

In determining what is reasonable on a reference or application under this Chapter relating to a licensing scheme or licence, the Copyright Tribunal shall have regard to—

(a)the availability of other schemes, or the granting of other licences, to other persons in similar circumstances, and

(b)the terms of those schemes or licences,

and shall exercise its powers so as to secure that there is no unreasonable discrimination between licensees, or prospective licensees, under the scheme or licence to which the reference or application relates and licensees under other schemes operated by, or other licences granted by, the same person.

130 Licences for reprographic copying.U.K.

Where a reference or application is made to the Copyright Tribunal under this Chapter relating to the licensing of reprographic copying of published literary, dramatic, musical or artistic works, or the typographical arrangement of published editions, the Tribunal shall have regard to—

(a)the extent to which published editions of the works in question are otherwise available,

(b)the proportion of the work to be copied, and

(c)the nature of the use to which the copies are likely to be put.

131 Licences for educational establishments in respect of works included in broadcasts F332. . . .U.K.

(1)This section applies to references or applications under this Chapter relating to licences for the recording by or on behalf of educational establishments of broadcasts F333. . . which include copyright works, or the making of copies of such recordings, for educational purposes.

(2)The Copyright Tribunal shall, in considering what charges (if any) should be paid for a licence, have regard to the extent to which the owners of copyright in the works included in the broadcast F333. . . have already received, or are entitled to receive, payment in respect of their inclusion.

Textual Amendments

132 Licences to reflect conditions imposed by promoters of events.U.K.

(1)This section applies to references or applications under this Chapter in respect of licences relating to sound recordings, films [F334or broadcasts] which include, or are to include, any entertainment or other event.

(2)The Copyright Tribunal shall have regard to any conditions imposed by the promoters of the entertainment or other event; and, in particular, the Tribunal shall not hold a refusal or failure to grant a licence to be unreasonable if it could not have been granted consistently with those conditions.

(3)Nothing in this section shall require the Tribunal to have regard to any such conditions in so far as they—

(a)purport to regulate the charges to be imposed in respect of the grant of licences, or

(b)relate to payments to be made to the promoters of any event in consideration of the grant of facilities for making the recording, film [F335or broadcast].

Textual Amendments

133 Licences to reflect payments in respect of underlying rights.U.K.

[F336(1)In considering what charges should be paid for a licence—

(a)on a reference or application under this Chapter relating to licences for the rental or lending of copies of a work, or

(b)on an application under section 142 (royalty or other sum payable for lending of certain works), the Copyright Tribunal shall take into account any reasonable payments which the owner of the copyright in the work is liable to make in consequence of the granting of the licence, or of the acts authorised by the licence, to owners of copyright in works included in that work.]

(2)On any reference or application under this Chapter relating to licensing in respect of the copyright in sound recordings, films [F337or broadcasts], the Copyright Tribunal shall take into account, in considering what charges should be paid for a licence, any reasonable payments which the copyright owner is liable to make in consequence of the granting of the licence, or of the acts authorised by the licence, in respect of any performance included in the recording, film [F338or broadcast].

Textual Amendments

F336S. 133(1) substituted (1.12.1996) by S.I. 1996/2967, reg. 13(1) (with Pt. III)

134 Licences in respect of works included in re-transmissions.U.K.

(1)F339... this section applies to references or applications under this Chapter relating to licences to include in a broadcast F340...—

(a)literary, dramatic, musical or artistic works, or,

(b)sound recordings or films,

where one broadcast F340... (“the first transmission”) is, by reception and immediate re-transmission, to be further broadcast F340... (“the further transmission”).

(2)So far as the further transmission is to the same area as the first transmission, the Copyright Tribunal shall, in considering what charges (if any) should be paid for licences for either transmission, have regard to the extent to which the copyright owner has already received, or is entitled to receive, payment for the other transmission which adequately remunerates him in respect of transmissions to that area.

(3)So far as the further transmission is to an area outside that to which the first transmission was made, the Tribunal shall F340... leave the further transmission out of account in considering what charges (if any) should be paid for licences for the first transmission.

F341(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F342(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

135 Mention of specific matters not to exclude other relevant considerations.U.K.

The mention in sections 129 to 134 of specific matters to which the Copyright Tribunal is to have regard in certain classes of case does not affect the Tribunal’s general obligation in any case to have regard to all relevant considerations.

[F343 Use as of right of sound recordings in broadcasts F344 . . . U.K.

Textual Amendments

F344Words in heading preceding s. 135A repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(2), Sch. 2 (with regs. 31-40)

135A Circumstances in which right available.U.K.

(1) Section 135C applies to the inclusion in a broadcast F345 . . . of any sound recordings if—

(a) a licence to include those recordings in the broadcast F345 . . . could be granted by a licensing body or such a body could procure the grant of a licence to do so,

(b)the condition in subsection (2) or (3) applies, and

(c) the person including those recordings in the broadcast F345 . . . has complied with section 135B.

(2) Where the person including the recordings in the broadcast F345 . . . does not hold a licence to do so, the condition is that the licensing body refuses to grant, or procure the grant of, such a licence, being a licence—

(a) whose terms as to payment for including the recordings in the broadcast F345 . . . would be acceptable to him or comply with an order of the Copyright Tribunal under section 135D relating to such a licence or any scheme under which it would be granted, and

(b)allowing unlimited needletime or such needletime as he has demanded.

(3) Where he holds a licence to include the recordings in the broadcast F345 . . . , the condition is that the terms of the licence limit needletime and the licensing body refuses to substitute or procure the substitution of terms allowing unlimited needletime or such needletime as he has demanded, or refuses to do so on terms that fall within subsection (2)(a).

(4)The references in subsection (2) to refusing to grant, or procure the grant of, a licence, and in subsection (3) to refusing to substitute or procure the substitution of terms, include failing to do so within a reasonable time of being asked.

(5)In the group of sections from this section to section 135G—

  • [F346 “ broadcast ” does not include any broadcast which is a transmission of the kind specified in section 6(1A)(b) or (c); ]

  • “ needletime ” means the time in any period (whether determined as a number of hours in the period or a proportion of the period, or otherwise) in which any recordings may be included in a broadcast F345 . . . ;

  • “ sound recording ” does not include a film sound track when accompanying a film.

(6) In sections 135B to 135G, “ terms of payment ” means terms as to payment for including sound recordings in a broadcast F345 . . . . ]

Textual Amendments

F346S. 135A(5): definition of "broadcast" inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1 para. 15(1) (with regs. 31-40)

[F347135B Notice of intention to exercise right.U.K.

(1)A person intending to avail himself of the right conferred by section 135C must—

(a)give notice to the licensing body of his intention to exercise the right, asking the body to propose terms of payment, and

(b)after receiving the proposal or the expiry of a reasonable period, give reasonable notice to the licensing body of the date on which he proposes to begin exercising that right, and the terms of payment in accordance with which he intends to do so.

(2) Where he has a licence to include the recordings in a broadcast F348 . . . , the date specified in a notice under subsection (1)(b) must not be sooner than the date of expiry of that licence except in a case falling within section 135A(3).

(3)Before the person intending to avail himself of the right begins to exercise it, he must—

(a)give reasonable notice to the Copyright Tribunal of his intention to exercise the right, and of the date on which he proposes to begin to do so, and

(b)apply to the Tribunal under section 135D to settle the terms of payment.]

Textual Amendments

[F349135C Conditions for exercise of right.U.K.

(1) A person who, on or after the date specified in a notice under section 135B(1)(b), includes in a broadcast F350 . . . any sound recordings in circumstances in which this section applies, and who—

(a) complies with any reasonable condition, notice of which has been given to him by the licensing body, as to inclusion in the broadcast F350 . . . of those recordings,

(b) provides that body with such information about their inclusion in the broadcast F350 . . . as it may reasonably require, and

(c)makes the payments to the licensing body that are required by this section,

shall be in the same position as regards infringement of copyright as if he had at all material times been the holder of a licence granted by the owner of the copyright in question.

(2)Payments are to be made at not less than quarterly intervals in arrears.

(3)The amount of any payment is that determined in accordance with any order of the Copyright Tribunal under section 135D or, if no such order has been made—

(a)in accordance with any proposal for terms of payment made by the licensing body pursuant to a request under section 135B, or

(b)where no proposal has been so made or the amount determined in accordance with the proposal so made is unreasonably high, in accordance with the terms of payment notified to the licensing body under section 135B(1)(b).

(4) Where this section applies to the inclusion in a broadcast F350 . . . of any sound recordings, it does so in place of any licence. ]

Textual Amendments

[F351135D Applications to settle payments.U.K.

(1)On an application to settle the terms of payment, the Copyright Tribunal shall consider the matter and make such order as it may determine to be reasonable in the circumstances.

(2)An order under subsection (1) has effect from the date the applicant begins to exercise the right conferred by section 135C and any necessary repayments, or further payments, shall be made in respect of amounts that have fallen due.]

Textual Amendments

[F352135E References etc. about conditions, information and other terms.U.K.

(1)A person exercising the right conferred by section 135C, or who has given notice to the Copyright Tribunal of his intention to do so, may refer to the Tribunal—

(a) any question whether any condition as to the inclusion in a broadcast F353 . . . of sound recordings, notice of which has been given to him by the licensing body in question, is a reasonable condition, or

(b)any question whether any information is information which the licensing body can reasonably require him to provide.

(2)On a reference under this section, the Tribunal shall consider the matter and make such order as it may determine to be reasonable in the circumstances.]

Textual Amendments

[F354135F Application for review of order.U.K.

(1)A person exercising the right conferred by section 135C or the licensing body may apply to the Copyright Tribunal to review any order under section 135D or 135E.

(2)An application shall not be made, except with the special leave of the Tribunal—

(a)within twelve months from the date of the order, or of the decision on a previous application under this section, or

(b)if the order was made so as to be in force for fifteen months or less, or as a result of a decision on a previous application is due to expire within fifteen months of that decision, until the last three months before the expiry date.

(3)On the application the Tribunal shall consider the matter and make such order confirming or varying the original order as it may determine to be reasonable in the circumstances.

(4)An order under this section has effect from the date on which it is made or such later date as may be specified by the Tribunal.]

Textual Amendments

[F355135G Factors to be taken into account.U.K.

(1)In determining what is reasonable on an application or reference under section 135D or 135E, or on reviewing any order under section 135F, the Copyright Tribunal shall—

(a)have regard to the terms of any orders which it has made in the case of persons in similar circumstances exercising the right conferred by section 135C, and

(b)exercise its powers so as to secure that there is no unreasonable discrimination between persons exercising that right against the same licensing body.

(2)In settling the terms of payment under section 135D, the Tribunal shall not be guided by any order it has made under any enactment other than that section.

(3)Section 134 (factors to be taken into account: retransmissions) applies on an application or reference under sections 135D to 135F as it applies on an application or reference relating to a licence.]

Textual Amendments

[F356135H Power to amend sections 135A to 135G.U.K.

(1)The Secretary of State may by order, subject to such transitional provision as appears to him to be appropriate, amend sections 135A to 135G so as—

(a)to include in any reference to sound recordings any works of a description specified in the order; or

(b) to exclude from any reference to a broadcast F357 . . . any broadcast F357 . . . of a description so specified.

(2)An order shall be made by statutory instrument; and no order shall be made unless a draft of it has been laid before and approved by resolution of each House of Parliament.]

Textual Amendments

F356S. 135H inserted (1.11.1996) by 1996 c. 55, s. 139(1) (with s. 43(6)); S.I. 1996/2120, art. 5, Sch. 2

Implied indemnity in schemes or licences for reprographic copyingU.K.

136 Implied indemnity in certain schemes and licences for reprographic copying.U.K.

(1)This section applies to—

(a)schemes for licensing reprographic copying of published literary, dramatic, musical or artistic works, or the typographical arrangement of published editions, and

(b)licences granted by licensing bodies for such copying,

where the scheme or licence does not specify the works to which it applies with such particularity as to enable licensees to determine whether a work falls within the scheme or licence by inspection of the scheme or licence and the work.

(2)There is implied—

(a)in every scheme to which this section applies an undertaking by the operator of the scheme to indemnify a person granted a licence under the scheme, and

(b)in every licence to which this section applies an undertaking by the licensing body to indemnify the licensee,

against any liability incurred by him by reason of his having infringed copyright by making or authorising the making of reprographic copies of a work in circumstances within the apparent scope of his licence.

(3)The circumstances of a case are within the apparent scope of a licence if—

(a)it is not apparent from inspection of the licence and the work that it does not fall within the description of works to which the licence applies; and

(b)the licence does not expressly provide that it does not extend to copyright of the description infringed.

(4)In this section “liability” includes liability to pay costs; and this section applies in relation to costs reasonably incurred by a licensee in connection with actual or contemplated proceedings against him for infringement of copyright as it applies to sums which he is liable to pay in respect of such infringement.

(5)A scheme or licence to which this section applies may contain reasonable provision—

(a)with respect to the manner in which, and time within which, claims under the undertaking implied by this section are to be made;

(b)enabling the operator of the scheme or, as the case may be, the licensing body to take over the conduct of any proceedings affecting the amount of his liability to indemnify.

Reprographic copying by educational establishmentsU.K.

137 Power to extend coverage of scheme or licence. U.K.

(1)This section applies to—

(a)a licensing scheme to which sections 118 to 123 apply (see section 117) and which is operated by a licensing body, or

(b)a licence to which sections 125 to 128 apply (see section 124),

so far as it provides for the grant of licences, or is a licence, authorising the making by or on behalf of educational establishments for the purposes of instruction of reprographic copies of published literary, dramatic, musical or artistic works, or of the typographical arrangement of published editions.

(2)If it appears to the Secretary of State with respect to a scheme or licence to which this section applies that—

(a)works of a description similar to those covered by the scheme or licence are unreasonably excluded from it, and

(b)making them subject to the scheme or licence would not conflict with the normal exploitation of the works or unreasonably prejudice the legitimate interests of the copyright owners,

he may by order provide that the scheme or licence shall extend to those works.

(3)Where he proposes to make such an order, the Secretary of State shall give notice of the proposal to—

(a)the copyright owners,

(b)the licensing body in question, and

(c)such persons or organisations representative of educational establishments, and such other persons or organisations, as the Secretary of State thinks fit.

(4)The notice shall inform those persons of their right to make written or oral representations to the Secretary of State about the proposal within six months from the date of the notice; and if any of them wishes to make oral representations, the Secretary of State shall appoint a person to hear the representations and report to him.

(5)In considering whether to make an order the Secretary of State shall take into account any representations made to him in accordance with subsection (4), and such other matters as appear to him to be relevant.

Modifications etc. (not altering text)

C54Ss. 137–141 extended by S.I. 1989/1067, art. 2

138 Variation or discharge of order extending scheme or licence. U.K.

(1)The owner of the copyright in a work in respect of which an order is in force under section 137 may apply to the Secretary of State for the variation or discharge of the order, stating his reasons for making the application.

(2)The Secretary of State shall not entertain an application made within two years of the making of the original order, or of the making of an order on a previous application under this section, unless it appears to him that the circumstances are exceptional.

(3)On considering the reasons for the application the Secretary of State may confirm the order forthwith; if he does not do so, he shall give notice of the application to—

(a)the licensing body in question, and

(b)such persons or organisations representative of educational establishments, and such other persons or organisations, as he thinks fit.

(4)The notice shall inform those persons of their right to make written or oral representations to the Secretary of State about the application within the period of two months from the date of the notice; and if any of them wishes to make oral representations, the Secretary of State shall appoint a person to hear the representations and report to him.

(5)In considering the application the Secretary of State shall take into account the reasons for the application, any representations made to him in accordance with subsection (4), and such other matters as appear to him to be relevant.

(6)The Secretary of State may make such order as he thinks fit confirming or discharging the order (or, as the case may be, the order as previously varied), or varying (or further varying) it so as to exclude works from it.

Modifications etc. (not altering text)

C55Ss. 137–141 extended by S.I. 1989/1067, art. 2

139 Appeals against orders. U.K.

(1)The owner of the copyright in a work which is the subject of an order under section 137 (order extending coverage of scheme or licence) may appeal to the Copyright Tribunal which may confirm or discharge the order, or vary it so as to exclude works from it, as it thinks fit having regard to the considerations mentioned in subsection (2) of that section.

(2)Where the Secretary of State has made an order under section 138 (order confirming, varying or discharging order extending coverage of scheme or licence)—

(a)the person who applied for the order, or

(b)any person or organisation representative of educational establishments who was given notice of the application for the order and made representations in accordance with subsection (4) of that section,

may appeal to the Tribunal which may confirm or discharge the order or make any other order which the Secretary of State might have made.

(3)An appeal under this section shall be brought within six weeks of the making of the order or such further period as the Tribunal may allow.

(4)An order under section 137 or 138 shall not come into effect until the end of the period of six weeks from the making of the order or, if an appeal is brought before the end of that period, until the appeal proceedings are disposed of or withdrawn.

(5)If an appeal is brought after the end of that period, any decision of the Tribunal on the appeal does not affect the validity of anything done in reliance on the order appealed against before that decision takes effect.

Modifications etc. (not altering text)

C56Ss. 137–141 extended by S.I. 1989/1067, art. 2

140 Inquiry whether new scheme or general licence required. U.K.

(1)The Secretary of State may appoint a person to inquire into the question whether new provision is required (whether by way of a licensing scheme or general licence) to authorise the making by or on behalf of educational establishments for the purposes of instruction of reprographic copies of—

(a)published literary, dramatic, musical or artistic works, or

(b)the typographical arrangement of published editions,

of a description which appears to the Secretary of State not to be covered by an existing licensing scheme or general licence and not to fall within the power conferred by section 137 (power to extend existing schemes and licences to similar works).

(2)The procedure to be followed in relation to an inquiry shall be such as may be prescribed by regulations made by the Secretary of State.

(3)The regulations shall, in particular, provide for notice to be given to—

(a)persons or organisations appearing to the Secretary of State to represent the owners of copyright in works of that description, and

(b)persons or organisations appearing to the Secretary of State to represent educational establishments,

and for the making of written or oral representations by such persons; but without prejudice to the giving of notice to, and the making of representations by, other persons and organisations.

(4)The person appointed to hold the inquiry shall not recommend the making of new provision unless he is satisfied—

(a)that it would be of advantage to educational establishments to be authorised to make reprographic copies of the works in question, and

(b)that making those works subject to a licensing scheme or general licence would not conflict with the normal exploitation of the works or unreasonably prejudice the legitimate interests of the copyright owners.

(5)If he does recommend the making of new provision he shall specify any terms, other than terms as to charges payable, on which authorisation under the new provision should be available.

(6)Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(7)In this section (and section 141) a “general licence” means a licence granted by a licensing body which covers all works of the description to which it applies.

Modifications etc. (not altering text)

C57Ss. 137–141 extended by S.I. 1989/1067, art. 2

141 Statutory licence where recommendation not implemented. U.K.

(1)The Secretary of State may, within one year of the making of a recommendation under section 140 by order provide that if, or to the extent that, provision has not been made in accordance with the recommendation, the making by or on behalf of an educational establishment, for the purposes of instruction, of reprographic copies of the works to which the recommendation relates shall be treated as licensed by the owners of the copyright in the works.

(2)For that purpose provision shall be regarded as having been made in accordance with the recommendation if—

(a)a certified licensing scheme has been established under which a licence is available to the establishment in question, or

(b)a general licence has been—

(i)granted to or for the benefit of that establishment, or

(ii)referred by or on behalf of that establishment to the Copyright Tribunal under section 125 (reference of terms of proposed licence), or

(iii)offered to or for the benefit of that establishment and refused without such a reference,

and the terms of the scheme or licence accord with the recommendation.

(3)The order shall also provide that any existing licence authorising the making of such copies (not being a licence granted under a certified licensing scheme or a general licence) shall cease to have effect to the extent that it is more restricted or more onerous than the licence provided for by the order.

(4)The order shall provide for the licence to be free of royalty but, as respects other matters, subject to any terms specified in the recommendation and to such other terms as the Secretary of State may think fit.

(5)The order may provide that where a copy which would otherwise be an infringing copy is made in accordance with the licence provided by the order but is subsequently dealt with, it shall be treated as an infringing copy for the purposes of that dealing, and if that dealing infringes copyright for all subsequent purposes.

In this subsection “dealt with” means sold or let for hire, offered or exposed for sale or hire, or exhibited in public.

(6)The order shall not come into force until at least six months after it is made.

(7)An order may be varied from time to time, but not so as to include works other than those to which the recommendation relates or remove any terms specified in the recommendation, and may be revoked.

(8)An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(9)In this section a “certified licensing scheme” means a licensing scheme certified for the purposes of this section under section 143.

Modifications etc. (not altering text)

C58Ss. 137–141 extended by S.I. 1989/1067, art. 2

[F358Royalty or other sum payable for lending of certain works]U.K.

Textual Amendments

F358S. 142 and crossheading substituted (1.12.1996) by S.I. 1996/2967, reg. 13(2) (with Pt. III)

[F359142 Royalty or other sum payable for lending of certain works.U.K.

(1)An application to settle the royalty or other sum payable in pursuance of section 66 (lending of copies of certain copyright works) may be made to the Copyright Tribunal by the copyright owner or the person claiming to be treated as licensed by him.

(2)The Tribunal shall consider the matter and make such order as it may determine to be reasonable in the circumstances.

(3)Either party may subsequently apply to the Tribunal to vary the order, and the Tribunal shall consider the matter and make such order confirming or varying the original order as it may determine to be reasonable in the circumstances.

(4)An application under subsection (3) shall not, except with the special leave of the Tribunal, be made within twelve months from the date of the original order or of the order on a previous application under that subsection.

(5)An order under subsection (3) has effect from the date on which it is made or such later date as may be specified by the Tribunal.]

Textual Amendments

F359S. 142 substituted (1.12.1996) by S.I. 1996/2967, reg. 13(2) (with Pt. III)

Certification of licensing schemesU.K.

143 Certification of licensing schemes.U.K.

(1)A person operating or proposing to operate a licensing scheme may apply to the Secretary of State to certify the scheme for the purposes of—

F360(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)section 60 (abstracts of scientific or technical articles),

[F361(c)section 66 (lending to public of copies of certain works),]

F362(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)section 141 (reprographic copying of published works by educational establishments).

(2)The Secretary of State shall by order made by statutory instrument certify the scheme if he is satisfied that it—

(a)enables the works to which it relates to be identified with sufficient certainty by persons likely to require licences, and

(b)sets out clearly the charges (if any) payable and the other terms on which licences will be granted.

(3)The scheme shall be scheduled to the order and the certification shall come into operation for the purposes of section F363... 60, 66F364... or 141, as the case may be—

(a)on such date, not less than eight weeks after the order is made, as may be specified in the order, or

(b)if the scheme is the subject of a reference under section 118 (reference of proposed scheme), any later date on which the order of the Copyright Tribunal under that section comes into force or the reference is withdrawn.

(4)A variation of the scheme is not effective unless a corresponding amendment of the order is made; and the Secretary of State shall make such an amendment in the case of a variation ordered by the Copyright Tribunal on a reference under section 118, 119 or 120, and may do so in any other case if he thinks fit.

(5)The order shall be revoked if the scheme ceases to be operated and may be revoked if it appears to the Secretary of State that it is no longer being operated according to its terms.

Textual Amendments

F361S. 143(1)(c) substituted (1.12.1996) by S.I. 1996/2967, reg. 11(4) (with Pt. III)

Powers exercisable in consequence of competition reportU.K.

144 Powers exercisable in consequence of report of [F365Competition and Markets Authority].U.K.

[F366( 1 )Subsection (1A) applies where whatever needs to be remedied, mitigated or prevented by the Secretary of State [F367or (as the case may be) the Competition and Markets Authority] under section 12(5) of the Competition Act 1980 or section 41(2), 55(2), 66(6), 75(2), 83(2), 138(2), 147(2)[F368, 147A(2)] or 160(2) of, or paragraph 5(2) or 10(2) of Schedule 7 to, the Enterprise Act 2002 (powers to take remedial action following references to the [F369Competition and Markets Authority] in connection with public bodies and certain other persons, mergers or market investigations) consists of or includes—

(a)conditions in licences granted by the owner of copyright in a work restricting the use of the work by the licensee or the right of the copyright owner to grant other licences; or

(b)a refusal of a copyright owner to grant licences on reasonable terms.

(1A)The powers conferred by Schedule 8 to the Enterprise Act 2002 include power to cancel or modify those conditions and, instead or in addition, to provide that licences in respect of the copyright shall be available as of right.

( 2 )The references to anything permitted by Schedule 8 to the Enterprise Act 2002 in section 12(5A) of the Competition Act 1980 and in sections 75(4)(a), 83(4)(a), 84(2)(a), 89(1), 160(4)(a), 161(3)(a) and 164(1) of, and paragraphs 5, 10 and 11 of Schedule 7 to, the Act of 2002 shall be construed accordingly.]

(2)The references in sections 56(2) and 73(2) of that Act, and [F370section] 12(5) of the M10Competition Act 1980, to the powers specified in that Part of that Schedule shall be construed accordingly.

(3)[F371The Secretary of State [F372or (as the case may be) the Competition and Markets Authority]] shall only exercise the powers available by virtue of this section if he [F373or it] is satisfied that to do so does not contravene any Convention relating to copyright to which the United Kingdom is a party.

(4)The terms of a licence available by virtue of this section shall, in default of agreement, be settled by the Copyright Tribunal on an application by the person requiring the licence; and terms so settled shall authorise the licensee to do everything in respect of which a licence is so available.

(5)Where the terms of a licence are settled by the Tribunal, the licence has effect from the date on which the application to the Tribunal was made.

Textual Amendments

F366S. 144(1)(1A)(2) substituted (20.6.2003 for certain purposes and 29.12.2004 otherwise) for s. 144(1)(2) by 2002 c. 40, ss. 278(1), 279, Sch. 25 para. 18(2); S.I. 2003/1397, arts. 2, 3(1), Sch. (with arts. 4-12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5)

F370Words in s. 144(2) substituted (1.3.2000) by S.I. 2000/311, art. 22(2)

F371Words in s. 144(3) substituted (20.6.2003 for certain purposes and 29.12.2004 otherwise) by 2002 c. 40, ss. 278(1), 279, Sch. 25 para. 18(3)(a); S.I. 2003/1397, arts. 2, 3(1), Sch. (with arts. 4-12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5)

F373Words in s. 144(3) inserted (20.6.2003 for certain purposes and 29.12.2004 otherwise) by 2002 c. 40, ss. 278(1), 279, Sch. 25 para. 18(3)(b); S.I. 2003/1397, arts. 2, 3(1), Sch. (with arts. 4-12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5)

Modifications etc. (not altering text)

C59S. 144(1) amended (20.6.2003) by The Enterprise Act 2002 (Protection of Legitimate Interests) Order 2003 (S.I. 2003/1592), art. 16, Sch. 4 para. 7(1)(a) (as amended (1.4.2014) by S.I. 2014/891, arts. 1, 19(3) (with arts. 20-23))

Marginal Citations

[F374Compulsory collective administration of certain rights]U.K.

Textual Amendments

F374S. 144A and crossheading inserted (1.12.1996) by S.I. 1996/2967, reg. 7 (with Pt. III)

[F375144A Collective exercise of certain rights in relation to cable re-transmission.U.K.

(1)This section applies to the right of the owner of copyright in a literary, dramatic, musical or artistic work, sound recording or film to grant or refuse authorisation for cable re-transmission of a [F376wireless] broadcast from [F377an] EEA F378. . . state in which the work is included. That right is referred to below as “cable re-transmission right”.

(2)Cable re-transmission right may be exercised against a cable operator only through a licensing body.

(3)Where a copyright owner has not transferred management of his cable re-transmission right to a licensing body, the licensing body which manages rights of the same category shall be deemed to be mandated to manage his right. Where more than one licensing body manages rights of that category, he may choose which of them is deemed to be mandated to manage his right.

(4)A copyright owner to whom subsection (3) applies has the same rights and obligations resulting from any relevant agreement between the cable operator and the licensing body as have copyright owners who have transferred management of their cable re-transmission right to that licensing body.

(5)Any rights to which a copyright owner may be entitled by virtue of subsection (4) must be claimed within the period of three years beginning with the date of the cable re-transmission concerned.

(6)This section does not affect any rights exercisable by the maker of the broadcast, whether in relation to the broadcast or a work included in it.

[F379(7)In this section—

  • “ cable operator ” means a person responsible for cable re-transmission of a wireless broadcast; and

  • “ cable re-transmission ” means the reception and immediate re-transmission by cable, including the transmission of microwave energy between terrestrial fixed points, of a wireless broadcast. ]]

Textual Amendments

F375S. 144A inserted (1.12.1996) by S.I. 1996/2967, reg. 7 (with Pt. III)

F377Word in s. 144A(1) substituted (31.12.2020) by The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 13 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

Chapter VIIIU.K. The Copyright Tribunal

Modifications etc. (not altering text)

C61Pt. 1 Ch. VIII applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

Pt. 1 Ch. VIII applied (1.1.1998) by S.I. 1997/3032, reg. 25(2) (with Pt. IV)

The TribunalU.K.

145 The Copyright Tribunal.U.K.

(1)The Tribunal established under section 23 of the M11Copyright Act 1956 is renamed the Copyright Tribunal.

(2)The Tribunal shall consist of a chairman and two deputy chairmen appointed by the Lord Chancellor, after consultation with the Lord Advocate, and not less than two or more than eight ordinary members appointed by the Secretary of State.

(3)A person is not eligible for appointment as chairman or deputy chairman [F380unless—

[F381(a)he satisfies the judicial-appointment eligibility condition on a 5-year basis;]

(b)he is an advocate or solicitor in Scotland of at least [F3825] years’ standing;

(c)he is a member of the Bar of Northern Ireland or [F383solicitor of the Court of Judicature of Northern Ireland] of at least [F3825] years’ standing; or

(d)he has held judicial office.]

Textual Amendments

F383S. 145(3)(c): words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 5; S.I. 2009/1604, art. 2

Modifications etc. (not altering text)

C62S. 145: functions of the Lord Advocate transferred to the Secretary of State, and all property, rights and liabilities to which the Lord Advocate is entitled or subject in connection with any such function transferred to the Secretary of State for Scotland (19.5.1999) by S.I. 1999/678, arts. 2, 3, Sch. (with art. 7)

S. 145 modified (30.6.1999) by S.I. 1999/1748, art. 3, Sch. 1 para. 10

C63S. 145(2): transfer of certain functions (1.7.1999) by S.I. 1999/1750, arts. 1, 2, Sch. 1(with art. 7); S.I. 1998/3178, art. 3

Marginal Citations

146 Membership of the Tribunal.U.K.

(1)The members of the Copyright Tribunal shall hold and vacate office in accordance with their terms of appointment, subject to the following provisions.

(2)A member of the Tribunal may resign his office by notice in writing to the Secretary of State or, in the case of the chairman or a deputy chairman, to the Lord Chancellor.

(3)The Secretary of State or, in the case of the chairman or a deputy chairman, the Lord Chancellor may by notice in writing to the member concerned remove him from office if—

(a)he has become bankrupt or made an arrangement with his creditors or, in Scotland, his estate has been sequestrated or he has executed a trust deed for his creditors or entered into a composition contract, or

(b)he is incapacitated by physical or mental illness,

or if he is in the opinion of the Secretary of State or, as the case may be, the Lord Chancellor otherwise unable or unfit to perform his duties as member.

[F384(3A)A person who is the chairman or a deputy chairman of the Tribunal shall vacate his office on the day on which he attains the age of [F38575].]

(4)If a member of the Tribunal is by reason of illness, absence or other reasonable cause for the time being unable to perform the duties of his office, either generally or in relation to particular proceedings, a person may be appointed to discharge his duties for a period not exceeding six months at one time or, as the case may be, in relation to those proceedings.

(5)The appointment shall be made—

(a)in the case of the chairman or deputy chairman, by the Lord Chancellor, who shall appoint a person who would be eligible for appointment to that office, and

(b)in the case of an ordinary member, by the Secretary of State;

and a person so appointed shall have during the period of his appointment, or in relation to the proceedings in question, the same powers as the person in whose place he is appointed.

(6)The Lord Chancellor shall consult the Lord Advocate before exercising his powers under this section.

[F386(7)The Lord Chancellor may exercise his powers to remove a person under subsection (3) or to appoint a person under subsection (4) only with the concurrence of the appropriate senior judge.

(8)The appropriate senior judge is the Lord Chief Justice of England and Wales, unless—

(a)the person to be removed exercises functions [F387, or the person to be appointed is to exercise functions,] wholly or mainly in Scotland, in which case it is the Lord President of the Court of Session, or

(b)the person to be removed exercises functions [F387, or the person to be appointed is to exercise functions,] wholly or mainly in Northern Ireland, in which case it is the Lord Chief Justice of Northern Ireland.

(9)The Lord Chief Justice of England and Wales may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under subsection (7) in relation to the appointment of a person under subsection (4).

(10)The Lord President of the Court of Session may nominate a judge of the Court of Session who is a member of the First or Second Division of the Inner House of that Court to exercise his functions under subsection (7) in relation to the appointment of a person under subsection (4).

(11)The Lord Chief Justice of Northern Ireland may nominate any of the following to exercise his functions under subsection (7) in relation to the appointment of a person under subsection (4)—

(a)the holder of one of the offices listed in Schedule 1 to the Justice (Northern Ireland) Act 2002;

(b)a Lord Justice of Appeal (as defined in section 88 of that Act).]

Textual Amendments

F384S. 146(3A) inserted (31.3.1995) by 1993 c. 8, s. 26, Sch. 6 para.49; S.I. 1995/631, art. 2

147 Financial provisions.U.K.

(1)There shall be paid to the members of the Copyright Tribunal such remuneration (whether by way of salaries or fees), and such allowances, as the Secretary of State with the approval of the Treasury may determine.

(2)The Secretary of State may appoint such staff for the Tribunal as, with the approval of the Treasury as to numbers and remuneration, he may determine.

(3)The remuneration and allowances of members of the Tribunal, the remuneration of any staff and such other expenses of the Tribunal as the Secretary of State with the approval of the Treasury may determine shall be paid out of money provided by Parliament.

148 Constitution for purposes of proceedings.U.K.

(1)For the purposes of any proceedings the Copyright Tribunal shall consist of—

(a)a chairman, who shall be either the chairman or a deputy chairman of the Tribunal, and

(b)two or more ordinary members.

(2)If the members of the Tribunal dealing with any matter are not unanimous, the decision shall be taken by majority vote; and if, in such a case, the votes are equal the chairman shall have a further, casting vote.

(3)Where part of any proceedings before the Tribunal has been heard and one or more members of the Tribunal are unable to continue, the Tribunal shall remain duly constituted for the purpose of those proceedings so long as the number of members is not reduced to less than three.

(4)If the chairman is unable to continue, the chairman of the Tribunal shall—

(a)appoint one of the remaining members to act as chairman, and

(b)appoint a suitably qualified person to attend the proceedings and advise the members on any questions of law arising.

(5)A person is “suitably qualified” for the purposes of subsection (4)(b) if he is, or is eligible for appointment as, a deputy chairman of the Tribunal.

Jurisdiction and procedureU.K.

149 Jurisdiction of the Tribunal. U.K.

[F388The Copyright Tribunal has jurisdiction under this Part] to hear and determine proceedings under—

F389(za). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F390 [( zb )section 93C (application to determine amount of equitable remuneration under section 93B);]

(a)section 118, 119, or 120 (reference of licensing scheme);

(b)section 121 or 122 (application with respect to entitlement to licence under licensing scheme);

(c)section 125, 126 or 127 (reference or application with respect to licensing by licensing body);

[F391(ca)section 128B (reference by the Secretary of State under section 128A);]

[F392(cc) section 135D or 135E (application or reference with respect to use as of right of sound recordings in broadcasts F393 . . . ); ]

(d)section 139 (appeal against order as to coverage of licensing scheme or licence);

(e)section 142 (application to settle royalty or other sum payable for [F394lending of certain works];

(f)section 144(4) (application to settle terms of copyright licence available as of right);

[F395(fa)paragraph 7 of Schedule ZA1 (application to determine compensation for use of orphan works).]

F396(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F396(h). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F388Words in s. 149 substituted (1.12.1996) by S.I. 1996/2967, reg. 24(2)(a) (with Pt. III)

F390S. 149(zb) inserted (1.12.1996) by S.I. 1996/2967, reg. 14(2) (with Pt. III)

F394Words in s. 149(e) substituted (1.12.1996) by S.I. 1996/2967, reg. 13(3) (with Pt. III)

F396S. 149(g)(h) omitted (1.12.1996) by virtue of S.I. 1996/2967, reg. 24(2)(b) (with Pt. III)

Modifications etc. (not altering text)

150 General power to make rules.U.K.

(1)The Lord Chancellor may, after consultation with the Lord Advocate, make rules for regulating proceedings before the Copyright Tribunal and, subject to the approval of the Treasury, as to the fees chargeable in respect of such proceedings.

[F397(2)The rules may apply in relation to the Tribunal, as respects proceedings in England and Wales or Northern Ireland, any of the provisions of Part I of the Arbitration Act 1996.]

(3)Provision shall be made by the rules—

(a)prohibiting the Tribunal from entertaining a reference under section 118, 119 or 120 by a representative organisation unless the Tribunal is satisfied that the organisation is reasonably representative of the class of persons which it claims to represent;

(b)specifying the parties to any proceedings and enabling the Tribunal to make a party to the proceedings any person or organisation satisfying the Tribunal that they have a substantial interest in the matter; and

(c)requiring the Tribunal to give the parties to proceedings an opportunity to state their case, in writing or orally as the rules may provide.

(4)The rules may make provision for regulating or prescribing any matters incidental to or consequential upon any appeal from the Tribunal under section 152 (appeal to the court on point of law).

(5)Rules under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F397S. 150(2) substituted (31.1.1997) by 1996 c. 23, s. 107(1), Sch. 3 para. 50 (with s. 81(2)); S.I. 1996/3146, art. 3 (with Sch. 2)

Modifications etc. (not altering text)

C65S. 150: functions of the Lord Advocate transferred to the Secretary of State, and all property, rights and liabilities to which the Lord Advocate is entitled or subject in connection with any such function transferred to the Secretary of State for Scotland (19.5.1999) by S.I. 1999/678, arts. 2, 3, Sch. (with art. 7)

S. 150 modified (30.6.1999) by S.I. 1999/1748, art. 3, Sch. 1 para. 10

C66S. 150(1): transfer of certain functions (1.7.1999) by S.I. 1999/1750, arts. 1, 2, Sch. 1 (with art. 7); S.I. 1998/3178, art. 3

151 Costs, proof of orders, &c.U.K.

(1)The Copyright Tribunal may order that the costs of a party to proceedings before it shall be paid by such other party as the Tribunal may direct; and the Tribunal may tax or settle the amount of the costs, or direct in what manner they are to be taxed.

(2)A document purporting to be a copy of an order of the Tribunal and to be certified by the chairman to be a true copy shall, in any proceedings, be sufficient evidence of the order unless the contrary is proved.

(3)As respect proceedings in Scotland, the Tribunal has the like powers for securing the attendance of witnesses and the production of documents, and with regard to the examination of witnesses on oath, as an arbiter under a submission.

[F398151A Award of interest.U.K.

(1)Any of the following, namely—

(a)a direction under section 123(3) so far as relating to a licence for [F399communicating a work to the public];

(b)a direction under section 128(3) so far as so relating;

(c)an order under section 135D(1); and

(d)an order under section 135F confirming or varying an order under section 135D(1),

may award simple interest at such rate and for such period, beginning not earlier than the relevant date and ending not later than the date of the order, as the Copyright Tribunal thinks reasonable in the circumstances.

(2) In this section “ the relevant date ” means—

(a)in relation to a direction under section 123(3), the date on which the reference was made;

(b)in relation to a direction under section 128(3), the date on which the reference or application was made;

(c)in relation to an order section 135D(1), the date on which the first payment under section 135C(2) became due; and

(d)in relation to an order under section 135F, the date on which the application was made.]

Textual Amendments

F398S. 151A inserted (1.11.1996 with effect as mentioned in s. 139(3)) by 1996 c. 55, s. 139(2) (with s. 43(6)); S.I. 1996/2120, art. 5, Sch. 2

AppealsU.K.

152 Appeal to the court on point of law.U.K.

(1)An appeal lies on any point of law arising from a decision of the Copyright Tribunal to the High Court or, in the case of proceedings of the Tribunal in Scotland, to the Court of Session.

(2)Provision shall be made by rules under section 150 limiting the time within which an appeal may be brought.

(3)Provision may be made by rules under that section—

(a)for suspending, or authorising or requiring the Tribunal to suspend, the operation of orders of the Tribunal in cases where its decision is appealed against;

(b)for modifying in relation to an order of the Tribunal whose operation is suspended the operation of any provision of this Act as to the effect of the order;

(c)for the publication of notices or the taking of other steps for securing that persons affected by the suspension of an order of the Tribunal will be informed of its suspension.

Chapter IXU.K. Qualification for and Extent of Copyright Protection

Qualification for copyright protectionU.K.

153 Qualification for copyright protection.U.K.

(1)Copyright does not subsist in a work unless the qualification requirements of this Chapter are satisfied as regards—

(a)the author (see section 154), or

(b)the country in which the work was first published (see section 155), or

(c)in the case of a broadcast F400. . . , the country from which the broadcast was made F400. . . (see section 156).

(2)Subsection (1) does not apply in relation to Crown copyright or Parliamentary copyright (see sections 163 to [F401166D]) or to copyright subsisting by virtue of section 168 (copyright of certain international organisations).

(3)If the qualification requirements of this Chapter, or section 163, 165 or 168, are once satisfied in respect of a work, copyright does not cease to subsist by reason of any subsequent event.

Textual Amendments

F401Word in s. 153(2) substituted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 25 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

Modifications etc. (not altering text)

C67Ss. 153, 154 extended by S.I. 1989/988, art. 2(1)

C68S. 153 extended (1.7.1992) by S.I. 1992/1313, art. 2

C69Ss. 153, 154 applied (with modifications) (4.5.1993) by S.I. 1993/942, arts. 2, 3, 4, 5, Sch. 4 (with art. 6)

Ss. 153-155 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(1)(2), 5, Sch. 1, Sch. 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

Ss. 153, 154, 155 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(1)(2), 3, 5, Sch. 1, Sch. 2, Sch. 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

Ss. 153, 154, 156 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 4(1)(2)(5), 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

154 Qualification by reference to author.U.K.

(1)A work qualifies for copyright protection if the author was at the material time a qualifying person, that is—

(a)a British citizen, F402... a British Dependent Territories citizen, a British National (Overseas), a British Overseas citizen, a British subject or a British protected person within the meaning of the M12British Nationality Act 1981, or

[F403(b)an individual domiciled or resident in the United Kingdom F404... or in the Channel Islands, the Isle of Man or Gibraltar or in a country to which the relevant provisions of this Part extend,] or

[F405(c)a body incorporated under the law of a part of the United Kingdom F406... or of the Channel Islands, the Isle of Man or Gibraltar or of a country to which the relevant provisions of this Part extend.]

(2)Where, or so far as, provision is made by Order under section 159 (application of this Part to countries to which it does not extend), a work also qualifies for copyright protection if at the material time the author was a citizen or subject of, an individual domiciled or resident in, or a body incorporated under the law of, a country to which the Order relates.

(3)A work of joint authorship qualifies for copyright protection if at the material time any of the authors satisfies the requirements of subsection (1) or (2); but where a work qualifies for copyright protection only under this section, only those authors who satisfy those requirements shall be taken into account for the purposes of—

section 11(1) and (2) (first ownership of copyright; entitlement of author or author’s employer),

[F407section 12 (duration of copyright), and section 9(4) (meaning of “unknown authorship”) so far as it applies for the purposes of section 12, and]

section 57 (anonymous or pseudonymous works: acts permitted on assumptions as to expiry of copyright or death of author).

(4)The material time in relation to a literary, dramatic, musical or artistic work is—

(a)in the case of an unpublished work, when the work was made or, if the making of the work extended over a period, a substantial part of that period;

(b)in the case of a published work, when the work was first published or, if the author had died before that time, immediately before his death.

(5)The material time in relation to other descriptions of work is as follows—

(a)in the case of a sound recording or film, when it was made;

(b)in the case of a broadcast, when the broadcast was made;

(c)F408. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)in the case of the typographical arrangement of a published edition, when the edition was first published.

Textual Amendments

F402Words in s. 154(1)(a) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 14(a) (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F403S. 154(1)(b) substituted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(1)(b), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

F404Words in s. 154(1)(b) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 14(b) (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F405S. 154(1)(c) substituted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(1)(c), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

F406Words in s. 154(1)(c) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 14(b) (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F407Paragraph in s. 154(3) substituted (1.1.1996) by S.I. 1995/3297, reg. 5(3) (with Pt. III)

Modifications etc. (not altering text)

C70Ss. 153, 154 extended by S.I. 1989/988, art. 2(1)

C71S. 154 extended (1.7.1992) by S.I. 1992/1313, art. 2

C72Ss. 153, 154 applied (with modifications) (4.5.1993) by S.I. 1993/942, arts. 2, 3, 4, 5, Sch. 4 (with art. 6)

Ss. 153-155 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(1)(2), 5, Sch. 1, Sch. 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

Ss. 153, 154, 155 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(1)(2), 3, 5, Sch. 1, Sch. 2, Sch. 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

Ss. 153, 154, 156 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 4(1)(2)(5), 5, Sch. 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

Marginal Citations

155 Qualification by reference to country of first publication.U.K.

(1)A literary, dramatic, musical or artistic work, a sound recording or film, or the typographical arrangement of a published edition, qualifies for copyright protection if it is first published—

(a)in the United Kingdom[F409, F410... the Channel Islands, the Isle of Man or Gibraltar], or

(b)in [F411a country] to which the relevant provisions of this Part extend.

(2)Where, or so far as, provision is made by Order under section 159 (application of this Part to countries to which it does not extend), such a work also qualifies for copyright protection if it is first published in a country to which the Order relates.

(3)For the purposes of this section, publication in one country shall not be regarded as other than the first publication by reason of simultaneous publication elsewhere; and for this purpose publication elsewhere within the previous 30 days shall be treated as simultaneous.

Textual Amendments

F409Words in s. 155(1)(a) inserted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(2)(a), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

F410Words in s. 155(1)(a) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 15 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F411Words in s. 155(1)(b) substituted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(2)(b), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

Modifications etc. (not altering text)

C73S. 155 extended with modifications by S.I. 1989/1293, arts. 2(1), 3, 5, 6, Schs. 1, 2, 3, 4

C74S. 155 extended (1.7.1992) by S.I. 1992/1313, art.2

C75S. 155 applied (with modifications) (4.5.1993) by S.I. 1993/942, arts.2, 3, 5, Sch. 4 (with art. 6)

Ss. 153-155 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(1)(2), 5, Sch. 1, Sch. 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

Ss. 153, 154, 155 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(1)(2), 3, 5, Sch. 1, Sch. 2, Sch. 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

156 Qualification by reference to place of transmission.U.K.

(1)A broadcast qualifies for copyright protection if it is made from F412... a place in—

(a)the United Kingdom[F413, F414... the Channel Islands, the Isle of Man or Gibraltar], or

(b)[F415a country] to which the relevant provisions of this Part extend.

(2)Where, or so far as, provision is made by Order under section 159 (application of this Part to countries to which it does not extend), a broadcast F412... also qualifies for copyright protection if it is made from F412... a place in a country to which the Order relates.

Textual Amendments

F413Words in s. 156(1)(a) inserted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(3)(a), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

F415Words in s. 156(1)(b) substituted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(3)(b), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

Modifications etc. (not altering text)

C84S. 156 extended (1.7.1992) by S.I. 1992/1313, art. 2

C85S. 156 applied (with modifications) (4.5.1993) by S.I. 1993/942, art.4, 5, Sch. 4 (with art. 6)

Ss. 153, 154, 156 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 4(1)(2)(5), 5 (as amended 22.4.2003 by S.I. 2003/774, arts. 2-5)

Extent and application of this PartU.K.

157 Countries to which this Part extends.U.K.

(1)This Part extends to England and Wales, Scotland and Northern Ireland.

(2)Her Majesty may by Order in Council direct that this Part shall extend, subject to such exceptions and modifications as may be specified in the Order, to—

(a)any of the Channel Islands,

(b)the Isle of Man, or

(c)any colony.

(3)That power includes power to extend, subject to such exceptions and modifications as may be specified in the Order, any Order in Council made under the following provisions of this Chapter.

(4)The legislature of a country to which this Part has been extended may modify or add to the provisions of this Part, in their operation as part of the law of that country, as the legislature may consider necessary to adapt the provisions to the circumstances of that country—

(a)as regards procedure and remedies, or

(b)as regards works qualifying for copyright protection by virtue of a connection with that country.

(5)Nothing in this section shall be construed as restricting the extent of paragraph 36 of Schedule 1 (transitional provisions: dependent territories where the M13Copyright Act 1956 or the M14Copyright Act 1911 remains in force) in relation to the law of a dependent territory to which this Part does not extend.

Modifications etc. (not altering text)

C86S. 157(2)(c) extended (8.4.2010) by Digital Economy Act 2010 (c. 24), ss. 46(4), 47(2)(c)

C87S. 157(2)(c): power to extend conferred (27.4.2017) by Digital Economy Act 2017 (c. 30), ss. 118(1), 119(9)

Marginal Citations

158 Countries ceasing to be colonies.U.K.

(1)The following provisions apply where a country to which this Part has been extended ceases to be a colony of the United Kingdom.

(2)As from the date on which it ceases to be a colony it shall cease to be regarded as a country to which this Part extends for the purposes of—

(a)section 160(2)(a) (denial of copyright protection to citizens of countries not giving adequate protection to British works), and

(b)sections 163 and 165 (Crown and Parliamentary copyright).

(3)But it shall continue to be treated as a country to which this Part extends for the purposes of sections 154 to 156 (qualification for copyright protection) until—

(a)an Order in Council is made in respect of that country under section 159 (application of this Part to countries to which it does not extend), or

(b)an Order in Council is made declaring that it shall cease to be so treated by reason of the fact that the provisions of this Part as part of the law of that country have been repealed or amended.

(4)A statutory instrument containing an Order in Council under subsection (3)(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

[F416159Application of this Part to countries to which it does not extendU.K.

(1)Where a country is a party to the Berne Convention or a member of the World Trade Organisation, this Part, so far as it relates to literary, dramatic, musical and artistic works, films and typographical arrangements of published editions—

(a)applies in relation to a citizen or subject of that country or a person domiciled or resident there as it applies in relation to a person who is a British citizen or is domiciled or resident in the United Kingdom,

(b)applies in relation to a body incorporated under the law of that country as it applies in relation to a body incorporated under the law of a part of the United Kingdom, and

(c)applies in relation to a work first published in that country as it applies in relation to a work first published in the United Kingdom.

(2)Where a country is a party to the Rome Convention, this Part, so far as it relates to sound recordings and broadcasts—

(a)applies in relation to that country as mentioned in paragraphs (a), (b) and (c) of subsection (1), and

(b)applies in relation to a broadcast made from that country as it applies to a broadcast made from the United Kingdom.

(3)Where a country is a party to the WPPT, this Part, so far as relating to sound recordings, applies in relation to that country as mentioned in paragraphs (a), (b) and (c) of subsection (1).

(4)Her Majesty may by Order in Council—

(a)make provision for the application of this Part to a country by subsection (1), (2) or (3) to be subject to specified restrictions;

(b)make provision for applying this Part, or any of its provisions, to a specified country;

(c)make provision for applying this Part, or any of its provisions, to any country of a specified description;

(d)make provision for the application of legislation to a country under paragraph (b) or (c) to be subject to specified restrictions.

(5)Provision made under subsection (4) may apply generally or in relation to such classes of works, or other classes of case, as are specified.

(6)Her Majesty may not make an Order in Council containing provision under subsection (4)(b) or (c) unless satisfied that provision has been or will be made under the law of the country or countries in question, in respect of the classes to which the provision under subsection (4)(b) or (c) relates, giving adequate protection to the owners of copyright under this Part.

(7)Application under subsection (4)(b) or (c) is in addition to application by subsections (1) to (3).

(8)Provision made under subsection (4)(c) may cover countries that become (or again become) of the specified description after the provision comes into force.

(9)In this section—

  • “the Berne Convention” means any Act of the International Convention for the Protection of Literary and Artistic Works signed at Berne on 9 September 1886;

  • “the Rome Convention” means the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations done at Rome on 26 October 1961;

  • “the WPPT” means the World Intellectual Property Organisation Performances and Phonograms Treaty adopted in Geneva on 20 December 1996.

(10)A statutory instrument containing an Order in Council under this section is subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F416S. 159 substituted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(4), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

160 Denial of copyright protection to citizens of countries not giving adequate protection to British works.U.K.

(1)If it appears to Her Majesty that the law of a country fails to give adequate protection to British works to which this section applies, or to one or more classes of such works, Her Majesty may make provision by Order in Council in accordance with this section restricting the rights conferred by this Part in relation to works of authors connected with that country.

(2)An Order in Council under this section shall designate the country concerned and provide that, for the purposes specified in the Order, works first published after a date specified in the Order shall not be treated as qualifying for copyright protection by virtue of such publication if at that time the authors are—

(a)citizens or subjects of that country (not domiciled or resident in the United Kingdom or another country to which the relevant provisions of this Part extend), or

(b)bodies incorporated under the law of that country;

and the Order may make such provision for all the purposes of this Part or for such purposes as are specified in the Order, and either generally or in relation to such class of cases as are specified in the Order, having regard to the nature and extent of that failure referred to in subsection (1).

(3)This section applies to literary, dramatic, musical and artistic works, sound recordings and films; and “British works” means works of which the author was a qualifying person at the material time within the meaning of section 154.

(4)A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

SupplementaryU.K.

161 Territorial waters and the continental shelf.U.K.

(1)For the purposes of this Part the territorial waters of the United Kingdom shall be treated as part of the United Kingdom.

(2)This Part applies to things done in the United Kingdom sector of the continental shelf on a structure or vessel which is present there for purposes directly connected with the exploration of the sea bed or subsoil or the exploitation of their natural resources as it applies to things done in the United Kingdom.

(3)The United Kingdom sector of the continental shelf means the areas designated by order under section 1(7) of the M15Continental Shelf Act 1964.

Modifications etc. (not altering text)

C88Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

Marginal Citations

162 British ships, aircraft and hovercraft.U.K.

(1)This Part applies to things done on a British ship, aircraft or hovercraft as it applies to things done in the United Kingdom.

(2)In this section—

  • “British ship” means a ship which is a British ship for the purposes of the [F417Merchant Shipping Act 1995] otherwise than by virtue of registration in a country outside the United Kingdom; and

  • “British aircraft” and “British hovercraft” mean an aircraft or hovercraft registered in the United Kingdom.

Textual Amendments

F417Words in s. 162(2) substituted (1.1.1996) by 1995 c. 21, ss. 314(2), 316(2), Sch. 13 para. 84(a) (with s. 312(1))

Modifications etc. (not altering text)

C89Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

Chapter XU.K. Miscellaneous and General

Crown and Parliamentary copyrightU.K.

163 Crown copyright.U.K.

(1)Where a work is made by Her Majesty or by an officer or servant of the Crown in the course of his duties—

(a)the work qualifies for copyright protection notwithstanding section 153(1) (ordinary requirement as to qualification for copyright protection), and

(b)Her Majesty is the first owner of any copyright in the work.

F418(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Copyright in such a work is referred to in this Part as “Crown copyright”, notwithstanding that it may be, or have been, assigned to another person.

(3)Crown copyright in a literary, dramatic, musical or artistic work continues to subsist—

(a)until the end of the period of 125 years from the end of the calendar year in which the work was made, or

(b)if the work is published commercially before the end of the period of 75 years from the end of the calendar year in which it was made, until the end of the period of 50 years from the end of the calendar year in which it was first so published.

(4)In the case of a work of joint authorship where one or more but not all of the authors are persons falling within subsection (1), this section applies only in relation to those authors and the copyright subsisting by virtue of their contribution to the work.

(5)Except as mentioned above, and subject to any express exclusion elsewhere in this Part, the provisions of this Part apply in relation to Crown copyright as to other copyright.

(6)This section does not apply to a work if, or to the extent that, Parliamentary copyright subsists in the work (see sections 165 [F419to [F420166D]]).

Textual Amendments

F418S. 163(1A) repealed by Government of Wales Act 2006 (c. 32), ss. 160(1), 163, Sch. 10 para. 26(2), Sch. 12 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

F419Words in s. 163(6) substituted (6.5.1999) by 1998 c. 46, s. 125(1), Sch. 8 para. 25(4); S.I. 1998/3178, art. 2(2), Sch. 3

F420Word in s. 163(6) substituted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 26(3) (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

164 Copyright in Acts and Measures.U.K.

(1)Her Majesty is entitled to copyright in every Act of Parliament [F421Act of the Scottish Parliament][F422, [F423Measure of the National Assembly for Wales, Act of the National Assembly for Wales,] Act of the Northern Ireland Assembly] or Measure of the General Synod of the Church of England.

(2)The copyright subsists

[F424(a)in the case of an Act or a Measure of the General Synod of the Church of England, until the end of the period of 50 years from the end of the calendar year in which Royal Assent was given, and

(b)in the case of a Measure of the National Assembly for Wales, until the end of the period of 50 years from the end of the calendar year in which the Measure was approved by Her Majesty in Council.]

(3)References in this Part to Crown copyright (except in section 163) include copyright under this section; and, except as mentioned above, the provisions of this Part apply in relation to copyright under this section as to other Crown copyright.

(4)No other copyright, or right in the nature of copyright, subsists in an Act or Measure.

Textual Amendments

F421Words in s. 164(1) inserted (6.5.1999) by 1998 c. 46, s. 125(1), Sch. 8 para. 25(5); S.I. 1998/3178, art. 2(2), Sch. 3

F422Words in s. 164(1) inserted (2.12.1999) by 1998 c. 47, s. 99, Sch. 13 para. 8(5) (with s. 95); S.I. 1999/3209, art. 2, Sch.

F423Words in s. 164(1) inserted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 27(2) (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

F424S. 164(2)(a)(b) substituted for words in s. 164(2) by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 27(3) (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

165 Parliamentary copyright.U.K.

(1)Where a work is made by or under the direction or control of the House of Commons or the House of Lords—

(a)the work qualifies for copyright protection notwithstanding section 153(1) (ordinary requirement as to qualification for copyright protection), and

(b)the House by whom, or under whose direction or control, the work is made is the first owner of any copyright in the work, and if the work is made by or under the direction or control of both Houses, the two Houses are joint first owners of copyright.

(2)Copyright in such a work is referred to in this Part as “Parliamentary copyright”, notwithstanding that it may be, or have been, assigned to another person.

(3)Parliamentary copyright in a literary, dramatic, musical or artistic work continues to subsist until the end of the period of 50 years from the end of the calendar year in which the work was made.

(4)For the purposes of this section, works made by or under the direction or control of the House of Commons or the House of Lords include—

(a)any work made by an officer or employee of that House in the course of his duties, and

(b)any sound recording, film [F425or live broadcast] of the proceedings of that House;

but a work shall not be regarded as made by or under the direction or control of either House by reason only of its being commissioned by or on behalf of that House.

(5)In the case of a work of joint authorship where one or more but not all of the authors are acting on behalf of, or under the direction or control of, the House of Commons or the House of Lords, this section applies only in relation to those authors and the copyright subsisting by virtue of their contribution to the work.

(6)Except as mentioned above, and subject to any express exclusion elsewhere in this Part, the provisions of this Part apply in relation to Parliamentary copyright as to other copyright.

(7)The provisions of this section also apply, subject to any exceptions or modifications specified by Order in Council, to works made by or under the direction or control of any other legislative body of a country to which this Part extends; and references in this Part to “Parliamentary copyright” shall be construed accordingly.

(8)A statutory instrument containing an Order in Council under subsection (7) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

Modifications etc. (not altering text)

C90S. 165 modified (6.5.1999) by S.I. 1999/676, art. 2

S. 165 modified (2.12.1999) by S.I. 1999/3146, arts. 1(1), 2; S.I. 1999/3208, art. 2

C91S. 165 modified (3.5.2007 in accordance with art. 1(2) of the amending S.I.) by The Parliamentary Copyright (National Assembly for Wales) Order 2007 (S.I. 2007/1116), art. 2

166 Copyright in Parliamentary Bills.U.K.

(1)Copyright in every Bill introduced into Parliament belongs, in accordance with the following provisions, to one or both of the Houses of Parliament.

(2)Copyright in a public Bill belongs in the first instance to the House into which the Bill is introduced, and after the Bill has been carried to the second House to both Houses jointly, and subsists from the time when the text of the Bill is handed in to the House in which it is introduced.

(3)Copyright in a private Bill belongs to both Houses jointly and subsists from the time when a copy of the Bill is first deposited in either House.

(4)Copyright in a personal Bill belongs in the first instance to the House of Lords, and after the Bill has been carried to the House of Commons to both Houses jointly, and subsists from the time when it is given a First Reading in the House of Lords.

(5)Copyright under this section ceases—

(a)on Royal Assent, or

(b)if the Bill does not receive Royal Assent, on the withdrawal or rejection of the Bill or the end of the Session:

Provided that, copyright in a Bill continues to subsist notwithstanding its rejection in any Session by the House of Lords if, by virtue of the Parliament Acts 1911 and 1949, it remains possible for it to be presented for Royal Assent in that Session.

(6)References in this Part to Parliamentary copyright (except in section 165) include copyright under this section; and, except as mentioned above, the provisions of this Part apply in relation to copyright under this section as to other Parliamentary copyright.

(7)No other copyright, or right in the nature of copyright, subsists in a Bill after copyright has once subsisted under this section; but without prejudice to the subsequent operation of this section in relation to a Bill which, not having passed in one Session, is reintroduced in a subsequent Session.

[F426166A Copyright in Bills of the Scottish Parliament.U.K.

(1)Copyright in every Bill introduced into the Scottish Parliament belongs to the Scottish Parliamentary Corporate Body.

(2)Copyright under this section subsists from the time when the text of the Bill is handed in to the Parliament for introduction—

(a)until the Bill receives Royal Assent, or

(b)if the Bill does not receive Royal Assent, until it is withdrawn or rejected or no further parliamentary proceedings may be taken in respect of it.

(3)References in this Part to Parliamentary copyright (except in section 165) include copyright under this section; and, except as mentioned above, the provisions of this Part apply in relation to copyright under this section as to other Parliamentary copyright.

(4)No other copyright, or right in the nature of copyright, subsists in a Bill after copyright has once subsisted under this section; but without prejudice to the subsequent operation of this section in relation to a Bill which, not having received Royal Assent, is later reintroduced into the Parliament.]

Textual Amendments

[F427166B Copyright in Bills of the Northern Ireland Assembly.U.K.

(1)Copyright in every Bill introduced into the Northern Ireland Assembly belongs to the Northern Ireland Assembly Commission.

(2)Copyright under this section subsists from the time when the text of the Bill is handed in to the Assembly for introduction—

(a)until the Bill receives Royal Assent, or

(b)if the Bill does not receive Royal Assent, until it is withdrawn or rejected or no further proceedings of the Assembly may be taken in respect of it.

(3)References in this Part to Parliamentary copyright (except in section 165) include copyright under this section; and, except as mentioned above, the provisions of this Part apply in relation to copyright under this section as to other Parliamentary copyright.

(4)No other copyright, or right in the nature of copyright, subsists in a Bill after copyright has once subsisted under this section; but without prejudice to the subsequent operation of this section in relation to a Bill which, not having received Royal Assent, is later reintroduced into the Assembly.]

Textual Amendments

F427S. 166B inserted (2.12.1999) by 1998 c. 47, s. 99, Sch. 13 para. 8(6) (with s. 95); S.I. 1999/3209, art. 2, Sch.

[F428166CCopyright in proposed Measures of the National Assembly for WalesU.K.

(1)Copyright in every proposed Assembly Measure introduced into the National Assembly for Wales belongs to the National Assembly for Wales Commission.

(2)Copyright under this section subsists from the time when the text of the proposed Assembly Measure is handed in to the Assembly for introduction—

(a)until the proposed Assembly Measure is approved by Her Majesty in Council, or

(b)if the proposed Assembly Measure is not approved by Her Majesty in Council, until it is withdrawn or rejected or no further proceedings of the Assembly may be taken in respect of it.

(3)References in this Part to Parliamentary copyright (except in section 165) include copyright under this section; and, except as mentioned above, the provisions of this Part apply in relation to copyright under this section as to other Parliamentary copyright.

(4)No other copyright, or right in the nature of copyright, subsists in a proposed Assembly Measure after copyright has once subsisted under this section; but without prejudice to the subsequent operation of this section in relation to a proposed Assembly Measure which, not having been approved by Her Majesty in Council, is later reintroduced into the Assembly.

Textual Amendments

F428Ss. 166C, 166D inserted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 28 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

166DCopyright in Bills of the National Assembly for WalesU.K.

(1)Copyright in every Bill introduced into the National Assembly for Wales belongs to the National Assembly for Wales Commission.

(2)Copyright under this section subsists from the time when the text of the Bill is handed in to the Assembly for introduction—

(a)until the Bill receives Royal Assent, or

(b)if the Bill does not receive Royal Assent, until it is withdrawn or rejected or no further proceedings of the Assembly may be taken in respect of it.

(3)References in this Part to Parliamentary copyright (except in section 165) include copyright under this section; and, except as mentioned above, the provisions of this Part apply in relation to copyright under this section as to other Parliamentary copyright.

(4)No other copyright, or right in the nature of copyright, subsists in a Bill after copyright has once subsisted under this section; but without prejudice to the subsequent operation of this section in relation to a Bill which, not having received Royal Assent, is later reintroduced into the Assembly.]

Textual Amendments

F428Ss. 166C, 166D inserted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 28 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

167 Houses of Parliament: supplementary provisions with respect to copyright.U.K.

(1)For the purposes of holding, dealing with and enforcing copyright, and in connection with all legal proceedings relating to copyright, each House of Parliament shall be treated as having the legal capacities of a body corporate, which shall not be affected by a prorogation or dissolution.

(2)The functions of the House of Commons as owner of copyright shall be exercised by the Speaker on behalf of the House; and if so authorised by the Speaker, or in case of a vacancy in the office of Speaker, those functions may be discharged by the Chairman of Ways and Means or a Deputy Chairman.

(3)For this purpose a person who on the dissolution of Parliament was Speaker of the House of Commons, Chairman of Ways and Means or a Deputy Chairman may continue to act until the corresponding appointment is made in the next Session of Parliament.

(4)The functions of the House of Lords as owner of copyright shall be exercised by the Clerk of the Parliaments on behalf of the House; and if so authorised by him, or in case of a vacancy in the office of Clerk of the Parliaments, those functions may be discharged by the Clerk Assistant or the Reading Clerk.

(5)Legal proceedings relating to copyright—

(a)shall be brought by or against the House of Commons in the name of “The Speaker of the House of Commons”; and

(b)shall be brought by or against the House of Lords in the name of “The Clerk of the Parliaments”.

Other miscellaneous provisionsU.K.

168 Copyright vesting in certain international organisations.U.K.

(1)Where an original literary, dramatic, musical or artistic work—

(a)is made by an officer or employee of, or is published by, an international organisation to which this section applies, and

(b)does not qualify for copyright protection under section 154 (qualification by reference to author) or section 155 (qualification by reference to country of first publication),

copyright nevertheless subsists in the work by virtue of this section and the organisation is first owner of that copyright.

(2)The international organisations to which this section applies are those as to which Her Majesty has by Order in Council declared that it is expedient that this section should apply.

(3)Copyright of which an international organisation is first owner by virtue of this section continues to subsist until the end of the period of 50 years from the end of the calendar year in which the work was made or such longer period as may be specified by Her Majesty by Order in Council for the purpose of complying with the international obligations of the United Kingdom.

(4)An international organisation to which this section applies shall be deemed to have, and to have had at all material times, the legal capacities of a body corporate for the purpose of holding, dealing with and enforcing copyright and in connection with all legal proceedings relating to copyright.

(5)A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

169 Folklore, &c.: anonymous unpublished works.U.K.

(1)Where in the case of an unpublished literary, dramatic, musical or artistic work of unknown authorship there is evidence that the author (or, in the case of a joint work, any of the authors) was a qualifying individual by connection with a country outside the United Kingdom, it shall be presumed until the contrary is proved that he was such a qualifying individual and that copyright accordingly subsists in the work, subject to the provisions of this Part.

(2)If under the law of that country a body is appointed to protect and enforce copyright in such works, Her Majesty may by Order in Council designate that body for the purposes of this section.

(3)A body so designated shall be recognised in the United Kingdom as having authority to do in place of the copyright owner anything, other than assign copyright, which it is empowered to do under the law of that country; and it may, in particular, bring proceedings in its own name.

(4)A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5)In subsection (1) a “qualifying individual” means an individual who at the material time (within the meaning of section 154) was a person whose works qualified under that section for copyright protection.

(6)This section does not apply if there has been an assignment of copyright in the work by the author of which notice has been given to the designated body; and nothing in this section affects the validity of an assignment of copyright made, or licence granted, by the author or a person lawfully claiming under him.

Transitional provisions and savingsU.K.

170 Transitional provisions and savings.U.K.

[F429(1)]Schedule 1 contains transitional provisions and savings relating to works made, and acts or events occurring, before the commencement of this Part, and otherwise with respect to the operation of the provisions of this Part.

[F430(2)The Secretary of State may by regulations amend Schedule 1 to reduce the duration of copyright in existing works which are unpublished, other than photographs or films.

F431(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) “ Existing works ” has the same meaning as in Schedule 1.

(5)Regulations under subsection (2) may—

(a)make different provision for different purposes;

(b)make supplementary or transitional provision;

(c)make consequential provision, including provision amending any enactment or subordinate legislation passed or made before that subsection comes into force.

(6)The power to make regulations under subsection (2) is exercisable by statutory instrument.

(7)A statutory instrument containing regulations under subsection (2) may not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.]

Textual Amendments

F429S. 170 renumbered as s. 170(1) (25.4.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 76(2), 103(1)

F431S. 170(3) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 17 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

171 Rights and privileges under other enactments or the common law.U.K.

(1)Nothing in this Part affects—

(a)any right or privilege of any person under any enactment (except where the enactment is expressly repealed, amended or modified by this Act);

(b)any right or privilege of the Crown subsisting otherwise than under an enactment;

(c)any right or privilege of either House of Parliament;

(d)the right of the Crown or any person deriving title from the Crown to sell, use or otherwise deal with articles forfeited under the laws relating to customs and excise;

(e)the operation of any rule of equity relating to breaches of trust or confidence.

(2)Subject to those savings, no copyright or right in the nature of copyright shall subsist otherwise than by virtue of this Part or some other enactment in that behalf.

(3)Nothing in this Part affects any rule of law preventing or restricting the enforcement of copyright, on grounds of public interest or otherwise.

(4)Nothing in this Part affects any right of action or other remedy, whether civil or criminal, available otherwise than under this Part in respect of acts infringing any of the rights conferred by Chapter IV (moral rights).

(5)The savings in subsection (1) have effect subject to section 164(4) and section 166(7) (copyright in Acts, Measures and Bills: exclusion of other rights in the nature of copyright).

Modifications etc. (not altering text)

C92Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

InterpretationU.K.

172 General provisions as to construction.U.K.

(1)This Part restates and amends the law of copyright, that is, the provisions of the M16Copyright Act 1956, as amended.

(2)A provision of this Part which corresponds to a provision of the previous law shall not be construed as departing from the previous law merely because of a change of expression.

(3)Decisions under the previous law may be referred to for the purpose of establishing whether a provision of this Part departs from the previous law, or otherwise for establishing the true construction of this Part.

Modifications etc. (not altering text)

C93Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

Marginal Citations

[F433172A[F432 Meaning of EEA and related expressions.]U.K.

[F434(1)In this Part—

  • “ the EEA ” means the European Economic Area; and

  • “ EEA state ” means a member State, Iceland, Liechtenstein or Norway. ]

F435(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F436(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F432S. 172A(1) and sidenote substituted (1.12.1996) by S.I. 1996/2967, reg. 9(5) (with Pt. III)

F433S. 172A inserted (1.1.1996) by S.I. 1995/3297, reg. 11(1) (with Pt. III)

Modifications etc. (not altering text)

C94Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

173 Construction of references to copyright owner.U.K.

(1)Where different persons are (whether in consequence of a partial assignment or otherwise) entitled to different aspects of copyright in a work, the copyright owner for any purpose of this Part is the person who is entitled to the aspect of copyright relevant for that purpose.

(2)Where copyright (or any aspect of copyright) is owned by more than one person jointly, references in this Part to the copyright owner are to all the owners, so that, in particular, any requirement of the licence of the copyright owner requires the licence of all of them.

Modifications etc. (not altering text)

C95Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

174 Meaning of “educational establishment” and related expressions.U.K.

(1)The expression “educational establishment” in a provision of this Part means—

(a)any school, and

(b)any other description of educational establishment specified for the purposes of this Part, or that provision, by order of the Secretary of State.

(2)The Secretary of State may by order provide that the provisions of this Part relating to educational establishments shall apply, with such modifications and adaptations as may be specified in the order, in relation to teachers who are employed by a [F437local authority (as defined in section 579(1) of the Education Act 1996) or (in Northern Ireland) a local education authority,] to give instruction elsewhere to pupils who are unable to attend an educational establishment.

(3)In subsection (1)(a) “school”—

(a)in relation to England and Wales, has the same meaning as in [F438the Education Act 1996];

(b)in relation to Scotland, has the same meaning as in the M17Education (Scotland) Act 1962, except that it includes an approved school within the meaning of the M18Social Work (Scotland) Act 1968; and

(c)in relation to Northern Ireland, has the same meaning as in the M19Education and Libraries (Northern Ireland) Order 1986.

(4)An order under subsection (1)(b) may specify a description of educational establishment by reference to the instruments from time to time in force under any enactment specified in the order.

(5)In relation to an educational establishment the expressions “teacher” and “pupil” in this Part include, respectively, any person who gives and any person who receives instruction.

(6)References in this Part to anything being done “on behalf of” an educational establishment are to its being done for the purposes of that establishment by any person.

(7)An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F438Words in s. 174(3) substituted (1.11.1996) by 1996 c. 56, ss. 582(1), 583(2), Sch. 37 Pt. I para. 83 (with Sch. 39)

Modifications etc. (not altering text)

C96Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

Marginal Citations

175 Meaning of publication and commercial publication.U.K.

(1)In this Part “publication”, in relation to a work—

(a)means the issue of copies to the public, and

(b)includes, in the case of a literary, dramatic, musical or artistic work, making it available to the public by means of an electronic retrieval system;

and related expressions shall be construed accordingly.

(2)In this Part “commercial publication”, in relation to a literary, dramatic, musical or artistic work means—

(a)issuing copies of the work to the public at a time when copies made in advance of the receipt of orders are generally available to the public, or

(b)making the work available to the public by means of an electronic retrieval system;

and related expressions shall be construed accordingly.

(3)In the case of a work of architecture in the form of a building, or an artistic work incorporated in a building, construction of the building shall be treated as equivalent to publication of the work.

(4)The following do not constitute publication for the purposes of this Part and references to commercial publication shall be construed accordingly—

(a)in the case of a literary, dramatic or musical work—

(i)the performance of the work, or

(ii)the [F439communication to the public of the work] (otherwise than for the purposes of an electronic retrieval system);

(b)in the case of an artistic work—

(i)the exhibition of the work,

(ii)the issue to the public of copies of a graphic work representing, or of photographs of, a work of architecture in the form of a building or a model for a building, a sculpture or a work of artistic craftsmanship,

(iii)the issue to the public of copies of a film including the work, or

(iv)the [F439communication to the public of the work] (otherwise than for the purposes of an electronic retrieval system);

(c)in the case of a sound recording or film—

(i)the work being played or shown in public, or

(ii)the [F439communication to the public of the work].

(5)References in this Part to publication or commercial publication do not include publication which is merely colourable and not intended to satisfy the reasonable requirements of the public.

(6)No account shall be taken for the purposes of this section of any unauthorised act.

Textual Amendments

F439Words in s. 175(4)(a)(ii)(b)(iv)(c)(ii) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1 para. 6(1) (with regs. 31-40)

Modifications etc. (not altering text)

C97Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

176 Requirement of signature: application in relation to body corporate.U.K.

(1)The requirement in the following provisions that an instrument be signed by or on behalf of a person is also satisfied in the case of a body corporate by the affixing of its seal—

  • section 78(3)(b) (assertion by licensor of right to identification of author in case of public exhibition of copy made in pursuance of the licence),

  • section 90(3) (assignment of copyright),

  • section 91(1) (assignment of future copyright),

  • section 92(1) (grant of exclusive licence).

(2)The requirement in the following provisions that an instrument be signed by a person is satisfied in the case of a body corporate by signature on behalf of the body or by the affixing of its seal—

  • section 78(2)(b) (assertion by instrument in writing of right to have author identified),

  • section 87(2) (waiver of moral rights).

Modifications etc. (not altering text)

C98Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

177 Adaptation of expressions for Scotland.U.K.

In the application of this Part to Scotland—

  • “account of profits” means accounting and payment of profits;

  • “accounts” means count, reckoning and payment;

  • “assignment” means assignation;

  • “costs” means expenses;

  • “defendant” means defender;

  • “delivery up” means delivery;

  • “estoppel” means personal bar;

  • “injunction” means interdict;

  • “interlocutory relief” means interim remedy; and

  • “plaintiff” means pursuer.

Modifications etc. (not altering text)

C99Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

178 Minor definitions.U.K.

In this Part—

  • “article”, in the context of an article in a periodical, includes an item of any description;

  • “business”includes a trade or profession;

  • “collective work” means—

    (a)

    a work of joint authorship, or

    (b)

    a work in which there are distinct contributions by different authors or in which works or parts of works of different authors are incorporated;

  • “computer-generated”, in relation to a work, means that the work is generated by computer in circumstances such that there is no human author of the work;

  • “country” includes any territory;

  • “the Crown” includes the Crown in right of [F440the Scottish Administration [F441, of the Welsh Assembly Government] or of] Her Majesty’s Government in Northern Ireland or in any country outside the United Kingdom to which this Part extends;

  • “electronic” means actuated by electric, magnetic, electro-mechanical energy, and “in electronic form” means in a form usable only by electronic means;

  • “employed”, “employee”, “employer”, and “employment” refer to employment under a contract of service or of apprenticeship;

  • “facsimile copy” includes a copy which is reduced or enlarged in scale;

  • “international organisation” means an organisation the members of which include one or more states;

  • “judicial proceedings”includes proceedings before any court, tribunal or person having authority to decide any matter affecting a person’s legal rights or liabilities;

  • [F442“national of the United Kingdom” means—

    (a)

    a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas Citizen,

    (b)

    a person who under the British Nationality Act 1981 is a British subject,

    (c)

    a British protected person within the meaning of that Act, or

    (d)

    a body incorporated under the law of any part of the United Kingdom.]

  • “parliamentary proceedings” includes proceedings of the Northern Ireland Assembly [F443of the Scottish Parliament][F444, of the New Northern Ireland Assembly] or of the European Parliament [F445and Assembly proceedings within the meaning of section 1(5) of the Government of Wales Act 2006];

  • [F446 “ private study ” does not include any study which is directly or indirectly for a commercial purpose; ]

  • [F447“producer”, in relation to a sound recording or a film, means the person by whom the arrangements necessary for the making of the sound recording or film are undertaken;]

  • [F448“public library” means a library administered by or on behalf of—

    (a)

    in England and Wales, a library authority within the meaning of the Public Libraries and Museums Act 1964;

    (b)

    in Scotland, a statutory library authority within the meaning of the Public Libraries (Scotland) Act 1955;

    (c)

    in Northern Ireland, an Education and Library Board within the meaning of the Education and Libraries (Northern Ireland) Order 1986;]

  • F449. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • [F450“rental right” means the right of a copyright owner to authorise or prohibit the rental of copies of the work (see section 18A);]

  • “reprographic copy” and “reprographic copying” refer to copying by means of a reprographic process;

  • “reprographic process” means a process—

    (a)

    for making facsimile copies, or

    (b)

    involving the use of an appliance for making multiple copies,

    and includes, in relation to a work held in electronic form, any copying by electronic means, but does not include the making of a film or sound recording;

  • “sufficient acknowledgement” means an acknowledgement identifying the work in question by its title or other description, and identifying the author unless—

    (a)

    in the case of a published work, it is published anonymously;

    (b)

    in the case of an unpublished work, it is not possible for a person to ascertain the identity of the author by reasonable inquiry;

  • “sufficient disclaimer”, in relation to an act capable of infringing the right conferred by section 80 (right to object to derogatory treatment of work), means a clear and reasonably prominent indication—

    (a)

    given at the time of the act, and

    (b)

    if the author or director is then identified, appearing along with the identification,

    that the work has been subjected to treatment to which the author or director has not consented,

  • “telecommunications system” means a system for conveying visual images, sounds or other information by electronic means;

  • “typeface” includes an ornamental motif used in printing;

  • “unauthorised”, as regards anything done in relation to a work, means done otherwise than—

    (a)

    by or with the licence of the copyright owner, or

    (b)

    if copyright does not subsist in the work, by or with the licence of the author or, in a case where section 11(2) would have applied, the author’s employer or, in either case, persons lawfully claiming under him, or

    (c)

    in pursuance of section 48 (copying, &c of certain material by the Crown);

  • [F451 “ wireless broadcast ” means a broadcast by means of wireless telegraphy; ]

  • “wireless telegraphy” means the sending of electro-magnetic energy over paths not provided by a material substance constructed or arranged for that purpose [F452, but does not include the transmission of microwave energy between terrestrial fixed points];

  • “writing” includes any form of notation or code, whether by hand or otherwise and regardless of the method by which, or medium in or on which, it is recorded, and “written” shall be construed accordingly

Textual Amendments

F440Words in s. 178 inserted (6.5.1999) by 1998 c. 46, s. 125(1), Sch. 8 para. 25(7)(a); S.I. 1998/3178, art. 2(2), Sch. 3

F441S. 178: words in definition of "the Crown" inserted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 29(2) (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

F442Words in s. 178 inserted (31.12.2020) by The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 19 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F443Words in s. 178 inserted (6.5.1999) by 1998 c. 46, s. 125(1), Sch. 8 para. 25(7)(b); S.I. 1998/3178, art. 2(2), Sch. 3

F444Words in s. 178 cease to have effect (2.12.1999) by virtue of 1998 c. 47, s. 99, Sch. 13 para. 8(7) (with s. 95); S.I. 1999/3209, art. 2, Sch.

F445S. 178: words in definition of "parliamentary proceedings" inserted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 29(3) (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

F446S. 178: definition of "private study" inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1 para. 15(3) (with regs. 31-40)

F447Definition in s. 178 inserted (1.12.1996 with effect in relation to films made on or after 31.7.1994) by S.I. 1996/2967, regs. 18(5), 36 (with Pt. III)

F448Definition in s. 178 inserted (1.12.1996) by S.I. 1996/2967, reg. 11(5) (with Pt. III)

F449Definition in s. 178 omitted (1.12.1996) by virtue of S.I. 1996/2967, reg. 10(3) (with Pt. III)

F450Definition in s. 178 inserted (1.12.1996) by S.I. 1996/2967, reg. 10(3) (with Pt. III)

F451S. 178: definition of "wireless broadcast" inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1 para. 15(3) (with regs. 31-40)

F452Words in s. 178 inserted (1.12.1996) by S.I. 1996/2967, reg. 8 (with Pt. III)

Modifications etc. (not altering text)

C100Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

179 Index of defined expressions.U.K.

The following Table shows provisions defining or otherwise explaining expressions used in this Part (other than provisions defining or explaining an expression used only in the same section)—

[F453accessible copy (in sections 31A to 31F)section 31F(4)]
account of profits and accounts (in Scotland)section 177
acts restricted by copyrightsection 16(1)
adaptationsection 21(3)
F454. . .F454. . .
[F455archivist (in sections 40A to 43)section 43A(5)]
article (in a periodical)section 178
artistic worksection 4(1)
assignment (in Scotland)section 177
authorsections 9 and 10(3)
[F456authorised body (in sections 31B to 31BB)section 31F(6)]
broadcast (and related expressions)section 6
buildingsection 4(2)
businesssection 178
F457. . . F458. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
collective worksection 178
commencement (in Schedule 1)paragraph 1(2) of that Schedule
commercial publicationsection 175
[F459communication to the publicsection 20]
computer-generatedsection 178
[F460conducted for profit (in sections 40A to 43)section 43A(4)]
copy and copyingsection 17
copyright (generally)section 1
copyright (in Schedule 1)paragraph 2(2) of that Schedule
copyright ownersections 101(2) and 173
Copyright Tribunalsection 145
copyright worksection 1(2)
costs (in Scotland)section 177
countrysection 178
[F461country of origin][F461section 15A.]
the Crownsection 178
Crown copyrightsections 163(2) and 164(3)
[F460curator (in sections 40A to 43)section 43A(5)]
[F462database][F462section 3A(1)]
defendant (in Scotland)section 177
delivery up (in Scotland)section 177
[F456disabled person (in sections 31A to 31F)section 31F(2) and (3)]
dramatic worksection 3(1)
educational establishmentsections 174(1) to (4)
electronic and electronic formsection 178
employed, employee, employer and employmentsection 178
[F463excepted sound recordingsection 72(1A)]
exclusive licencesection 92(1)
[F464 the EEA [F465and EEA state]][F466section 172A]
existing works (in Schedule 1)paragraph 1(3) of that Schedule
facsimile copysection 178
film[F467section 5B]
future copyrightsection 91(2)
general licence (in sections 140 and 141)section 140(7)
graphic worksection 4(2)
infringing copysection 27
injunction (in Scotland)section 177
interlocutory relief (in Scotland)section 177
international organisationsection 178
issue of copies to the public[F468section 18]
joint authorship (work of)sections 10(1) and (2)
judicial proceedingssection 178
[F469lawful user (in sections 50A to 50C)][F469section 50A(2).]
[F470lending][F470section 18A(2) to (6)]
[F471librarian (in sections 40A to 43section 43A(5)]
[F460library (in sections 40A to 43)section 43A(2)]
licence (in sections 125 to 128)section 124
licence of copyright ownersections 90(4), 91(3) and 173
licensing body (in Chapter VII)section 116(2)
licensing scheme (generally)section 116(1)
licensing scheme (in sections 118 to 121)section 117
literary worksection 3(1)
made (in relation to a literary, dramatic or musical work)section 3(2)
[F460museum (in sections 40A to 43)section 43A(3)]
musical worksection 3(1)
[F472national of the United Kingdom section 178]
[F473needletime][F473section 135A]
the new copyright provisions (in Schedule 1)paragraph 1(1) of that Schedule
the 1911 Act (in Schedule 1)paragraph 1(1) of that Schedule
the 1956 Act (in Schedule 1)paragraph 1(1) of that Schedule
on behalf of (in relation to an educational establishment)section 174(5)
[F462original (in relation to a database)][F462section 3A(2)]
Parliamentary copyrightsections 165(2) and (7) [F474166(6) [F475166A(3) [F476166B(3) 166C(3) and 166D(3)]]]
parliamentary proceedingssection 178
performancesection 19(2)
photographsection 4(2)
plaintiff (in Scotland)section 177
F477. . .F477. . .
F477. . .F477. . .
[F478private studysection 178]
[F479producer (in relation to a sound recording or film][F479section 178.]
programme (in the context of broadcasting)section 6(3)
prospective owner (of copyright)section 91(2)
[F480public library][F480section 178.]
publication and related expressionssection 175
published edition (in the context of copyright in the typographical arrangement)section 8
pupilsection 174(5)
rental[F481section 18A(2) to (6)]
[F470rental right][F470section 178.]
reprographic copies and repographic copyingsection 178
reprographic processsection 178
sculpturesection 4(2)
signedsection 176
sound recording[F482sections 5A and 135A]
sufficient acknowledgementsection 178
sufficient disclaimersection 178
[F456supply (in sections 31B to 31BB)section 31F(7)]
teachersection 174(5)
telecommunications systemsection 178
[F473terms of payment][F473section 135A]
typefacesection 178
unauthorised (as regards things done in relation to a work)section 178
unknown (in relation to the author of a work)section 9(5)
unknown authorship (work of)section 9(4)
F454. . .F454. . .
[F483wireless broadcastsection 178]
wireless telegraphysection 178
work (in Schedule 1)paragraph 2(1) of that Schedule
work of more than one author (in Chapter VII)section 116(4)
writing and writtensection 178

Textual Amendments

F457S. 179: entry for "cable programme, cable programme service (and related expressions)" repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(2), Sch. 2 (with regs. 31-40)

F461Words in s. 179 inserted (1.1.1996) by S.I. 1995/3297, reg. 8(2) (with Pt. III)

F462Words in s. 179 inserted (1.1.1998) by S.I. 1997/3032, reg. 11 (with Pt. IV)

F465Words in s. 179 substituted (31.12.2020) by The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 20(a) (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F466Words in s. 179 inserted (1.1.1996) by S.I. 1995/3297, reg. 11(2) (with Pt. III)

F467Words in s. 179 substituted (1.1.1996) by S.I. 1995/3297, reg. 9(5)(a) (with Pt. III)

F468Words in s. 179 inserted (1.12.1996) by S.I. 1996/2967, reg. 9(6)(b) (with Pt. III)

F469Words in s. 179 inserted (1.1.1993) by S.I. 1992/3233, reg. 9

F470Words in s. 179 inserted (1.12.1996) by S.I. 1996/2967, reg. 10(4) (with Pt. III)

F474Words in s. 179 substituted (6.5.1999) by 1998 c. 46, s. 125(1), Sch. 8 para. 25(8); S.I. 1998/3178, art. 2(2), Sch. 3

F475Words in s. 179 substituted (2.12.1999) by 1998 c. 47, s. 99, Sch. 13 para. 8(8) (with s. 95); S.I. 1999/3209, art. 2, Sch.

F476Words in s. 179 substituted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 30 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

F479Words in s. 179 inserted (1.12.1996 with effect in relation to films made on or after 1.7.1994) by S.I. 1996/2967, regs. 18(6), 36 (with Pt. III)

F480Words in s. 179 inserted (1.12.1996) by S.I. 1996/2967, reg. 11(6) (with Pt. III)

F481Words in s. 179 substituted (1.12.1996) by S.I. 1996/2967, reg. 10(4) (with Pt. III)

F482Words in s. 179 substituted (1.1.1996) by S.I. 1995/3297, reg. 9(5)(b) (with Pt. III)

Modifications etc. (not altering text)

C101Ss. 161, 162, 171(1)(3), 172-179 applied (1.12.1996) by S.I. 1996/2967, reg. 17(4) (with Pt. III)

Part IIU.K. Rights in performances

Modifications etc. (not altering text)

C103Pt. 2 extended (with modifications) (1.5.2005) by The Copyright and Performances (Application to Other Countries) Order 2005 (S.I. 2005/852), art. 6, Sch. (with art. 7) (which S.I. was revoked (6.4.2006) by S.I. 2006/316, art. 1(3))

C104Pt. 2 extended (with modifications) (6.4.2006) by The Copyright and Performances (Application to Other Countries) Order 2006 (S.I. 2006/316), art. 6, Sch. (with art. 7) (which S.I. was revoked (6.4.2007) by S.I. 2007/273, art. 1(3))

C105Pt. 2 extended (with modifications) (6.4.2007) by The Copyright and Performances (Application to Other Countries) Order 2007 (S.I. 2007/273), art. 6, Sch. (with art. 7) (which S.I. was revoked (6.4.2008) by S.I. 2008/677, art. 1(3))

C106Pt. 2 extended (with modifications) (6.4.2008) by The Copyright and Performances (Application to Other Countries) Order 2008 (S.I. 2008/677), art. 6, Sch. (with art. 7) (which S.I. was revoked (6.4.2012) by S.I. 2012/799, art. 1(3))

C107Pt. 2 extended (with modifications) (6.4.2012) by The Copyright and Performances (Application to Other Countries) Order 2012 (S.I. 2012/799), arts. 1(1), 6, 7, Sch. (with art. 8) (which S.I. was revoked (6.4.2013) by S.I. 2013/536, art. 1(3))

C108Pt. 2 extended in part (with modifications) (6.4.2013) by The Copyright and Performances (Application to Other Countries) Order 2013 (S.I. 2013/536), arts. 1(1), 6, 7, Sch. (with art. 8) (as amended (6.4.2015) by S.I. 2015/216, art. 2) (which S.I. and amending S.I. were revoked (6.4.2017) by S.I. 2016/1219, art. 1(3))

[F484Chapter 1U.K.INTRODUCTORY

Textual Amendments

F484Cross-headings before ss. 180, 181 omitted (1.2.2006) and ss. 180, 181 become Pt. 2 Ch. 1 by virtue of The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 4(1)-(3) (with reg. 8)

X1180 Rights conferred on performers and persons having recording rights.U.K.

(1)[F485Chapter 2 of this Part (economic rights)] confers rights—

(a)on a performer, by requiring his consent to the exploitation of his performances (see sections 181 to 184), and

(b)on a person having recording rights in relation to a performance, in relation to recordings made without his consent or that of the performer (see sections 185 to 188),

and creates offences in relation to dealing with or using illicit recordings and certain other related acts (see sections 198 and 201).

[F486(1A)Rights are also conferred on a performer by the following provisions of Chapter 3 of this Part (moral rights)—

(a)section 205C (right to be identified);

(b)section 205F (right to object to derogatory treatment of performance).]

(2)In this Part — “performance” means —

(a)a dramatic performance (which includes dance and mime),

(b)a musical performance,

(c)a reading or recitation of a literary work, or

(d)a performance of a variety act or any similar presentation,

which is, or so far as it is, a live performance given by one or more individuals; and “recording”, in relation to a performance, means a film or sound recording—

(a)made directly from the live performance,

(b)made from a broadcast of F487. . . the performance, or

(c)made, directly or indirectly, from another recording of the performance.

(3)The rights conferred by this Part apply in relation to performances taking place before the commencement of this Part; but no act done before commencement, or in pursuance of arrangements made before commencement, shall be regarded as infringing those rights.

(4)The rights conferred by this Part are independent of—

(a)any copyright in, or moral rights relating to, any work performed or any film or sound recording of, or broadcast F488. . . the performance, and

(b)any other right or obligation arising otherwise than under this Part.]

Editorial Information

X1The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F488Words in s. 180(1)(4)(a) repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(2), Sch. 2 (with regs. 32, 33)

[F489181 Qualifying performances.U.K.

(1)A performance is a qualifying performance for the purposes of this Part if it meets any of Conditions A to D.

(2)Condition A is that the performance is given by a qualifying individual.

(3)Condition B is that the performance takes place in a qualifying country.

(4)Condition C is that the performance is included in a sound recording and—

(a)the producer of that sound recording is a qualifying individual or a body incorporated under the law of a qualifying country, or

(b)that sound recording is—

(i)first published in a qualifying country, or

(ii)published in a qualifying country within the period of 30 days beginning with the day on which it is first published.

(5)But Condition C is not met if, or to the extent that, the sound recording in question is a copy taken from a previous sound recording.

(6)Condition D is that—

(a)the performance has not been included in a sound recording,

(b)the performance is broadcast, and

(c)the broadcast is—

(i)made from a qualifying country, or

(ii)made by a broadcasting organisation the headquarters of which are situated in a qualifying country.

(7)In subsection (4)(a), the “producer” of a sound recording means the person who undertakes the arrangements necessary for the making of the sound recording.]

Textual Amendments

F489S. 181 substituted (coming into force in accordance with s. 7(1) of the amending Act) by Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 (c. 6), s. 5(2) (with s. 5(4)-(6))

[F490Chapter 2U.K.ECONOMIC RIGHTS

Textual Amendments

F490Ss. 182-205B become Pt. 2 Ch. 2 (1.2.2006) by virtue of The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 4(4) (with reg. 8)

X2[F491Performers' rights]U.K.

Editorial Information

X2The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F491Pt. 2 Ch. 2: cross-heading inserted (1.2.2006) at beginning of Chapter by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 4(5) (with reg. 8)

X3[F492182 Consent required for recording, &c. of live performance.U.K.

(1)A performer’s rights are infringed by a person who, without his consent—

(a)makes a recording of the whole or any substantial part of a qualifying performance directly from the live performance,

(b)broadcasts live, F493. . . the whole or any substantial part of a qualifying performance,

(c)makes a recording of the whole or any substantial part of a qualifying performance directly from a broadcast of, F494. . . the live performance.

(2)F495. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In an action for infringement of a performer’s rights brought by virtue of this section damages shall not be awarded against a defendant who shows that at the time of the infringement he believed on reasonable grounds that consent had been given.]

Editorial Information

X3The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F492S. 182 substituted (1.12.1996) by S.I. 1996/2967, reg. 20(1) (with Pt. III)

X4[F496182A Consent required for copying of recording.U.K.

(1)A performer’s rights are infringed by a person who, without his consent, makes F497. . . a copy of a recording of the whole or any substantial part of a qualifying performance.

[F498(1A)In subsection (1), making a copy of a recording includes making a copy which is transient or is incidental to some other use of the original recording.]

(2)It is immaterial whether the copy is made directly or indirectly.

(3)The right of a performer under this section to authorise or prohibit the making of such copies is referred to in [F499this Chapter] as “reproduction right”.]

Editorial Information

X4The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F496S. 182A inserted (1.12.1996) by S.I. 1996/2967, reg. 20(2) (with Pt. III)

X5[F500182B Consent required for issue of copies to public.U.K.

(1)A performer’s rights are infringed by a person who, without his consent, issues to the public copies of a recording of the whole or any substantial part of a qualifying performance.

(2)References in this Part to the issue to the public of copies of a recording are to—

(a)the act of putting into circulation in the [F501UK-EEA area] copies not previously put into circulation in the [F501UK-EEA area] by or with the consent of the performer, or

(b)the act of putting into circulation outside the [F501UK-EEA area] copies not previously put into circulation in the [F501UK-EEA area] or elsewhere.

(3)References in this Part to the issue to the public of copies of a recording do not include—

(a)any subsequent distribution, sale, hiring or loan of copies previously put into circulation (but see section 182C: consent required for rental or lending), or

(b)any subsequent importation of such copies into the United Kingdom or [F502an] EEA state,

except so far as paragraph (a) of subsection (2) applies to putting into circulation in the [F503UK-EEA area] copies previously put into circulation outside the [F503UK-EEA area].

[F504(3A)In this section “UK-EEA area” means the United Kingdom and the EEA, taken together.]

(4)References in this Part to the issue of copies of a recording of a performance include the issue of the original recording of the live performance.

(5)The right of a performer under this section to authorise or prohibit the issue of copies to the public is referred to in [F505this Chapter] as “distribution right”.]

Editorial Information

X5The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F500S. 182B inserted (1.12.1996) by S.I. 1996/2967, reg. 20(2) (with Pt. III)

X6[F506182C Consent required for rental or lending of copies to public.U.K.

(1)A performer’s rights are infringed by a person who, without his consent, rents or lends to the public copies of a recording of the whole or any substantial part of a qualifying performance.

(2)In [F507this Chapter], subject to the following provisions of this section—

(a)“rental” means making a copy of a recording available for use, on terms that it will or may be returned, for direct or indirect economic or commercial advantage, and

(b)“lending” means making a copy of a recording available for use, on terms that it will or may be returned, otherwise than for direct or indirect economic or commercial advantage, through an establishment which is accessible to the public.

(3)The expressions “rental” and “lending” do not include—

(a)making available for the purpose of public performance, playing or showing in public [F508or communication to the public];

(b)making available for the purpose of exhibition in public; or

(c)making available for on-the-spot reference use.

(4)The expression “lending” does not include making available between establishments which are accessible to the public.

(5)Where lending by an establishment accessible to the public gives rise to a payment the amount of which does not go beyond what is necessary to cover the operating costs of the establishment, there is no direct or indirect economic or commercial advantage for the purposes of this section.

(6)References in [F507this Chapter] to the rental or lending of copies of a recording of a performance include the rental or lending of the original recording of the live performance.

(7)In [F507this Chapter]—

“rental right” means the right of a performer under this section to authorise or prohibit the rental of copies to the public, and

“lending right” means the right of a performer under this section to authorise or prohibit the lending of copies to the public.]

Editorial Information

X6The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F506S. 182C inserted (1.12.1996) by S.I. 1996/2967, reg. 20(2) (with Pt. III)

X7[F509182CAConsent required for making available to the publicU.K.

(1)A performer’s rights are infringed by a person who, without his consent, makes available to the public a recording of the whole or any substantial part of a qualifying performance by electronic transmission in such a way that members of the public may access the recording from a place and at a time individually chosen by them.

(2)The right of a performer under this section to authorise or prohibit the making available to the public of a recording is referred to in [F510this Chapter] as “making available right.]

Editorial Information

X7The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X8 [F511 182D Right to equitable remuneration for exploitation of sound recording.U.K.

(1)Where a commercially published sound recording of the whole or any substantial part of a qualifying performance—

(a)is played in public, or

[F512(b)is communicated to the public otherwise than by its being made available to the public in the way mentioned in section 182CA(1),]

the performer is entitled to equitable remuneration from the owner of the copyright in the sound recording [F513or, where copyright in the sound recording has expired pursuant to section 191HA(4), from a person who plays the sound recording in public or communicates the sound recording to the public].

[F514(1A)In subsection (1), the reference to publication of a sound recording includes making it available to the public by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.]

(2)The right to equitable remuneration under this section may not be assigned by the performer except to a collecting society for the purpose of enabling it to enforce the right on his behalf.

The right is, however, transmissible by testamentary disposition or by operation of law as personal or moveable property; and it may be assigned or further transmitted by any person into whose hands it passes.

(3)The amount payable by way of equitable remuneration is as agreed by or on behalf of the persons by and to whom it is payable, subject to the following provisions.

(4)In default of agreement as to the amount payable by way of equitable remuneration, the person by or to whom it is payable may apply to the Copyright Tribunal to determine the amount payable.

(5)A person to or by whom equitable remuneration is payable may also apply to the Copyright Tribunal—

(a)to vary any agreement as to the amount payable, or

(b)to vary any previous determination of the Tribunal as to that matter;

but except with the special leave of the Tribunal no such application may be made within twelve months from the date of a previous determination.

An order made on an application under this subsection has effect from the date on which it is made or such later date as may be specified by the Tribunal.

(6)On an application under this section the Tribunal shall consider the matter and make such order as to the method of calculating and paying equitable remuneration as it may determine to be reasonable in the circumstances, taking into account the importance of the contribution of the performer to the sound recording.

(7)An agreement is of no effect in so far as it purports—

(a)to exclude or restrict the right to equitable remuneration under this section, or

(b)to prevent a person questioning the amount of equitable remuneration or to restrict the powers of the Copyright Tribunal under this section.

[F515(8) In this section “ collecting society ” means a society or other organisation which has as its main object, or one of its main objects, the exercise of the right to equitable remuneration on behalf of more than one performer. ]]

Editorial Information

X8The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F511S. 182D inserted (1.12.1996) by S.I. 1996/2967, reg. 20(2) (with Pt. III)

Modifications etc. (not altering text)

X9183 Infringement of performer’s rights by use of recording made without consent.U.K.

A performer’s rights are infringed by a person who, without his consent—

(a)shows or plays in public the whole or any substantial part of a qualifying performance, or

(b)[F516communicates to the public] the whole or any substantial part of a qualifying performance,

by means of a recording which was, and which that person knows or has reason to believe was, made without the performer’s consent.

Editorial Information

X9The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X10184 Infringement of performer’s rights by importing, possessing or dealing with illicit recording.U.K.

(1)A performer’s rights are infringed by a person who, without his consent—

(a)imports into the United Kingdom otherwise than for his private and domestic use, or

(b)in the course of a business possesses, sells or lets for hire, offers or exposes for sale or hire, or distributes,

a recording of a qualifying performance which is, and which that person knows or has reason to believe is, an illicit recording.

(2)Where in an action for infringement of a performer’s rights brought by virtue of this section a defendant shows that the illicit recording was innocently acquired by him or a predecessor in title of his, the only remedy available against him in respect of the infringement is damages not exceeding a reasonable payment in respect of the act complained of.

(3)In subsection (2) “innocently acquired” means that the person acquiring the recording did not know and had no reason to believe that it was an illicit recording.

Editorial Information

X10The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X11 Rights of person having recording rightsU.K.

Editorial Information

X11The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X12185 Exclusive recording contracts and persons having recording rights.U.K.

(1)In [F517this Chapter] an “exclusive recording contract” means a contract between a performer and another person under which that person is entitled to the exclusion of all other persons (including the performer) to make recordings of one or more of his performances with a view to their commercial exploitation.

(2)References in [F517this Chapter] to a “person having recording rights”, in relation to a performance, are (subject to subsection (3)) to a person—

(a)who is party to and has the benefit of an exclusive recording contract to which the performance is subject, or

(b)to whom the benefit of such a contract has been assigned,

and who is a qualifying person.

(3)If a performance is subject to an exclusive recording contract but the person mentioned in subsection (2) is not a qualifying person, references in [F517this Chapter] to a “person having recording rights” in relation to the performance are to any person—

(a)who is licensed by such a person to make recordings of the performance with a view to their commercial exploitation, or

(b)to whom the benefit of such a licence has been assigned,

and who is a qualifying person.

(4)In this section “with a view to commercial exploitation” means with a view to the recordings being sold or let for hire, or shown or played in public.

Editorial Information

X12The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X13186 Consent required for recording of performance subject to exclusive contract.U.K.

(1)A person infringes the rights of a person having recording rights in relation to a performance who, without his consent or that of the performer, makes a recording of the whole or any substantial part of the performance F518. . . .

(2)In an action for infringement of those rights brought by virtue of this section damages shall not be awarded against a defendant who shows that at the time of the infringement he believed on reasonable grounds that consent had been given.

Editorial Information

X13The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X14187 Infringement of recording rights by use of recording made without consent.U.K.

(1)A person infringes the rights of a person having recording rights in relation to a performance who, without his consent or, in the case of a qualifying performance, that of the performer—

(a)shows or plays in public the whole or any substantial part of the performance, or

(b)[F519communicates to the public] the whole or any substantial part of the performance,

by means of a recording which was, and which that person knows or has reason to believe was, made without the appropriate consent.

(2)The reference in subsection (1) to “the appropriate consent” is to the consent of—

(a)the performer, or

(b)the person who at the time the consent was given had recording rights in relation to the performance (or, if there was more than one such person, of all of them).

Editorial Information

X14The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X15188 Infringement of recording rights by importing, possessing or dealing with illicit recording.U.K.

(1)A person infringes the rights of a person having recording rights in relation to a performance who, without his consent or, in the case of a qualifying performance, that of the performer—

(a)imports into the United Kingdom otherwise than for his private and domestic use, or

(b)in the course of a business possesses, sells or lets for hire, offers or exposes for sale or hire, or distributes,

a recording of the performance which is, and which that person knows or has reason to believe is, an illicit recording.

(2)Where in an action for infringement of those rights brought by virtue of this section a defendant shows that the illicit recording was innocently acquired by him or a predecessor in title of his, the only remedy available against him in respect of the infringement is damages not exceeding a reasonable payment in respect of the act complained of.

(3)In subsection (2) “innocently acquired” means that the person acquiring the recording did not know and had no reason to believe that it was an illicit recording.

Editorial Information

X15The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X16 Exceptions to rights conferredU.K.

Editorial Information

X16The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X17189 Acts permitted notwithstanding rights conferred by [F520this Chapter].U.K.

The provisions of Schedule 2 specify acts which may be done notwithstanding the rights conferred by [F521this Chapter], being acts which correspond broadly to certain of those specified in Chapter III of Part I (acts permitted notwithstanding copyright).

Editorial Information

X17The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F520Words in heading to s. 189 substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 8 (with reg. 8)

X18190 Power of tribunal to give consent on behalf of performer in certain cases.U.K.

[F522(1)The Copyright Tribunal may, on the application of a person wishing to make a copy of a recording of a performance, give consent in a case where the identity or whereabouts of the person entitled to the reproduction right cannot be ascertained by reasonable inquiry.]

(2)Consent given by the Tribunal has effect as consent of [F523the person entitled to the reproduction right] for the purposes of—

(a)the provisions of [F524this Chapter] relating to performers’ rights, and

(b)section 198(3)(a) (criminal liability: sufficient consent in relation to qualifying performances),

and may be given subject to any conditions specified in the Tribunal’s order.

(3)The Tribunal shall not give consent under subsection (1)(a) except after the service or publication of such notices as may be required by rules made under section 150 (general procedural rules) or as the Tribunal may in any particular case direct.

F525(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)In any case the Tribunal shall take into account the following factors—

(a)whether the original recording was made with the performer’s consent and is lawfully in the possession or control of the person proposing to make the further recording;

(b)whether the making of the further recording is consistent with the obligations of the parties to the arrangements under which, or is otherwise consistent with the purposes for which, the original recording was made.

(6)Where the Tribunal gives consent under this section it shall, in default of agreement between the applicant and [F526the person entitled to the reproduction right], make such order as it thinks fit as to the payment to be made to [F527that person] in consideration of consent being given.

Editorial Information

X18The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F522S. 190(1) substituted (1.12.1996) by S.I. 1996/2967, reg. 23(2) (with Pt. III)

F523Words in s. 190(2) substituted (1.12.1996) by S.I. 1996/2967, reg. 23(3) (with Pt. III)

F525S. 190(4) omitted (1.12.1996) by virtue of S.I. 1996/2967, reg. 23(4) (with Pt. III)

F526Words in s. 190(6) substituted (1.12.1996) by S.I. 1996/2967, reg. 23(5)(a) (with Pt. III)

F527Words in s. 190(6) substituted (1.12.1996) by S.I. 1996/2967, reg. 23(5)(b) (with Pt. III)

X19[F528Duration of rights]U.K.

Editorial Information

X19The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F528Cross-heading substituted (1.12.1996) by S.I. 1996/2967, reg. 21(5)(a) (with Pt. III)

X20 [F529 191 Duration of rights.]U.K.

(1)The following provisions have effect with respect to the duration of the rights conferred by [F530this Chapter].

(2)The rights conferred by [F530this Chapter] in relation to a performance expire—

(a)at the end of the period of 50 years from the end of the calendar year in which the performance takes place, or

(b)if during that period a recording of the performance[F531, other than a sound recording,] is released, 50 years from the end of the calendar year in which it is released, [F532or

(c)if during that period a sound recording of the performance is released, 70 years from the end of the calendar year in which it is released,]

subject as follows.

(3)For the purposes of subsection (2) a recording is “released” when it is first published, played or shown in public [F533 or communicated to the public]; but in determining whether a recording has been released no account shall be taken of any unauthorised act.

(4) Where a performer is not a national of [F534the United Kingdom], the duration of the rights conferred by [F530 this Chapter ] in relation to his performance is that to which the performance is entitled in the country of which he is a national, provided that does not exceed the period which would apply under subsections (2) and (3).

(5)If or to the extent that the application of subsection (4) would be at variance with an international obligation to which the United Kingdom became subject prior to 29th October 1993, the duration of the rights conferred by [F530this Chapter] shall be as specified in subsections (2) and (3).]

Editorial Information

X20The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F529S. 191 substituted (1.1.1996) by S.I. 1995/3297, reg. 10 (with Pt. III)

F530Words in s. 191(1)(2)(4)(5) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 8 (with reg. 8)

F534Words in s. 191(4) substituted (31.12.2020) by The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 21 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

X21[F535Performers’ property rights]U.K.

Editorial Information

X21The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F535Crossheading inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X22[F536191A Performers’ property rights.U.K.

(1)The following rights conferred by [F537this Chapter] on a performer—

  • reproduction right (section 182A),

  • distribution right (section 182B),

  • rental right and lending right (section 182C),

  • [F538making available right (section 182CA),]

are property rights (“F539. . . performer’s property rights”).

(2)References in [F537this Chapter] to the consent of the performer shall be construed in relation to a performer’s property rights as references to the consent of the rights owner.

(3)Where different persons are (whether in consequence of a partial assignment or otherwise) entitled to different aspects of a performer’s property rights in relation to a performance, the rights owner for any purpose of [F537this Chapter] is the person who is entitled to the aspect of those rights relevant for that purpose.

(4)Where a performer’s property rights (or any aspect of them) is owned by more than one person jointly, references in [F537this Chapter] to the rights owner are to all the owners, so that, in particular, any requirement of the licence of the rights owner requires the licence of all of them.]

Editorial Information

X22The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F536Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X23[F540191B Assignment and licences.U.K.

(1)A performer’s property rights are transmissible by assignment, by testamentary disposition or by operation of law, as personal or moveable property.

(2)An assignment or other transmission of a performer’s property rights may be partial, that is, limited so as to apply—

(a)to one or more, but not all, of the things requiring the consent of the rights owner;

(b)to part, but not the whole, of the period for which the rights are to subsist.

(3)An assignment of a performer’s property rights is not effective unless it is in writing signed by or on behalf of the assignor.

(4)A licence granted by the owner of a performer’s property rights is binding on every successor in title to his interest in the rights, except a purchaser in good faith for valuable consideration and without notice (actual or constructive) of the licence or a person deriving title from such a purchaser; and references in [F541this Chapter] to doing anything with, or without, the licence of the rights owner shall be construed accordingly.]

Editorial Information

X23The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F540Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X24[F542191C Prospective ownership of a performer’s property rights.U.K.

(1)This section applies where by an agreement made in relation to a future recording of a performance, and signed by or on behalf of the performer, the performer purports to assign his performer’s property rights (wholly or partially) to another person.

(2)If on the rights coming into existence the assignee or another person claiming under him would be entitled as against all other persons to require the rights to be vested in him, they shall vest in the assignee or his successor in title by virtue of this subsection.

(3)A licence granted by a prospective owner of a performer’s property rights is binding on every successor in title to his interest (or prospective interest) in the rights, except a purchaser in good faith for valuable consideration and without notice (actual or constructive) of the licence or a person deriving title from such a purchaser.

References in [F543this Chapter] to doing anything with, or without, the licence of the rights owner shall be construed accordingly.

(4)In subsection (3) “prospective owner” in relation to a performer’s property rights means a person who is prospectively entitled to those rights by virtue of such an agreement as is mentioned in subsection (1).]

Editorial Information

X24The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F542Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X25[F544191D Exclusive licences.U.K.

(1)In [F545this Chapter] an “exclusive licence” means a licence in writing signed by or on behalf of the owner of a performer’s property rights authorising the licensee to the exclusion of all other persons, including the person granting the licence, to do anything requiring the consent of the rights owner.

(2)The licensee under an exclusive licence has the same rights against a successor in title who is bound by the licence as he has against the person granting the licence.]

Editorial Information

X25The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F544Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X26[F546191E Performer’s property right to pass under will with unpublished original recording.U.K.

Where under a bequest (whether general or specific) a person is entitled beneficially or otherwise to any material thing containing an original recording of a performance which was not published before the death of the testator, the bequest shall, unless a contrary intention is indicated in the testator’s will or a codicil to it, be construed as including any performer’s rights in relation to the recording to which the testator was entitled immediately before his death.]

Editorial Information

X26The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F546Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X27[F547191F Presumption of transfer of rental right in case of film production agreement.U.K.

(1)Where an agreement concerning film production is concluded between a performer and a film producer, the performer shall be presumed, unless the agreement provides to the contrary, to have transferred to the film producer any rental right in relation to the film arising from the inclusion of a recording of his performance in the film.

(2)Where this section applies, the absence of signature by or on behalf of the performer does not exclude the operation of section 191C (effect of purported assignment of future rights).

(3)The reference in subsection (1) to an agreement concluded between a performer and a film producer includes any agreement having effect between those persons, whether made by them directly or through intermediaries.

(4)Section 191G (right to equitable remuneration on transfer of rental right) applies where there is a presumed transfer by virtue of this section as in the case of an actual transfer.]

Editorial Information

X27The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F547Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

Modifications etc. (not altering text)

C113S. 191F applied (1.12.1996) by S.I. 1996/2967, reg. 32(1) (with Pt. III)

X28[F548191G Right to equitable remuneration where rental right transferred.U.K.

(1)Where a performer has transferred his rental right concerning a sound recording or a film to the producer of the sound recording or film, he retains the right to equitable remuneration for the rental.

The reference above to the transfer of rental right by one person to another includes any arrangement having that effect, whether made by them directly or through intermediaries.

(2)The right to equitable remuneration under this section may not be assigned by the performer except to a collecting society for the purpose of enabling it to enforce the right on his behalf.

The right is, however, transmissible by testamentary disposition or by operation of law as personal or moveable property; and it may be assigned or further transmitted by any person into whose hands it passes.

(3)Equitable remuneration under this section is payable by the person for the time being entitled to the rental right, that is, the person to whom the right was transferred or any successor in title of his.

(4)The amount payable by way of equitable remuneration is as agreed by or on behalf of the persons by and to whom it is payable, subject to section 191H (reference of amount to Copyright Tribunal).

(5)An agreement is of no effect in so far as it purports to exclude or restrict the right to equitable remuneration under this section.

(6)In this section a “collecting society” means a society or other organisation which has as its main object, or one of its main objects, the exercise of the right to equitable remuneration on behalf of more than one performer.]

Editorial Information

X28The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F548Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

Modifications etc. (not altering text)

C114S. 191G applied (with modifications) (1.12.1996) by S.I. 1996/2967, reg. 32(2) (with Pt. III)

C115S. 191G restricted (1.12.1996) by S.I. 1996/2967, reg. 33 (with Pt. III)

X29[F549191H Equitable remuneration: reference of amount to Copyright Tribunal.U.K.

(1)In default of agreement as to the amount payable by way of equitable remuneration under section 191G, the person by or to whom it is payable may apply to the Copyright Tribunal to determine the amount payable.

(2)A person to or by whom equitable remuneration is payable may also apply to the Copyright Tribunal—

(a)to vary any agreement as to the amount payable, or

(b)to vary any previous determination of the Tribunal as to that matter;

but except with the special leave of the Tribunal no such application may be made within twelve months from the date of a previous determination.

An order made on an application under this subsection has effect from the date on which it is made or such later date as may be specified by the Tribunal.

(3)On an application under this section the Tribunal shall consider the matter and make such order as to the method of calculating and paying equitable remuneration as it may determine to be reasonable in the circumstances, taking into account the importance of the contribution of the performer to the film or sound recording.

(4)Remuneration shall not be considered inequitable merely because it was paid by way of a single payment or at the time of the transfer of the rental right.

(5)An agreement is of no effect in so far as it purports to prevent a person questioning the amount of equitable remuneration or to restrict the powers of the Copyright Tribunal under this section.]

Editorial Information

X29The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F549Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

[F550191HAAssignment of performer’s property rights in a sound recordingU.K.

(1)This section applies where a performer has [F551by an agreement] assigned the following rights concerning a sound recording to the producer of the sound recording—

(a)reproduction, distribution and making available rights, or

(b)performer’s property rights.

(2)If, at the end of the 50-year period, the producer has failed to meet one or both of the following conditions, the performer may give a notice in writing to the producer of the performer’s intention to terminate the agreement—

(a)condition 1 is to issue to the public copies of the sound recording in sufficient quantities;

(b)condition 2 is to make the sound recording available to the public by electronic transmission in such a way that a member of the public may access the recording from a place and at a time chosen by him or her.

(3)If, at any time after the end of the 50-year period, the producer, having met one or both of the conditions referred to in subsection (2), fails to do so, the performer may give a notice in writing to the producer of the performer’s intention to terminate the agreement.

(4)If at the end of the period of 12 months beginning with the date of the notice, the producer has not met the conditions referred to in subsection (2), the agreement terminates and the copyright in the sound recording expires with immediate effect.

(5)An agreement is of no effect in so far as it purports to exclude or restrict the right to give a notice under subsection (2) or (3).

(6)A reference in this section to the assignment of rights includes any arrangement having that effect, whether made directly between the parties or through intermediaries.

(7)In this section—

  • “50-year period” means

    (a)

    where the sound recording is published during the initial period, the period of 50 years from the end of the calendar year in which the sound recording is first published, or

    (b)

    where during the initial period the sound recording is not published but is made available to the public by being played in public or communicated to the public, the period of 50 years from the end of the calendar year in which it was first made available to the public,

    but in determining whether a sound recording has been published, played in public or communicated to the public, no account shall be taken of any unauthorised act,

  • “initial period” means the period beginning on the date the recording is made and ending 50 years from the end of the calendar year in which the sound recording is made,

  • “producer” means the person for the time being entitled to the copyright in the sound recording,

  • “sufficient quantities” means such quantity as to satisfy the reasonable requirements of the public for copies of the sound recording,

  • “unauthorised act” has the same meaning as in section 178.

Textual Amendments

191HBPayment in consideration of assignmentU.K.

(1)A performer who, under an agreement relating to the assignment of rights referred to in section 191HA(1) (an “assignment agreement”), is entitled to a non-recurring payment in consideration of the assignment, is entitled to an annual payment for each relevant period from—

(a)the producer, or

(b)where the producer has granted an exclusive licence of the copyright in the sound recording, the licensee under the exclusive licence (the “exclusive licensee”).

(2)In this section, “relevant period” means—

(a)the period of 12 months beginning at the end of the 50-year period, and

(b)each subsequent period of 12 months beginning with the end of the previous period, until the date on which copyright in the sound recording expires.

(3)The producer or, where relevant, the exclusive licensee gives effect to the entitlement under subsection (1) by remitting to a collecting society for distribution to the performer in accordance with its rules an amount for each relevant period equal to 20% of the gross revenue received during that period in respect of—

(a)the reproduction and issue to the public of copies of the sound recording, and

(b)the making available to the public of the sound recording by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.

(4)The amount required to be remitted under subsection (3) is payable within 6 months of the end of each relevant period and is recoverable by the collecting society as a debt.

(5)Subsection (6) applies where—

(a)the performer makes a written request to the producer or, where relevant, the exclusive licensee for information in that person’s possession or under that person’s control to enable the performer—

(i)to ascertain the amount of the annual payment to which the performer is entitled under subsection (1), or

(ii)to secure its distribution by the collecting society, and

(b)the producer or, where relevant, the exclusive licensee does not supply the information within the period of 90 days beginning with the date of the request.

(6)The performer may apply to the county court, or in Scotland to the sheriff, for an order requiring the producer or, where relevant, the exclusive licensee to supply the information.

(7)An agreement is of no effect in so far as it purports to exclude or restrict the entitlement under subsection (1).

(8)In the event of any dispute as to the amount required to be remitted under subsection (3), the performer may apply to the Copyright Tribunal to determine the amount payable.

(9)Where a performer is entitled under an assignment agreement to recurring payments in consideration of the assignment, the payments must, from the end of the 50-year period, be made in full, regardless of any provision in the agreement which entitles the producer to withhold or deduct sums from the amounts payable.

(10)In this section—

  • “producer” and “50-year period” each has the same meaning as in section 191HA,

  • “exclusive licence” has the same meaning as in section 92, and

  • “collecting society” has the same meaning as in section 191G.]

Textual Amendments

X30[F552191I Infringement actionable by rights owner.U.K.

(1)An infringement of a performer’s property rights is actionable by the rights owner.

(2)In an action for infringement of a performer’s property rights all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right.

(3)This section has effect subject to the following provisions of [F553this Chapter].]

Editorial Information

X30The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F552Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X31[F554191J Provisions as to damages in infringement action.U.K.

(1)Where in an action for infringement of a performer’s property rights it is shown that at the time of the infringement the defendant did not know, and had no reason to believe, that the rights subsisted in the recording to which the action relates, the plaintiff is not entitled to damages against him, but without prejudice to any other remedy.

(2)The court may in an action for infringement of a performer’s property rights having regard to all the circumstances, and in particular to—

(a)the flagrancy of the infringement, and

(b)any benefit accruing to the defendant by reason of the infringement,

award such additional damages as the justice of the case may require.]

Editorial Information

X31The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F554Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X32[F555191JAInjunctions against service providersU.K.

?

(1)The High Court (in Scotland, the Court of Session) shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe a performer’s property right.

(2)In determining whether a service provider has actual knowledge for the purpose of this section, a court shall take into account all matters which appear to it in the particular circumstances to be relevant and, amongst other things, shall have regard to—

(a)whether a service provider has received a notice through a means of contact made available in accordance with regulation 6(1)(c) of the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013); and

(b)the extent to which any notice includes—

(i)the full name and address of the sender of the notice;

(ii)details of the infringement in question.

(3) In this section “ service provider ” has the meaning given to it by regulation 2 of the Electronic Commerce ( EC Directive) Regulations 2002.

(4)Section 177 applies in respect of this section as it applies in respect of Part 1.]

Editorial Information

X32The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X33[F556191K Undertaking to take licence of right in infringement proceedings.U.K.

(1)If in proceedings for infringement of a performer’s property rights in respect of which a licence is available as of right under paragraph 17 of Schedule 2A (powers exercisable in consequence of competition report) the defendant undertakes to take a licence on such terms as may be agreed or, in default of agreement, settled by the Copyright Tribunal under that paragraph—

(a)no injunction shall be granted against him,

(b)no order for delivery up shall be made under section 195, and

(c)the amount recoverable against him by way of damages or on an account of profits shall not exceed double the amount which would have been payable by him as licensee if such a licence on those terms had been granted before the earliest infringement.

(2)An undertaking may be given at any time before final order in the proceedings, without any admission of liability.

(3)Nothing in this section affects the remedies available in respect of an infringement committed before licences of right were available.]

Editorial Information

X33The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F556Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X34[F557191L Rights and remedies for exclusive licensee.U.K.

(1)An exclusive licensee has, except against the owner of a performer’s property rights, the same rights and remedies in respect of matters occurring after the grant of the licence as if the licence had been an assignment.

(2)His rights and remedies are concurrent with those of the rights owner; and references in the relevant provisions of [F558this Chapter] to the rights owner shall be construed accordingly.

(3)In an action brought by an exclusive licensee by virtue of this section a defendant may avail himself of any defence which would have been available to him if the action had been brought by the rights owner.]

Editorial Information

X34The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F557Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X35[F559191M Exercise of concurrent rights.U.K.

(1)Where an action for infringement of a performer’s property rights brought by the rights owner or an exclusive licensee relates (wholly or partly) to an infringement in respect of which they have concurrent rights of action, the rights owner or, as the case may be, the exclusive licensee may not, without the leave of the court, proceed with the action unless the other is either joined as plaintiff or added as a defendant.

(2)A rights owner or exclusive licensee who is added as a defendant in pursuance of subsection (1) is not liable for any costs in the action unless he takes part in the proceedings.

(3)The above provisions do not affect the granting of interlocutory relief on an application by the rights owner or exclusive licensee alone.

(4)Where an action for infringement of a performer’s property rights is brought which relates (wholly or partly) to an infringement in respect of which the rights owner and an exclusive licensee have or had concurrent rights of action—

(a)the court shall in assessing damages take into account—

(i)the terms of the licence, and

(ii)any pecuniary remedy already awarded or available to either of them in respect of the infringement;

(b)no account of profits shall be directed if an award of damages has been made, or an account of profits has been directed, in favour of the other of them in respect of the infringement; and

(c)the court shall if an account of profits is directed apportion the profits between them as the court considers just, subject to any agreement between them; and these provisions apply whether or not the rights owner and the exclusive licensee are both parties to the action.

(5)The owner of a performer’s property rights shall notify any exclusive licensee having concurrent rights before applying for an order under section 195 (order for delivery up) or exercising the right conferred by section 196 (right of seizure); and the court may on the application of the licensee make such order under section 195 or, as the case may be, prohibiting or permitting the exercise by the rights owner of the right conferred by section 196, as it thinks fit having regard to the terms of the licence.]

Editorial Information

X35The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F559Ss. 191A-191M inserted (1.12.1996) by S.I. 1996/2967, reg. 21(1) (with Pt. III)

X36[F560Non-property rights]U.K.

Editorial Information

X36The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F560Ss. 192A, 192B and crossheading substituted for s. 192 (1.12.1996) by S.I. 1996/2967, reg. 21(2) (with Pt. III)

X37 [F561 192A Performers’ non-property rights.U.K.

(1)the rights conferred on a performer by -

section 182 (consent required for recording, &c. of live performance),

section 183 (infringement of performer’s rights by use of recording made without consent), F562 ...

section 184 (infringement of performer’s rights importing, possessing or dealing with illicit recording),

[F563section 191HA (assignment of performer’s property rights in a sound recording), and

section 191HB (payment in consideration of assignment),]

are not assignable or transmissible, except to the following extent.

They are referred to in [F564 this Chapter ] as “ F565 . . . performer’s non-property rights”.

(2)On the death of a person entitled to any such right—

(a)the right passes to such person as he may by testamentary disposition specifically direct, and

(b)if or to the extent that there is no such direction, the right is exercisable by his personal representatives.

(3)References in [F564this Chapter] to the performer, in the context of the person having any such right, shall be construed as references to the person for the time being entitled to exercise those rights.

(4)Where by virtue of subsection (2)(a) a right becomes exercisable by more than one person, it is exercisable by each of them independently of the other or others.

(5)Any damages recovered by personal representatives by virtue of this section in respect of an infringement after a person’s death shall devolve as part of his estate as if the right of action had subsisted and been vested in him immediately before his death.]

Editorial Information

X37The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F561Ss. 192A, 192B and crossheading substituted for s. 192 (1.12.1996) by S.I. 1996/2967, reg. 21(2) (with Pt. III)

X38[F566192B Transmissibility of rights of person having recording rights.U.K.

(1)The rights conferred by [F567this Chapter] on a person having recording rights are not assignable or transmissible.

(2)This does not affect section 185(2)(b) or (3)(b), so far as those provisions confer rights under [F567this Chapter] on a person to whom the benefit of a contract or licence is assigned.]

Editorial Information

X38The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F566Ss. 192A, 192B and crossheading substituted for s. 192 (1.12.1996) by S.I. 1996/2967, reg. 21(2) (with Pt. III)

X39193 Consent.U.K.

(1)Consent for the purposes of [F568this Chapter][F569by a person having a performer’s non-property rights, or by a person having recording rights,] may be given in relation to a specific performance, a specified description of performances or performances generally, and may relate to past or future performances.

(2)A person having recording rights in a performance is bound by any consent given by a person through whom he derives his rights under the exclusive recording contract or licence in question, in the same way as if the consent had been given by him.

(3)Where [F570a performer’s non-property right] passes to another person, any consent binding on the person previously entitled binds the person to whom the right passes in the same way as if the consent had been given by him.

Editorial Information

X39The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F569Words in s. 193(1) inserted (1.12.1996) by S.I. 1996/2967, reg. 21(3)(a) (with Pt. III)

F570Words in s. 193(3) substituted (1.12.1996) by S.I. 1996/2967, reg. 21(3)(b) (with Pt. III)

X40F571. . .U.K.

Editorial Information

X40The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F571Crossheading before s. 194 omitted (1.12.1996) by virtue of S.I. 1996/2967, reg. 21(5)(b) (with Pt. III)

X41194 Infringement actionable as breach of statutory duty.U.K.

An infringement of [F572—

(a)a performer’s non-property rights, or

(b)any right conferred by [F573this Chapter] on a person having recording rights,]

is actionable by the person entitled to the right as a breach of statutory duty.

Editorial Information

X41The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F572Words in s. 194 substituted (1.12.1996) by S.I. 1996/2967, reg. 21(4) (with Pt. III)

X42[F574Delivery up or seizure of illicit recordings]U.K.

Editorial Information

X42The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F574Heading before s. 195 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(5)(c) (with Pt. III)

X43195 Order for delivery up.U.K.

(1)Where a person has in his possession, custody or control in the course of a business an illicit recording of a performance, a person having performer’s rights or recording rights in relation to the performance under [F575this Chapter] may apply to the court for an order that the recording be delivered up to him or to such other person as the court may direct.

(2)An application shall not be made after the end of the period specified in section 203; and no order shall be made unless the court also makes, or it appears to the court that there are grounds for making, an order under section 204 (order as to disposal of illicit recording).

(3)A person to whom a recording is delivered up in pursuance of an order under this section shall, if an order under section 204 is not made, retain it pending the making of an order, or the decision not to make an order, under that section.

(4)Nothing in this section affects any other power of the court.

Editorial Information

X43The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

Modifications etc. (not altering text)

C116S. 195 extended by S.I. 1991/724, art. 2(1)(n)

X44196 Right to seize illicit recordings.U.K.

(1)An illicit recording of a performance which is found exposed or otherwise immediately available for sale or hire, and in respect of which a person would be entitled to apply for an order under section 195, may be seized and detained by him or a person authorised by him.

The right to seize and detain is exercisable subject to the following conditions and is subject to any decision of the court under section 204 (order as to disposal of illicit recording).

(2)Before anything is seized under this section notice of the time and place of the proposed seizure must be given to a local police station.

(3)A person may for the purpose of exercising the right conferred by this section enter premises to which the public have access but may not seize anything in the possession, custody or control of a person at a permanent or regular place of business of his and may not use any force.

(4)At the time when anything is seized under this section there shall be left at the place where it was seized a notice in the prescribed form containing the prescribed particulars as to the person by whom or on whose authority the seizure is made and the grounds on which it is made.

(5)In this section—

  • “premises” includes land, buildings, fixed or moveable structures, vehicles, vessels, aircraft and hovercraft; and

  • “prescribed” means prescribed by order of the Secretary of State.

(6)An order of the Secretary of State under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Editorial Information

X44The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X45197 Meaning of “illicit recording”.U.K.

(1)In [F576this Chapter] “illicit recording”, in relation to a performance, shall be construed in accordance with this section.

(2)For the purposes of a performer’s rights, a recording of the whole or any substantial part of a performance of his is an illicit recording if it is made, otherwise than for private purposes, without his consent.

(3)For the purposes of the rights of a person having recording rights, a recording of the whole or any substantial part of a performance subject to the exclusive recording contract is an illicit recording if it is made, otherwise than for private purposes, without his consent or that of the performer.

(4)For the purposes of sections 198 and 199 (offences and orders for delivery up in criminal proceedings), a recording is an illicit recording if it is an illicit recording for the purposes mentioned in subsection (2) or subsection (3).

(5)In [F576this Chapter] “illicit recording” includes a recording falling to be treated as an illicit recording by virtue of any of the following provisions of Schedule 2—

  • [F577paragraph 1D(3) (copies for text and data analysis for non-commercial research),]

  • [F578paragraph 3A(5) or (6) or 3B(10) (accessible copies of recordings made for disabled persons)]

  • [F579paragraph 1B(5) and (7) (personal copies of recordings for private use),]

  • F580...

  • [F581paragraph 6(5) (recording by educational establishments of broadcasts),]

  • [F577paragraph 6F(5)(b) (copying by librarians: single copies of published recordings),]

  • [F577paragraph 6G(5)(b) (copying by librarians or archivists: single copies of unpublished recordings),]

  • [F577paragraph 6ZA(7) (copying and use of extracts of recordings by educational establishments),]

  • paragraph 12(2) (recordings of performance in electronic form retained on transfer of principal recording), F582. . .

  • [F577paragraph 14(6)(b) (recordings of folksongs),]

  • paragraph 16(3) (recordings made for purposes of broadcast F583...),

  • [F584paragraph 17A(2) (recording for the purposes of time-shifting), or

  • paragraph 17B(2) (photographs of broadcasts),]

but otherwise does not include a recording made in accordance with any of the provisions of that Schedule.

(6)It is immaterial for the purposes of this section where the recording was made.

Editorial Information

X45The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F579Words in s. 197(5) inserted (1.10.2014) by The Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (S.I. 2014/2361), regs. 1(1), 4(2) (with reg. 5) (but note that the amending S.I. was quashed with prospective effect by the High Court in the case of R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), 17 July 2015)

[F585197APresumptions relevant to recordings of performancesU.K.

(1)In proceedings brought by virtue of this Part with respect to the rights in a performance, where copies of a recording of the performance as issued to the public bear a statement that a named person was the performer, the statement shall be admissible as evidence of the fact stated and shall be presumed to be correct until the contrary is proved.

(2)Subsection (1) does not apply to proceedings for an offence under section 198 (criminal liability for making etc. illicit recordings); but without prejudice to its application in proceedings for an order under section 199 (order for delivery up in criminal proceedings).]

Textual Amendments

X46 OffencesU.K.

Editorial Information

X46The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X47198 Criminal liability for making, dealing with or using illicit recordings.U.K.

(1)A person commits an offence who without sufficient consent—

(a)makes for sale or hire, or

(b)imports into the United Kingdom otherwise than for his private and domestic use, or

(c)possesses in the course of a business with a view to committing any act infringing the rights conferred by [F586this Chapter], or

(d)in the course of a business—

(i)sells or lets for hire, or

(ii)offers or exposes for sale or hire, or

(iii)distributes,

a recording which is, and which he knows or has reason to believe is, an illicit recording.

[F587(1A)A person (“P”) who infringes a performer's making available right in a recording commits an offence if P—

(a)knows or has reason to believe that P is infringing the right, and

(b)either—

(i)intends to make a gain for P or another person, or

(ii)knows or has reason to believe that infringing the right will cause loss to the owner of the right, or expose the owner of the right to a risk of loss.

(1B)For the purposes of subsection (1A)—

(a)“gain” and “loss”—

(i)extend only to gain or loss in money, and

(ii)include any such gain or loss whether temporary or permanent, and

(b)“loss” includes a loss by not getting what one might get.]

(2)A person commits an offence who causes a recording of a performance made without sufficient consent to be—

(a)shown or played in public, or

[F588(b)communicated to the public,]

thereby infringing any of the rights conferred by [F586this Chapter], if he knows or has reason to believe that those rights are thereby infringed.

(3)In subsections (1) and (2) “sufficient consent” means—

(a)in the case of a qualifying performance, the consent of the performer, and

(b)in the case of a non-qualifying performance subject to an exclusive recording contract—

(i)for the purposes of subsection (1)(a) (making of recording), the consent of the performer or the person having recording rights, and

(ii)for the purposes of subsection (1)(b), (c) and (d) and subsection (2) (dealing with or using recording), the consent of the person having recording rights.

The references in this subsection to the person having recording rights are to the person having those rights at the time the consent is given or, if there is more than one such person, to all of them.

(4)No offence is committed under subsection (1) or (2) by the commission of an act which by virtue of any provision of Schedule 2 may be done without infringing the rights conferred by [F586this Chapter].

(5)A person guilty of an offence under subsection (1)(a), (b) or (d)(iii) is liable—

(a)on summary conviction to imprisonment for a term not exceeding six months or [F589a fine], or both;

(b)on conviction on indictment to a fine or imprisonment for a term not exceeding [F590ten] years, or both.

[F591(5A)A person guilty of an offence under subsection (1A) is liable—

(a)on summary conviction to imprisonment for a term not exceeding three months or [F592a fine], or both;

(b)on conviction on indictment to a fine or imprisonment for a term not exceeding [F593 ten ] years, or both.]

(6)A person guilty of any other offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale or imprisonment for a term not exceeding six months, or both.

Editorial Information

X47The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F586Words in s. 198(1)(c)(2)(4) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 8 (with reg. 8)

F587S. 198(1A)(1B) substituted for s. 198(1A) (1.10.2017) by Digital Economy Act 2017 (c. 30), ss. 32(4), 118(6) (with s. 32(6)); S.I. 2017/765, reg. 3(a)

F590S. 198(5)(b) substituted (20.11.2002) by 2002 c. 25, s. 1(3)(5); S.I. 2002/2749, art. 2

F593Word in s. 198(5A)(b) substituted (1.10.2017) by Digital Economy Act 2017 (c. 30), ss. 32(5), 118(6) (with s. 32(6)); S.I. 2017/765, reg. 3(a)

X48[F594198A Enforcement by local weights and measures authority.U.K.

(1)It is the duty of every local weights and measures authority to enforce within their area the provisions of section 198.

F595(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Subsection (1) above does not apply in relation to the enforcement of section 198 in Northern Ireland, but it is the duty of the Department of Economic Development to enforce that section in Northern Ireland.

F596...

[F597(3A)For the investigatory powers available to a local weights and measures authority or the Department of Enterprise, Trade and Investment in Northern Ireland for the purposes of the duties in this section, see Schedule 5 to the Consumer Rights Act 2015.]

(4)Any enactment which authorises the disclosure of information for the purpose of facilitating the enforcement of the Trade Descriptions Act 1968 shall apply as if section 198 were contained in that Act and as if the functions of any person in relation to the enforcement of that section were functions under that Act.

(5)Nothing in this section shall be construed as authorising a local weights and measures authority to bring proceedings in Scotland for an offence.]

Editorial Information

X48The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F594S. 198A inserted (6.4.2007) by 1994 c. 33, ss. 165(3), 172(2); S.I. 2007/621, art. 2

F596Words in s. 198A(3) omitted (1.10.2015) by virtue of Consumer Rights Act 2015 (c. 15), s. 100(5), Sch. 6 para. 50(3); S.I. 2015/1630, art. 3(i) (with art. 8)

X49199 Order for delivery up in criminal proceedings.U.K.

(1)The court before which proceedings are brought against a person for an offence under section 198 may, if satisfied that at the time of his arrest or charge he had in his possession, custody or control in the course of a business an illicit recording of a performance, order that it be delivered up to a person having performers’ rights or recording rights in relation to the performance or to such other person as the court may direct.

(2)For this purpose a person shall be treated as charged with an offence—

(a)in England, Wales and Northern Ireland, when he is orally charged or is served with a summons or indictment;

(b)in Scotland, when he is cautioned, charged or served with a complaint or indictment.

(3)An order may be made by the court of its own motion or on the application of the prosecutor (or, in Scotland, the Lord Advocate or procurator-fiscal), and may be made whether or not the person is convicted of the offence, but shall not be made—

(a)after the end of the period specified in section 203 (period after which remedy of delivery up not available), or

(b)if it appears to the court unlikely that any order will be made under section 204 (order as to disposal of illicit recording).

(4)An appeal lies from an order made under this section by a magistrates’ court—

(a)in England and Wales, to the Crown Court, and

(b)in Northern Ireland, to the county court;

and in Scotland, where an order has been made under this section, the person from whose possession, custody or control the illicit recording has been been removed may, without predudice to any other form of appeal under any rule of law, appeal against that order in the same manner as against sentence.

(5)A person to whom an illicit recording is delivered up in pursuance of an order under this section shall retain it pending the making of an order, or the decision not to make an order, under section 204.

(6)Nothing in in this section affects the powers of the court under [F598section 153 of the Sentencing Code], [F599Part II of the Proceeds of Crime (Scotland) Act 1995] or [F600Article 11 of the Criminal Justice (Northern Ireland) Order 1994] (general provisions as to forfeiture in criminal proceedings).

Editorial Information

X49The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F599Words in s. 199(6) substituted (1.4.1996) by 1995 c. 20, ss. 5, 7(2), Sch. 4 para. 70(3)

F600Words in s. 199(6) substituted (9.1.1995) by S.I. 1994/2795 (N.I. 15), art. 26(1), Sch. 2 para. 14; S.R. 1994/446, art. 2

X50200 Search warrants.U.K.

(1)Where a justice of the peace (in Scotland, a sheriff or justice of the peace) is satisfied by information on oath given by a constable (in Scotland, by evidence on oath) that there are reasonable grounds for believing—

(a)that an offence under [F601section 198(1) or (1A)] (offences of making, importing [F602, possessing, selling etc.] or distributing illicit recordings) has been or is about to be committed in any premises, and

(b)that evidence that such an offence has been or is about to be committed is in those premises,

he may issue a warrant authorising a constable to enter and search the premises, using such reasonable force as is necessary.

(2)The power conferred by subsection (1) does not, in England and Wales, extend to authorising a search for material of the kinds mentioned in section 9(2) of the M20Police and Criminal Evidence Act 1984 (certain classes of personal or confidential material).

(3)A warrant under subsection (1)—

(a)may authorise persons to accompany any constable executing the warrant, and

(b)remains in force for [F603three months] from the date of its issue.

[F604(3A)In executing a warrant issued under subsection (1) a constable may seize an article if he reasonably believes that it is evidence that any offence under [F605section 198(1) or (1A)] has been or is about to be committed.]

(4)In this section “premises” includes land, buildings, fixed or moveable structures, vehicles, vessels, aircraft and hovercraft.

Editorial Information

X50The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F602Words in s. 200(1)(a) inserted (20.11.2002) by 2002 c. 25, s. 2(3)(a)(ii); S.I. 2002/2749, art. 2

F604S. 200(3A) inserted (20.11.2002) by 2002 c. 25, s. 2(3)(b); S.I. 2002/2749, art. 2

Marginal Citations

X51201 False representation of authority to give consent.U.K.

(1)It is an offence for a person to represent falsely that he is authorised by any person to give consent for the purposes of [F606this Chapter] in relation to a performance, unless he believes on reasonable grounds that he is so authorised.

(2)A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding level 5 on the standard scale or both.

Editorial Information

X51The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X52202 Offence by body corporate: liability of officers.U.K.

(1)Where an offence under [F607this Chapter] committed by a body corporate is proved to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2)In relation to a body corporate whose affairs are managed by its members “director” means a member of the body corporate.

Editorial Information

X52The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

X53 Supplementary provisions with respect to delivery up and seizureU.K.

Editorial Information

X53The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X54203 Period after which remedy of delivery up not available.U.K.

(1)An application for an order under section 195 (order for delivery up in civil proceedings) may not be made after the end of the period of six years from the date on which the illicit recording in question was made, subject to the following provisions.

(2)If during the whole or any part of that period a person entitled to apply for an order—

(a)is under a disability, or

(b)is prevented by fraud or concealment from discovering the facts entitling him to apply,

an application may be made by him at any time before the end of the period of six years from the date on which he ceased to be under a disability or, as the case may be, could with reasonable diligence have discovered those facts.

(3)In subsection (2) “disability”—

(a)in England and Wales, has the same meaning as in the M21Limitation Act 1980;

(b)in Scotland, means legal disability within the meaning of the M22Prescription and Limitations (Scotland) Act 1973;

(c)in Northern Ireland, has the same meaning as in the M23Statute of Limitation (Northern Ireland) 1958.

(4)An order under section 199 (order for delivery up in criminal proceedings) shall not, in any case, be made after the end of the period of six years from the date on which the illicit recording in question was made.

Editorial Information

X54The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Marginal Citations

X55204 Order as to disposal of illicit recording.U.K.

(1)An application may be made to the court for an order that an illicit recording of a performance delivered up in pursuance of an order under section 195 or 199, or seized and detained in pursuance of the right conferred by section 196, shall be—

(a)forfeited to such person having performer’s rights or recording rights in relation to the performance as the court may direct, or

(b)destroyed or otherwise dealt with as the court may think fit,

or for a decision that no such order should be made.

(2)In considering what order (if any) should be made, the court shall consider whether other remedies available in an action for infringement of the rights conferred by [F608this Chapter] would be adequate to compensate the person or persons entitled to the rights and to protect their interests.

(3)Provision shall be made by rules of court as to the service of notice on persons having an interest in the recording, and any such person is entitled—

(a)to appear in proceedings for an order under this section, whether or not he was served with notice, and

(b)to appeal against any order made, whether or not he appeared;

and an order shall not take effect until the end of the period within which notice of an appeal may be given or, if before the end of that period notice of appeal is duly given, until the final determination or abandonment of the proceedings on the appeal.

(4)Where there is more than one person interested in a recording, the court shall make such order as it thinks just and may (in particular) direct that the recording be sold, or otherwise dealt with, and the proceeds divided.

(5)If the court decides that no order should be made under this section, the person in whose possession, custody or control the recording was before being delivered up or seized is entitled to its return.

(6)References in this section to a person having an interest in a recording include any person in whose favour an order could be made in respect of the recording

[F609(a)under this section or under section 114 or 231 of this Act;

(b)under section 24D of the Registered Designs Act 1949;

(c)under section 19 of Trade Marks Act 1994 F610...; or

(d)under regulation 1C of the Community Design Regulations 2005 (SI 2005/2339).]

Editorial Information

X55The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

Modifications etc. (not altering text)

C117S. 204 extended by S.I. 1991/724, art. 2(1)(n)

X56[F611204A Forfeiture of illicit recordings: England and Wales or Northern IrelandU.K.

(1)In England and Wales or Northern Ireland where illicit recordings of a performance have come into the possession of any person in connection with the investigation or prosecution of a relevant offence, that person may apply under this section for an order for the forfeiture of the illicit recordings.

(2)For the purposes of this section “relevant offence” means—

(a)an offence under [F612section 198(1) or (1A)](criminal liability for making or dealing with illicit recordings),

(b)an offence under the Trade Descriptions Act 1968 (c. 29),

[F613(ba)an offence under the Business Protection from Misleading Marketing Regulations 2008,

(bb)an offence under [F614Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024], or]

(c)an offence involving dishonesty or deception.

(3)An application under this section may be made—

(a)where proceedings have been brought in any court for a relevant offence relating to some or all of the illicit recordings, to that court, or

(b)where no application for the forfeiture of the illicit recordings has been made under paragraph (a), by way of complaint to a magistrates’ court.

(4)On an application under this section, the court shall make an order for the forfeiture of any illicit recordings only if it is satisfied that a relevant offence has been committed in relation to the illicit recordings.

(5)A court may infer for the purposes of this section that such an offence has been committed in relation to any illicit recordings if it is satisfied that such an offence has been committed in relation to illicit recordings which are representative of the illicit recordings in question (whether by reason of being part of the same consignment or batch or otherwise).

(6)Any person aggrieved by an order made under this section by a magistrates’ court, or by a decision of such a court not to make such an order, may appeal against that order or decision—

(a)in England and Wales, to the Crown Court, or

(b)in Northern Ireland, to the county court.

(7)An order under this section may contain such provision as appears to the court to be appropriate for delaying the coming into force of the order pending the making and determination of any appeal (including any application under section 111 of the Magistrates’ Courts Act 1980 (c. 43) or Article 146 of the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1987/1675 (N.I. 26)) (statement of case)).

(8)Subject to subsection (9), where any illicit recordings are forfeited under this section they shall be destroyed in accordance with such directions as the court may give.

(9)On making an order under this section the court may direct that the illicit recordings to which the order relates shall (instead of being destroyed) be forfeited to the person having the performers’ rights or recording rights in question or dealt with in such other way as the court considers appropriate.]

Editorial Information

X56The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F611S. 204A inserted (20.11.2002) by 2002 c. 25, s. 4; S.I. 2002/2749, art. 2

X57F615204B Forfeiture: ScotlandU.K.

(1)In Scotland the court may make an order under this section for the forfeiture of any illicit recordings.

(2)An order under this section may be made—

(a)on an application by the procurator-fiscal made in the manner specified in section 134 of the Criminal Procedure (Scotland) Act 1995 (c. 46), or

(b)where a person is convicted of a relevant offence, in addition to any other penalty which the court may impose.

(3)On an application under subsection (2)(a), the court shall make an order for the forfeiture of any illicit recordings only if it is satisfied that a relevant offence has been committed in relation to the illicit recordings.

(4)The court may infer for the purposes of this section that such an offence has been committed in relation to any illicit recordings if it is satisfied that such an offence has been committed in relation to illicit recordings which are representative of the illicit recordings in question (whether by reason of being part of the same consignment or batch or otherwise).

(5)The procurator-fiscal making the application under subsection (2)(a) shall serve on any person appearing to him to be the owner of, or otherwise to have an interest in, the illicit recordings to which the application relates a copy of the application, together with a notice giving him the opportunity to appear at the hearing of the application to show cause why the illicit recordings should not be forfeited.

(6)Service under subsection (5) shall be carried out, and such service may be proved, in the manner specified for citation of an accused in summary proceedings under the Criminal Procedure (Scotland) Act 1995.

(7)Any person upon whom notice is served under subsection (5) and any other person claiming to be the owner of, or otherwise to have an interest in, illicit recordings to which an application under this section relates shall be entitled to appear at the hearing of the application to show cause why the illicit recordings should not be forfeited.

(8)The court shall not make an order following an application under subsection (2)(a)—

(a)if any person on whom notice is served under subsection (5) does not appear, unless service of the notice on that person is proved, or

(b)if no notice under subsection (5) has been served, unless the court is satisfied that in the circumstances it was reasonable not to serve such notice.

(9)Where an order for the forfeiture of any illicit recordings is made following an application under subsection (2)(a), any person who appeared, or was entitled to appear, to show cause why the illicit recordings should not be forfeited may, within 21 days of the making of the order, appeal to the High Court by Bill of Suspension.

(10)Section 182(5)(a) to (e) of the Criminal Procedure (Scotland) Act 1995 shall apply to an appeal under subsection (9) as it applies to a stated case under Part 2 of that Act.

(11)An order following an application under subsection (2)(a) shall not take effect—

(a)until the end of the period of 21 days beginning with the day after the day on which the order is made, or

(b)if an appeal is made under subsection (9) above within that period, until the appeal is determined or abandoned.

(12)An order under subsection (2)(b) shall not take effect—

(a)until the end of the period within which an appeal against the order could be brought under the Criminal Procedure (Scotland) Act 1995 (c. 46), or

(b)if an appeal is made within that period, until the appeal is determined or abandoned.

(13)Subject to subsection (14), illicit recordings forfeited under this section shall be destroyed in accordance with such directions as the court may give.

(14)On making an order under this section the court may direct that the illicit recordings to which the order relates shall (instead of being destroyed) be forfeited to the person having the performers’ rights or recording rights in question or dealt with in such other way as the court considers appropriate.

(15)For the purposes of this section—

  • [F616“relevant offence” means—

    (a)

    an offence under section 198(1) or (1A) (criminal liability for making or dealing with illicit recordings),

    (b)

    an offence under the Trade Descriptions Act 1968,

    (c)

    an offence under the Business Protection from Misleading Marketing Regulations 2008,

    (d)

    an offence under [F617Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024], or

    (e)

    any offence involving dishonesty or deception;]

  • “the court” means—

    (a)

    in relation to an order made on an application under subsection (2)(a), the sheriff, and

    (b)

    in relation to an order made under subsection (2)(b), the court which imposed the penalty.

Editorial Information

X57The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F615S. 204B inserted (20.11.2002) by 2002 c. 25, s. 4; S.I. 2002/2749, art. 2

X58205 Jurisdiction of county court and sheriff court.U.K.

(1)In England [F618and Wales the county court and in] Northern Ireland a county court may entertain proceedings under—

  • section 195 (order for delivery up of illicit recording), or

  • section 204 (order as to disposal of illicit recording),

[F619save that, in Northern Ireland, a county court may entertain such proceedings only] where the value of the illicit recordings in question does not exceed the county court limit for actions in tort.

(2)In Scotland proceedings for an order under either of those provisions may be brought in the sheriff court.

(3)Nothing in this section shall be construed as affecting the jurisdiction of the High Court or, in Scotland, the Court of Session.

Editorial Information

X58The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F618Words in s. 205(1) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 72; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F619Words in s. 205(1) inserted by S.I. 1991/724, art. 2(8), Schedule Part I

X59[F620Licensing of performers’ F621... rights]U.K.

Editorial Information

X59The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F620S. 205A and cross-heading inserted (1.12.1996) by S.I. 1996/2967, reg. 22(1) (with Pt. III)

F621Word in s. 205A cross-heading omitted (25.4.2013) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(1), Sch. 22 para. 6

X60[F623 205A Licensing of performers’ F622... rights.U.K.

The provisions of Schedule 2A have effect with respect to the licensing of performers’ F622... rights.]

Editorial Information

X60The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F622Word in s. 205A omitted (25.4.2013) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(1), Sch. 22 para. 6

F623S. 205A inserted (1.12.1996) by S.I. 1996/2967, reg. 22(1) (with Pt. III)

X61[F624Jurisdiction of Copyright Tribunal]U.K.

Editorial Information

X61The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F624S. 205B and cross-heading inserted (1.12.1996) by S.I. 1996/2967, reg. 24 (with Pt. III)

X62[F625205B. Jurisdiction of Copyright Tribunal.U.K.

(1)The Copyright Tribunal has jurisdiction under [F626this Chapter] to hear and determine proceedings under—

(a)section 182D (amount of equitable remuneration for exploitation of commercial sound recording);

(b)section 190 (application to give consent on behalf of owner of reproduction right);

(c)section 191H (amount of equitable remuneration on transfer of rental right);

F627(cc). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)paragraph 3, 4 or 5 of Schedule 2A (reference of licensing scheme);

(e)paragraph 6 or 7 of that Schedule (application with respect to licence under licensing scheme);

(f)paragraph 10, 11 or 12 of that Schedule (reference or application with respect to licensing by licensing body);

(g)paragraph 15 of that Schedule (application to settle royalty for certain lending);

(h)paragraph 17 of that Schedule (application to settle terms of licence available as of right).

(2)The provisions of Chapter VIII of Part I (general provisions relating to the Copyright Tribunal) apply in relation to the Tribunal when exercising any jurisdiction under [F626this Chapter].

(3)Provision shall be made by rules under section 150 prohibiting the Tribunal from entertaining a reference under paragraph 3, 4 or 5 of Schedule 2A (reference of licensing scheme) by a representative organisation unless the Tribunal is satisfied that the organisation is reasonably representative of the class of persons which it claims to represent.]

Editorial Information

X62The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F625S. 205B inserted (1.12.1996) by S.I. 1996/2967, reg. 24 (with Pt. III)

[F628Chapter 3U.K.MORAL RIGHTS

Textual Amendments

F628Ss. 205C-205N and cross-headings inserted (1.2 2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), art. 6 (with reg. 8) (which inserted provisions accordingly become Pt. 2 Ch. 3 (1.2.2006) by virtue of S.I. 2006/18, art. 4(6) (with reg. 8))

Right to be identified as performerU.K.

205CRight to be identified as performerU.K.

(1)Whenever a person—

(a)produces or puts on a qualifying performance that is given in public,

(b)broadcasts live a qualifying performance,

(c)communicates to the public a sound recording of a qualifying performance, or

(d)issues to the public copies of such a recording,

the performer has the right to be identified as such.

(2)The right of the performer under this section is—

(a)in the case of a performance that is given in public, to be identified in any programme accompanying the performance or in some other manner likely to bring his identity to the notice of a person seeing or hearing the performance,

(b)in the case of a performance that is broadcast, to be identified in a manner likely to bring his identity to the notice of a person seeing or hearing the broadcast,

(c)in the case of a sound recording that is communicated to the public, to be identified in a manner likely to bring his identity to the notice of a person hearing the communication,

(d)in the case of a sound recording that is issued to the public, to be identified in or on each copy or, if that is not appropriate, in some other manner likely to bring his identity to the notice of a person acquiring a copy,

or (in any of the above cases) to be identified in such other manner as may be agreed between the performer and the person mentioned in subsection (1).

(3)The right conferred by this section in relation to a performance given by a group (or so much of a performance as is given by a group) is not infringed—

(a)in a case falling within paragraph (a), (b) or (c) of subsection (2), or

(b)in a case falling within paragraph (d) of that subsection in which it is not reasonably practicable for each member of the group to be identified,

if the group itself is identified as specified in subsection (2).

(4)In this section “group” means two or more performers who have a particular name by which they may be identified collectively.

(5)If the assertion under section 205D specifies a pseudonym, initials or some other particular form of identification, that form shall be used; otherwise any reasonable form of identification may be used.

(6)This section has effect subject to section 205E (exceptions to right).

205DRequirement that right be assertedU.K.

(1)A person does not infringe the right conferred by section 205C (right to be identified as performer) by doing any of the acts mentioned in that section unless the right has been asserted in accordance with the following provisions so as to bind him in relation to that act.

(2)The right may be asserted generally, or in relation to any specified act or description of acts—

(a)by instrument in writing signed by or on behalf of the performer, or

(b)on an assignment of a performer's property rights, by including in the instrument effecting the assignment a statement that the performer asserts in relation to the performance his right to be identified.

(3)The persons bound by an assertion of the right under subsection (2) are—

(a)in the case of an assertion under subsection (2)(a), anyone to whose notice the assertion is brought;

(b)in the case of an assertion under subsection (2)(b), the assignee and anyone claiming through him, whether or not he has notice of the assertion.

(4)In an action for infringement of the right the court shall, in considering remedies, take into account any delay in asserting the right.

205EExceptions to rightU.K.

(1)The right conferred by section 205C (right to be identified as performer) is subject to the following exceptions.

(2)The right does not apply where it is not reasonably practicable to identify the performer (or, where identification of a group is permitted by virtue of section 205C(3), the group).

(3)The right does not apply in relation to any performance given for the purposes of reporting current events.

(4)The right does not apply in relation to any performance given for the purposes of advertising any goods or services.

(5)The right is not infringed by an act which by virtue of any of the following provisions of Schedule 2 would not infringe any of the rights conferred by Chapter 2—

(a)paragraph 2(1A) (news reporting);

(b)paragraph 3 (incidental inclusion of a performance or recording);

(c)paragraph 4(2) (things done for the purposes of examination);

(d)paragraph 8 (parliamentary and judicial proceedings);

(e)paragraph 9 (Royal Commissions and statutory inquiries).

Right to object to derogatory treatmentU.K.

205FRight to object to derogatory treatment of performanceU.K.

(1)The performer of a qualifying performance has a right which is infringed if—

(a)the performance is broadcast live, or

(b)by means of a sound recording the performance is played in public or communicated to the public,

with any distortion, mutilation or other modification that is prejudicial to the reputation of the performer.

(2)This section has effect subject to section 205G (exceptions to right).

205GExceptions to rightU.K.

(1)The right conferred by section 205F (right to object to derogatory treatment of performance) is subject to the following exceptions.

(2)The right does not apply in relation to any performance given for the purposes of reporting current events.

(3)The right is not infringed by modifications made to a performance which are consistent with normal editorial or production practice.

(4)Subject to subsection (5), the right is not infringed by anything done for the purpose of—

(a)avoiding the commission of an offence,

(b)complying with a duty imposed by or under an enactment, or

(c)in the case of the British Broadcasting Corporation, avoiding the inclusion in a programme broadcast by them of anything which offends against good taste or decency or which is likely to encourage or incite crime or lead to disorder or to be offensive to public feeling.

(5)Where—

(a)the performer is identified in a manner likely to bring his identity to the notice of a person seeing or hearing the performance as modified by the act in question; or

(b)he has previously been identified in or on copies of a sound recording issued to the public,

subsection (4) applies only if there is sufficient disclaimer.

(6)In subsection (5) “sufficient disclaimer”, in relation to an act capable of infringing the right, means a clear and reasonably prominent indication—

(a)given in a manner likely to bring it to the notice of a person seeing or hearing the performance as modified by the act in question, and

(b)if the performer is identified at the time of the act, appearing along with the identification,

that the modifications were made without the performer's consent.

205HInfringement of right by possessing or dealing with infringing articleU.K.

(1)The right conferred by section 205F (right to object to derogatory treatment of performance) is also infringed by a person who—

(a)possesses in the course of business, or

(b)sells or lets for hire, or offers or exposes for sale or hire, or

(c)distributes,

an article which is, and which he knows or has reason to believe is, an infringing article.

(2)An “infringing article” means a sound recording of a qualifying performance with any distortion, mutilation or other modification that is prejudicial to the reputation of the performer.

SupplementaryU.K.

205IDuration of rightsU.K.

(1)A performer's rights under this Chapter in relation to a performance subsist so long as that performer's rights under Chapter 2 subsist in relation to the performance.

(2)In subsection (1) “performer's rights” includes rights of a performer that are vested in a successor of his.

205JConsent and waiver of rightsU.K.

(1)It is not an infringement of the rights conferred by this Chapter to do any act to which consent has been given by or on behalf of the person entitled to the right.

(2)Any of those rights may be waived by instrument in writing signed by or on behalf of the person giving up the right.

(3)A waiver—

(a)may relate to a specific performance, to performances of a specified description or to performances generally, and may relate to existing or future performances, and

(b)may be conditional or unconditional and may be expressed to be subject to revocation,

and if made in favour of the owner or prospective owner of a performer's property rights in the performance or performances to which it relates, it shall be presumed to extend to his licensees and successors in title unless a contrary intention is expressed.

(4)Nothing in this Chapter shall be construed as excluding the operation of the general law of contract or estoppel in relation to an informal waiver or other transaction in relation to either of the rights conferred by this Chapter.

205KApplication of provisions to parts of performancesU.K.

(1)The right conferred by section 205C (right to be identified as performer) applies in relation to the whole or any substantial part of a performance.

(2)The right conferred by section 205F (right to object to derogatory treatment of performance) applies in relation to the whole or any part of a performance.

205LMoral rights not assignableU.K.

The rights conferred by this Chapter are not assignable.

205MTransmission of moral rights on deathU.K.

(1)On the death of a person entitled to a right conferred by this Chapter—

(a)the right passes to such person as he may by testamentary disposition specifically direct,

(b)if there is no such direction but the performer's property rights in respect of the performance in question form part of his estate, the right passes to the person to whom the property rights pass,

(c)if or to the extent that the right does not pass under paragraph (a) or (b) it is exercisable by his personal representatives.

(2)Where a performer's property rights pass in part to one person and in part to another, as for example where a bequest is limited so as to apply—

(a)to one or more, but not all, of the things to which the owner has the right to consent, or

(b)to part, but not the whole, of the period for which the rights subsist,

any right which by virtue of subsection (1) passes with the performer's property rights is correspondingly divided.

(3)Where by virtue of subsection (1)(a) or (1)(b) a right becomes exercisable by more than one person—

(a)it is, in the case of the right conferred by section 205F (right to object to derogatory treatment of performance), a right exercisable by each of them and is satisfied in relation to any of them if he consents to the treatment or act in question, and

(b)any waiver of the right in accordance with section 205J by one of them does not affect the rights of the others.

(4)A consent or waiver previously given or made binds any person to whom a right passes by virtue of subsection (1).

(5)Any damages recovered by personal representatives by virtue of this section in respect of an infringement after a person's death shall devolve as part of his estate as if the right of action had subsisted and been vested in him immediately before his death.

205NRemedies for infringement of moral rightsU.K.

(1)An infringement of a right conferred by this Chapter is actionable as a breach of statutory duty owed to the person entitled to the right.

(2)Where—

(a)there is an infringement of a right conferred by this Chapter,

(b)a person falsely claiming to act on behalf of a performer consented to the relevant conduct or purported to waive the right, and

(c)there would have been no infringement if he had been so acting,

that person shall be liable, jointly and severally with any person liable in respect of the infringement by virtue of subsection (1), as if he himself had infringed the right.

(3)Where proceedings for infringement of the right conferred on a performer by this Chapter, it shall be a defence to prove—

(a)that a person claiming to act on behalf of the performer consented to the defendant's conduct or purported to waive the right, and

(b)that the defendant reasonably believed that the person was acting on behalf of the performer.

(4)In proceedings for infringement of the right conferred by section 205F the court may, if it thinks it an adequate remedy in the circumstances, grant an injunction on terms prohibiting the doing of any act unless a disclaimer is made, in such terms and in such manner as may be approved by the court, dissociating the performer from the broadcast or sound recording of the performance.]

[F629Chapter 4U.K.QUALIFICATION FOR PROTECTION, EXTENT AND INTERPRETATION

Textual Amendments

F629Ss. 206-212 become Pt. 2 Ch. 4 (1.2.2006) by virtue of The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 4(7) (with reg. 8)

Modifications etc. (not altering text)

X63 Qualification for protection and extentU.K.

Editorial Information

X63The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X64206 Qualifying countries, individuals and persons.U.K.

(1)In this Part—

  • “qualifying country” means—

(a)the United Kingdom,

F630(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F631(ba)the Channel Islands, the Isle of Man or Gibraltar,] or

[F632(bb)a country which is a party to the Rome Convention,] or

(c)to the extent that an Order under section 208 so provides, a country designated under that section as enjoying reciprocal protection;

  • “qualifying individual” means a citizen or subject of, or an individual resident in, a qualifying country; and

  • “qualifying person” means a qualifying individual or a body corporate or other body having legal personality which—

(a)is formed under the law of a part of the United Kingdom or another qualifying country, and

(b)has in any qualifying country a place of business at which substantial business activity is carried on.

(2)The reference in the definition of “qualifying individual” to a person’s being a citizen or subject of a qualifying country shall be construed—

(a)in relation to the United Kingdom, as a reference to his being a British citizen, and

(b)in relation to a colony of the United Kingdom, as a reference to his being a British Dependent Territories’ citizen by connection with that colony.

(3)In determining for the purpose of the definition of “qualifying person” whether substantial business activity is carried on at a place of business in any country, no account shall be taken of dealings in goods which are at all material times outside that country.

[F633(4)Her Majesty may by Order in Council—

[F634(za)make provision for the application of this Part to a country by virtue of paragraph (a) or (ba) of the definition of “qualifying country” in subsection (1) to be subject to specified restrictions, but those restrictions may only relate to rights which would otherwise apply as a result of—

(i)a performance being a qualifying performance because it meets Condition C or Condition D in section 181, and

(ii)that condition being met by way of a connection to such a country;]

(a)make provision for the application of this Part to a country by virtue of paragraph (bb) or (c) of the definition of “qualifying country” in subsection (1) to be subject to specified restrictions;

(b)amend the definition of “qualifying country” in subsection (1) so as to add a country which is not a party to the Rome Convention;

(c)make provision for the application of this Part to a country added under paragraph (b) to be subject to specified restrictions.

(5)A statutory instrument containing an Order in Council under this section is subject to annulment in pursuance of a resolution of either House of Parliament.]

[F635(6)In this section, “the Rome Convention” means the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations done at Rome on 26 October 1961.]

Editorial Information

X64The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F630S. 206(1)(b) omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 22 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1)

F631Words in s. 206(1) inserted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(5)(b), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

F632Words in s. 206(1) inserted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(5)(c), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

F633S. 206(4)(5) inserted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(6), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

F635S. 206(6) inserted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(7), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

X65207 Countries to which this Part extends.U.K.

This Part extends to England and Wales, Scotland and Northern Ireland.

Editorial Information

X65The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X66208 Countries enjoying reciprocal protection.U.K.

(1)Her Majesty may by Order in Council designate as enjoying reciprocal protection under this Part—

(a)a Convention country, or

(b)a country as to which Her Majesty is satisfied that provision has been or will be made under its law giving adequate protection for British performances.

(2)A “Convention country” means a country which is a party to a Convention relating to performers’ rights to which the United Kingdom is also a party.

(3)A “British performance” means a performance—

(a)given by an individual who is a British citizen or resident in the United Kingdom, or

(b)taking place in the United Kingdom.

(4)If the law of that country provides adequate protection only for certain descriptions of performance, an Order under subsection (1)(b) designating that country shall contain provision limiting to a corresponding extent the protection afforded by this Part in relation to performances connected with that country.

(5)The power conferred by subsection (1)(b) is exercisable in relation to F636... any colony of the United Kingdom, as in relation to a foreign country.

(6)A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Editorial Information

X66The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F636Words in s. 208(5) omitted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by virtue of Intellectual Property Act 2014 (c. 18), ss. 22(8), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

X67209 Territorial waters and the continental shelf.U.K.

(1)For the purposes of this Part the territorial waters of the United Kingdom shall be treated as part of the United Kingdom.

(2)This Part applies to things done in the United Kingdom sector of the continental shelf on a structure or vessel which is present there for purposes directly connected with the exploration of the sea bed or subsoil or the exploitation of their natural resources as it applies to things done in the United Kingdom.

(3)The United Kingdom sector of the continental shelf means the areas designated by order under section 1(7) of the M24Continental Shelf Act 1964.

Editorial Information

X67The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Marginal Citations

X68210 British ships, aircraft and hovercraft.U.K.

(1)This Part applies to things done on a British ship, aircraft or hovercraft as it applies to things done in the United Kingdom.

(2)In this section—

  • “British ship” means a ship which is a British ship for the purposes of the [F637Merchant Shipping Act 1995] otherwise than by virtue of registration in a country outside the United Kingdom; and

  • “British aircraft” and “British hovercraft” mean an aircraft or hovercraft registered in the United Kingdom.

Editorial Information

X68The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F637Words in s. 210(2) substituted (1.1.1996) by 1995 c. 21, ss. 314(2), 316(2), Sch. 13 para. 84(b) (with s. 312(1))

[F638210AU.K.

Requirement of signature: application in relation to body corporate

(1)The requirement in the following provisions that an instrument be signed by or on behalf of a person is also satisfied in the case of a body corporate by the affixing of its seal—

  • section 191B(3) (assignment of performer's property rights);

  • section 191C(1) (assignment of future performer's property rights);

  • section 191D(1) (grant of exclusive licence).

(2)The requirement in the following provisions that an instrument be signed by a person is also satisfied in the case of a body corporate by signature on behalf of the body or by the affixing of its seal—

  • section 205D(2)(a) (assertion of performer's moral rights);

  • section 205J(2) (waiver of performer's moral rights).]

Textual Amendments

X69 InterpretationU.K.

Editorial Information

X69The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

X70211 Expressions having same meaning as in copyright provisions.U.K.

(1)The following expressions have the same meaning in this Part as in Part I (copyright)—

  • [F639assignment (in Scotland),]

  • broadcast,

  • business,

  • F640. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • F641. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • [F642communication to the public,]

  • country,

  • defendant (in Scotland),

  • delivery up (in Scotland),

  • [F643the EEA,]

  • [F643EEA state,]

  • film,

  • [F644injunction (in Scotland)]

  • literary work,

  • published, F645. . .

  • [F646signed,]

  • [F647sound recording, and]

  • [F648wireless broadcast.]

(2)[F649 The provisions of—

(a)section 5B(2) and (3) (supplementary provisions relating to films), and

(b)section 6(3) to (5A) and section 19(4) (supplementary provisions relating to broadcasting),

apply] for the purposes of this Part, and in relation to an infringement of the rights conferred by this Part, as they apply for the purposes of Part I and in relation to an infringement of copyright.

Editorial Information

X70The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F643S. 211(1): entries relating to "the EEA," and "EEA state," substituted (29.4.2006) for entry relating to "EEA national," by The Intellectual Property (Enforcement, etc.) Regulations 2006 (S.I. 2006/1028), reg. 2(2), Sch. 2 para. 12

F647S. 211(1): entry substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1para. 15(5)(a)(ii) (with regs. 31-40)

X71212 Index of defined expressions.U.K.

The following Table shows provisions defining or otherwise explaining expressions used in this Part (other than provisions defining or explaining an expression used only in the same section)—

[F650accessible copy (in paragraphs 3A to 3E of Schedule 2)paragraph 3E(4) of Schedule 2]
[F651assignment (in Scotland)section 211(1) (and section 177);]
broadcast (and related expressions)section 211 (and section 6)
businesssection 211(1) (and section 178)
F652. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F653communication to the publicsection 211(1) (and section 20)]
[F654consent of performer (in relation to performer’s property rights)][F655section 191A(2)]
countrysection 211(1) (and section 178)
defendant (in Scotland)section 211(1) (and section 177)
delivery up (in Scotland)section 211(1) (and section 177)
[F650disabled person (in paragraphs 3A to 3E of Schedule 2)paragraph 3E(2) and (3) of Schedule 2]
[F656distribution right][F657section 182B(5)]
[F658the EEA and EEA state][F659section 211(1) (and section 172A)]
exclusive recording contractsection 185(1)
filmsection 211(1) (and [F660section 5B])
[F661groupsection 205C(4);]
illicit recordingsection 197
[F662injunction (in Scotland)section 211(1) (and section 177)]
[F663issue to the publicsection 182B;]
literary worksection 211(1) (and section 3(1))
[F664lending right][F665section 182C(7)]
[F666making available rightsection 182CA]
performancesection 180(2)
[F667performer’s non-property rights][F668section 192A(1)]
[F669performer’s property rights][F670section 191A(1)]
publishedsection 211(1) (and section 175)
qualifying countrysection 206(1)
qualifying individualsection 206(1) and (2)
qualifying performancesection 181
qualifying personsection 206(1) and (3)
recording (of a performance)section 180(2)
recording rights (person having)section 185(2) and (3)
[F671rental right)][F672section 182C(7)]
[F673reproduction right][F674section 182A(3)]
[F675rights owner (in relation to performer’s property rights)][F676 section 191A(3) and (4).]
[F677signedsection 211(1) (and section 176);]
sound recordingsection 211(1) (and [F678section 5A]).
[F679wireless broadcastsection 211(1) (and section 178).]]

Editorial Information

X71The insertion of the new headings "Chapter 1 Introductory", "Chapter 2 Economic Rights", "Chapter 3 Moral Rights" and "Chapter 4 Qualification for Protection, Extent and Interpretation" in Pt. II on 1.2.2006 gives rise to a change in the structure of this legislation on SLD which breaks the continuity of historical versions of the existing provisions which are now brought under those new headings.

Textual Amendments

F654Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F655Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F656Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F657Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F659Words in s. 212 inserted (1.1.1996) by S.I. 1995/3297, reg. 11(4) (with Pt. III)

F660Words in s. 212 substituted (1.1.1996) by S.I. 1995/3297, reg. 9(6)(a) (with Pt. III)

F664Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F665Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F667Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F668Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F669Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F670Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F671Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F672Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F673Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F674Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 20(4) (with Pt. III)

F675Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F676Words in s. 212 inserted (1.12.1996) by S.I. 1996/2967, reg. 21(6) (with Pt. III)

F678Words in s. 212 substituted (1.1.1996) by S.I. 1995/3297, reg. 9(6)(b) (with Pt. III)

[F680SupplementaryU.K.

Textual Amendments

F680S. 212A and cross-heading inserted (1.12.2016 for specified purposes, 6.4.2017 in so far as not already in force) by Intellectual Property Act 2014 (c. 18), ss. 22(9), 24(1); S.I. 2016/1139, arts. 2, 3 (with art. 4)

212APower to amend in consequence of changes to international lawU.K.

(1)The Secretary of State may by order amend this Part in consequence of changes to international law in the area of performance rights.

(2)An order under this section must be made by statutory instrument; and no order may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.]

Part IIIU.K. Design Right

Modifications etc. (not altering text)

C120Pt. 3 modified by S.I. 1989/1100, arts. 3-9, Sch. (as amended (1.1.2024) by S.I. 2023/1285, regs. 1(2), 2(2))

Chapter IU.K. Design right in original designs

IntroductoryU.K.

213 Design right.U.K.

(1)Design right is a property right which subsists in accordance with this Part in an original design.

(2)In this Part “design” means the design of F681... the shape or configuration (whether internal or external) of the whole or part of an article.

(3)Design right does not subsist in—

(a)a method or principle of construction,

(b)features of shape or configuration of an article which—

(i)enable the article to be connected to, or placed in, around or against, another article so that either article may perform its function, or

(ii)are dependent upon the appearance of another article of which the article is intended by the designer to form an integral part, or

(c)surface decoration.

(4)A design is not “original” for the purposes of this Part if it is commonplace [F682in a qualifying country] in the design field in question at the time of its creation[F683; and “qualifying country” has the meaning given in section 217(3) ].

(5)Design right subsists in a design only if the design qualifies for design right protection by reference to—

(a)the designer or the person by whom [F684the designer was employed] (see sections 218 and 219), or

(b)the person by whom and country in which articles made to the design were first marketed (see section 220),

or in accordance with any Order under section 221 (power to make further provision with respect to qualification).

[F685(5A) Design right does not subsist in a design which consists of or contains a controlled representation within the meaning of the Olympic Symbol etc. (Protection) Act 1995. ]

(6)Design right does not subsist unless and until the design has been recorded in a design document or an article has been made to the design.

(7)Design right does not subsist in a design which was so recorded, or to which an article was made, before the commencement of this Part.

Textual Amendments

F681Words in s. 213(2) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 1(1), 24(1); S.I. 2014/2330, art. 3, Sch.

F682Words in s. 213(4) inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 1(3)(a), 24(1) (with s. 1(4)); S.I. 2014/2330, art. 3, Sch.

F683Words in s. 213(4) inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 1(3)(b), 24(1) (with s. 1(4)); S.I. 2014/2330, art. 3, Sch.

F684Words in s. 213(5)(a) substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 2(2)(a), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F685S. 213(5A) inserted (20.9.1995 with effect as mentioned in s. 14(2)(3) of the amending Act) by 1995 c. 32, s. 14(1); S.I. 1995/2472, art. 2

214 The designer.U.K.

(1)In this Part the “designer”, in relation to a design, means the person who creates it.

(2)In the case of a computer-generated design the person by whom the arrangements necessary for the creation of the design are undertaken shall be taken to be the designer.

215 Ownership of design right.U.K.

(1)The designer is the first owner of any design right in a design which is not created F686... in the course of employment.

F687(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Where F688... a design is created by an employee in the course of his employment, his employer is the first owner of any design right in the design.

(4)If a design qualifies for design right protection by virtue of section 220 (qualification by reference to first marketing of articles made to the design), the above rules do not apply and the person by whom the articles in question are marketed is the first owner of the design right.

Textual Amendments

F686Words in s. 215(1) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(1)(a), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F687S. 215(2) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(1)(b), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F688Words in s. 215(3) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(1)(c), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

216 Duration of design right.U.K.

(1)Design right expires—

(a)fifteen years from the end of the calendar year in which the design was first recorded in a design document or an article was first made to the design, whichever first occurred, or

(b)if articles made to the design are made available for sale or hire within five years from the end of that calendar year, ten years from the end of the calendar year in which that first occurred.

(2)The reference in subsection (1) to articles being made available for sale or hire is to their being made so available anywhere in the world by or with the licence of the design right owner.

Qualification for design right protectionU.K.

217 Qualifying individuals and qualifying persons.U.K.

(1)In this Part—

  • F689...

  • [F690 “ qualifying person ” means—

(a)an individual habitually resident in a qualifying country, or

(b)a body corporate or other body having legal personality which—

(i)is formed under the law of a part of the United Kingdom or another qualifying country, and

(ii)has in any qualifying country a place of business at which substantial business activity is carried on.]

(2)References in this Part to a qualifying person include the Crown and the government of any other qualifying country.

(3)In this section “qualifying country” means—

(a)the United Kingdom,

(b)a country to which this Part extends by virtue of an Order under section 255, [F691or]

F692(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)to the extent that an Order under section 256 so provides, a country designated under that section as enjoying reciprocal protection.

F693(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)In determining for the purpose of the definition of “qualifying person” whether substantial business activity is carried on at a place of business in any country, no account shall be taken of dealings in goods which are at all material times outside that country.

Textual Amendments

F689Words in s. 217(1) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(1)(a), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

F690Words in s. 217(1) substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 3(1)(b), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

F693S. 217(4) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(2), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

218 Qualification by reference to designer.U.K.

(1)This section applies to a design which is not created F694...in the course of employment.

(2)A design to which this section applies qualifies for design right protection if the designer is F695... a qualifying person.

(3)A joint design to which this section applies qualifies for design right protection if any of the designers is F696... a qualifying person.

(4)Where a joint design qualifies for design right protection under this section, only those designers who are F697... qualifying persons are entitled to design right under section 215(1) (first ownership of design right: entitlement of designer).

Textual Amendments

F694Words in s. 218(1) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(2)(b), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F695Words in s. 218(2) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(3)(a), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

F696Words in s. 218(3) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(3)(b), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

F697Words in s. 218(4) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(3)(c), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

219 [F698Qualification by reference to employer].U.K.

(1)A design qualifies for design right protection if it is created [F699in the course of employment with ] a qualifying person.

(2)In the case of F700... joint employment a design qualifies for design right protection if any of the F700... employers is a qualifying person.

(3)Where a design which is F701... created in the course of joint employment qualifies for design right protection under this section, only those F701... employers who are qualifying persons are entitled to design right under section [F702215(3)] (first ownership of design right: entitlement of F701... employer).

Textual Amendments

F698S. 219 heading substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 2(2)(c), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F699Words in s. 219(1) substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 2(2)(c), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F700Words in s. 219(2) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(2)(d), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F701Words in s. 219(3) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(2)(e), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F702Word in s. 219(3) substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 2(2)(f), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

220 Qualification by reference to first marketing.U.K.

(1)A design which does not qualify for design right protection under section 218 or 219 (qualification by reference to designerF703... or employer) qualifies for design right protection if the first marketing of articles made to the design—

(a)is by a qualifying person F704..., and

(b)takes place in the United Kingdom [F705or], another country to which this Part extends by virtue of an Order under section 255, F706....

(2)If the first marketing of articles made to the design is done jointly by two or more persons, the design qualifies for design right protection if any of those persons meets the [F707 requirement] specified in subsection (1)(a).

(3)In such a case only the persons who meet [F708that requirement ] are entitled to design right under section 215(4) (first ownership of design right: entitlement of first marketer of articles made to the design).

F709(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F703Word in s. 220(1) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(2)(g), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F704Words in s. 220(1)(a) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(4)(a), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

F707Word in s. 220(2) substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 3(4)(b), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

F708Words in s. 220(3) substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 3(4)(c), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

F709S. 220(4) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(4)(d), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

221 Power to make further provision as to qualification.U.K.

(1)Her Majesty may, with a view to fulfilling an international obligation of the United Kingdom, by Order in Council provide that a design qualifies for design right protection if such requirements as are specified in the Order are met.

(2)An Order may make different provision for different descriptions of design or article; and may make such consequential modifications of the operation of sections 215 (ownership of design right) and sections 218 to 220 (other means of qualification) as appear to Her Majesty to be appropriate.

(3)A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Dealings with design rightU.K.

222 Assignment and licences.U.K.

(1)Design right is transmissible by assignment, by testamentary disposition or by operation of law, as personal or moveable property.

(2)An assignment or other transmission of design right may be partial, that is, limited so as to apply—

(a)to one or more, but not all, of the things the design right owner has the exclusive right to do;

(b)to part, but not the whole, of the period for which the right is to subsist.

(3)An assignment of design right is not effective unless it is in writing signed by or on behalf of the assignor.

(4)A licence granted by the owner of design right is binding on every successor in title to his interest in the right, except a purchaser in good faith for valuable consideration and without notice (actual or constructive) of the licence or a person deriving title from such a purchaser; and references in this Part to doing anything with, or without, the licence of the design right owner shall be construed accordingly.

223 Prospective ownership of design right.U.K.

(1)Where by an agreement made in relation to future design right, and signed by or on behalf of the prospective owner of the design right, the prospective owner purports to assign the future design right (wholly or partially) to another person, then if, on the right coming into existence, the assignee or another person claiming under him would be entitled as against all other persons to require the right to be vested in him, the right shall vest in him by virtue of this section.

(2)In this section—

  • “future design right” means design right which will or may come into existence in respect of a future design or class of designs or on the occurrence of a future event; and

  • “prospective owner” shall be construed accordingly, and includes a person who is prospectively entitled to design right by virtue of such an agreement as is mentioned in subsection (1).

(3)A licence granted by a prospective owner of design right is binding on every successor in title to his interest (or prospective interest) in the right, except a purchaser in good faith for valuable consideration and without notice (actual or constructive) of the licence or a person deriving title from such a purchaser; and references in this Part to doing anything with, or without, the licence of the design right owner shall be construed accordingly.

224 Assignment of right in registered design presumed to carry with it design right.U.K.

Where a design consisting of a design in which design right subsists is registered under the M25Registered Designs Act 1949 and the proprietor of the registered design is also the design right owner, an assignment of the right in the registered design shall be taken to be also an assignment of the design right, unless a contrary intention appears.

Marginal Citations

225 Exclusive licences.U.K.

(1)In this Part an “exclusive licence” means a licence in writing signed by or on behalf of the design right owner authorising the licensee to the exclusion of all other persons, including the person granting the licence, to exercise a right which would otherwise be exercisable exclusively by the design right owner.

(2)The licensee under an exclusive licence has the same rights against any successor in title who is bound by the licence as he has against the person granting the licence.

Chapter IIU.K. Rights of Design Right Owner and Remedies

Infringement of design rightU.K.

226 Primary infringement of design right.U.K.

(1)The owner of design right in a design has the exclusive right to reproduce the design for commercial purposes—

(a)by making articles to that design, or

(b)by making a design document recording the design for the purpose of enabling such articles to be made.

(2)Reproduction of a design by making articles to the design means copying the design so as to produce articles exactly or substantially to that design, and references in this Part to making articles to a design shall be construed accordingly.

(3)Design right is infringed by a person who without the licence of the design right owner does, or authorises another to do, anything which by virtue of this section is the exclusive right of the design right owner.

[F710(3A)But design right in a design is not infringed where a person does, or authorises another to do, anything relating to an article that is made to the design if the article has been put on the market in the United Kingdom or the European Economic Area with the licence of the design right owner.]

(4)For the purposes of this section reproduction may be direct or indirect, and it is immaterial whether any intervening acts themselves infringe the design right.

(5)This section has effect subject to the provisions of Chapter III (exceptions to rights of design right owner).

Textual Amendments

227 Secondary infringement: importing or dealing with infringing article.U.K.

(1)Design right is infringed by a person who, without the licence of the design right owner—

(a)imports into the United Kingdom for commercial purposes, or

(b)has in his possession for commercial purposes, or

(c)sells, lets for hire, or offers or exposes for sale or hire, in the course of a business,

an article which is, and which he knows or has reason to believe is, an infringing article.

(2)This section has effect subject to the provisions of Chapter III (exceptions to rights of design right owner).

228 Meaning of “infringing article”.U.K.

(1)In this Part “infringing article”, in relation to a design, shall be construed in accordance with this section.

(2)An article is an infringing article if its making to that design was an infringement of design right in the design.

(3)An article is also an infringing article if—

(a)it has been or is proposed to be imported into the United Kingdom, and

(b)its making to that design in the United Kingdom would have been an infringement of design right in the design or a breach of an exclusive licence agreement relating to the design.

(4)Where it is shown that an article is made to a design in which design right subsists or has subsisted at any time, it shall be presumed until the contrary is proved that the article was made at a time when design right subsisted.

[F711(5)Nothing in subsection (3) shall be construed as applying to an article which—

(a)may lawfully be imported into the United Kingdom by virtue of anything which forms part of assimilated law as a result of section 3 of the European Union (Withdrawal) Act 2018, or

(b)has been or is proposed to be imported into the United Kingdom after being put on the market in the European Economic Area by or with the licence of the design right owner.

(5A)In subsection (5)(a), the reference to assimilated law is to be read, until the coming into force of paragraph 2(6) of Schedule 2 to the Retained EU Law (Revocation and Reform) Act 2023, as a reference to retained EU law.]

(6)The expression “infringing article” does not include a design document, notwithstanding that its making was or would have been an infringement of design right.

Textual Amendments

Remedies for infringementU.K.

229 Rights and remedies of design right owner.U.K.

(1)An infringement of design right is actionable by the design right owner.

(2)In an action for infringement of design right all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right.

(3)The court may in an action for infringement of design right, having regard to all the circumstances and in particular to—

(a)the flagrancy of the infringement, and

(b)any benefit accruing to the defendant by reason of the infringement,

award such additional damages as the justice of the case may require.

(4)This section has effect subject to section 233 (innocent infringement).

230 Order for delivery up.U.K.

(1)Where a person—

(a)has in his possession, custody or control for commercial purposes an infringing article, or

(b)has in his possession, custody or control anything specifically designed or adapted for making articles to a particular design, knowing or having reason to believe that it has been or is to be used to make an infringing article,

the owner of the design right in the design in question may apply to the court for an order that the infringing article or other thing be delivered up to him or to such other person as the court may direct.

(2)An application shall not be made after the end of the period specified in the following provisions of this section; and no order shall be made unless the court also makes, or it appears to the court that there are grounds for making, an order under section 231 (order as to disposal of infringing article, &c.).

(3)An application for an order under this section may not be made after the end of the period of six years from the date on which the article or thing in question was made, subject to subsection (4).

(4)If during the whole or any part of that period the design right owner—

(a)is under a disability, or

(b)is prevented by fraud or concealment from discovering the facts entitling him to apply for an order,

an application may be made at any time before the end of the period of six years from the date on which he ceased to be under a disability or, as the case may be, could with reasonable diligence have discovered those facts.

(5)In subsection (4) “disability”—

(a)in England and Wales, has the same meaning as in the M26Limitation Act 1980;

(b)in Scotland, means legal disability within the meaning of the M27Prescription and Limitation (Scotland) Act 1973;

(c)in Northern Ireland, has the same meaning as in the M28Statute of Limitations (Northern Ireland) 1958.

(6)A person to whom an infringing article or other thing is delivered up in pursuance of an order under this section shall, if an order under section 231 is not made, retain it pending the making of an order, or the decision not to make an order, under that section.

(7)Nothing in this section affects any other power of the court.

Modifications etc. (not altering text)

C121S. 230 extended by S.I.1991/724, art. 2(1)(n)

Marginal Citations

231 Order as to disposal of infringing articles, &c.U.K.

(1)An application may be made to the court for an order that an infringing article or other thing delivered up in pursuance of an order under section 230 shall be—

(a)forfeited to the design right owner, or

(b)destroyed or otherwise dealt with as the court may think fit,

or for a decision that no such order should be made.

(2)In considering what order (if any) should be made, the court shall consider whether other remedies available in an action for infringement of design right would be adequate to compensate the design right owner and to protect his interests.

(3)Provision shall be made by rules of court as to the service of notice on persons having an interest in the article or other thing, and any such person is entitled—

(a)to appear in proceedings for an order under this section, whether or not he was served with notice, and

(b)to appeal against any order made, whether or not he appeared;

and an order shall not take effect until the end of the period within which notice of an appeal may be given or, if before the end of that period notice of appeal is duly given, until the final determination or abandonment of the proceedings on the appeal.

(4)Where there is more than one person interested in an article or other thing, the court shall make such order as it thinks just and may (in particular) direct that the thing be sold, or otherwise dealt with, and the proceeds divided.

(5)If the court decides that no order should be made under this section, the person in whose possession, custody or control the article or other thing was before being delivered up F712. . . is entitled to its return.

(6)References in this section to a person having an interest in an article or other thing include any person in whose favour an order could be made in respect of it

[F713(a)under this section or under section 114 or 204 of this Act;

(b)under section 24D of the Registered Designs Act 1949;

(c)under section 19 of Trade Marks Act 1994 F714...; or

(d)under regulation 1C of the Community Design Regulations 2005 (SI 2005/2339).]

Textual Amendments

F714Words in s. 231(6)(c) omitted (31.12.2020) by virtue of The Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/269), reg. 1(1), Sch. 5 para. 2; 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C122S. 231 extended by S.I. 1991/724, art. 2(1)(n)

232 Jurisdiction of county court and sheriff court.U.K.

(1)In England [F715and Wales the county court and in] Northern Ireland a county court may entertain proceedings under—

  • section 230 (order for delivery up of infringing article, &c.),

  • section 231 (order as to disposal of infringing article, &c.), or

  • section 235(5) (application by exclusive licensee having concurrent rights),

[F716save that, in Northern Ireland, a county court may entertain such proceedings only] where the value of the infringing articles and other things in question does not exceed the county court limit for actions in tort.

(2)In Scotland proceedings for an order under any of those provisions may be brought in the sheriff court.

(3)Nothing in this section shall be construed as affecting the jurisdiction of the High Court or, in Scotland, the Court of Session.

Textual Amendments

F715Words in s. 232(1) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 72; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F716Words in s. 232(1) inserted by S.I. 1991/724, art. 2(8), Schedule Part I

233 Innocent infringement.U.K.

(1)Where in an action for infringement of design right brought by virtue of section 226 (primary infringement) it is shown that at the time of the infringement the defendant did not know, and had no reason to believe, that design right subsisted in the design to which the action relates, the plaintiff is not entitled to damages against him, but without prejudice to any other remedy.

(2)Where in an action for infringement of design right brought by virtue of section 227 (secondary infringement) a defendant shows that the infringing article was innocently acquired by him or a predecessor in title of his, the only remedy available against him in respect of the infringement is damages not exceeding a reasonable royalty in respect of the act complained of.

(3)In subsection (2) “innocently acquired” means that the person acquiring the article did not know and had no reason to believe that it was an infringing article.

234 Rights and remedies of exclusive licensee.U.K.

(1)An exclusive licensee has, except against the design right owner, the same rights and remedies in respect of matters occurring after the grant of the licence as if the licence had been an assignment.

(2)His rights and remedies are concurrent with those of the design right owner; and references in the relevant provisions of this Part to the design right owner shall be construed accordingly.

(3)In an action brought by an exclusive licensee by virtue of this section a defendant may avail himself of any defence which would have been available to him if the action had been brought by the design right owner.

235 Exercise of concurrent rights.U.K.

(1)Where an action for infringement of design right brought by the design right owner or an exclusive licensee relates (wholly or partly) to an infringement in respect of which they have concurrent rights of action, the design right owner or, as the case may be, the exclusive licensee may not, without the leave of the court, proceed with the action unless the other is either joined as a plaintiff or added as a defendant.

(2)A design right owner or exclusive licensee who is added as a defendant in pursuance of subsection (1) is not liable for any costs in the action unless he takes part in the proceedings.

(3)The above provisions do not affect the granting of interlocutory relief on the application of the design right owner or an exclusive licensee.

(4)Where an action for infringement of design right is brought which relates (wholly or partly) to an infringement in respect of which the design right owner and an exclusive licensee have concurrent rights of action—

(a)the court shall, in assessing damages, take into account—

(i)the terms of the licence, and

(ii)any pecuniary remedy already awarded or available to either of them in respect of the infringement;

(b)no account of profits shall be directed if an award of damages has been made, or an account of profits has been directed, in favour of the other of them in respect of the infringement; and

(c)the court shall if an account of profits is directed apportion the profits between them as the court considers just, subject to any agreement between them;

and these provisions apply whether or not the design right owner and the exclusive licensee are both parties to the action.

(5)The design right owner shall notify any exclusive licensee having concurrent rights before applying for an order under section 230 (order for delivery up of infringing article, &c.); and the court may on the application of the licensee make such order under that section as it thinks fit having regard to the terms of the licence.

Modifications etc. (not altering text)

C123S. 235(5) extended by S.I. 1991/724, art. 2(1)(n)

Chapter IIIU.K. Exceptions to Rights of Design Right Owners

Infringement of copyrightU.K.

236 Infringement of copyright.U.K.

Where copyright subsists in a work which consists of or includes a design in which design right subsists, it is not an infringement of design right in the design to do anything which is an infringement of the copyright in that work.

Availability of licences of rightU.K.

237 Licences available in last five years of design right.U.K.

(1)Any person is entitled as of right to a licence to do in the last five years of the design right term anything which would otherwise infringe the design right.

(2)The terms of the licence shall, in default of agreement, be settled by the comptroller.

(3)The Secretary of State may if it appears to him necessary in order to—

(a)comply with an international obligation of the United Kingdom, or

(b)secure or maintain reciprocal protection for British designs in other countries,

by order exclude from the operation of subsection (1) designs of a description specified in the order or designs applied to articles of a description so specified.

(4)An order shall be made by statutory instrument; and no order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

238 Powers exercisable for protection of the public interest.U.K.

[F717(1)Subsection (1A) applies where whatever needs to be remedied, mitigated or prevented by the Secretary of State [F718or (as the case may be) the Competition and Markets Authority] under section 12(5) of the Competition Act 1980 or section 41(2), 55(2), 66(6), 75(2), 83(2), 138(2), 147(2) [F719, 147A(2)] or 160(2) of, or paragraph 5(2) or 10(2) of Schedule 7 to, the Enterprise Act 2002 (powers to take remedial action following references to the [F720Competition and Markets Authority] in connection with public bodies and certain other persons, mergers or market investigations etc.) consists of or includes—

(a)conditions in licences granted by a design right owner restricting the use of the design by the licensee or the right of the design right owner to grant other licences, or

(b)a refusal of a design right owner to grant licences on reasonable terms.

(1A)The powers conferred by Schedule 8 to the Enterprise Act 2002 include power to cancel or modify those conditions and, instead or in addition, to provide that licences in respect of the design right shall be available as of right.

(2)The references to anything permitted by Schedule 8 to the Enterprise Act 2002 in section 12(5A) of the Competition Act 1980 and in sections 75(4)(a), 83(4)(a), 84(2)(a), 89(1), 160(4)(a), 161(3)(a) and 164(1) of, and paragraphs 5, 10 and 11 of Schedule 7 to, the Act of 2002 shall be construed accordingly.]

(3)The terms of a licence available by virtue of this section shall, in default of agreement, be settled by the comptroller.

Textual Amendments

F717S. 238(1)(1A)(2) substituted (20.6.2003 for certain purposes and 29.12.2004 otherwise) for s. 238(1)(2) by 2002 c. 40, ss. 278(1), 279, Sch. 25 para. 18(4); S.I. 2003/1397, arts. 2, 3(1), Sch. (with arts. 4-12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5)

Modifications etc. (not altering text)

239 Undertaking to take licence of right in infringement proceedings.U.K.

(1)If in proceedings for infringement of design right in a design in respect of which a licence is available as of right under section 237 or 238 the defendant undertakes to take a licence on such terms as may be agreed or, in default of agreement, settled by the comptroller under that section—

(a)no injunction shall be granted against him,

(b)no order for delivery up shall be made under section 230, and

(c)the amount recoverable against him by way of damages or on an account of profits shall not exceed double the amount which would have been payable by him as licensee if such a licence on those terms had been granted before the earliest infringement.

(2)An undertaking may be given at any time before final order in the proceedings, without any admission of liability.

(3)Nothing in this section affects the remedies available in respect of an infringement committed before licences of right were available.

Crown use of designsU.K.

240 Crown use of designs.U.K.

(1)A government department, or a person authorised in writing by a government department, may without the licence of the design right owner—

(a)do anything for the purpose of supplying articles for the services of the Crown, or

(b)dispose of articles no longer required for the services of the Crown;

and nothing done by virtue of this section infringes the design right.

(2)References in this Part to “the services of the Crown” are to—

(a)the defence of the realm,

(b)foreign defence purposes, and

(c)health service purposes.

(3)The reference to the supply of articles for “foreign defence purposes” is to their supply—

(a)for the defence of a country outside the realm in pursuance of an agreement or arrangement to which the government of that country and Her Majesty’s Government in the United Kingdom are parties; or

(b)for use by armed forces operating in pursuance of a resolution of the United Nations or one of its organs.

(4)The reference to the supply of articles for “health service purposes” are to their supply for the purpose of providing—

[F721(za)primary medical services or primary dental services under [F722the National Health Service Act 2006 or the National Health Service (Wales) Act 2006,] [F723or primary medical services under Part 1 of the National Health Service (Scotland) Act 1978]]

[F724(a)pharmaceutical services, general medical services or general dental services under—

[F725(i)Chapter 1 of Part 7 of the National Health Service Act 2006, or Chapter 1 of Part 7 of the National Health Service (Wales) Act 2006 (in the case of pharmaceutical services),]

(ii)Part II of the National Health Service (Scotland) Act 1978 [F726(in the case of pharmaceutical services or general dental services)], or

(iii)the corresponding provisions of the law in force in Northern Ireland; or

(b)personal medical services or personal dental services in accordance with arrangements made under—

F727(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)section 17C of the 1978 Act [F728(in the case of personal dental services)], or

(iii)the corresponding provisions of the law in force in Northern Ireland] [F729or

(c)local pharmaceutical services provided under[F730 the National Health Service Act 2006 or the National Health Service (Wales) Act 2006].]

(5)In this Part—

  • “Crown use”, in relation to a design, means the doing of anything by virtue of this section which would otherwise be an infringement of design right in the design; and

  • “the government department concerned”, in relation to such use, means the government department by whom or on whose authority the act was done.

(6)The authority of a government department in respect of Crown use of a design may be given to a person either before or after the use and whether or not he is authorised, directly or indirectly, by the design right owner to do anything in relation to the design.

(7)A person acquiring anything sold in the exercise of powers conferred by this section, and any person claiming under him, may deal with it in the same manner as if the design right were held on behalf of the Crown.

Textual Amendments

F729S. 240(4)(c) and the word "or" immediately preceding it inserted (1.7.2002 for W. and 1.1.2003 for E.) by 2001 c. 15, ss. 67(1), 70(2), Sch. 5 Pt. 1 para. 7 (with ss. 64(9), 65(4)); S.I. 2002/1475, art. 2(1), Sch. Pt. I; S.I. 2003/53, art. 2

241 Settlement of terms for Crown use.U.K.

(1)Where Crown use is made of a design, the government department concerned shall—

(a)notify the design right owner as soon as practicable, and

(b)give him such information as to the extent of the use as he may from time to time require,

unless it appears to the department that it would be contrary to the public interest to do so or the identity of the design right owner cannot be ascertained on reasonable inquiry.

(2)Crown use of a design shall be on such terms as, either before or after the use, are agreed between the government department concerned and the design right owner with the approval of the Treasury or, in default of agreement, are determined by the court.

In the application of this subsection to Northern Ireland the reference to the Treasury shall, where the government department referred to in that subsection is a Northern Ireland department, be construed as a reference to the Department of Finance and Personnel.

[F731In the application of this subsection to Scotland, where the government department referred to in that subsection is any part of the Scottish Administration, the words “with the approval of the Treasury” are omitted.]

(3)Where the identity of the design right owner cannot be ascertained on reasonable inquiry, the government department concerned may apply to the court who may order that no royalty or other sum shall be payable in respect of Crown use of the design until the owner agrees terms with the department or refers the matter to the court for determination.

Textual Amendments

F731Paragraph in s. 241(2) inserted (1.7.1999) by S.I. 1999/1820, arts. 1(2), 4, Sch. 2 Pt. I para. 93(2); S.I. 1998/3178, art. 3

242 Rights of third parties in case of Crown use.U.K.

(1)The provisions of any licence, assignment or agreement made between the design right owner (or anyone deriving title from him or from whom he derives title) and any person other than a government department are of no effect in relation to Crown use of a design, or any act incidental to Crown use, so far as they—

(a)restrict or regulate anything done in relation to the design, or the use of any model, document or other information relating to it, or

(b)provide for the making of payments in respect of, or calculated by reference to such use;

and the copying or issuing to the public of copies of any such model or document in connection with the thing done, or any such use, shall be deemed not to be an infringement of any copyright in the model or document.

(2)Subsection (1) shall not be construed as authorising the disclosure of any such model, document or information in contravention of the licence, assignment or agreement.

(3)Where an exclusive licence is in force in respect of the design—

(a)if the licence was granted for royalties—

(i)any agreement between the design right owner and a government department under section 241 (settlement of terms for Crown use) requires the consent of the licensee, and

(ii)the licensee is entitled to recover from the design right owner such part of the payment for Crown use as may be agreed between them or, in default of agreement, determined by the court;

(b)if the licence was granted otherwise than for royalties—

(i)section 241 applies in relation to anything done which but for section 240 (Crown use) and subsection (1) above would be an infringement of the rights of the licensee with the substitution for references to the design right owner of references to the licensee, and

(ii)section 241 does not apply in relation to anything done by the licensee by virtue of an authority given under section 240.

(4)Where the design right has been assigned to the design right owner in consideration of royalties—

(a)section 241 applies in relation to Crown use of the design as if the references to the design right owner included the assignor, and any payment for Crown use shall be divided between them in such proportion as may be agreed or, in default of agreement, determined by the court; and

(b)section 241 applies in relation to any act incidental to Crown use as it applies in relation to Crown use of the design.

(5)Where any model, document or other information relating to a design is used in connection with Crown use of the design, or any act incidental to Crown use, section 241 applies to the use of the model, document or other information with the substitution for the references to the design right owner of references to the person entitled to the benefit of any provision of an agreement rendered inoperative by subsection (1) above.

(6)In this section—

  • “act incidental to Crown use” means anything done for the services of the Crown to the order of a government department by the design right owner in respect of a design;

  • “payment for Crown use” means such amount as is payable by the government department concerned by virtue of section 241; and

  • “royalties” includes any benefit determined by reference to the use of the design.

243 Crown use: compensation for loss of profit.U.K.

(1)Where Crown use is made of a design, the government department concerned shall pay—

(a)to the design right owner, or

(b)if there is an exclusive licence in force in respect of the design, to the exclusive licensee,

compensation for any loss resulting from his not being awarded a contract to supply the articles made to the design.

(2)Compensation is payable only to the extent that such a contract could have been fulfilled from his existing manufacturing capacity; but is payable notwithstanding the existence of circumstances rendering him ineligible for the award of such a contract.

(3)In determining the loss, regard shall be had to the profit which would have been made on such a contract and to the extent to which any manufacturing capacity was under-used.

(4)No compensation is payable in respect of any failure to secure contracts for the supply of articles made to the design otherwise than for the services of the Crown.

(5)The amount payable shall, if not agreed between the design right owner or licensee and the government department concerned with the approval of the Treasury, be determined by the court on a reference under section 252; and it is in addition to any amount payable under section 241 or 242.

(6)In the application of this section to Northern Ireland, the reference in subsection (5) to the Treasury shall, where the government department concerned is a Northern Ireland department, be construed as a reference to the Department of Finance and Personnel.

[F732(7)In the application of this section to Scotland, where the government department referred to in subsection (5) is any part of the Scottish Administration, the words “with the approval of the Treasury” in that subsection are omitted.]

Textual Amendments

244 Special provision for Crown use during emergency.U.K.

(1)During a period of emergency the powers exercisable in relation to a design by virtue of section 240 (Crown use) include power to do any act which would otherwise be an infringement of design right for any purpose which appears to the government department concerned necessary or expedient—

(a)for the efficient prosecution of any war in which Her Majesty may be engaged;

(b)for the maintenance of supplies and services essential to the life of the community;

(c)for securing a sufficiency of supplies and services essential to the well-being of the community;

(d)for promoting the productivity of industry, commerce and agriculture;

(e)for fostering and directing exports and reducing imports, or imports of any classes, from all or any countries and for redressing the balance of trade;

(f)generally for ensuring that the whole resources of the community are available for use, and are used, in a manner best calculated to serve the interests of the community; or

(g)for assisting the relief of suffering and the restoration and distribution of essential supplies and services in any country outside the United Kingdom which is in grave distress as the result of war.

(2)References in this Part to the services of the Crown include, as respects a period of emergency, those purposes; and references to “Crown use” include any act which would apart from this section be an infringement of design right.

(3)In this section “period of emergency” means a period beginning with such date as may be declared by Order in Council to be the beginning, and ending with such date as may be so declared to be the end, of a period of emergency for the purposes of this section.

(4)No Order in Council under this section shall be submitted to Her Majesty unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

[F733MiscellaneousU.K.

Textual Amendments

F733Ss. 244A, 244B and cross-heading inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 4, 24(1); S.I. 2014/2330, art. 3, Sch.

244AException for private acts, experiments and teachingU.K.

Design right is not infringed by—

(a)an act which is done privately and for purposes which are not commercial;

(b)an act which is done for experimental purposes; or

(c)an act of reproduction for teaching purposes or for the purpose of making citations provided that—

(i)the act of reproduction is compatible with fair trade practice and does not unduly prejudice the normal exploitation of the design, and

(ii)mention is made of the source.

244BException for overseas ships and aircraftU.K.

Design right is not infringed by—

(a)the use of equipment on ships or aircraft which are registered in another country but which are temporarily in the United Kingdom;

(b)the importation into the United Kingdom of spare parts or accessories for the purpose of repairing such ships or aircraft; or

(c)the carrying out of repairs on such ships or aircraft.]

GeneralU.K.

245 Power to provide for further exceptions.U.K.

(1)The Secretary of State may if it appears to him necessary in order to—

(a)comply with an international obligation of the United Kingdom, or

(b)secure or maintain reciprocal protection for British designs in other countries,

by order provide that acts of a description specified in the order do not infringe design right.

(2)An order may make different provision for different descriptions of design or article.

(3)An order shall be made by statutory instrument and no order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

Chapter IVU.K. Jurisdiction of the Comptroller and the Court

Jurisdiction of the comptrollerU.K.

246 Jurisdiction to decide matters relating to design right.U.K.

(1)A party to a dispute as to any of the following matters may refer the dispute to the comptroller for his decision—

(a)the subsistence of design right,

(b)the term of design right, or

(c)the identity of the person in whom design right first vested;

and the comptroller’s decision on the reference is binding on the parties to the dispute.

(2)No other court or tribunal shall decide any such matter except—

(a)on a reference or appeal from the comptroller,

(b)in infringement or other proceedings in which the issue arises incidentally, or

(c)in proceedings brought with the agreement of the parties or the leave of the comptroller.

(3)The comptroller has jurisdiction to decide any incidental question of fact or law arising in the course of a reference under this section.

247 Application to settle terms of licence of right.U.K.

(1)A person requiring a licence which is available as of right by virtue of—

(a)section 237 (licences available in last five years of design right), or

(b)an order under section 238 (licences made available in the public interest),

may apply to the comptroller to settle the terms of the licence.

(2)No application for the settlement of the terms of a licence available by virtue of section 237 may be made earlier than one year before the earliest date on which the licence may take effect under that section.

(3)The terms of a licence settled by the comptroller shall authorise the licensee to do—

(a)in the case of licence available by virtue of section 237, everything which would be an infringement of the design right in the absence of a licence;

(b)in the case of a licence available by virtue of section 238, everything in respect of which a licence is so available.

(4)In settling the terms of a licence the comptroller shall have regard to such factors as may be prescribed by the Secretary of State by order made by statutory instrument.

(5)No such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(6)Where the terms of a licence are settled by the comptroller, the licence has effect—

(a)in the case of an application in respect of a licence available by virtue of section 237 made before the earliest date on which the licence may take effect under that section, from that date;

(b)in any other case, from the date on which the application to the comptroller was made.

248 Settlement of terms where design right owner unknown.U.K.

(1)This section applies where a person making an application under section 247 (settlement of terms of licence of right) is unable on reasonable inquiry to discover the identity of the design right owner.

(2)The comptroller may in settling the terms of the licence order that the licence shall be free of any obligation as to royalties or other payments.

(3)If such an order is made the design right owner may apply to the comptroller to vary the terms of the licence with effect from the date on which his application is made.

(4)If the terms of a licence are settled by the comptroller and it is subsequently established that a licence was not available as of right, the licensee shall not be liable in damages for, or for an account of profits in respect of, anything done before he was aware of any claim by the design right owner that a licence was not available.

249 Appeals as to terms of licence of right.U.K.

(1)An appeal lies from any decision of the comptroller under section 247 or 248 (settlement of terms of licence of right) to [F734a person appointed under section 27A of the Registered Designs Act 1949].

F735(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F734Words in s. 249(1) substituted (6.4.2015) by Intellectual Property Act 2014 (c. 18), ss. 10(7)(a), 24(1); S.I. 2015/165, art. 3

[F736249AOpinions serviceU.K.

The descriptions of designs which may be specified in regulations under subsection (1)(b) of section 28A of the Registered Designs Act 1949 (requests to the comptroller for opinions on designs) include, in particular—

(a)designs in which design right subsists in accordance with this Part, and

(b)designs in relation to which there is a question whether design right so subsists.]

Textual Amendments

250 Rules.U.K.

(1)The Secretary of State may make rules for regulating the procedure to be followed in connection with any proceeding before the comptroller under this Part.

(2)Rules may, in particular, make provision—

(a)prescribing forms;

(b)requiring fees to be paid;

(c)authorising the rectification of irregularities of procedure;

(d)regulating the mode of giving evidence and empowering the comptroller to compel the attendance of witnesses and the discovery of and production of documents;

(e)providing for the appointment of advisers to assist the comptroller in proceedings before him;

(f)prescribing time limits for doing anything required to be done (and providing for the alteration of any such limit); and

(g)empowering the comptroller to award costs and to direct how, to what party and from what parties, costs are to be paid.

(3)Rules prescribing fees require the consent of the Treasury.

(4)The remuneration of an adviser appointed to assist the comptroller shall be determined by the Secretary of State with the consent of the Treasury and shall be defrayed out of money provided by Parliament.

(5)Rules shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Jurisdiction of the courtU.K.

251 References and appeals on design right matters.U.K.

(1)In any proceedings before him under section 246 (reference of matter relating to design right), the comptroller may at any time order the whole proceedings or any question or issue (whether of fact or law) to be referred, on such terms as he may direct, to the High Court or, in Scotland, the Court of Session.

(2)The comptroller shall make such an order if the parties to the proceedings agree that he should do so.

(3)On a reference under this section the court may exercise any power available to the comptroller by virtue of this Part as respects the matter referred to it and, following its determination, may refer any matter back to the comptroller.

(4)An appeal lies from any decision of the comptroller in proceedings before him under section 246 (decisions on matters relating to design right) to [F737—

(a)]the High Court or, in Scotland, the Court of Session [F738, or

(b)a person appointed under section 27A of the Registered Designs Act 1949].

Textual Amendments

F737Words in s. 251(4) renumbered as s. 251(4)(a) (6.4.2015) by Intellectual Property Act 2014 (c. 18), ss. 10(8)(a), 24(1); S.I. 2015/165, art. 3

F738S. 251(4)(b) and word preceding it inserted (6.4.2015) by Intellectual Property Act 2014 (c. 18), ss. 10(8)(b), 24(1); S.I. 2015/165, art. 3

252 Reference of disputes relating to Crown use.U.K.

(1)A dispute as to any matter which falls to be determined by the court in default of agreement under—

(a)section 241 (settlement of terms for Crown use),

(b)section 242 (rights of third parties in case of Crown use), or

(c)section 243 (Crown use: compensation for loss of profit),

may be referred to the court by any party to the dispute.

(2)In determining a dispute between a government department and any person as to the terms for Crown use of a design the court shall have regard to—

(a)any sums which that person or a person from whom he derives title has received or is entitled to receive, directly or indirectly, from any government department in respect of the design; and

(b)whether that person or a person from whom he derives title has in the court’s opinion without reasonable cause failed to comply with a request of the department for the use of the design on reasonable terms.

(3)One of two or more joint owners of design right may, without the concurrence of the others, refer a dispute to the court under this section, but shall not do so unless the others are made parties; and none of those others is liable for any costs unless he takes part in the proceedings.

(4)Where the consent of an exclusive licensee is required by section 242(3)(a)(i) to the settlement by agreement of the terms for Crown use of a design, a determination by the court of the amount of any payment to be made for such use is of no effect unless the licensee has been notified of the reference and given an opportunity to be heard.

(5)On the reference of a dispute as to the amount recoverable as mentioned in section 242(3)(a)(ii) (right of exclusive licensee to recover part of amount payable to design right owner) the court shall determine what is just having regard to any expenditure incurred by the licensee—

(a)in developing the design, or

(b)in making payments to the design right owner in consideration of the licence (other than royalties or other payments determined by reference to the use of the design).

(6)In this section “the court” means—

(a)in England and Wales, the High [F739Court,]

(b)in Scotland, the Court of Session, and

(c)in Northern Ireland, the High Court.

Textual Amendments

Chapter VU.K. Miscellaneous and General

[F740 Unjustified threatsU.K.

Textual Amendments

F740S. 253 253 and crossheading substituted for (1.10.2017) by Intellectual Property (Unjustified Threats) Act 2017 (c. 14), ss. 5(2), 8 (with art. 7(4)); S.I. 2017/771, reg. 2(1)(b) (with reg. 3)

253Threats of infringement proceedingsU.K.

(1)A communication contains a “threat of infringement proceedings” if a reasonable person in the position of a recipient would understand from the communication that—

(a)design right subsists in a design, and

(b)a person intends to bring proceedings (whether in a court in the United Kingdom or elsewhere) against another person for infringement of the design right by—

(i)an act done in the United Kingdom, or

(ii)an act which, if done, would be done in the United Kingdom.

(2)References in this section and in section 253C to a “recipient” include, in the case of a communication directed to the public or a section of the public, references to a person to whom the communication is directed.

253AActionable threatsU.K.

(1)Subject to subsections (2) to (5), a threat of infringement proceedings made by any person is actionable by any person aggrieved by the threat.

(2)A threat of infringement proceedings is not actionable if the infringement is alleged to consist of—

(a)making an article for disposal, or

(b)importing an article for disposal.

(3)A threat of infringement proceedings is not actionable if the infringement is alleged to consist of an act which, if done, would constitute an infringement of a kind mentioned in subsection (2)(a) or (b).

(4)A threat of infringement proceedings is not actionable if the threat—

(a)is made to a person who has done, or intends to do, an act mentioned in subsection (2)(a) or (b) in relation to an article, and

(b)is a threat of proceedings for an infringement alleged to consist of doing anything else in relation to that article.

(5)A threat of infringement proceedings which is not an express threat is not actionable if it is contained in a permitted communication.

(6)In sections 253C and 253D an “actionable threat” means a threat of infringement proceedings that is actionable in accordance with this section.

253BPermitted communicationsU.K.

(1)For the purposes of section 253A(5), a communication containing a threat of infringement proceedings is a “permitted communication” if—

(a)the communication, so far as it contains information that relates to the threat, is made for a permitted purpose;

(b)all of the information that relates to the threat is information that—

(i)is necessary for that purpose (see subsection (5)(a) to (c) for some examples of necessary information), and

(ii)the person making the communication reasonably believes is true.

(2)Each of the following is a “permitted purpose”—

(a)giving notice that design right subsists in a design;

(b)discovering whether, or by whom, design right in a design has been infringed by an act mentioned in section 253A(2)(a) or (b);

(c)giving notice that a person has a right in or under the design right in a design, where another person's awareness of the right is relevant to any proceedings that may be brought in respect of the design right in the design.

(3)The court may, having regard to the nature of the purposes listed in subsection (2)(a) to (c), treat any other purpose as a “permitted purpose” if it considers that it is in the interests of justice to do so.

(4)But the following may not be treated as a “permitted purpose”—

(a)requesting a person to cease doing, for commercial purposes, anything in relation to an article made to a design,

(b)requesting a person to deliver up or destroy an article made to a design, or

(c)requesting a person to give an undertaking relating to an article made to a design.

(5)If any of the following information is included in a communication made for a permitted purpose, it is information that is “necessary for that purpose” (see subsection (1)(b)(i))—

(a)a statement that design right subsists in a design;

(b)details of the design, or of a right in or under the design right in the design, which—

(i)are accurate in all material respects, and

(ii)are not misleading in any material respect; and

(c)information enabling the identification of articles that are alleged to be infringing articles in relation to the design.

253CRemedies and defencesU.K.

(1)Proceedings in respect of an actionable threat may be brought against the person who made the threat for—

(a)a declaration that the threat is unjustified;

(b)an injunction against the continuance of the threat;

(c)damages in respect of any loss sustained by the aggrieved person by reason of the threat.

(2)It is a defence for the person who made the threat to show that the act in respect of which proceedings were threatened constitutes (or if done would constitute) an infringement of design right.

(3)It is a defence for the person who made the threat to show—

(a)that, despite having taken reasonable steps, the person has not identified anyone who has done an act mentioned in section 253A(2)(a) or (b) in relation to the article which is the subject of the threat, and

(b)that the person notified the recipient, before or at the time of making the threat, of the steps taken.

253DProfessional advisersU.K.

(1)Proceedings in respect of an actionable threat may not be brought against a professional adviser (or any person vicariously liable for the actions of that professional adviser) if the conditions in subsection (3) are met.

(2)In this section “professional adviser” means a person who, in relation to the making of the communication containing the threat—

(a)is acting in a professional capacity in providing legal services or the services of a trade mark attorney or a patent attorney, and

(b)is regulated in the provision of legal services, or the services of a trade mark attorney or a patent attorney, by one or more regulatory bodies (whether through membership of a regulatory body, the issue of a licence to practise or any other means).

(3)The conditions are that—

(a)in making the communication the professional adviser is acting on the instructions of another person, and

(b)when the communication is made the professional adviser identifies the person on whose instructions the adviser is acting.

(4)This section does not affect any liability of the person on whose instructions the professional adviser is acting.

(5)It is for a person asserting that subsection (1) applies to prove (if required) that at the material time—

(a)the person concerned was acting as a professional adviser, and

(b)the conditions in subsection (3) were met.

253ESupplementary: proceedings for delivery up etc.U.K.

In section 253(1)(b) the reference to proceedings for infringement of design right includes a reference to—

(a)proceedings for an order under section 230 (order for delivery up), and

(b)proceedings for an order under section 231 (order as to disposal of infringing articles).]

[F741Licensee under licence of right not to claim connection with design right owner]U.K.

Textual Amendments

254 Licensee under licence of right not to claim connection with design right owner.U.K.

(1)A person who has a licence in respect of a design by virtue of section 237 or 238 (licences of right) shall not, without the consent of the design right owner—

(a)apply to goods which he is marketing, or proposes to market, in reliance on that licence a trade description indicating that he is the licensee of the design right owner, or

(b)use any such trade description in an advertisement in relation to such goods.

(2)A contravention of subsection (1) is actionable by the design right owner.

(3)In this section “trade description”, the reference to applying a trade description to goods and “advertisement” have the same meaning as in the M29Trade Descriptions Act 1968.

Marginal Citations

Extent of operation of this PartU.K.

255 Countries to which this Part extends.U.K.

(1)This Part extends to England and Wales, Scotland and Northern Ireland.

(2)Her Majesty may by Order in Council direct that this Part shall extend, subject to such exceptions and modifications as may be specified in the Order, to—

(a)any of the Channel Islands,

(b)the Isle of Man, or

(c)any colony.

(3)That power includes power to extend, subject to such exceptions and modifications as may be specified in the Order, any Order in Council made under section 221 (further provision as to qualification for design right protection) or section 256 (countries enjoying reciprocal protection).

(4)The legislature of a country to which this Part has been extended may modify or add to the provisions of this Part, in their operation as part of the law of that country, as the legislature may consider necessary to adapt the provisions to the circumstances of that country; but not so as to deny design right protection in a case where it would otherwise exist.

(5)Where a country to which this Part extends ceases to be a colony of the United Kingdom, it shall continue to be treated as such a country for the purposes of this Part until—

(a)an Order in Council is made under section 256 designating it as a country enjoying reciprocal protection, or

(b)an Order in Council is made declaring that it shall cease to be so treated by reason of the fact that the provisions of this Part as part of the law of that country have been amended or repealed.

(6)A statutory instrument containing an Order in Council under subsection (5)(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

256 Countries enjoying reciprocal protection.U.K.

(1)Her Majesty may, if it appears to Her that the law of a country provides adequate protection for British designs, by Order in Council designate that country as one enjoying reciprocal protection under this Part.

(2)If the law of a country provides adequate protection only for certain classes of British design, or only for designs applied to certain classes of article, any Order designating that country shall contain provision limiting, to a corresponding extent, the protection afforded by this Part in relation to designs connected with that country.

(3)An Order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

257 Territorial waters and the continental shelf.U.K.

(1)For the purposes of this Part the territorial waters of the United Kingdom shall be treated as part of the United Kingdom.

(2)This Part applies to things done in the United Kingdom sector of the continental shelf on a structure or vessel which is present there for purposes directly connected with the exploration of the sea bed or subsoil or the exploitation of their natural resources as it applies to things done in the United Kingdom.

(3)The United Kingdom sector of the continental shelf means the areas designated by order under section 1(7) of the M30Continental Shelf Act 1964.

Marginal Citations

InterpretationU.K.

258 Construction of references to design right owner.U.K.

(1)Where different persons are (whether in consequence of a partial assignment or otherwise) entitled to different aspects of design right in a work, the design right owner for any purpose of this Part is the person who is entitled to the right in the respect relevant for that purpose.

(2)Where design right (or any aspect of design right) is owned by more than one person jointly, references in this Part to the design right owner are to all the owners, so that, in particular, any requirement of the licence of the design right owner requires the licence of all of them.

259 Joint designs.U.K.

(1)In this Part a “joint design” means a design produced by the collaboration of two or more designers in which the contribution of each is not distinct from that of the other or others.

(2)References in this Part to the designer of a design shall, except as otherwise provided, be construed in relation to a joint design as references to all the designers of the design.

260 Application of provisions to articles in kit form.U.K.

(1)The provisions of this Part apply in relation to a kit, that is, a complete or substantially complete set of components intended to be assembled into an article, as they apply in relation to the assembled article.

(2)Subsection (1) does not affect the question whether design right subsists in any aspect of the design of the components of a kit as opposed to the design of the assembled article.

261 Requirement of signature: application in relation to body corporate.U.K.

The requirement in the following provisions that an instrument be signed by or on behalf of a person is also satisfied in the case of a body corporate by the affixing of its seal—

  • section 222(3) (assignment of design right),

  • section 223(1) (assignment of future design right),

  • section 225(1) (grant of exclusive licence).

262 Adaptation of expressions in relation to Scotland.U.K.

In the application of this Part to Scotland—

  • “account of profits” means accounting and payment of profits;

  • “accounts” means count, reckoning and payment;

  • “assignment” means assignation;

  • “costs” means expenses;

  • [F742“declaration” means “declarator”;]

  • “defendant” means defender;

  • “delivery up” means delivery;

  • “injunction” means interdict;

  • “interlocutory relief” means interim remedy; and

  • “plaintiff” means pursuer.

Textual Amendments

263 Minor definitions.U.K.

(1)In this Part—

  • “British design” means a design which qualifies for design right protection by reason of a connection with the United Kingdom of the designer or the person by whom F743... the designer is employed;

  • “business” includes a trade or profession;

  • F744...

  • “the comptroller” means the Comptroller-General of Patents, Designs and Trade Marks;

  • “computer-generated”, in relation to a design, means that the design is generated by computer in circumstances such that there is no human designer,

  • “country” includes any territory;

  • “the Crown” includes the Crown in right of Her Majesty’s Government in Northern Ireland [F745and the Crown in right of the Scottish Administration][F746and the Crown in right of the Welsh Assembly Government];

  • “design document” means any record of a design, whether in the form of a drawing, a written description, a photograph, data stored in a computer or otherwise;

  • “employee”, “employment” and “employer” refer to employment under a contract of service or of apprenticeship;

  • “government department” includes a Northern Ireland department [F747and any part of the Scottish Administration][F748and any part of the Welsh Assembly Government].

(2)References in this Part to “marketing”, in relation to an article, are to its being sold or let for hire, or offered or exposed for sale or hire, in the course of a business, and related expressions shall be construed accordingly; but no account shall be taken for the purposes of this Part of marketing which is merely colourable and not intended to satisfy the reasonable requirements of the public.

(3)References in this Part to an act being done in relation to an article for “commercial purposes” are to its being done with a view to the article in question being sold or hired in the course of a business.

Textual Amendments

F743Words in s. 263(1) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(2)(i), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F744Words in s. 263(1) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(2)(j), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F745Words in definition of "the Crown" in s. 263(1) inserted (1.7.1999) by S.I. 1999/1820, arts. 1(2), 4, Sch. 2 Pt. I para. 93(4)(a); S.I. 1998/3178, art. 3

F746S. 263(1): words in definition of "the Crown" inserted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 31(2) (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

F747Words in definition of "government department" in s. 263(1) inserted (1.7.1999) by S.I. 1999/1820, arts. 1(2), 4, Sch. 2 Pt. I para. 93(4)(b); S.I. 1998/3178, art. 3

F748S. 263(1): words in definition of "government department" inserted by Government of Wales Act 2006 (c. 32), s. 160(1), Sch. 10 para. 31(3) (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act.

264 Index of defined expressions.U.K.

The following Table shows provisions defining or otherwise explaining expressions used in this Part (other than provisions defining or explaining an expression used only in the same section)—

account of profits and accounts (in Scotland)section 262
assignment (in Scotland)section 262
British designssection 263(1)
businesssection 263(1)
commercial purposessection 263(3)
F749. . .F749. . .
the comptrollersection 263(1)
computer-generatedsection 263(1)
costs (in Scotland)section 262
countrysection 263(1)
the Crownsection 263(1)
Crown usesections 240(5) and 244(2)
defendant (in Scotland)section 262
delivery up (in Scotland)section 262
designsection 213(2)
design documentsection 263(1)
designersections 214 and 259(2)
design rightsection 213(1)
design right ownersections 234(2) and 258
employee, employment and employersection 263(1)
exclusive licencesection 225(1)
government departmentsection 263(1)
government department concerned (in relation to Crown use)section 240(5)
infringing articlesection 228
injunction (in Scotland)section 262
interlocutory relief (in Scotland)section 262
joint designsection 259(1)
licence (of the design right owner)sections 222(4), 223(3) and 258
making articles to a designsection 226(2)
marketing (and related expressions)section 263(2)
originalsection 213(4)
plaintiff (in Scotland)section 262
F750. . .F750. . .
qualifying personsections 217(1) and (2)
signedsection 261

Textual Amendments

F749Words in s. 264 omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 2(2)(k), 24(1) (with s. 2(3)); S.I. 2014/2330, art. 3, Sch.

F750Words in s. 264 omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 3(5), 24(1) (with s. 3(6)); S.I. 2014/2330, art. 3, Sch.

Part IVU.K. Registered Designs

Modifications etc. (not altering text)

C126Pt. IV (ss. 265-273) extended (with modifications) (Isle of Man) (9.12.2001) by S.I. 2001/3678, art. 3, Sch. 3

C127Pt. 4 extended (Isle of Man) (with modifications) (11.11.2013) by The Registered Designs (Isle of Man) Order 2013 (S.I. 2013/2533), arts. 1, 3(2), Sch. 2

Amendments of the Registered Designs Act 1949U.K.

F751265. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F751S. 265 repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14)

266 Provisions with respect to certain designs registered in pursuance of application made before commencement.U.K.

(1)Where a design is registered under the Registered Designs Act 1949 in pursuance of an application made after 12th January 1988 and before the commencement of this part which could not have been registered under section 1 of that Act as substituted by section 265 above—

(a)the right in the registered design expires ten years after the commencement of this part, if it does not expire earlier in accordance with the 1949 Act, and

(b)any person is, after the commencement of this Part, entitled as of right to a licence to do anything which would otherwise infringe the right in the registered design.

(2)The terms of a licence available by virtue of this section shall, in default of agreement, be settled by the registrar on an application by the person requiring the licence; and the terms so settled shall authorise the licensee to do everything which would be an infringement of the right in the registered design in the absence of a licence.

(3)In settling the terms of a licence the registrar shall have regard to such factors as may be prescribed by the Secretary of State by order made by statutory instrument.

No such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(4)Where the terms of a licence are settled by the registrar, the licence has effect from the date on which the application to the registrar was made.

(5)Section 11B of the 1949 Act (undertaking to take licence of right in infringement proceedings), as inserted by section 270 below, applies where a licence is available as of right under this section, as it applies where a licence is available as of right under section 11A of that Act.

(6)Where a licence is available as of right under this section, a person to whom a licence was granted before the commencement of this part may apply to the registrar for an order adjusting the terms of that licence.

(7)an appeal lies from any decision of the registrar under this section.

(8)This section shall be construed as one with the Registered Designs Act 1949.

267 Authorship and first ownership of designs.U.K.

(1)Section 2 of the Registered Designs Act 1949 (proprietorship of designs) is amended as follows.

(2)For subsection (1) substitute—

“(1)The author of a design shall be treated for the purposes of this Act as the original proprietor of the design, subject to the following provisions.

(1A)Where a design is created in pursuance of a commission for money or money’s worth, the person commissioning the design shall be treated as the original proprietor of the design.

(1B)Where, in a case not falling within subsection (1A), a design is created by an employee in the course of his employment, his employer shall be treated as the original proprietor of the design.”.

(3)After subsection (2) insert—

“(3)In this Act the “author” of a design means the person who creates it.

(4)In the case of a design generated by computer in circumstances such that there is no human author, the person by whom the arrangements necessary for the creation of thee design are made shall be taken to be the author.”.

(4)The amendments made by this section do not apply in relation to an application for registration made before the commencement of this Part.

F752268. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F752S. 268 repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14)

269 Duration of right in registered design.U.K.

(1)For section 8 of the M31Registered Designs Act 1949 (period of right) substitute—

“8 Duration of right in registered design.

(1)The right in a registered design subsists in the first instance for a period of five years from the date of the registration of the design.

(2)The period for which the right subsists may be extended for a second, third, fourth and fifth period of five years, by applying to the registrar for an extension and paying the prescribed renewal fee.

(3)If the first, second, third or fourth period expires without such application and payment being made, the right shall cease to have effect; and the registrar shall, in accordance with rules made by the Secretary of State, notify the proprietor of that fact.

(4)If during the period of six months immediately following the end of that period an application for extension is made and the prescribed renewal fee and any prescribed additional fee is paid, the right shall be treated as if it had never expired, with the result that—

(a)anything done under or in relation to the right during that further period shall be treated as valid,

(b)an act which would have constituted an infringement of the right if it had not expired shall be treated as an infringement, and

(c)an act which would have constituted use of the design for the services of the Crown if the right had not expired shall be treated as such use.

(5)Where it is shown that a registered design—

(a)was at the time it was registered a corresponding design in relation to an artistic work in which copyright subsists, and

(b)by reason of a previous use of that work would not have been registrable but for section 6(4) of this Act (registration despite certain prior applications of design),

the right in the registered design expires when the copyright in that work expires, if that is earlier than the time at which it would otherwise expire, and it may not thereafter be renewed.

(6)The above provisions have effect subject to the proviso to section 4(1) (registration of same design in respect of other articles, &c.).

8A Restoration of lapsed right in design.

(1)Where the right in a registered design has expired by reason of a failure to extend, in accordance with section 8(2) or (4), the period for which the right subsists, an application for the restoration of the right in the design may be made to the registrar within the prescribed period.

(2)The application may be made by the person who was the registered proprietor of the design or by any other person who would have been entitled to the right in the design if it had not expired; and where the design was held by two or more persons jointly, the application may, with the leave of the registrar, be made by one or more of them without joining the others.

(3)Notice of the application shall be published by the registrar in the prescribed manner.

(4)If the registrar is satisfied that the proprietor took reasonable care to see that the period for which the right subsisted was extended in accordance with section 8(2) or (4), he shall, on payment of any unpaid renewal fee and any prescribed additional fee, order the restoration of the right in the design.

(5)The order may be made subject to such conditions as the registrar thinks fit, and if the proprietor of the design does not comply with any condition the registrar may revoke the order and give such consequential directions as he thinks fit.

(6)Rules altering the period prescribed for the purposes of subsection (1) may contain such transitional provisions and savings as appear to the Secretary of State to be necessary or expedient.

8B Effect of order for restoration of right.

(1)

The effect of an order under section 8A for the restoration of the right in a registered design is as follows.

(2)Anything done under or in relation to the right during the period between expiry and restoration shall be treated as valid.

(3)Anything done during that period which would have constituted an infringement if the right had not expired shall be treated as an infringement—

(a)if done at a time when it was possible for an application for extension to be made under section 8(4); or

(b)if it was a continuation or repetition of an earlier infringing act.

(4)If, after it was no longer possible for such an application for extension to be made and before publication of notice of the application for restoration, a person—

(a)began in good faith to do an act which would have constituted an infringement of the right in the design if it had not expired, or

(b)made in good faith effective and serious preparations to do such an act,

he has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the restoration of the right in the design; but this does not extend to granting a licence to another person to do the act.

(5)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (4) may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(6)Where an article is disposed of to another in exercise of the rights conferred by subsection (4) or subsection (5), that other and any person claiming through him may deal with the article in the same way as if it had been disposed of by the registered proprietor of the design.

(7)The above provisions apply in relation to the use of a registered design for the services of the Crown as they apply in relation to infringement of the right in the design.”.

(2)The above amendment does not apply in relation to the right in a design registered in pursuance of an application made before the commencement of this Part.

Marginal Citations

270 Powers exercisable for protection of the public interest.U.K.

In the M32Registered Designs Act 1949 after section 11 insert—

“11A Powers exercisable for protection of the public interest.

(1)Where a report of the Monopolies and Mergers Commission has been laid before Parliament containing conclusions to the effect—

(a)on a monopoly reference, that a monopoly situation exists and facts found by the Commission operate or may be expected to operate against the public interest,

(b)on a merger reference, that a merger situation qualifying for investigation has been created and the creation of the situation, or particular elements in or consequences of it specified in the report, operate or may be expected to operate against the public interest,

(c)on a competition reference, that a person was engaged in an anti-competitive practice which operated or may be expected to operate against the public interest, or

(d)on a reference under section 11 of the Competition Act 1980 (reference of public bodies and certain other persons), that a person is pursuing a course of conduct which operates against the public interest,

the appropriate Minister or Ministers may apply to the registrar to take action under this section.

(2)Before making an application the appropriate Minister or Ministers shall publish, in such a manner as he or they think appropriate, a notice describing the nature of the proposed application and shall consider any representations which may be made within 30 days of such publication by persons whose interests appear to him or them to be affected.

(3)If on an application under this section it appears to the registrar that the matters specified in the Commission’s report as being those which in the Commission’s opinion operate or operated or may be expected to operate against the public interest include—

(a)conditions in licences granted in respect of a registered design by its proprietor restricting the use of the design by the licensee or the right of the proprietor to grant other licences, or

(b)a refusal by the proprietor of a registered design to grant licences on reasonable terms,

he may by order cancel or modify any such condition or may, instead or in addition, make an entry in the register to the effect that licences in respect of the design are to be available as of right.

(4)The terms of a licence available by virtue of this section shall, in default of agreement, be settled by the registrar on an application by the person requiring the licence; and terms so settled shall authorise the licensee to do everything which would be an infringement of the right in the registered design in the absence of a licence.

(5)Where the terms of a licence are settled by the registrar the licence has effect from the date on which the application to him was made.

(6)An appeal lies from any order of the registrar under this section.

(7)In this section “the appropriate Minister or Ministers” means the Minister or Ministers to whom the report of the Monopolies and Mergers Commission was made.

11B Undertaking to take licence of right in infringement proceedings.

(1)If in proceedings for infringement of the right in a registered design in respect of which a licence is available as of right under section 11A of this Act the defendant undertakes to take a licence on such terms as may be agreed or, in default of agreement, settled by the registrar under that section—

(a)no injunction shall be granted against him, and

(b)the amount recoverable against him by way of damages or on an account of profits shall not exceed double the amount which would have been payable by him as licensee if such a licence on those terms had been granted before the earliest infringement.

(2)An undertaking may be given at any time before final order in the proceedings, without any admission of liability.

(3)Nothing in this section affects the remedies available in respect of an infringement committed before licences of right were available.”.

Marginal Citations

271 Crown use: compensation for loss of profit.U.K.

(1)In Schedule 1 to the M33Registered Designs Act 1949 (Crown use), after paragraph 2 insert—

Compensation for loss of profit.

2A(1)Where Crown use is made of a registered design, the government department concerned shall pay—

(a)to the registered proprietor, or

(b)if there is an exclusive licence in force in respect of the design, to the exclusive licensee,

compensation for any loss resulting from his not being awarded a contract to supply the articles to which the design is applied.

(2)Compensation is payable only to the extent that such a contract could have been fulfilled from his existing manufacturing capacity; but is payable notwithstanding the existence of circumstances rendering him ineligible for the award of such a contract.

(3)In determining the loss, regard shall be had to the profit which would have been made on such a contract and to the extent to which any manufacturing capacity was underused.

(4)No compensation is payable in respect of any failure to secure contracts for the supply of articles to which the design is applied otherwise than for the services of the Crown.

(5)The amount payable under this paragraph shall, if not agreed between the registered proprietor or licensee and the government department concerned with the approval of the Treasury, be determined by the court on a reference under paragraph 3; and it is in addition to any amount payable under paragraph 1 or 2 of this Schedule.

(6)In this paragraph—

  • “Crown use”, in relation to a design, means the doing of anything by virtue of paragraph 1 which would otherwise be an infringement of the right in the design; and

  • “the government department concerned”, in relation to such use, means the government department by whom or on whose authority the act was done.”.

(2)In paragraph 3 of that Schedule (reference of disputes as to Crown use), for sub-paragraph (1) substitute—

“(1)Any dispute as to—

(a)the exercise by a Government department, or a person authorised by a Government department, of the powers conferred by paragraph 1 of this Schedule,

(b)terms for the use of a design for the services of the Crown under that paragraph,

(c)the right of any person to receive any part of a payment made under paragraph 1(3), or

(d)the right of any person to receive a payment under paragraph 2A,

may be referred to the court by either party to the dispute.”.

(3)The above amendments apply in relation to any Crown use of a registered design after the commencement of this section, even if the terms for such use were settled before commencement.

Marginal Citations

272 Minor and consequential amendments.U.K.

The M34Registered Designs Act 1949 is further amended in accordance with Schedule 3 which contains minor amendments and amendments consequential upon the provisions of this Act.

Marginal Citations

SupplementaryU.K.

273 Text of Registered Designs Act 1949 as amended.U.K.

Schedule 4 contains the text of the Registered Designs Act 1949 as amended.

Part VU.K. Patent Agents and Trade Mark Agents

Patent agentsU.K.

274 Persons permitted to carry on business of a patent agent.U.K.

(1)Any individual, partnership or body corporate may, subject to the following provisions of this Part [F753and to the Legal Services Act 2007], carry on the business of acting as agent for others for the purpose of—

(a)applying for or obtaining patents, in the United Kingdom or elsewhere, or

(b)conducting proceedings before the comptroller relating to applications for, or otherwise in connection with, patents.

(2)This does not affect any restriction under the European Patent Convention as to who may act on behalf of another for any purpose relating to European patents.

Textual Amendments

[F754275The register of patent attorneysU.K.

(1)There is to continue to be a register of persons who act as agent for others for the purpose of applying for or obtaining patents.

(2)In this Part a registered patent attorney means an individual whose name is entered on the register kept under this section.

(3)The register is to be kept by the Chartered Institute of Patent Attorneys.

(4)The Secretary of State may, by order, amend subsection (3) so as to require the register to be kept by the person specified in the order.

(5)Before making an order under subsection (4), the Secretary of State must consult the Legal Services Board.

(6)An order under this section must be made by statutory instrument.

(7)An order under this section may not be made unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.]

Textual Amendments

F754Ss. 275, 275A substituted (1.1.2010) for s. 275 by Legal Services Act 2007 ( c. 29), {ss. 185(3)}, 211 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(f)(i) (with art. 9)

[F755275ARegulation of patent attorneysU.K.

(1)The person who keeps the register under section 275 may make regulations which regulate—

(a)the keeping of the register and the registration of persons;

(b)the carrying on of patent attorney work by registered persons.

(2)Those regulations may, amongst other things, make—

(a)provision as to the educational and training qualifications, and other requirements, which must be satisfied before an individual may be registered or for an individual to remain registered;

(b)provision as to the requirements which must be met by a body (corporate or unincorporate) before it may be registered, or for it to remain registered, including provision as to the management and control of the body;

(c)provision as to the educational, training and other requirements to be met by regulated persons;

(d)provision regulating the practice, conduct and discipline of registered persons or regulated persons;

(e)provision authorising in such cases as may be specified in the regulations the erasure from the register of the name of any person registered in it, or the suspension of a person's registration;

(f)provision requiring the payment of such fees as may be specified in or determined in accordance with the regulations;

(g)provision about the provision to be made by registered persons in respect of complaints made against them;

(h)provision about the keeping by registered persons or regulated persons of records and accounts;

(i)provision for reviews of or appeals against decisions made under the regulations;

(j)provision as to the indemnification of registered persons or regulated persons against losses arising from claims in respect of civil liability incurred by them.

(3)Regulations under this section may make different provision for different purposes.

(4)Regulations under this section which are not regulatory arrangements within the meaning of the Legal Services Act 2007 are to be treated as such arrangements for the purposes of that Act.

(5)Before the appointed day, regulations under this section may be made only with the approval of the Secretary of State.

(6)The powers conferred to make regulations under this section are not to be taken to prejudice—

(a)any other power which the person who keeps the register may have to make rules or regulations (however they may be described and whether they are made under an enactment or otherwise);

(b)any rules or regulations made by that person under any such power.

(7)In this section—

  • “appointed day” means the day appointed for the coming into force of paragraph 1 of Schedule 4 to the Legal Services Act 2007;

  • “manager”, in relation to a body, has the same meaning as in the Legal Services Act 2007 (see section 207);

  • “patent attorney work” means work done in the course of carrying on the business of acting as agent for others for the purpose of—

    (a)

    applying for or obtaining patents, in the United Kingdom or elsewhere, or

    (b)

    conducting proceedings before the comptroller relating to applications for, or otherwise in connection with, patents;

  • “registered person” means—

    (a)

    a registered patent attorney, or

    (b)

    a body (corporate or unincorporate) registered in the register kept under section 275;

  • “regulated person” means a person who is not a registered person but is a manager or employee of a body which is a registered person.]

Textual Amendments

F755Ss. 275, 275A substituted (1.1.2010) for s. 275 by Legal Services Act 2007 ( c. 29), {ss. 185(3)}, 211 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(f)(i) (with art. 9)

276 Persons entitled to describe themselves as patent agents.U.K.

(1)An individual who is not a [F756registered patent attorney] shall not—

(a)carry on a business (otherwise than in partnership) under any name or other description which contains the words “patent agent” or “patent attorney”; or

(b)in the course of a business otherwise describe himself, or permit himself to be described, as a “patent agent” or “patent attorney”.

(2)A partnership [F757or other unincorporated body] shall not—

(a)carry on a business under any name or other description which contains the words “patent agent” or “patent attorney”; or

(b)in the course of a business otherwise describe itself, or permit itself to be described as, a firm of “patent agents” or “patent attorneys”,

unless [F758the partnership or other body is registered in the register kept under section 275].

(3)A body corporate shall not—

(a)carry on a business (otherwise than in partnership) under any name or other description which contains the words “patent agent” or “patent attorney”; or

(b)in the course of a business otherwise describe itself, or permit itself to be described as, a “patent agent” or “patent attorney”,

unless [F759the body corporate is registered in the register kept under section 275.]

(4)Subsection (3) does not apply to a company which began to carry on business as a patent agent before 17th November 1917 if the name of a director or the manager of the company who is a registered patent [F760attorney] is mentioned as being so registered in all professional advertisements, circulars or letters issued by or with the company’s consent on which its name appears.

(5)Where this section would be contravened by the use of the words “patent agent” or “patent attorney” in reference to an individual, partnership or body corporate, it is equally contravened by the use of other expressions in reference to that person, or his business or place of business, which are likely to be understood as indicating that he is entitled to be described as a “patent agent” or “patent attorney”.

(6)A person who contravenes this section commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale; and proceedings for such an offence may be begun at any time within a year from the date of the offence.

(7)This section has effect subject to—

(a)section 277 (persons entitled to describe themselves as European patent attorneys, &c.), and

(b)section 278(1) (use of term “patent attorney” in reference to solicitors).

Textual Amendments

F756Words in s. 276(1) substituted (1.1.2010) by Legal Services Act 2007 ( c. 29), ss. 208(1), 211, {Sch. 21 para. 76(a)} (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9)

F760Words in s. 276(4) substituted (1.1.2010) by Legal Services Act 2007 ( c. 29), ss. 208(1), 211, {Sch. 21 para. 76(b)} (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9)

Modifications etc. (not altering text)

C128S. 276(7)(b) amended (E.W.) (1.1.1992) by S.I. 1991/2684 arts. 2, 4, Sch.1

277 Persons entitled to describe themselves as European patent attorneys, &c.U.K.

(1)The term “European patent attorney” or “European patent agent” may be used in the following cases without any contravention of section 276.

(2)An individual who is on the European list may—

(a)carry on business under a name or other description which contains the words “European patent attorney” or “European patent agent”, or

(b)otherwise describe himself, or permit himself to be described, as a “European patent attorney” or “European patent agent”.

(3)A partnership of which not less than the prescribed number or proportion of partners is on the European list may—

(a)carry on a business under a name or other description which contains the words “European patent attorneys” or “European patent agents”, or

(b)otherwise describe itself, or permit itself to be described, as a firm which carries on the business of a “European patent attorney” or “European patent agent”.

(4)A body corporate of which not less than the prescribed number or proportion of directors is on the European list may—

(a)carry on a business under a name or other description which contains the words “European patent attorney” or “European patent agent”, or

(b)otherwise describe itself, or permit itself to be described as, a company which carries on the business of a “European patent attorney” or “European patent agent”.

(5)Where the term “European patent attorney” or “European patent agent” may, in accordance with this section, be used in reference to an individual, partnership or body corporate, it is equally permissible to use other expressions in reference to that person, or to his business or place of business, which are likely to be understood as indicating that he is entitled to be described as a “European patent attorney” or “European patent agent.”

278 Use of the term “patent attorney”: supplementary provisions.U.K.

(1)The term “patent attorney” may be used in reference to a solicitor, and a firm of solicitors may be described as a firm of “patent attorneys”, without any contravention of section 276.

(2)No offence is committed under the enactments restricting the use of certain expressions in reference to persons not qualified to act as solicitors—

(a)by the use of the term “patent attorney” in reference to a registered patent agent, or

(b)by the use of the term “European patent attorney” in reference to a person on the European list.

(3)The enactments referred to in subsection (2) are section 21 of the M35Solicitors Act 1974, section 31 of the M36Solicitors (Scotland) Act 1980 and Article 22 of the M37Solicitors (Northern Ireland) Order 1976.

Modifications etc. (not altering text)

Marginal Citations

F761279 Power to prescribe conditions, &c. for mixed partnerships and bodies corporate.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

280 Privilege for communications with patent agents.U.K.

(1)This section applies to [F762—

(a)]communications as to any matter relating to the protection of any invention, design, technical information, [F763or trade mark], or as to any matter involving passing off [F764, and

(b)documents, material or information relating to any matter mentioned in paragraph (a).]

[F765(2)Where a patent attorney acts for a client in relation to a matter mentioned in subsection (1), any communication, document, material or information to which this section applies is privileged from disclosure in like manner as if the patent attorney had at all material times been acting as the client's solicitor.]

(3)In subsection (2) “patent [F766attorney]” means—

(a)a registered patent [F766attorney] or a person who is on the European list,

(b)a partnership entitled to describe itself as a firm of patent [F767attorneys] or as a firm carrying on the business of a European patent attorney, F768...

[F769(ba)an unincorporated body (other than a partnership) entitled to describe itself as a patent attorney, or]

(c)a body corporate entitled to describe itself as a patent [F766attorney] or as a company carrying on the business of a European patent attorney.

F770(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F762Words in s. 280(1) renumbered as s. 280(1)(a) (1.1.2010) by virtue of Legal Services Act 2007 (c. 29), ss. 208(1), 211, Sch. 21 para. 77(a) (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9)

F763Words in s. 280(1) substituted (31.10.1994) by 1994 c. 26, s. 106(1), Sch. 4 para. 8(3); S.I. 1994/2550, art. 2

F764S. 280(1)(b) and preceding word inserted (1.1.2010) by Legal Services Act 2007 (c. 29), ss. 208(1), 211, Sch. 21 para. 77(b) (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9)

F766Words in s. 280(3) substituted (1.1.2010) by Legal Services Act 2007 (c. 29), ss. 280(1), 211, Sch. 21 para. 77(d)(i) (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9)

F768Word in s. 280(3)(b) repealed (1.10.2011) by Legal Services Act 2007 (c. 29), ss. 210, 211, Sch. 23 (with ss. 29, 192, 193); S.I. 2011/2196, art. 2(1)(h)(iii)

F769S. 280(3)(ba) inserted (1.1.2010) by Legal Services Act 2007 (c. 29), ss. 185(6), 211 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(f)(i) (with art. 9)

F770S. 280(4) omitted (1.1.2010) and repealed (1.10.2011) by virtue of Legal Services Act 2007 (c. 29), ss. 208(1), 210, 211, Sch. 21 para 77(e), Sch. 23 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9); S.I. 2011/2196, art. 2(1)(h)(iii)

281 Power of comptroller to refuse to deal with certain agents.U.K.

(1)This section applies to business under the M38Patents Act 1949, the M39Registered Designs Act 1949 or the M40Patents Act 1977.

(2)The Secretary of State may make rules authorising the comptroller to refuse to recognise as agent in respect of any business to which this section applies—

(a)a person who has been convicted of an offence under section 88 of the Patents Act 1949, section 114 of the Patents Act 1977 or section 276 of this Act;

(b)[F771a person] whose name has been erased from and not restored to, or who is suspended from, the register of patent [F772attorneys] on the ground of misconduct;

(c)a person who is found by the Secretary of State to have been guilty of such conduct as would, in the case of [F773 a person] registered in the register of patent [F772attorneys], render [F774the person] liable to have [F775the person's] name erased from the register on the ground of misconduct;

(d)a partnership or body corporate of which one of the partners or directors is a person whom the comptroller could refuse to recognise under paragraph (a), (b) or (c) above.

(3)The rules may contain such incidental and supplementary provisions as appear to the Secretary of State to be appropriate and may, in particular, prescribe circumstances in which a person is or is not to be taken to have been guilty of misconduct.

(4)Rules made under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5)The comptroller shall refuse to recognise as agent in respect of any business to which this section applies a person who neither resides nor has a place of business in the United Kingdom, the Isle of Man or [F776a member State].

Textual Amendments

F772Words in s. 281(2) substituted (1.1.2010) by Legal Services Act 2007 (c. 29), ss. 208(1), 211, Sch. 21 para. 78 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9)

F776Words in s. 281(5) substituted (31.12.2020) by The Patents (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/801), regs. 1, 5(2); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

Trade mark agentsU.K.

F777282. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F778283. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F779284. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

SupplementaryU.K.

285 Offences committed by partnerships and bodies corporate.U.K.

(1)Proceedings for an offence under this Part alleged to have been committed by a partnership shall be brought in the name of the partnership and not in that of the partners; but without prejudice to any liability of theirs under subsection (4) below.

(2)The following provisions apply for the purposes of such proceedings as in relation to a body corporate—

(a)any rules of court relating to the service of documents;

(b)in England, Wales or Northern Ireland, Schedule 3 to the M41Magistrates’ Courts Act 1980 or Schedule 4 to the M42Magistrates’ Courts (Northern Ireland) Order 1981 (procedure on charge of offence).

(3)A fine imposed on a partnership on its conviction in such proceedings shall be paid out of the partnership assets.

(4)Where a partnership is guilty of an offence under this Part, every partner, other than a partner who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, is also guilty of the offence and liable to be proceeded against and punished accordingly.

(5)Where an offence under this Part committed by a body corporate is proved to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

Marginal Citations

286 Interpretation.U.K.

In this Part—

  • “the comptroller” means the Comptroller-General of Patents, Designs and Trade Marks;

  • “director”, in relation to a body corporate whose affairs are managed by its members, means any member of the body corporate;

  • “the European list” means the list of professional representatives maintained by the European Patent Office in pursuance of the European Patent Convention;

  • “registered patent [F780attorney”] has the meaning given by section 275 [F781(2)];

  • F782. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F782Definition in s. 286 repealed (31.10.1994) by 1994 c. 26, s. 106(2), Sch. 5; S.I. 1994/2550, art. 2

Part VIU.K. Patents

Patents county courtsE+W

F783287 Patents county courts: special jurisdiction.E+W

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F783288 Financial limits in relation to proceedings within special jurisdiction of patents county court.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F783289 Transfer of proceedings between High Court and patents county court.E+W

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F784290 Limitation of costs where pecuniary claim could have been brought in patents county court.E+W

(1)Where an action is commenced in the High Court which could have been commenced in a patents county court and in which a claim for a pecuniary remedy is made, then, subject to the provisions of this section, if the plaintiff recovers less than the prescribed amount, he is not entitled to recover any more costs than those to which he would have been entitled if the action had been brought in the county court.

(2)For this purpose a plaintiff shall be treated as recovering the full amount recoverable in respect of his claim without regard to any deduction made in respect of matters not falling to be taken into account in determining whether the action could have been commenced in a patents county court.

(3)This section does not affect any question as to costs if it appears to the High Court that there was reasonable ground for supposing the amount recoverable in respect of the plaintiff’s claim to be in excess of the prescribed amount.

(4)The High Court, if satisfied that there was sufficient reason for bringing the action in the High Court, may make an order allowing the costs or any part of the costs on the High Court scale or on such one of the county court scales as it may direct.

(5)This section does not apply to proceedings brought by the Crown.

(6)In this section “the prescribed amount” means such amount as may be prescribed by Her Majesty for the purposes of this section by Order in Council.

(7)No recommendation shall be made to Her Majesty to make an Order under this section unless a draft of the Order has been laid before and approved by a resolution of each House of Parliament.]

Textual Amendments

F785291 Proceedings in patents county court.E+W

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F786292 Rights and duties of registered patent agents in relation to proceedings in patents county court.E+W

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Licences of right in respect of certain patentsU.K.

293 Restriction of acts authorised by certain licences.U.K.

In paragraph 4(2)(c) of Schedule 1 to the M43Patents Act 1977 (licences to be available as of right where term of existing patent extended), at the end insert “, but subject to paragraph 4A below”, and after that paragraph insert—

“4A(1)If the proprietor of a patent for an invention which is a product files a declaration with the Patent Office in accordance with this paragraph, the licences to which persons are entitled by virtue of paragraph 4(2)(c) above shall not extend to a use of the product which is excepted by or under this paragraph.

(2)Pharmaceutical use is excepted, that is—

(a)use as a medicinal product within the meaning of the Medicines Act 1968, and

(b)the doing of any other act mentioned in section 60(1)(a) above with a view to such use.

(3)The Secretary of State may by order except such other uses as he thinks fit; and an order may—

(a)specify as an excepted use any act mentioned in section 60(1)(a) above, and

(b)make different provision with respect to acts done in different circumstances or for different purposes.

(4)For the purposes of this paragraph the question what uses are excepted, so far as that depends on—

(a)orders under section 130 of the Medicines Act 1968 (meaning of “medicinal product”), or

(b)orders under sub-paragraph (3) above,

shall be determined in relation to a patent at the beginning of the sixteenth year of the patent.

(5)A declaration under this paragraph shall be in the prescribed form and shall be filed in the prescribed manner and within the prescribed time limits.

(6)A declaration may not be filed—

(a)in respect of a patent which has at the commencement of section 293 of the Copyright, Designs and Patents Act 1988 passed the end of its fifteenth year; or

(b)if at the date of filing there is—

(i)an existing licence for any description of excepted use of the product, or

(ii)an outstanding application under section 46(3)(a) or (b) above for the settlement by the comptroller of the terms of a licence for any description of excepted use of the product,

and, in either case, the licence took or is to take effect at or after the end of the sixteenth year of the patent.

(7)Where a declaration has been filed under this paragraph in respect of a patent—

(a)section 46(3)(c) above (restriction of remedies for infringement where licences available as of right) does not apply to an infringement of the patent in so far as it consists of the excepted use of the product after the filing of the declaration; and

(b)section 46(3)(d) above (abatement of renewal fee if licences available as of right) does not apply to the patent.”.

Marginal Citations

294 When application may be made for settlement of terms of licence.U.K.

In Schedule 1 to the M44Patents Act 1977, after the paragraph inserted by section 293 above, insert—

“4B(1)An application under section 46(3)(a) or (b) above for the settlement by the comptroller of the terms on which a person is entitled to a licence by virtue of paragraph 4(2)(c) above is ineffective if made before the beginning of the sixteenth year of the patent.

(2)This paragraph applies to applications made after the commencement of section 294 of the Copyright, Designs and Patents Act 1988 and to any application made before the commencement of that section in respect of a patent which has not at the commencement of that section passed the end of its fifteenth year.”.

Marginal Citations

Patents: miscellaneous amendmentsU.K.

295 Patents: miscellaneous amendments.U.K.

The M45Patents Act 1949 and the M46Patents Act 1977 are amended in accordance with Schedule 5.

Marginal Citations

Part VIIU.K. Miscellaneous and General

[F787Circumvention of protection measures]U.K.

Textual Amendments

F787Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

[F788296 Devices designed to circumvent copy-protection.U.K.

(1)This section applies where—

(a)a technical device has been applied to a computer program; and

(b)a person (A) knowing or having reason to believe that it will be used to make infringing copies—

(i)manufactures for sale or hire, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, advertises for sale or hire or has in his possession for commercial purposes any means the sole intended purpose of which is to facilitate the unauthorised removal or circumvention of the technical device; or

(ii)publishes information intended to enable or assist persons to remove or circumvent the technical device.

(2)The following persons have the same rights against A as a copyright owner has in respect of an infringement of copyright—

(a)a person—

(i)issuing to the public copies of, or

(ii)communicating to the public,

the computer program to which the technical device has been applied;

(b)the copyright owner or his exclusive licensee, if he is not the person specified in paragraph (a);

(c)the owner or exclusive licensee of any intellectual property right in the technical device applied to the computer program.

(3)The rights conferred by subsection (2) are concurrent, and sections 101(3) and 102(1) to (4) apply, in proceedings under this section, in relation to persons with concurrent rights as they apply, in proceedings mentioned in those provisions, in relation to a copyright owner and exclusive licensee with concurrent rights.

(4)Further, the persons in subsection (2) have the same rights under section 99 or 100 (delivery up or seizure of certain articles) in relation to any such means as is referred to in subsection (1) which a person has in his possession, custody or control with the intention that it should be used to facilitate the unauthorised removal or circumvention of any technical device which has been applied to a computer program, as a copyright owner has in relation to an infringing copy.

(5)The rights conferred by subsection (4) are concurrent, and section 102(5) shall apply, as respects anything done under section 99 or 100 by virtue of subsection (4), in relation to persons with concurrent rights as it applies, as respects anything done under section 99 or 100, in relation to a copyright owner and exclusive licensee with concurrent rights.

(6)In this section references to a technical device in relation to a computer program are to any device intended to prevent or restrict acts that are not authorised by the copyright owner of that computer program and are restricted by copyright.

(7)The following provisions apply in relation to proceedings under this section as in relation to proceedings under Part 1 (copyright)—

(a)sections 104 to 106 of this Act (presumptions as to certain matters relating to copyright); and

(b)section 72 of the [F789Senior Courts Act 1981], section 15 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and section 94A of the Judicature (Northern Ireland) Act 1978 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property);

and section 114 of this Act applies, with the necessary modifications, in relation to the disposal of anything delivered up or seized by virtue of subsection (4).

(8)Expressions used in this section which are defined for the purposes of Part 1 of this Act (copyright) have the same meaning as in that Part.]

Textual Amendments

F788Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

F789S. 296(7)(b): words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 1(2); S.I. 2009/1604, art. 2

[F790296ZACircumvention of technological measuresU.K.

(1)This section applies where—

(a)effective technological measures have been applied to a copyright work other than a computer program; and

(b)a person (B) does anything which circumvents those measures knowing, or with reasonable grounds to know, that he is pursuing that objective.

(2)This section does not apply where a person, for the purposes of research into cryptography, does anything which circumvents effective technological measures unless in so doing, or in issuing information derived from that research, he affects prejudicially the rights of the copyright owner.

(3)The following persons have the same rights against B as a copyright owner has in respect of an infringement of copyright—

(a)a person—

(i)issuing to the public copies of, or

(ii)communicating to the public,

the work to which effective technological measures have been applied; and

(b)the copyright owner or his exclusive licensee, if he is not the person specified in paragraph (a).

(4)The rights conferred by subsection (3) are concurrent, and sections 101(3) and 102(1) to (4) apply, in proceedings under this section, in relation to persons with concurrent rights as they apply, in proceedings mentioned in those provisions, in relation to a copyright owner and exclusive licensee with concurrent rights.

(5)The following provisions apply in relation to proceedings under this section as in relation to proceedings under Part 1 (copyright)—

(a)sections 104 to 106 of this Act (presumptions as to certain matters relating to copyright); and

(b)section 72 of the [F791Senior Courts Act 1981], section 15 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and section 94A of the Judicature (Northern Ireland) Act 1978 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property).

(6)Subsections (1) to (4) and (5)(b) and any other provision of this Act as it has effect for the purposes of those subsections apply, with any necessary adaptations, to rights in performances, publication right and database right.

(7)The provisions of regulation 22 (presumptions relevant to database right) of the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032) apply in proceedings brought by virtue of this section in relation to database right.

Textual Amendments

F790Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

F791S. 296ZA(5)(b): words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 1(2); S.I. 2009/1604, art. 2

296ZBDevices and services designed to circumvent technological measuresU.K.

(1)A person commits an offence if he—

(a)manufactures for sale or hire, or

(b)imports otherwise than for his private and domestic use, or

(c)in the course of a business—

(i)sells or lets for hire, or

(ii)offers or exposes for sale or hire, or

(iii)advertises for sale or hire, or

(iv)possesses, or

(v)distributes, or

(d)distributes otherwise than in the course of a business to such an extent as to affect prejudicially the copyright owner,

any device, product or component which is primarily designed, produced, or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures.

(2)A person commits an offence if he provides, promotes, advertises or markets—

(a)in the course of a business, or

(b)otherwise than in the course of a business to such an extent as to affect prejudicially the copyright owner,

a service the purpose of which is to enable or facilitate the circumvention of effective technological measures.

(3)Subsections (1) and (2) do not make unlawful anything done by, or on behalf of, law enforcement agencies or any of the intelligence services—

(a)in the interests of national security; or

(b)for the purpose of the prevention or detection of crime, the investigation of an offence, or the conduct of a prosecution,

and in this subsection “ intelligence services ” has the meaning given in section 81 of the Regulation of Investigatory Powers Act 2000.

(4)A person guilty of an offence under subsection (1) or (2) is liable—

(a)on summary conviction, to imprisonment for a term not exceeding three months, or to a fine not exceeding the statutory maximum, or both;

(b)on conviction on indictment to a fine or imprisonment for a term not exceeding two years, or both.

(5)It is a defence to any prosecution for an offence under this section for the defendant to prove that he did not know, and had no reasonable ground for believing, that—

(a)the device, product or component; or

(b)the service,

enabled or facilitated the circumvention of effective technological measures.

Textual Amendments

F790Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

296ZCDevices and services designed to circumvent technological measures: search warrants and forfeitureU.K.

(1)The provisions of sections 297B (search warrants), 297C (forfeiture of unauthorised decoders: England and Wales or Northern Ireland) and 297D (forfeiture of unauthorised decoders: Scotland) apply to offences under section 296ZB with the following modifications.

(2)In section 297B the reference to an offence under section 297A(1) shall be construed as a reference to an offence under section 296ZB(1) or (2).

(3)In sections 297C(2)(a) and 297D(15) the references to an offence under section 297A(1) shall be construed as a reference to an offence under section 296ZB(1).

(4)In sections 297C and 297D references to unauthorised decoders shall be construed as references to devices, products or components for the purpose of circumventing effective technological measures.

Textual Amendments

F790Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

296ZDRights and remedies in respect of devices and services designed to circumvent technological measuresU.K.

(1)This section applies where—

(a)effective technological measures have been applied to a copyright work other than a computer program; and

(b)a person (C) manufactures, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, advertises for sale or hire, or has in his possession for commercial purposes any device, product or component, or provides services which—

(i)are promoted, advertised or marketed for the purpose of the circumvention of, or

(ii)have only a limited commercially significant purpose or use other than to circumvent, or

(iii)are primarily designed, produced, adapted or performed for the purpose of enabling or facilitating the circumvention of,

those measures.

(2)The following persons have the same rights against C as a copyright owner has in respect of an infringement of copyright—

(a)a person—

(i)issuing to the public copies of, or

(ii)communicating to the public,

the work to which effective technological measures have been applied;

(b)the copyright owner or his exclusive licensee, if he is not the person specified in paragraph (a); and

(c)the owner or exclusive licensee of any intellectual property right in the effective technological measures applied to the work.

(3)The rights conferred by subsection (2) are concurrent, and sections 101(3) and 102(1) to (4) apply, in proceedings under this section, in relation to persons with concurrent rights as they apply, in proceedings mentioned in those provisions, in relation to a copyright owner and exclusive licensee with concurrent rights.

(4)Further, the persons in subsection (2) have the same rights under section 99 or 100 (delivery up or seizure of certain articles) in relation to any such device, product or component which a person has in his possession, custody or control with the intention that it should be used to circumvent effective technological measures, as a copyright owner has in relation to any infringing copy.

(5)The rights conferred by subsection (4) are concurrent, and section 102(5) shall apply, as respects anything done under section 99 or 100 by virtue of subsection (4), in relation to persons with concurrent rights as it applies, as respects anything done under section 99 or 100, in relation to a copyright owner and exclusive licensee with concurrent rights.

(6)The following provisions apply in relation to proceedings under this section as in relation to proceedings under Part 1 (copyright)—

(a)sections 104 to 106 of this Act (presumptions as to certain matters relating to copyright); and

(b)section 72 of the [F792Senior Courts Act 1981], section 15 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and section 94A of the Judicature (Northern Ireland) Act 1978 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property);

and section 114 of this Act applies, with the necessary modifications, in relation to the disposal of anything delivered up or seized by virtue of subsection (4).

(7)In section 97(1) (innocent infringement of copyright) as it applies to proceedings for infringement of the rights conferred by this section, the reference to the defendant not knowing or having reason to believe that copyright subsisted in the work shall be construed as a reference to his not knowing or having reason to believe that his acts enabled or facilitated an infringement of copyright.

(8)Subsections (1) to (5), (6)(b) and (7) and any other provision of this Act as it has effect for the purposes of those subsections apply, with any necessary adaptations, to rights in performances, publication right and database right.

(9)The provisions of regulation 22 (presumptions relevant to database right) of the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032) apply in proceedings brought by virtue of this section in relation to database right.

Textual Amendments

F790Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

F792S. 296ZD(6)(b): words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 1(2); S.I. 2009/1604, art. 2

296ZERemedy where effective technological measures prevent permitted actsU.K.

(1)In this section—

  • [F793“ Marrakesh beneficiary” means a person who—

    (a)

    is blind,

    (b)

    has a visual impairment which cannot be improved so as to give the person visual function substantially equivalent to that of a person who has no such impairment, and who is, as a result, unable to read printed works to substantially the same degree as a person without such an impairment,

    (c)

    has a perceptual or reading disability and is, as a result, unable to read printed works to substantially the same degree as a person without such disability, or

    (d)

    is otherwise unable, due to a physical disability, to hold or manipulate a book or to focus or move their eyes to the extent that would normally be acceptable for reading;]

  • [F793“Marrakesh work” means a work in the form of a book, journal, newspaper, magazine or other kind of writing, notation, including sheet music, and related illustrations, in any media, including in audio form such as audiobooks and in digital format, which is protected by copyright, related rights or database rights and which is published or otherwise lawfully made publicly available;]

  • “ permitted act ” means an act which may be done in relation to copyright works, notwithstanding the subsistence of copyright, by virtue of a provision of this Act listed in Part 1 of Schedule 5A;

  • “ voluntary measure or agreement ” means—

    (a)

    any measure taken voluntarily by a copyright owner, his exclusive licensee or a person issuing copies of, or communicating to the public, a work other than a computer program, or

    (b)

    any agreement between a copyright owner, his exclusive licensee or a person issuing copies of, or communicating to the public, a work other than a computer program and another party,

    the effect of which is to enable a person to carry out a permitted act.

(2)Where the application of any effective technological measure to a copyright work other than a computer program prevents a person from carrying out a permitted act in relation to that work then that person or a person being a representative of a class of persons prevented from carrying out a permitted act may issue a notice of complaint to the Secretary of State.

(3)Following receipt of a notice of complaint, the Secretary of State may give to the owner of that copyright work or an exclusive licensee such directions as appear to the Secretary of State to be requisite or expedient for the purpose of—

(a)establishing whether any voluntary measure or agreement relevant to the copyright work the subject of the complaint subsists; or

(b)(where it is established there is no subsisting voluntary measure or agreement) ensuring that the owner or exclusive licensee of that copyright work makes available to the complainant the means of carrying out the permitted act the subject of the complaint to the extent necessary to so benefit from that permitted act.

(4)The Secretary of State may also give directions—

(a)as to the form and manner in which a notice of complaint in subsection (2) may be delivered to him;

(b)as to the form and manner in which evidence of any voluntary measure or agreement may be delivered to him; and

(c)generally as to the procedure to be followed in relation to a complaint made under this section;

and shall publish directions given under this subsection in such manner as in his opinion will secure adequate publicity for them.

(5)It shall be the duty of any person to whom a direction is given under subsection (3)(a) or (b) to give effect to that direction.

(6)The obligation to comply with a direction given under subsection (3)(b) is a duty owed to the complainant or, where the complaint is made by a representative of a class of persons, to that representative and to each person in the class represented; and a breach of the duty is actionable accordingly (subject to the defences and other incidents applying to actions for breach of statutory duty).

(7)Any direction under this section may be varied or revoked by a subsequent direction under this section.

(8)Any direction given under this section shall be in writing.

(9)[F794Subject to subsection (9A),] This section does not apply to copyright works made available to the public on agreed contractual terms in such a way that members of the public may access them from a place and at a time individually chosen by them.

[F795(9A)But this section does apply where the application of any effective technological measure to a Marrakesh work prevents the making of an accessible copy of that work under sections 31A, 31B or 31BA, or paragraphs 3A, 3B or 3C of Schedule 2, for the benefit of a Marrakesh beneficiary.]

(10)This section applies only where a complainant has lawful access to the protected copyright work, or where the complainant is a representative of a class of persons, where the class of persons have lawful access to the work.

(11)Subsections (1) to (10) apply with any necessary adaptations to—

(a) rights in performances, and in this context the expression “ permitted act ” refers to an act that may be done by virtue of a provision of this Act listed in Part 2 of Schedule 5A;

(b) database right, and in this context the expression “ permitted act ” refers to an act that may be done by virtue of a provision of this Act listed in Part 3 of Schedule 5A; and

(c)publication right.

Textual Amendments

F790Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

[F796296ZEA.Remedy where restrictive measures prevent or restrict personal copyingU.K.

(1)This section applies where an individual is prevented from making a personal copy of a copyright work, or is restricted in the number of personal copies of it which may be made, because of a restrictive measure applied by or on behalf of the copyright owner.

(2)That individual, or a person being a representative of a class of such individuals, may issue a notice of complaint to the Secretary of State.

(3)Following receipt of a notice of complaint, the Secretary of State may give to the owner of that copyright work or an exclusive licensee such directions as appear to the Secretary of State to be requisite or expedient for the purpose of—

(a)establishing whether any voluntary measure or agreement relevant to the copyright work subsists, or

(b)(where it is established there is no subsisting voluntary measure or agreement) ensuring that the owner or exclusive licensee of that copyright work makes available to the complainant or the class of individuals represented by the complainant the means of benefiting from section 28B to the extent necessary to benefit from that section.

(4)In deciding whether to give such directions, the Secretary of State must consider whether the restrictive measure unreasonably prevents or restricts the making of personal copies, in particular having regard to—

(a)the right of the copyright owner to adopt adequate measures limiting the number of personal copies which may be made, and

(b)whether other copies of the work are commercially available on reasonable terms by or with the authority of the copyright owner in a form which does not prevent or unreasonably restrict the making of personal copies.

(5)The Secretary of State may also give directions—

(a)as to the form and manner in which a notice of complaint in subsection (2) may be delivered,

(b)as to the form and manner in which evidence of any voluntary measure or agreement may be delivered, and

(c)generally as to the procedure to be followed in relation to a complaint made under this section,

and shall publish directions given under this subsection in such manner as the Secretary of State thinks will secure adequate publicity for them.

(6)Subsections (5) to (8) of section 296ZE—

(a)apply to directions under subsection (3)(a) or (b) as they apply to directions under section 296ZE(3)(a) or (b), and

(b)apply to directions under subsection (5) as they apply to directions under section 296ZE(4).

(7)This section does not apply to copyright works made available to the public on agreed contractual terms in such a way that members of the public may access them from a place and at a time individually chosen by them.

(8)In this section—

  • “restrictive measure” means any technology, device or component designed, in the normal course of its operation, to protect the rights of copyright owners, which has the effect of preventing a copyright work from being copied (in whole or in part) or restricting the number of copies which may be made;

  • “personal copy” means a copy of a copyright work which may be made under section 28B;

  • “voluntary measure or agreement” has the same meaning as in section 296ZE, except that the reference to carrying out a permitted act is to be read as a reference to making a personal copy.

(9)Subsections (1) to (8) apply with any necessary adaptations to—

(a)rights in performances, and in this context “personal copy” refers to a copy of a recording of a performance which may be made under paragraph 1B of Schedule 2 without infringing the rights conferred by Chapter 2 of Part II (rights in performances), and

(b)publication right.]

Textual Amendments

F790Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

F796S. 296ZEA inserted (1.10.2014) by The Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (S.I. 2014/2361), regs. 1(1), 3(2) (with reg. 5) (but note that the amending S.I. was quashed with prospective effect by the High Court in the case of R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), 17 July 2015)

296ZFInterpretation of sections 296ZA to [F797296ZEA]U.K.

(1)In sections 296ZA to 296ZE, “technological measures” are any technology, device or component which is designed, in the normal course of its operation, to protect a copyright work other than a computer program.

(2)Such measures are “effective” if the use of the work is controlled by the copyright owner through—

(a)an access control or protection process such as encryption, scrambling or other transformation of the work, or

(b)a copy control mechanism,

which achieves the intended protection.

(3)In this section, the reference to—

(a)protection of a work is to the prevention or restriction of acts that are not authorised by the copyright owner of that work and are restricted by copyright; and

(b)use of a work does not extend to any use of the work that is outside the scope of the acts restricted by copyright.

(4)Expressions used in sections 296ZA to [F798296ZEA] which are defined for the purposes of Part 1 of this Act (copyright) have the same meaning as in that Part.]

Textual Amendments

F790Ss. 296-296ZF and cross-heading substituted (31.10.2003) for s. 296 and cross-heading by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 24(1) (with regs. 31-40)

F797Word in s. 296ZF heading substituted (1.10.2014) by The Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (S.I. 2014/2361), regs. 1(1), 4(3) (with reg. 5) (but note that the amending S.I. was quashed with prospective effect by the High Court in the case of R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), 17 July 2015)

F798Word in s. 296ZF(4) substituted (1.10.2014) by The Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (S.I. 2014/2361), regs. 1(1), 4(3) (with reg. 5) (but note that the amending S.I. was quashed with prospective effect by the High Court in the case of R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), 17 July 2015)

[F799Rights management informationU.K.

Textual Amendments

F799S. 296ZG and cross-heading inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 25 (with regs. 31-40)

296ZGElectronic rights management informationU.K.

(1)This section applies where a person (D), knowingly and without authority, removes or alters electronic rights management information which—

(a)is associated with a copy of a copyright work, or

(b)appears in connection with the communication to the public of a copyright work, and

where D knows, or has reason to believe, that by so doing he is inducing, enabling, facilitating or concealing an infringement of copyright.

(2)This section also applies where a person (E), knowingly and without authority, distributes, imports for distribution or communicates to the public copies of a copyright work from which electronic rights management information—

(a)associated with the copies, or

(b)appearing in connection with the communication to the public of the work,

has been removed or altered without authority and where E knows, or has reason to believe, that by so doing he is inducing, enabling, facilitating or concealing an infringement of copyright.

(3)A person issuing to the public copies of, or communicating, the work to the public, has the same rights against D and E as a copyright owner has in respect of an infringement of copyright.

(4)The copyright owner or his exclusive licensee, if he is not the person issuing to the public copies of, or communicating, the work to the public, also has the same rights against D and E as he has in respect of an infringement of copyright.

(5)The rights conferred by subsections (3) and (4) are concurrent, and sections 101(3) and 102(1) to (4) apply, in proceedings under this section, in relation to persons with concurrent rights as they apply, in proceedings mentioned in those provisions, in relation to a copyright owner and exclusive licensee with concurrent rights.

(6)The following provisions apply in relation to proceedings under this section as in relation to proceedings under Part 1 (copyright)—

(a)sections 104 to 106 of this Act (presumptions as to certain matters relating to copyright); and

(b)section 72 of the [F800Senior Courts Act 1981], section 15 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and section 94A of the Judicature (Northern Ireland) Act 1978 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property).

(7)In this section—

(a)expressions which are defined for the purposes of Part 1 of this Act (copyright) have the same meaning as in that Part; and

(b) “ rights management information ” means any information provided by the copyright owner or the holder of any right under copyright which identifies the work, the author, the copyright owner or the holder of any intellectual property rights, or information about the terms and conditions of use of the work, and any numbers or codes that represent such information.

(8)Subsections (1) to (5) and (6)(b), and any other provision of this Act as it has effect for the purposes of those subsections, apply, with any necessary adaptations, to rights in performances, publication right and database right.

(9)The provisions of regulation 22 (presumptions relevant to database right) of the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032) apply in proceedings brought by virtue of this section in relation to database right.]

Textual Amendments

F800S. 296ZG(6)(b): words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 1(2); S.I. 2009/1604, art. 2

[F801Computer programsU.K.

Textual Amendments

F801Cross heading and s. 296A inserted (1.1.1993) by S.I. 1992/3233, reg.11

F802296A Avoidance of certain terms.U.K.

(1)Where a person has the use of a computer program under an agreement, any term or condition in the agreement shall be void in so far as it purports to prohibit or restrict—

(a)the making of any back up copy of the program which it is necessary for him to have for the purposes of the agreed use;

(b)where the conditions in section 50B(2) are met, the decompiling of the program; or

[F803(c)the observing, studying or testing of the functioning of the program in accordance with section 50BA.]

(2)In this section, decompile, in relation to a computer program, has the same meaning as in section 50B]

Textual Amendments

F802S. 296A inserted (1.1.1993) by S.I. 1992/3233, reg.11.

[F804Databases]U.K.

Textual Amendments

F804S. 296B and cross-heading inserted (1.1.1998) by S.I. 1997/3032, reg. 10 (with Pt. IV)

[F805296B Avoidance of certain terms relating to databasesU.K.

Where under an agreement a person has a right to use a database or part of a database, any term or condition in the agreement shall be void in so far as it purports to prohibit or restrict the performance of any act which would but for section 50D infringe the copyright in the database.]

Textual Amendments

F805S. 296B inserted (1.1.1998) by S.I. 1997/3032, reg. 10 (with Pt. IV)

Fraudulent reception of transmissionsU.K.

297 Offence of fraudulently receiving programmes.U.K.

(1)A person who dishonestly receives a programme included in a broadcasting F806. . . service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(2)Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

In relation to a body corporate whose affairs are managed by its members “director” means a member of the body corporate.

Textual Amendments

[F807297A Unauthorised decoders.U.K.

(1)A person commits an offence if he—

(a)makes, imports, distributes, sells or lets for hire or offers or exposes for sale or hire any unauthorised decoder;

(b)has in his possession for commercial purposes any unauthorised decoder;

(c)instals, maintains or replaces for commercial purposes any unauthorised decoder; or

(d)advertises any unauthorised decoder for sale or hire or otherwise promotes any unauthorised decoder by means of commercial communications.

(2)A person guilty of an offence under subsection (1) is liable—

[F808(a)on summary conviction, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum, or to both;]

(b)on conviction on indictment, to imprisonment for a term not exceeding [F809ten] years, or to a fine, or to both.

(3)It is a defence to any prosecution for an offence under this section for the defendant to prove that he did not know, and had no reasonable ground for believing, that the decoder was an unauthorised decoder.

(4)In this section—

  • “apparatus” includes any device, component or electronic data (including software);

  • “conditional access technology” means any technical measure or arrangement whereby access to encrypted transmissions in an intelligbile form is made conditional on prior individual authorisation;

  • “decoder” means any apparatus which is designed or adapted to enable (whether on its own or with any other apparatus) an encrypted transmission to be decoded;

  • “encrypted” includes subjected to scrambling or the operation of cryptographic envelopes, electronic locks, passwords or any other analogous application;

  • “transmission” means—

    (a)

    any programme included in a broadcasting F810. . . service which is provided from a place in the United KingdomF811...; or

    (b)

    an information society service (within the meaning of Directive 98/34/EC of the European Parliament and of the Council of 22nd June 1998 M47, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20th July 1998 M48) which is provided from a place in the United Kingdom F811...; and

  • “unauthorised”, in relation to a decoder, means that the decoder is designed or adapted to enable an encrypted transmission, or any service of which it forms part, to be accessed in an intelligible form without payment of the fee (however imposed) which the person making the transmission, or on whose behalf it is made, charges for accessing the transmission or service (whether by the circumvention of any conditional access technology related to the transmission or service or by any other means).]

Textual Amendments

F807S. 297A substituted (28.5.2000) by S.I. 2000/1175, art. 2(2)

F808S. 297A(2)(a) substituted (20.11.2002) by 2002 c. 25, s. 1(4)(a)(5); S.I. 2002/2749, art. 2

F809Word in s. 297A(2)(b) substituted (20.11.2002) by 2002 c. 25, s. 1(4)(b)(5); S.I. 2002/2749, art. 2

F811Words in s. 297A(4) omitted (31.12.2020) by virtue of The Broadcasting (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/224), reg. 1(2), Sch. 1 para. 35(2) (with reg. 6) (as amended by S.I. 2020/1536, reg. 5(2)(3)); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M47O.J. L204, 21.7.98, p.37

M48O.J. L217, 5.8.98, p.18

[F812297B Search warrantsU.K.

(1)Where a justice of the peace (in Scotland, a sheriff or justice of the peace) is satisfied by information on oath given by a constable (in Scotland, by evidence on oath) that there are reasonable grounds for believing—

(a)that an offence under section 297A(1) has been or is about to be committed in any premises, and

(b)that evidence that such an offence has been or is about to be committed is in those premises,

he may issue a warrant authorising a constable to enter and search the premises, using such reasonable force as is necessary.

(2)The power conferred by subsection (1) does not, in England and Wales, extend to authorising a search for material of the kinds mentioned in section 9(2) of the Police and Criminal Evidence Act 1984 (c. 60) (certain classes of personal or confidential material).

(3)A warrant under subsection (1)—

(a)may authorise persons to accompany any constable executing the warrant, and

(b)remains in force for [F813three months] from the date of its issue.

(4)In executing a warrant issued under subsection (1) a constable may seize an article if he reasonably believes that it is evidence that any offence under section 297A(1) has been or is about to be committed.

(5) In this section “ premises ” includes land, buildings, fixed or moveable structures, vehicles, vessels, aircraft and hovercraft. ]

Textual Amendments

F812S. 297B inserted (20.11.2002) by 2002 c. 25, s. 2(4); S.I. 2002/2749, art. 2

[F814297C Forfeiture of unauthorised decoders: England and Wales or Northern IrelandU.K.

(1)In England and Wales or Northern Ireland where unauthorised decoders have come into the possession of any person in connection with the investigation or prosecution of a relevant offence, that person may apply under this section for an order for the forfeiture of the unauthorised decoders.

(2)For the purposes of this section “relevant offence” means—

(a)an offence under section 297A(1) (criminal liability for making, importing, etc. unauthorised decoders),

(b)an offence under the Trade Descriptions Act 1968,

[F815(ba)an offence under the Business Protection from Misleading Marketing Regulations 2008,

(bb)an offence under [F816Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024], or]

(c)an offence involving dishonesty or deception.

(3)An application under this section may be made—

(a)where proceedings have been brought in any court for a relevant offence relating to some or all of the unauthorised decoders, to that court, or

(b)where no application for the forfeiture of the unauthorised decoders has been made under paragraph (a), by way of complaint to a magistrates’ court.

(4)On an application under this section, the court shall make an order for the forfeiture of any unauthorised decoders only if it is satisfied that a relevant offence has been committed in relation to the unauthorised decoders.

(5)A court may infer for the purposes of this section that such an offence has been committed in relation to any unauthorised decoders if it is satisfied that such an offence has been committed in relation to unauthorised decoders which are representative of the unauthorised decoders in question (whether by reason of being of the same design or part of the same consignment or batch or otherwise).

(6)Any person aggrieved by an order made under this section by a magistrates’ court, or by a decision of such a court not to make such an order, may appeal against that order or decision—

(a)in England and Wales, to the Crown Court, or

(b)in Northern Ireland, to the county court.

(7)An order under this section may contain such provision as appears to the court to be appropriate for delaying the coming into force of the order pending the making and determination of any appeal (including any application under section 111 of the Magistrates’ Courts Act 1980 (c. 43) or Article 146 of the Magistrates’ Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26)) (statement of case)).

(8)Subject to subsection (9), where any unauthorised decoders are forfeited under this section they shall be destroyed in accordance with such directions as the court may give.

(9)On making an order under this section the court may direct that the unauthorised decoders to which the order relates shall (instead of being destroyed) be forfeited to a person who has rights or remedies under section 298 in relation to the unauthorised decoders in question, or dealt with in such other way as the court considers appropriate.]

Textual Amendments

F814Ss. 297C, 297D inserted (20.11.2002) by 2002 c. 25, s. 5; S.I. 2002/2749, art. 2

F817297D Forfeiture of unauthorised decoders: ScotlandU.K.

(1)In Scotland the court may make an order under this section for the forfeiture of unauthorised decoders.

(2)An order under this section may be made—

(a)on an application by the procurator-fiscal made in the manner specified in section 134 of the Criminal Procedure (Scotland) Act 1995 (c. 46), or

(b)where a person is convicted of a relevant offence, in addition to any other penalty which the court may impose.

(3)On an application under subsection (2)(a), the court shall make an order for the forfeiture of any unauthorised decoders only if it is satisfied that a relevant offence has been committed in relation to the unauthorised decoders.

(4)The court may infer for the purposes of this section that such an offence has been committed in relation to any unauthorised decoders if it is satisfied that such an offence has been committed in relation to unauthorised decoders which are representative of the unauthorised decoders in question (whether by reason of being of the same design or part of the same consignment or batch or otherwise).

(5)The procurator-fiscal making the application under subsection (2)(a) shall serve on any person appearing to him to be the owner of, or otherwise to have an interest in, the unauthorised decoders to which the application relates a copy of the application, together with a notice giving him the opportunity to appear at the hearing of the application to show cause why the unauthorised decoders should not be forfeited.

(6)Service under subsection (5) shall be carried out, and such service may be proved, in the manner specified for citation of an accused in summary proceedings under the Criminal Procedure (Scotland) Act 1995 (c. 46).

(7)Any person upon whom notice is served under subsection (5) and any other person claiming to be the owner of, or otherwise to have an interest in, unauthorised decoders to which an application under this section relates shall be entitled to appear at the hearing of the application to show cause why the unauthorised decoders should not be forfeited.

(8)The court shall not make an order following an application under subsection (2)(a)—

(a)if any person on whom notice is served under subsection (5) does not appear, unless service of the notice on that person is proved, or

(b)if no notice under subsection (5) has been served, unless the court is satisfied that in the circumstances it was reasonable not to serve such notice.

(9)Where an order for the forfeiture of any unauthorised decoders is made following an application under subsection (2)(a), any person who appeared, or was entitled to appear, to show cause why the unauthorised decoders should not be forfeited may, within 21 days of the making of the order, appeal to the High Court by Bill of Suspension.

(10)Section 182(5)(a) to (e) of the Criminal Procedure (Scotland) Act 1995 shall apply to an appeal under subsection (9) as it applies to a stated case under Part 2 of that Act.

(11)An order following an application under subsection (2)(a) shall not take effect—

(a)until the end of the period of 21 days beginning with the day after the day on which the order is made, or

(b)if an appeal is made under subsection (9) above within that period, until the appeal is determined or abandoned.

(12)An order under subsection (2)(b) shall not take effect—

(a)until the end of the period within which an appeal against the order could be brought under the Criminal Procedure (Scotland) Act 1995 (c. 46), or

(b)if an appeal is made within that period, until the appeal is determined or abandoned.

(13)Subject to subsection (14), where any unauthorised decoders are forfeited under this section they shall be destroyed in accordance with such directions as the court may give.

(14)On making an order under this section the court may direct that the unauthorised decoders to which the order relates shall (instead of being destroyed) be forfeited to a person who has rights or remedies under section 298 in relation to the unauthorised decoders in question, or dealt with in such other way as the court considers appropriate.

(15)For the purposes of this section—

  • [F818“relevant offence” means—

    (a)

    an offence under section 297A(1) (criminal liability for making, importing, etc unauthorised decoders),

    (b)

    an offence under the Trade Descriptions Act 1968,

    (c)

    an offence under the Business Protection from Misleading Marketing Regulations 2008,

    (d)

    an offence under [F819Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024], or

    (e)

    any offence involving dishonesty or deception;]

  • “the court” means—

    (a)

    in relation to an order made on an application under subsection (2)(a), the sheriff, and

    (b)

    in relation to an order made under subsection (2)(b), the court which imposed the penalty.

Textual Amendments

F817Ss. 297C, 297D inserted (20.11.2002) by 2002 c. 25, s. 5; S.I. 2002/2749, art. 2

[F820298 Rights and remedies in respect of apparatus, &c. for unauthorised reception of transmissions.U.K.

(1)A person who—

(a)makes charges for the reception of programmes included in a broadcasting F821. . . service provided from a place in the United Kingdom F822...,

(b)sends encrypted tranmissions of any other description from a place in the United Kingdom F823..., or

(c)provides conditional access services from a place in the United Kingdom F824...,

is entitled to the following rights and remedies.

(2)He has the same rights and remedies against a person—

(a)who—

(i)makes, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, or advertises for sale or hire,

(ii)has in his possession for commercial purposes, or

(iii)instals, maintains or replaces for commercial purposes,

any apparatus designed or adapted to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so, or

(b)who publishes or otherwise promotes by means of commercial communications any information which is calculated to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so,

as a copyright owner has in respect of an infringement of copyright.

(3)Further, he has the same rights under section 99 or 100 (delivery up or seizure of certain articles) in relation to any such apparatus as a copyright owner has in relation to an infringing copy.

(4)Section 72 of the M49[F825Senior Courts Act 1981], section 15 of the M50Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and section 94A of the M51Judicature (Northern Ireland) Act 1978 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property) apply to proceedings under this section as to proceedings under Part I of this Act (copyright).

(5)In section 97(1) (innocent infringement of copyright) as it applies to proceedings for infringement of the rights conferred by this section, the reference to the defendant not knowing or having reason to believe that copyright subsisted in the work shall be construed as a reference to his not knowing or having reason to believe that his acts infringed the rights conferred by this section.

(6)Section 114 applies, with the necessary modifications, in relation to the disposal of anything delivered up or seized by virtue of subsection (3) above.

(7)In this section “apparatus”, “conditional access technology” and “encrypted” have the same meanings as in section 297A, “transmission” includes transmissions as defined in that section and “conditional access services” means services comprising the provision of conditional access technology.]

Textual Amendments

F820S. 298 substituted (25.5.2000) by S.I. 2000/1175, art. 2(3)

F822Words in s. 298(1)(a) omitted (31.12.2020) by virtue of The Broadcasting (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/224), reg. 1(2), Sch. 1 para. 35(3) (with reg. 6) (as amended by S.I. 2020/1536, reg. 5(2)(3)); 2020 c. 1, Sch. 5 para. 1(1)

F823Words in s. 298(1)(b) omitted (31.12.2020) by virtue of The Broadcasting (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/224), reg. 1(2), Sch. 1 para. 35(3) (with reg. 6) (as amended by S.I. 2020/1536, reg. 5(2)(3)); 2020 c. 1, Sch. 5 para. 1(1)

F824Words in s. 298(1)(c) omitted (31.12.2020) by virtue of The Broadcasting (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/224), reg. 1(2), Sch. 1 para. 35(3) (with reg. 6) (as amended by S.I. 2020/1536, reg. 5(2)(3)); 2020 c. 1, Sch. 5 para. 1(1)

F825S. 298(4): words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 1(2); S.I. 2009/1604, art. 2

Marginal Citations

299 Supplementary provisions as to fraudulent reception.U.K.

(1)Her Majesty may by Order in Council—

(a)provide that section 297 applies in relation to programmes included in services provided from a country or territory outside the United Kingdom, and

(b)provide that section 298 applies in relation to such programmes and to encrypted transmissions sent from such a country or territory.

F826(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)A statutory instrument containing an Order in Council under subsection (1) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4)Where sections 297 and 298 apply in relation to a broadcasting service F827..., they also apply to any service run for the person providing that service, or a person providing programmes for that service, which consists wholly or mainly in the sending by means of a telecommunications system of sounds or visual images, or both.

(5)In sections 297 [F828, 297A] and 298, and this section, “programme” [F829and “broadcasting”], and related expressions, have the same meaning as in Part I (copyright).

Textual Amendments

Fraudulent application or use of trade markU.K.

F830300. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F830S. 300 repealed (31.10.1994) by 1994 c. 26, s. 106(2), Sch. 5; S.I. 1994/2550, art. 2

Provisions for the benefit of [F831Great Ormond Street Hospital for Children]U.K.

Textual Amendments

301 Provisions for the benefit of [F832Great Ormond Street Hospital for Children].U.K.

The provisions of Schedule 6 have effect for conferring on [F833GOSH Children's Charity for the benefit of Great Ormond Street Hospital for Children] a right to a royalty in respect of the public performance, commercial publication [F834or communication to the public] of the play “Peter Pan” by Sir James Matthew Barrie, or of any adaptation of that work, notwithstanding that copyright in the work expired on 31st December 1987.

Textual Amendments

F833Words in s. 301 substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(3), 5(3)

Financial assistance for certain international bodiesU.K.

302 Financial assistance for certain international bodies.U.K.

(1)The Secretary of State may give financial assistance, in the form of grants, loans or guarantees to—

(a)any international organisation having functions relating to trade marks or other intellectual property, or

(b)any [F835EU] institution or other body established under any of the [F835EU] Treaties having any such functions,

with a view to the establishment or maintenance by that organisation, institution or body of premises in the United Kingdom.

(2)Any expenditure of the Secretary of State under this section shall be defrayed out of money provided by Parliament; and any sums received by the Secretary of State in consequence of this section shall be paid into the Consolidated Fund.

Textual Amendments

GeneralU.K.

303 Consequential amendments and repeals.U.K.

(1)The enactments specified in Schedule 7 are amended in accordance with that Schedule, the amendments being consequential on the provisions of this Act.

(2)The enactments specified in Schedule 8 are repealed to the extent specified.

304 Extent.U.K.

(1)Provision as to the extent of Part I (copyright), Part II (rights in performances) and Part III (design right) is to be found in sections 157, 207 and 255 respectively; the extent of the other provisions of this Act is as follows.

(2)Parts IV to VII extend to England and Wales, Scotland and Northern Ireland, except that—

(a)sections 287 to 292 (patents county courts) extend to England and Wales only,

F836(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)the amendments and repeals in Schedules 7 and 8 have the same extent as the enactments amended or repealed.

(3)The following provisions extend to the Isle of Man subject to any modifications contained in an Order made by Her Majesty in Council—

(a)sections 293 and 294 (patents: licences of right), and

(b)paragraphs 24 and 29 of Schedule 5 (patents: effect of filing international application for patent and power to extend time limits).

(4)Her Majesty may by Order in Council direct that the following provisions extend to the Isle of Man, with such exceptions and modifications as may be specified in the Order—

(a)Part IV (registered designs),

(b)Part V (patent agents),

(c)the provisions of Schedule 5 (patents: miscellaneous amendments) not mentioned in subsection (3) above,

(d)sections 297 to 299 (fraudulent reception of transmissions), and

(e)section 300 (fraudulent application or use of trade mark).

(5)Her Majesty may by Order in Council direct that sections 297 to 299 (fraudulent reception of transmissions) extend to any of the Channel Islands, with such exceptions and modifications as may be specified in the Order.

(6)Any power conferred by this Act to make provision by Order in Council for or in connection with the extent of provisions of this Act to a country outside the United Kingdom includes power to extend to that country, subject to any modifications specified in the Order, any provision of this Act which amends or repeals an enactment extending to that country.

Textual Amendments

305 Commencement.U.K.

(1)The following provisions of this Act come into force on Royal Assent—

  • paragraphs 24 and 29 of Schedule 5 (patents: effect of filing international application for patent and power to extend time limits);

  • section 301 and Schedule 6 (provisions for the benefit of the Hospital for Sick Children).

(2)Sections 293 and 294 (licences of right) come into force at the end of the period of two months beginning with the passing of this Act.

(3)The other provisions of this Act come into force on such day as the Secretary of State may appoint by order made by statutory instrument, and different days may be appointed for different provisions and different purposes.

Modifications etc. (not altering text)

C131Power of appointment conferred by s. 305(3) partly exercised: S.I. 1989/816, 955, 1032, 1303, 1990/1400, 2168

306 Short title.U.K.

This Act may be cited as the Copyright, Designs and Patents Act 1988.

SCHEDULES

Section 76A

F837SCHEDULE ZA1 U.K.CERTAIN PERMITTED USES OF ORPHAN WORKS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F837 +Sch. ZA1 omitted (31.12.2020) by virtue of The Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/605), regs. 1(2), 23 (with reg. 38) (as amended by S.I. 2020/1050, regs. 1(2), 4); 2020 c. 1, Sch. 5 para. 1(1) +

[F838SCHEDULE A1U.K.Regulation of licensing bodies

Textual Amendments

Codes of practiceU.K.

1(1)The Secretary of State may by regulations make provision for a licensing body to be required to adopt a code of practice that complies with criteria specified in the regulations.U.K.

(2)The regulations may provide that, if a licensing body fails to adopt such a code of practice, any code of practice that is approved for the purposes of that licensing body by the Secretary of State, or by a person designated by the Secretary of State under the regulations, has effect as a code of practice adopted by the body.

(3)The regulations must provide that a code is not to be approved for the purposes of provision under sub-paragraph (2) unless it complies with criteria specified in the regulations.

2U.K.Regulations under paragraph 1 may make provision as to conditions that are to be satisfied, and procedures that are to be followed—

(a)before a licensing body is required to adopt a code of practice as described in paragraph 1(1);

(b)before a code of practice has effect as one adopted by a licensing body as described in paragraph 1(2).

Licensing code ombudsmanU.K.

3(1)The Secretary of State may by regulations make provision—U.K.

(a)for the appointment of a person (the “licensing code ombudsman”) to investigate and determine disputes about a licensing body's compliance with its code of practice;

(b)for the reference of disputes to the licensing code ombudsman;

(c)for the investigation and determination of a dispute so referred.

(2)Provision made under this paragraph may in particular include provision—

(a)about eligibility for appointment as the licensing code ombudsman;

(b)about the disputes to be referred to the licensing code ombudsman;

(c)requiring any person to provide information, documents or assistance to the licensing code ombudsman for the purposes of an investigation or determination;

(d)requiring a licensing body to comply with a determination of the licensing code ombudsman;

(e)about the payment of expenses and allowances to the licensing code ombudsman.

Code reviewerU.K.

4(1)The Secretary of State may by regulations make provision—U.K.

(a)for the appointment by the Secretary of State of a person (the “code reviewer”) to review and report to the Secretary of State on—

(i)the codes of practice adopted by licensing bodies, and

(ii)compliance with the codes of practice;

(b)for the carrying out of a review and the making of a report by that person.

(2)The regulations must provide for the Secretary of State, before appointing a person as the code reviewer, to consult persons whom the Secretary of State considers represent the interests of licensing bodies, licensees, members of licensing bodies, and the Intellectual Property Office.

(3)The regulations may, in particular, make provision—

(a)requiring any person to provide information, documents or assistance to the code reviewer for the purposes of a review or report;

(b)about the payment of expenses and allowances to the code reviewer.

(4) In this paragraph “ member ”, in relation to a licensing body, means a person on whose behalf the body is authorised to negotiate or grant licences.

SanctionsU.K.

5(1)The Secretary of State may by regulations provide for the consequences of a failure by a licensing body to comply with—U.K.

(a)a requirement to adopt a code of practice under provision within paragraph 1(1);

(b)a code of practice that has been adopted by the body in accordance with a requirement under provision within paragraph 1(1), or that has effect as one adopted by the body under provision within paragraph 1(2);

(c)a requirement imposed on the body under any other provision made under this Schedule;

(d)an authorisation under regulations under section 116A or 116B;

(e)a requirement imposed by regulations under section 116A or 116B;

(f)an authorisation under regulations under paragraph 1A or 1B of Schedule 2A;

(g)a requirement imposed by regulations under paragraph 1A or 1B of that Schedule.

(2)The regulations may in particular provide for—

(a)the imposition of financial penalties or other sanctions;

(b)the imposition of sanctions on a director, manager or similar officer of a licensing body or, where the body's affairs are managed by its members, on a member.

(3)The regulations must include provision—

(a)for determining whether there has been a failure to comply with a requirement or code of practice for the purposes of any provision made under sub-paragraph (1);

(b)for determining any sanction that may be imposed in respect of the failure to comply;

(c)for an appeal against a determination within paragraph (a) or (b).

(4)A financial penalty imposed under sub-paragraph (2) must not be greater than £50,000.

(5)The regulations may provide for a determination within sub-paragraph (3)(a) or (3)(b) to be made by the Secretary of State or by a person designated by the Secretary of State under the regulations.

(6)The regulations may make provision for requiring a person to give the person by whom a determination within sub-paragraph (3)(a) falls to be made (the “adjudicator”) any information that the adjudicator reasonably requires for the purpose of making that determination.

FeesU.K.

6(1)The Secretary of State may by regulations require a licensing body to which regulations under any other paragraph of this Schedule apply to pay fees to the Secretary of State.U.K.

(2)The aggregate amount of fees payable under the regulations must not be more than the cost to the Secretary of State of administering the operation of regulations under this Schedule.

GeneralU.K.

7(1)The power to make regulations under this Schedule includes in particular power—U.K.

(a)to make incidental, supplementary or consequential provision, including provision extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it;

(b)to make provision for bodies of a particular description, or carrying out activities of a particular description, not to be treated as licensing bodies for the purposes of requirements imposed under regulations under this Schedule;

(c)to make provision that applies only in respect of licensing bodies of a particular description, or only in respect of activities of a particular description;

(d)otherwise to make different provision for different purposes.

(2)Regulations under a paragraph of this Schedule may amend Part 1 or Part 2, or any other enactment or subordinate legislation passed or made before the paragraph in question comes into force, for the purpose of making consequential provision or extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it.

(3)The power to make regulations is exercisable by statutory instrument.

(4)A statutory instrument containing regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

8U.K.References in this Schedule to a licensing body are to a body that is a licensing body for the purposes of Chapter 7 of Part 1 or Chapter 2 of Part 2, and references to licensees are to be construed accordingly.]

Section 170.

SCHEDULE 1U.K. Copyright: transitional provisions and savings

Modifications etc. (not altering text)

C132 +Sch. 1 applied (with modifications) by S.I. 1989/1293, art. 4(4)(5)(6) +

C133 +Sch. 1 applied (with modifications)(4.5.1993) by S.I. 1993/942, arts. 2(3), 5, Sch. 4 (with art. 6) +

C134 +Sch. 1 applied (4.5.1993) by S.I. 1993/942, arts.4, 5, Sch. 4 (with art. 6) +

C135 +Sch. 1 applied (with modifications) (22.7.1999) by S.I. 1999/1751, arts. 2(3), 3, 4(3)-(5), 6, Sch. 5 (subject to arts. 5, 7) (as amended (22.4.2003) by S.I. 2003/774, arts. 2-5) +

C136 +Sch. 1 extended in part (with modifications) by The Copyright (Bermuda) Order 2003 (S.I. 2003/1517), art. 2, Sch. (the amendment coming into force in accordance with art. 1 of the amending S.I.) +

C137 +Sch. 1 extended in part (with modifications) by The Copyright (Gibraltar) Order 2005 (S.I. 2005/853), art. 2, Sch. (the amendment coming into force in accordance with art. 1 of the amending S.I.) +

IntroductoryU.K.

1(1)In this Schedule—U.K.

  • “the 1911 Act” means the M52Copyright Act 1911,

  • “the 1956 Act” means the M53Copyright Act 1956, and

  • “the new copyright provisions” means the provisions of this Act relating to copyright, that is, Part I (including this Schedule) and Schedules 3, 7 and 8 so far as they make amendments or repeals consequential on the provisions of Part I.

(2)References in this Schedule to “commencement”, without more, are to the date on which the new copyright provisions come into force.

(3)References in this Schedule to “existing works” are to works made before commencement; and for this purpose a work of which the making extended over a period shall be taken to have been made when its making was completed.

Marginal Citations

2(1)In relation to the 1956 Act, references in this Schedule to a work include any work or other subject-matter within the meaning of that Act.U.K.

(2)In relation to the 1911 Act—

(a)references in this Schedule to copyright include the right conferred by section 24 of that Act in substitution for a right subsisting immediately before the commencement of that Act;

(b)references in this Schedule to copyright in a sound recording are to the copyright under that Act in records embodying the recording; and

(c)references in this Schedule to copyright in a film are to any copyright under that Act in the film (so far as it constituted a dramatic work for the purposes of that Act) or in photographs forming part of the film.

General principles: continuity of the lawU.K.

3U.K.The new copyright provisions apply in relation to things existing at commencement as they apply in relation to things coming into existence after commencement, subject to any express provision to the contrary.

4(1)The provisions of this paragraph have effect for securing the continuity of the law so far as the new copyright provisions re-enact (with or without modification) earlier provisions.U.K.

(2)A reference in an enactment, instrument or other document to copyright, or to a work or other subject-matter in which copyright subsists, which apart from this Act would be construed as referring to copyright under the 1956 Act shall be construed, so far as may be required for continuing its effect, as being, or as the case may require, including, a reference to copyright under this Act or to works in which copyright subsists under this Act.

(3)Anything done (including subordinate legislation made), or having effect as done, under or for the purposes of a provision repealed by this Act has effect as if done under or for the purposes of the corresponding provision of the new copyright provisions.

(4)References (expressed or implied) in this Act or any other enactment, instrument or document to any of the new copyright provisions shall, so far as the context permits, be construed as including, in relation to times, circumstances and purposes before commencement, a reference to corresponding earlier provisions.

(5)A reference (express or implied) in an enactment, instrument or other document to a provision repealed by this Act shall be construed, so far as may be required for continuing its effect, as a reference to the corresponding provision of this Act.

(6)The provisions of this paragraph have effect subject to any specific transitional provision or saving and to any express amendment made by this Act.

Subsistence of copyrightU.K.

5(1)Copyright subsists in an existing work after commencement only if copyright subsisted in it immediately before commencement.U.K.

(2)Sub-paragraph (1) does not prevent an existing work qualifying for copyright protection after commencement—

(a)under section 155 (qualification by virtue of first publication), F839...

(b)by virtue of an Order under section 159 (application of Part I to countries to which it does not extend) [F840, or]

[F841(c)where the work is an artistic work in which copyright subsists as a result of the disapplication of paragraph 6(1) by paragraph 6(1A)]

Textual Amendments

6(1)Copyright shall not subsist by virtue of this Act in an artistic work made before 1st June 1957 which at the time when the work was made constituted a design capable of registration under the M54Registered Designs Act 1949 or under the enactments repealed by that Act, and was used, or intended to be used, as a model or pattern to be multiplied by an industrial process.U.K.

[F842(1A)Sub-paragraph (1) does not apply to an artistic work which was on 1st July 1995 protected under the law of [F843an] EEA state relating to copyright or related rights.]

(2)For this purpose a design shall be deemed to be used as a model or pattern to be multiplied by any industrial process—

(a)when the design is reproduced or is intended to be reproduced on more than 50 single articles, unless all the articles in which the design is reproduced or is intended to be reproduced together form only a single set of articles as defined in section 44(1) of the Registered Designs Act 1949, or

(b)when the design is to be applied to—

(i)printed paper hangings,

(ii)carpets, floor cloths or oil cloths, manufactured or sold in lengths or pieces,

(iii)textile piece goods, or textile goods manufactured or sold in lengths or pieces, or

(iv)lace, not made by hand.

Textual Amendments

F842 +Sch. 1 para. 6(1A) inserted (6.4.2017) by The Copyright (Amendment) Regulations 2016 (S.I. 2016/1210), regs. 1, 2(3) +

Marginal Citations

7(1)No copyright subsists in a film, as such, made before 1st June 1957.U.K.

(2)Where a film made before that date was an original dramatic work within the meaning of the 1911 Act, the new copyright provisions have effect in relation to the film as if it was an original dramatic work within the meaning of Part I.

(3)The new copyright provisions have effect in relation to photographs forming part of a film made before 1st June 1957 as they have effect in relation to photographs not forming part of a film.

8(1)A film sound-track to which section 13(9) of the 1956 Act applied before commencement (film to be taken to include sounds in associated sound-track) shall be treated for the purposes of the new copyright provisions not as part of the film, but as a sound recording.U.K.

(2)However—

(a)copyright subsists in the sound recording only if copyright subsisted in the film immediately before commencement, and it continues to subsist until copyright in the film expires;

(b)the author and first owner of copyright in the film shall be treated as having been author and first owner of the copyright in the sound recording; and

(c)anything done before commencement under or in relation to the copyright in the film continues to have effect in relation to the sound recording as in relation to the film.

[F8449U.K.No copyright subsists in—

(a)a wireless broadcast made before 1st June 1957, or

(b)a broadcast by cable made before 1st January 1985;

and any such broadcast shall be disregarded for the purposes of section 14(5) (duration of copyright in repeats).]

Textual Amendments

F844 +Sch. 1 para. 9 substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg, 2(1), {Sch. 1 para. 16(a)} (with regs. 31-40) +

Authorship of workU.K.

10U.K.The question who was the author of an existing work shall be determined in accordance with the new copyright provisions for the purposes of the rights conferred by Chapter IV of Part I (moral rights), and for all other purposes shall be determined in accordance with the law in force at the time the work was made.

First ownership of copyrightU.K.

11(1)The question who was first owner of copyright in an existing work shall be determined in accordance with the law in force at the time the work was made.U.K.

(2)Where before commencement a person commissioned the making of a work in circumstances falling within—

(a)section 4(3) of the 1956 Act or paragraph (a) of the proviso to section 5(1) of the 1911 Act (photographs, portraits and engravings), or

(b)the proviso to section 12(4) of the 1956 Act (sound recordings),

those provisions apply to determine first ownership of copyright in any work made in pursuance of the commission after commencement.

Duration of copyright in existing worksU.K.

12(1)The following provisions have effect with respect to the duration of copyright in existing works.U.K.

The question which provision applies to a work shall be determined by reference to the facts immediately before commencement; and expressions used in this paragraph which were defined for the purposes of the 1956 Act have the same meaning as in that Act.

(2)Copyright in the following descriptions of work continues to subsist until the date on which it would have expired under the 1956 Act—

(a)literary, dramatic or musical works in relation to which the period of 50 years mentioned in the proviso to section 2(3) of the 1956 Act (duration of copyright in works made available to the public after the death of the author) has begun to run;

(b)engravings in relation to which the period of 50 years mentioned in the proviso to section 3(4) of the 1956 Act (duration of copyright in works published after the death of the author) has begun to run;

(c)published photographs and photographs taken before 1st June 1957;

(d)published sound recordings and sound recordings made before 1st June 1957;

(e)published films and films falling within section 13(3)(a) of the 1956 Act (films registered under former enactments relating to registration of films).

(3)Copyright in anonymous or pseudonymous literary, dramatic, musical or artistic works (other than photographs) continues to subsist—

(a)if the work is published, until the date on which it would have expired in accordance with the 1956 Act, and

(b)if the work is unpublished, until the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force or, if during that period the work is first made available to the public within the meaning of [F845section 12(3)] (duration of copyright in works of unknown authorship), the date on which copyright expires in accordance with that provision;

unless, in any case, the identity of the author becomes known before that date, in which case [F846section 12(2)] applies (general rule: life of the author [F847plus 70]).

(4)Copyright in the following descriptions of work continues to subsist until the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force—

(a)literary, dramatic and musical works of which the author has died and in relation to which none of the acts mentioned in paragraphs (a) to (e) of the proviso to section 2(3) of the 1956 Act has been done;

(b)unpublished engravings of which the author has died;

(c)unpublished photographs taken on or after 1st June 1957.

(5)Copyright in the following descriptions of work continues to subsist until the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force—

(a)unpublished sound recordings made on or after 1st June 1957;

(b)films not falling within sub-paragraph (2)(e) above,

unless the recording or film is published before the end of that period in which case copyright in it shall continue until the end of the period of 50 years from the end of the calendar year in which the recording or film is published.

(6)Copyright in any other description of existing work continues to subsist until the date on which copyright in that description of work expires in accordance with sections 12 to 15 of this Act.

(7)The above provisions do not apply to works subject to Crown or Parliamentary copyright (see paragraphs 41 to 43 below).

Textual Amendments

F845 +Words in Sch. 1 para. 12(3)(b) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1 para. 18(3)(a) (with regs. 31-40) +

Perpetual copyright under the Copyright Act 1775U.K.

13(1)The rights conferred on universities and colleges by the M55Copyright Act 1775 shall continue to subsist until the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force and shall then expire.U.K.

(2)The provisions of the following Chapters of Part I—

  • Chapter III (acts permitted in relation to copyright works),

  • Chapter VI (remedies for infringement),

  • Chapter VII (provisions with respect to copyright licensing), and

  • Chapter VIII (the Copyright Tribunal),

apply in relation to those rights as they apply in relation to copyright under this Act.

Marginal Citations

Acts infringing copyrightU.K.

14(1)The provisions of Chapters II and III of Part I as to the acts constituting an infringement of copyright apply only in relation to acts done after commencement; the provisions of the 1956 Act continue to apply in relation to acts done before commencement.U.K.

(2)So much of section 18(2) as extends the restricted act of issuing copies to the public to include the rental to the public of copies of sound recordings, films or computer programs does not apply in relation to a copy of a sound recording, film or computer program acquired by any person before commencement for the purpose of renting it to the public.

(3)For the purposes of section 27 (meaning of “infringing copy”) the question whether the making of an article constituted an infringement of copyright, or would have done if the article had been made in the United Kingdom, shall be determined—

(a)in relation to an article made on or after 1st June 1957 and before commencement, by reference to the 1956 Act, and

(b)in relation to an article made before 1st June 1957, by reference to the 1911 Act.

(4)For the purposes of the application of sections 31(2), 51(2) and 62(3) (subsequent exploitation of things whose making was, by virtue of an earlier provision of the section, not an infringement of copyright) to things made before commencement, it shall be assumed that the new copyright provisions were in force at all material times.

(5)Section 55 (articles for producing material in a particular typeface) applies where articles have been marketed as mentioned in subsection (1) before commencement with the substitution for the period mentioned in subsection (3) of the period of 25 years from the end of the calendar year in which the new copyright provisions come into force.

(6)Section 56 (transfer of copies, adaptations, &c. of work in electronic form) does not apply in relation to a copy purchased before commencement.

(7)In section 65 (reconstruction of buildings) the reference to the owner of the copyright in the drawings or plans is, in relation to buildings constructed before commencement, to the person who at the time of the construction was the owner of the copyright in the drawings or plans under the 1956 Act, the 1911 Act or any enactment repealed by the 1911 Act.

15(1)Section 57 (anonymous or pseudonymous works: acts permitted on assumptions as to expiry of copyright or death of author) has effect in relation to existing works subject to the following provisions.U.K.

(2)Subsection (1)(b)(i) (assumption as to expiry of copyright) does not apply in relation to—

(a)photographs, or

(b)the rights mentioned in paragraph 13 above (rights conferred by the M56Copyright Act 1775).

(3)F848. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Marginal Citations

16U.K.The following provisions of section 7 of the 1956 Act continue to apply in relation to existing works—

(a)subsection (6) (copying of unpublished works from manuscript or copy in library, museum or other institution);

(b)subsection (7) (publication of work containing material to which subsection (6) applies), except paragraph (a) (duty to give notice of intended publication);

(c)subsection (8) (subsequent broadcasting, performance, &c. of material published in accordance with subsection (7));

and subsection (9)(d) (illustrations) continues to apply for the purposes of those provisions.

17U.K.Where in the case of a dramatic or musical work made before 1st July 1912, the right conferred by the 1911 Act did not include the sole right to perform the work in public, the acts restricted by the copyright shall be treated as not including—

(a)performing the work in public,

[F849(b)communicating the work to the public, or]

(c)doing any of the above in relation to an adaptation of the work;

and where the right conferred by the 1911 Act consisted only of the sole right to perform the work in public, the acts restricted by the copyright shall be treated as consisting only of those acts.

Textual Amendments

18U.K.Where a work made before 1st July 1912 consists of an essay, article or portion forming part of and first published in a review, magazine or other periodical or work of a like nature, the copyright is subject to any right of publishing the essay, article, or portion in a separate form to which the author was entitled at the commencement of the 1911 Act, or would if that Act had not been passed, have become entitled under section 18 of the M57Copyright Act 1842.

Marginal Citations

DesignsU.K.

19(1)Section 51 (exclusion of copyright protection in relation to works recorded or embodied in design document or models) does not apply for ten years after commencement in relation to a design recorded or embodied in a design document or model before commencement.U.K.

(2)During those ten years the following provisions of Part III (design right) apply to any relevant copyright as in relation to design right—

(a)sections 237 to 239 (availability of licences of right), and

(b)sections 247 and 248 (application to comptroller to settle terms of licence of right).

(3)In section 237 as it applies by virtue of this paragraph, for the reference in subsection (1) to the last five years of the design right term there shall be substituted a reference to the last five years of the period of ten years referred to in sub-paragraph (1) above, or to so much of those last five years during which copyright subsists.

(4)In section 239 as it applies by virtue of this paragraph, for the reference in subsection (1)(b) to section 230 there shall be substituted a reference to section 99.

(5)Where a licence of right is available by virtue of this paragraph, a person to whom a licence was granted before commencement may apply to the comptroller for an order adjusting the terms of that licence.

(6)The provisions of sections 249 and 250 (appeals and rules) apply in relation to proceedings brought under or by virtue of this paragraph as to proceedings under Part III.

(7)A licence granted by virtue of this paragraph shall relate only to acts which would be permitted by section 51 if the design document or model had been made after commencement.

(8)Section 100 (right to seize infringing copies, &c.) does not apply during the period of ten years referred to in sub-paragraph (1) in relation to anything to which it would not apply if the design in question had been first recorded or embodied in a design document or model after commencement.

(9)Nothing in this paragraph affects the operation of any rule of law preventing or restricting the enforcement of copyright in relation to a design.

Modifications etc. (not altering text)

C138 +Sch. 1 para. 19(1) excluded by S.I. 1989/1100, art. 10(2) +

C139 +Sch. 1 para. 19(2) modified by S.I. 1989/1100, art. 10(3) +

C140 +Sch. 1 para. 19(3) excluded by S.I. 1989/1100, art. 10(3) +

F85020U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F850 +Sch. 1 para. 20 omitted (28.7.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 74(3)(b), 103(3); S.I. 2016/593, arts. 2(1), 3 (with arts. 4, 5) +

Abolition of statutory recording licenceU.K.

21U.K.Section 8 of the 1956 Act (statutory licence to copy records sold by retail) continues to apply where notice under subsection (1)(b) of that section was given before the repeal of that section by this Act, but only in respect of the making of records—

(a)within one year of the repeal coming into force, and

(b)up to the number stated in the notice as intended to be sold.

Moral rightsU.K.

22(1)No act done before commencement is actionable by virtue of any provision of Chapter IV of Part I (moral rights).U.K.

(2)Section 43 of the 1956 Act (false attribution of authorship) continues to apply in relation to acts done before commencement.

23(1)The following provisions have effect with respect to the rights conferred by—U.K.

(a)section 77 (right to be identified as author or director), and

(b)section 80 (right to object to derogatory treatment of work).

(2)The rights do not apply—

(a)in relation to a literary, dramatic, musical and artistic work of which the author died before commencement; or

(b)in relation to a film made before commencement.

(3)The rights in relation to an existing literary, dramatic, musical or artistic work do not apply—

(a)where copyright first vested in the author, to anything which by virtue of an assignment of copyright made or licence granted before commencement may be done without infringing copyright;

(b)where copyright first vested in a person other than the author, to anything done by or with the licence of the copyright owner.

(4)The rights do not apply to anything done in relation to a record made in pursuance of section 8 of the 1956 Act (statutory recording licence).

24U.K.The right conferred by section 85 (right to privacy of certain photographs and films) does not apply to photographs taken or films made before commencement.

Assignments and licencesU.K.

25(1)Any document made or event occurring before commencement which had any operation—U.K.

(a)affecting the ownership of the copyright in an existing work, or

(b)creating, transferring or terminating an interest, right or licence in respect of the copyright in an existing work,

has the corresponding operation in relation to copyright in the work under this Act.

(2)Expressions used in such a document shall be construed in accordance with their effect immediately before commencement.

26(1)Section 91(1) of this Act (assignment of future copyright: statutory vesting of legal interest on copyright coming into existence) does not apply in relation to an agreement made before 1st June 1957.U.K.

(2)The repeal by this Act of section 37(2) of the 1956 Act (assignment of future copyright: devolution of right where assignee dies before copyright comes into existence) does not affect the operation of that provision in relation to an agreement made before commencement.

27(1)Where the author of a literary, dramatic, musical or artistic work was the first owner of the copyright in it, no assignment of the copyright and no grant of any interest in it, made by him (otherwise than by will) after the passing of the 1911 Act and before 1st June 1957, shall be operative to vest in the assignee or grantee any rights with respect to the copyright in the work beyond the expiration of 25 years from the death of the author.U.K.

(2)The reversionary interest in the copyright expectant on the termination of that period may after commencement be assigned by the author during his life but in the absence of any assignment shall, on his death, devolve on his legal personal representatives as part of his estate.

(3)Nothing in this paragraph affects—

(a)an assignment of the reversionary interest by a person to whom it has been assigned,

(b)an assignment of the reversionary interest after the death of the author by his personal representatives or any person becoming entitled to it, or

(c)any assignment of the copyright after the reversionary interest has fallen in.

(4)Nothing in this paragraph applies to the assignment of the copyright in a collective work or a licence to publish a work or part of a work as part of a collective work.

(5)In sub-paragraph (4) “collective work” means—

(a)any encyclopaedia, dictionary, yearbook, or similar work;

(b)a newspaper, review, magazine, or similar periodical; and

(c)any work written in distinct parts by different authors, or in which works or parts of works of different authors are incorporated.

28(1)This paragraph applies where copyright subsists in a literary, dramatic, musical or artistic work made before 1st July 1912 in relation to which the author, before the commencement of the 1911 Act, made such an assignment or grant as was mentioned in paragraph (a) of the proviso to section 24(1) of that Act (assignment or grant of copyright or performing right for full term of the right under the previous law).U.K.

(2)If before commencement any event has occurred or notice has been given which by virtue of paragraph 38 of Schedule 7 to the 1956 Act had any operation in relation to copyright in the work under that Act, the event or notice has the corresponding operation in relation to copyright under this Act.

(3)Any right which immediately before commencement would by virtue of paragraph 38(3) of that Schedule have been exercisable in relation to the work, or copyright in it, is exercisable in relation to the work or copyright in it under this Act.

(4)If in accordance with paragraph 38(4) of that Schedule copyright would, on a date after the commencement of the 1956 Act, have reverted to the author or his personal representatives and that date falls after the commencement of the new copyright provisions—

(a)the copyright in the work shall revert to the author or his personal representatives, as the case may be, and

(b)any interest of any other person in the copyright which subsists on that date by virtue of any document made before the commencement of the 1911 Act shall thereupon determine.

29U.K.Section 92(2) of this Act (rights of exclusive licensee against successors in title of person granting licence) does not apply in relation to an exclusive licence granted before commencement.

BequestsU.K.

30(1)Section 93 of this Act (copyright to pass under will with original document or other material thing embodying unpublished work)—U.K.

(a)does not apply where the testator died before 1st June 1957, and

(b)where the testator died on or after that date and before commencement, applies only in relation to an original document embodying a work.

(2)In the case of an author who died before 1st June 1957, the ownership after his death of a manuscript of his, where such ownership has been acquired under a testamentary disposition made by him and the manuscript is of a work which has not been published or performed in public, is prima facie proof of the copyright being with the owner of the manuscript.

Remedies for infringementU.K.

31(1)Sections 96 and 97 of this Act (remedies for infringement) apply only in relation to an infringement of copyright committed after commencement; section 17 of the 1956 Act continues to apply in relation to infringements committed before commencement.U.K.

(2)Sections 99 and 100 of this Act (delivery up or seizure of infringing copies, &c.) apply to infringing copies and other articles made before or after commencement; section 18 of the 1956 Act, and section 7 of the 1911 Act, (conversion damages, &c.), do not apply after commencement except for the purposes of proceedings begun before commencement.

(3)Sections 101 to 102 of this Act (rights and remedies of exclusive licensee) apply where sections 96 to 100 of this Act apply; section 19 of the 1956 Act continues to apply where section 17 or 18 of that Act applies.

(4)Sections 104 to 106 of this Act (presumptions) apply only in proceedings brought by virtue of this Act; section 20 of the 1956 Act continues to apply in proceedings brought by virtue of that Act.

32U.K.Sections 101 and 102 of this Act (rights and remedies of exclusive licensee) do not apply to a licence granted before 1st June 1957.

33(1)The provisions of section 107 of this Act (criminal liability for making or dealing with infringing articles, &c.) apply only in relation to acts done after commencement; section 21 of the 1956 Act (penalties and summary proceedings in respect of dealings which infringe copyright) continues to apply in relation to acts done before commencement.U.K.

(2)Section 109 of this Act (search warrants) applies in relation to offences committed before commencement in relation to which section 21A or 21B of the 1956 Act applied; sections 21A and 21B continue to apply in relation to warrants issued before commencement.

Copyright Tribunal: proceedings pending on commencementU.K.

34(1)The Lord Chancellor may, after consultation with the Lord Advocate, by rules make such provision as he considers necessary or expedient with respect to proceedings pending under Part IV of the 1956 Act immediately before commencement.U.K.

(2)Rules under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Qualification for copyright protectionU.K.

35U.K.Every work in which copyright subsisted under the 1956 Act immediately before commencement shall be deemed to satisfy the requirements of Part I of this Act as to qualification for copyright protection.

Dependent territoriesU.K.

36(1)The 1911 Act shall remain in force as part of the law of any dependent territory in which it was in force immediately before commencement until—U.K.

(a)the new copyright provisions come into force in that territory by virtue of an Order under section 157 of this Act (power to extend new copyright provisions), or

(b)in the case of any of the Channel Islands, the Act is repealed by Order under sub-paragraph (3) below.

(2)An Order in Council in force immediately before commencement which extends to any dependent territory any provisions of the 1956 Act shall remain in force as part of the law of that territory until—

(a)the new copyright provisions come into force in that territory by virtue of an Order under section 157 of this Act (power to extend new copyright provisions), or

(b)in the case of the Isle of Man, the Order is revoked by Order under sub-paragraph (3) below;

and while it remains in force such an Order may be varied under the provisions of the 1956 Act under which it was made.

(3)If it appears to Her Majesty that provision with respect to copyright has been made in the law of any of the Channel Islands or the Isle of Man otherwise than by extending the provisions of Part I of this Act, Her Majesty may by Order in Council repeal the 1911 Act as it has effect as part of the law of that territory or, as the case may be, revoke the Order extending the 1956 Act there.

(4)A dependent territory in which the 1911 or 1956 Act remains in force shall be treated, in the law of the countries to which Part I extends, as a country to which that Part extends; and those countries shall be treated in the law of such a territory as countries to which the 1911 Act or, as the case may be, the 1956 Act extends.

(5)If a country in which the 1911 or 1956 Act is in force ceases to be a colony of the United Kingdom, section 158 of this Act (consequences of country ceasing to be colony) applies with the substitution for the reference in subsection (3)(b) to the provisions of Part I of this Act of a reference to the provisions of the 1911 or 1956 Act, as the case may be.

(6)In this paragraph “dependent territory” means any of the Channel Islands, the Isle of Man or any colony.

37(1)This paragraph applies to a country which immediately before commencement was not a dependent territory within the meaning of paragraph 36 above but—U.K.

(a)was a country to which the 1956 Act extended, or

(b)was treated as such a country by virtue of paragraph 39(2) of Schedule 7 to that Act (countries to which the 1911 Act extended or was treated as extending);

and Her Majesty may by Order in Council conclusively declare for the purposes of this paragraph whether a country was such a country or was so treated.

(2)A country to which this paragraph applies shall be treated as a country to which Part I extends for the purposes of sections 154 to 156 (qualification for copyright protection) until—

(a)an Order in Council is made in respect of that country under section 159 (application of Part I to countries to which it does not extend), or

(b)an Order in Council is made declaring that it shall cease to be so treated by reason of the fact that the provisions of the 1956 Act or, as the case may be, the 1911 Act, which extended there as part of the law of that country have been repealed or amended.

(3)A statutory instrument containing an Order in Council under this paragraph shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Territorial waters and the continental shelfU.K.

38U.K.Section 161 of this Act (application of Part I to things done in territorial waters or the United Kingdom sector of the continental shelf) does not apply in relation to anything done before commencement.

British ships, aircraft and hovercraftU.K.

39U.K.Section 162 (British ships, aircraft and hovercraft) does not apply in relation to anything done before commencement.

Crown copyrightU.K.

40(1)Section 163 of this Act (general provisions as to Crown copyright) applies to an existing work if—U.K.

(a)section 39 of the 1956 Act applied to the work immediately before commencement, and

(b)the work is not one to which section 164, 165 or 166 applies (copyright in Acts, Measures and Bills and Parliamentary copyright: see paragraphs 42 and 43 below).

(2)Section 163 (1)(b) (first ownership of copyright) has effect subject to any agreement entered into before commencement under section 39(6) of the 1956 Act.

41(1)The following provisions have effect with respect to the duration of copyright in existing works to which section 163 (Crown copyright) applies.U.K.

The question which provision applies to a work shall be determined by reference to the facts immediately before commencement; and expressions used in this paragraph which were defined for the purposes of the 1956 Act have the same meaning as in that Act.

(2)Copyright in the following descriptions of work continues to subsist until the date on which it would have expired in accordance with the 1956 Act—

(a)published literary, dramatic or musical works;

(b)artistic works other than engravings or photographs;

(c)published engravings;

(d)published photographs and photographs taken before 1st June 1957;

(e)published sound recordings and sound recordings made before 1st June 1957;

(f)published films and films falling within section 13(3)(a) of the 1956 Act (films registered under former enactments relating to registration of films).

(3)Copyright in unpublished literary, dramatic or musical works continues to subsist until—

(a)the date on which copyright expires in accordance with section 163(3), or

(b)the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force,

whichever is the later.

(4)Copyright in the following descriptions of work continues to subsist until the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force—

(a)unpublished engravings;

(b)unpublished photographs taken on or after 1st June 1957.

(5)Copyright in a film or sound recording not falling within sub-paragraph (2) above continues to subsist until the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force, unless the film or recording is published before the end of that period, in which case copyright expires 50 years from the end of the calendar year in which it is published.

42(1)Section 164 (copyright in Acts and Measures) applies to existing Acts of Parliament and Measures of the General Synod of the Church of England.U.K.

(2)References in that section to Measures of the General Synod of the Church of England include Church Assembly Measures.

Parliamentary copyrightU.K.

43(1)Section 165 of this Act (general provisions as to Parliamentary copyright) applies to existing unpublished literary, dramatic, musical or artistic works, but does not otherwise apply to existing works.U.K.

(2)Section 166 (copyright in Parliamentary Bills) does not apply—

(a)to a public Bill which was introduced into Parliament and published before commencement,

(b)to a private Bill of which a copy was deposited in either House before commencement, or

(c)to a personal Bill which was given a First Reading in the House of Lords before commencement.

Copyright vesting in certain international organisationsU.K.

44(1)Any work in which immediately before commencement copyright subsisted by virtue of section 33 of the 1956 Act shall be deemed to satisfy the requirements of section 168(1); but otherwise section 168 does not apply to works made or, as the case may be, published before commencement.U.K.

(2)Copyright in any such work which is unpublished continues to subsist until the date on which it would have expired in accordance with the 1956 Act, or the end of the period of 50 years from the end of the calendar year in which the new copyright provisions come into force, whichever is the earlier.

Meaning of “publication”U.K.

45U.K.Section 175(3) (construction of building treated as equivalent to publication) applies only where the construction of the building began after commencement.

Meaning of “unauthorised”U.K.

46U.K.For the purposes of the application of the definition in section 178 (minor definitions) of the expression “unauthorised” in relation to things done before commencement—

(a)paragraph (a) applies in relation to things done before 1st June 1957 as if the reference to the licence of the copyright owner were a reference to his consent or acquiescence;

(b)paragraph (b) applies with the substitution for the words from “or, in a case” to the end of the words “or any person lawfully claiming under him”; and

(c)paragraph (c) shall be disregarded.

Section 189.

SCHEDULE 2U.K. Rights in performances: permitted acts

Modifications etc. (not altering text)

C141 + Sch. 2 continued (31.10.2003) by virtue of The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 33 (with regs. 31-40 ) +

IntroductoryU.K.

1(1)The provisions of this Schedule specify acts which may be done in relation to a performance or recording notwithstanding the rights conferred by [F851this Chapter]; they relate only to the question of infringement of those rights and do not affect any other right or obligation restricting the doing of any of the specified acts.U.K.

(2)No inference shall be drawn from the description of any act which may by virtue of this Schedule be done without infringing the rights conferred by [F851this Chapter] as to the scope of those rights.

(3)The provisions of this Schedule are to be construed independently of each other, so that the fact that an act does not fall within one provision does not mean that it is not covered by another provision.

Textual Amendments

F851 +Words in Sch. 2 para. 1(1)(2) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 9 (with reg. 8) +

[F852Making of temporary copiesU.K.

Textual Amendments

F852 + Sch. 2 para. 1A and cross-heading inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 8(2) (with regs. 31-40 ) +

1AU.K.The rights conferred by [F853this Chapter] are not infringed by the making of a temporary copy of a recording of a performance which is transient or incidental, which is an integral and essential part of a technological process and the sole purpose of which is to enable—

(a)a transmission of the recording in a network between third parties by an intermediary; or

(b)a lawful use of the recording;

and which has no independent economic significance.]

Textual Amendments

F853 + Words in Sch. 2 para. 1A substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

[F854Personal copies of recordings for private useU.K.

Textual Amendments

F854 +Sch. 2 para. 1B and cross-heading inserted (1.10.2014) by The Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (S.I. 2014/2361), regs. 1(1), 3(3) (with reg. 5) (but note that the amending S.I. was quashed with prospective effect by the High Court in the case of R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), 17 July 2015) +

1B.(1)The making of a copy of a recording of a performance by an individual does not infringe the rights conferred by this Chapter provided that the copy—U.K.

(a)is a copy of—

(i)the individual’s own copy of the recording, or

(ii)a personal copy of the recording made by the individual,

(b)is made for the individual’s private use, and

(c)is made for ends which are neither directly nor indirectly commercial.

(2)In this paragraph “the individual’s own copy” is a copy of a recording which—

(a)has been lawfully acquired by the individual on a permanent basis,

(b)is not an illicit recording, and

(c)has not been made under any provision of this Schedule which permits the making of a copy without infringing the rights conferred by this Chapter.

(3)In this paragraph a “personal copy” means a copy made under this paragraph.

(4)The rights conferred by this Chapter in a recording are infringed if an individual transfers a personal copy of the recording to another person (otherwise than on a private and temporary basis), except where the transfer is authorised by the rights owner.

(5)If the rights conferred by this Chapter are infringed as set out in sub-paragraph (4), a personal copy which has been transferred is for all purposes subsequently treated as an illicit recording.

(6)The rights conferred by this Chapter in a recording are also infringed if an individual, having made a personal copy of the recording, transfers the individual’s own copy of the recording to another person (otherwise than on a private and temporary basis) and, after that transfer and without the consent of the rights owner, retains any personal copy.

(7)If the rights conferred by this Chapter are infringed as set out in sub-paragraph (6), any retained personal copy is for all purposes subsequently treated as an illicit recording.

(8)To the extent that a term of a contract purports to prevent or restrict the making of a copy which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

(9)Expressions used but not defined in this paragraph have the same meaning as in section 28B.]

[F855Research and private studyU.K.

Textual Amendments

1C.(1)Fair dealing with a performance or a recording of a performance for the purposes of research for a non-commercial purpose does not infringe the rights conferred by this Chapter.U.K.

(2)Fair dealing with a performance or recording of a performance for the purposes of private study does not infringe the rights conferred by this Chapter.

(3)Copying of a recording by a person other than the researcher or student is not fair dealing if—

(a)in the case of a librarian, or a person acting on behalf of a librarian, that person does anything which is not permitted under paragraph 6F (copying by librarians: single copies of published recordings), or

(b)in any other case, the person doing the copying knows or has reason to believe that it will result in copies of substantially the same material being provided to more than one person at substantially the same time and for substantially the same purpose.

(4)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

(5)Expressions used in this paragraph have the same meaning as in section 29.

Copies for text and data analysis for non-commercial researchU.K.

1D.(1)The making of a copy of a recording of a performance by a person who has lawful access to the recording does not infringe any rights conferred by this Chapter provided that the copy is made in order that a person who has lawful access to the recording may carry out a computational analysis of anything recorded in the recording for the sole purpose of research for a non-commercial purpose.U.K.

(2)Where a copy of a recording has been made under this paragraph, the rights conferred by this Chapter are infringed if—

(a)the copy is transferred to any other person, except where the transfer is authorised by the rights owner, or

(b)the copy is used for any purpose other than that mentioned in sub-paragraph (1), except where the use is authorised by the rights owner.

(3)If a copy of a recording made under this paragraph is subsequently dealt with—

(a)it is to be treated as an illicit recording for the purposes of that dealing, and

(b)if that dealing infringes any right conferred by this Chapter, it is to be treated as an illicit recording for all subsequent purposes.

(4)To the extent that a term of a contract purports to prevent or restrict the making of a copy which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

(5)Expressions used in this paragraph have the same meaning as in section 29A.]

Criticism, reviews[F856, quotation] and news reportingU.K.

Textual Amendments

F856 +Word in Sch. 2 para. 2 heading inserted (1.10.2014) by S.I. 2014/2356 reg. 4(2) +

2[F857(1)Fair dealing with a performance or recording for the purpose of criticism or review, of that or another performance or recording, or of a work, does not infringe any of the rights conferred by [F858this Chapter] provided that the performance or recording has been made available to the public.U.K.

[F859(1ZA)The rights conferred by this Chapter in a performance or a recording of a performance are not infringed by the use of a quotation from the performance or recording (whether for criticism or review or otherwise) provided that—

(a)the performance or recording has been made available to the public,

(b)the use of the quotation is fair dealing with the performance or recording, and

(c)the extent of the quotation is no more than is required by the specific purpose for which it is used.]

(1A)Fair dealing with a performance or recording for the purpose of reporting current events does not infringe any of the rights conferred by [F858this Chapter].]

[F860(1B)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of sub-paragraph (1ZA), would not infringe any right conferred by this Chapter, that term is unenforceable.]

(2)Expressions used in this paragraph have the same meaning as in section 30.

Textual Amendments

F857 + Sch. 2 para. 2(1)(1A) substituted (31.10.2003) for Sch. 2 para. 2(1) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 10(2) (with regs. 31-40 ) +

F858 + Words in Sch. 2 para. 2(1)(1A) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

[F861Caricature, parody or pasticheU.K.

Textual Amendments

2A.(1)Fair dealing with a performance or a recording of a performance for the purposes of caricature, parody or pastiche does not infringe the rights conferred by this Chapter in the performance or recording.U.K.

(2)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

(3)Expressions used in this paragraph have the same meaning as in section 30A.]

Incidental inclusion of performance or recordingU.K.

3(1)The rights conferred by [F862this Chapter] are not infringed by the incidental inclusion of a performance or recording in a sound recording, film [F863or broadcast].U.K.

(2)Nor are those rights infringed by anything done in relation to copies of, or the playing, showing [F864or communication to the public] of, anything whose making was, by virtue of sub-paragraph (1), not an infringement of those rights.

(3)A performance or recording so far as it consists of music, or words spoken or sung with music, shall not be regarded as incidentally included in a sound recording [F863or broadcast] if it is deliberately included.

(4)Expressions used in this paragraph have the same meaning as in section 31.

Textual Amendments

F862 + Words in Sch. 2 para. 3(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

F863 + Words in Sch. 2 para. 3(1)(3) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(1) , Sch. 1 para. 3(1)(l)(m) (with regs. 31-40 ) +

F864 + Words in Sch. 2 para. 3(2) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(1) , Sch. 1 para. 6(2)(e) (with regs. 31-40 ) +

[F865Disabled persons: copies of recordings for personal useU.K.

Textual Amendments

F865 +Sch. 2 paras. 3A-3E and cross-headings inserted (1.6.2014) by The Copyright and Rights in Performances (Disability) Regulations 2014 (S.I. 2014/1384), regs. 1(1), 3 +

3A.(1)This paragraph applies if—U.K.

(a)a disabled person has lawful [F866access to] a copy of the whole or part of a recording of a performance, and

(b)the person’s disability prevents the person from enjoying the recording to [F867substantially] the same degree as a person who does not have that disability.

(2)The making of an accessible copy of the copy of the recording referred to in sub-paragraph (1)(a) does not infringe the rights conferred by this Chapter if—

(a)the copy is made by the disabled person [F868and] or by a person acting on behalf of the disabled person,

(b)the copy is made for the disabled person’s personal use, F869...

F870(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F871(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)The rights conferred by this Chapter are infringed by the transfer of an accessible copy of a recording made under this paragraph to any person other than—

(a)a person by or for whom an accessible copy of the recording may be made under this paragraph, or

(b)a person who intends to transfer the copy to a person falling within paragraph (a),

except where the transfer is authorised by the rights owner.

(5)An accessible copy of a recording made under this paragraph is to be treated for all purposes as an illicit recording if it is held by a person at a time when the person does not fall within sub-paragraph (4)(a) or (b).

(6)If an accessible copy of a recording made under this paragraph is subsequently dealt with—

(a)it is to be treated as an illicit recording for the purposes of that dealing, and

(b)if that dealing infringes any right conferred by this Chapter, it is to be treated as an illicit recording for all subsequent purposes.

Textual Amendments

Making [F872communicating, making available, distributing or lending] of accessible copies by authorised bodiesU.K.

Textual Amendments

3B.[F873(1)If—U.K.

(a)an authorised body has lawful access to the whole or part of a work which has been published or otherwise made available, and

(b)the body complies with sub-paragraph (1A),

the body may, without infringing the rights conferred by this Chapter, make, communicate, make available, distribute or lend accessible copies of the work on a non-profit basis for the personal use of disabled persons in the United Kingdom F874....

(1A)An authorised body complies with this sub-paragraph if it—

(a)distributes, communicates, makes available or lends accessible copies only to disabled persons or other authorised bodies,

(b)takes appropriate steps to discourage the unauthorised reproduction, distribution, communication to the public or making available to the public of accessible copies,

(c)demonstrates due care in, and maintains records of, its handling of works and accessible copies, and

(d)publishes and updates, on its website if appropriate, or through other online or offline channels, information on how it complies with the obligations in paragraphs (a), (b) and (c).]

F875(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F875(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)For the purposes of [F876sub-paragraph (1)], [F877communicate, make available, distribute or lend] “for the personal use of disabled persons” [F878includes to communicate, make available, distribute or lend] to a person acting on behalf of a disabled person.

F879(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F879(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F879(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)An authorised body which has made an accessible copy of a recording under this paragraph may [F880communicate, make available, distribute or lend] it to another authorised body [F881established in the United Kingdom F882...] which is entitled to make accessible copies of the recording under this paragraph for the purposes of enabling that other body to make accessible copies of the recording.

F883(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)If an accessible copy of a recording made under this paragraph is subsequently dealt with—

(a)it is to be treated as an illicit recording for the purposes of that dealing, and

(b)if that dealing infringes any right conferred by this Chapter, it is to be treated as an illicit recording for all subsequent purposes.

[F884(11)In this paragraph “dealt with” means sold or let for hire or offered or exposed for sale or hire.]

Textual Amendments

F873 +Sch. 2 para. 3B(1)(1A) substituted for Sch. 2 para. 3B(1) (11.10.2018) by The Copyright and Related Rights (Marrakesh Treaty etc.) (Amendment) Regulations 2018 (S.I. 2018/995), regs. 1(2), 13(3) +

Making [F885communicating, making available, distributing or lending] of intermediate copies by authorised bodiesU.K.

Textual Amendments

3C.(1)An authorised body which is entitled to make an accessible copy of a recording of a performance under paragraph 3B may, without infringing the rights conferred by this Chapter, make a copy of the recording (“an intermediate copy”) if this is necessary in order to make the accessible copy.U.K.

(2)An authorised body which has made an intermediate copy of a recording under this paragraph may [F886communicate, make available, distribute or lend it on a non-profit basis] it to another authorised body which is entitled to make accessible copies of the recording under paragraph 3B for the purposes of enabling that other body to make accessible copies of the recording.

(3)The rights conferred by this Chapter are infringed by the transfer of an intermediate copy made under this paragraph to a person other than another authorised body as permitted by sub-paragraph (2), except where the transfer is authorised by the rights owner.

F887(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Accessible and intermediate copies: recordsU.K.

[F8883D.(1)A person listed in sub-paragraph (2) may request an authorised body—U.K.

(a)making accessible copies under paragraph 3B, or

(b)making intermediate copies under paragraph 3C,

to provide the person with the information in sub-paragraph (4).

(2)On receipt of a request under sub-paragraph (1), an authorised body must provide the information to the person in an accessible way within in a reasonable time.

(3)The persons who may make a request under sub-paragraph (1) are—

(a)disabled person;

(b)another authorised body;

(c)rightholders.

(4)The information that must be provided by the authorised body is—

(a)the list of works for which it has accessible copies and the available formats, and

(b)the name and contact details of any authorised body established in [F889a] member State of the European Union from which, or to which, it has imported, exported or accessed an accessible copy.]

Textual Amendments

F888 +Sch. 2 paras. 3D(1)-(4) substituted for Sch. 2 para. 3D(1)(2) (11.10.2018) by The Copyright and Related Rights (Marrakesh Treaty etc.) (Amendment) Regulations 2018 (S.I. 2018/995), regs. 1(2), 15 +

Paragraphs 3A to 3D: interpretation and generalU.K.

3E.(1)This paragraph supplements paragraphs 3A to 3D and includes definitions.U.K.

(2)“Disabled person” means a person who has a physical or mental impairment which prevents the person from enjoying a recording of a performance to [F890substantially] the same degree as a person who does not have that impairment, and “disability” is to be construed accordingly.

(3)But a person is not to be regarded as disabled by reason only of an impairment of visual function which can be improved, [F891for example] by the use of corrective lenses, to a level that is normally acceptable for reading without a special level or kind of light.

(4)An “accessible copy” of a recording of a performance means a version of the recording which enables [F892disabled persons to access that version, including accessing it as feasibly and comfortably as a person who is not a disabled person].

(5)An accessible copy—

(a)may include facilities for navigating around the version of the recording, but

(b)must not include any changes to the recording which are not necessary to overcome the problems suffered by the disabled persons for whom the accessible copy is intended.

(6)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of paragraph 3A, 3B or 3C, would not infringe any right conferred by this Chapter, that term is unenforceable.

(7)“Authorised body” [F893has] the meaning given in section 31F, and other expressions used in paragraphs 3A to 3D but not defined in this paragraph have the same meaning as in sections 31A to 31BB.]

Textual Amendments

[F894Illustration for instructionU.K.

Textual Amendments

4.(1)Fair dealing with a performance or a recording of a performance for the sole purpose of illustration for instruction does not infringe the rights conferred by this Chapter provided that the dealing is—U.K.

(a)for a non-commercial purpose, and

(b)by a person giving or receiving instruction (or preparing for giving or receiving instruction).

(2)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

(3)Expressions used in this paragraph have the same meaning as in section 32.]

Playing or showing sound recording, film, [F895or broadcast]at educational establishmentU.K.

Textual Amendments

F895 + Words in heading preceding Sch. 2 para. 5 substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(1) , Sch. 1 para. 2(2) (with regs. 31-40 ) +

5(1)The playing or showing of a sound recording, film [F896or broadcast] at an educational establishment for the purposes of instruction before an audience consisting of teachers and pupils at the establishment and other persons directly connected with the activities of the establishment is not a playing or showing of a performance in public for the purposes of infringement of the rights conferred by [F897this Chapter] .U.K.

(2)A person is not for this purpose directly connected with the activities of the educational establishment simply because he is the parent of a pupil at the establishment.

(3)Expressions used in this paragraph have the same meaning as in section 34 and any provision made under section 174(2) with respect to the application of that section also applies for the purposes of this paragraph.

Textual Amendments

F896 + Words in Sch. 2 para. 5(1) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(1) , Sch. 1 para. 3(1)(n) (with regs. 31-40 ) +

F897 + Words in Sch. 2 para. 5(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

[F898Recording by educational establishments of broadcastsU.K.

Textual Amendments

F898 +Sch. 2 paras. 6, 6ZA and cross-headings substituted (1.6.2014) for Sch. 2 para. 6 and cross-heading by The Copyright and Rights in Performances (Research, Education, Libraries and Archives) Regulations 2014 (S.I. 2014/1372), regs. 1, 4(5) +

6.(1)A recording of a broadcast, or a copy of such a recording, may be made by or on behalf of an educational establishment for the educational purposes of that establishment without infringing any of the rights conferred by this Chapter in relation to any performance or recording included in it, provided that the educational purposes are non-commercial.U.K.

(2)The rights conferred by this Chapter are not infringed where a recording of a broadcast or a copy of such a recording, made under sub-paragraph (1), is communicated by or on behalf of the educational establishment to its pupils or staff for the non-commercial educational purposes of that establishment.

(3)Sub-paragraph (2) only applies to a communication received outside the premises of the establishment if that communication is made by means of a secure electronic network accessible only by the establishment’s pupils and staff.

(4)Acts which would otherwise be permitted by this paragraph are not permitted if, or to the extent that, licences are available authorising the acts in question and the educational establishment responsible for those acts knew or ought to have been aware of that fact.

(5)If a recording made under this paragraph is subsequently dealt with—

(a)it is to be treated as an illicit recording for the purposes of that dealing, and

(b)if that dealing infringes any right conferred by this Chapter, it is to be treated as an illicit recording for all subsequent purposes.

(6)In this paragraph “dealt with” means—

(a)sold or let for hire,

(b)offered or exposed for sale or hire, or

(c)communicated otherwise than as permitted by sub-paragraph (2).

(7)Expressions used in this paragraph (other than “dealt with”) have the same meaning as in section 35 and any provision made under section 174(2) with respect to the application of that section also applies for the purposes of this paragraph.

Copying and use of extracts of recordings by educational establishmentsU.K.

6ZA.(1)The copying of extracts of a recording of a performance by or on behalf of an educational establishment does not infringe any of the rights conferred by this Chapter in the recording provided that the copy is made for the purposes of instruction for a non-commercial purpose.U.K.

(2)The rights conferred by this Chapter are not infringed where an extract of a recording of a performance, made under sub-paragraph (1), is communicated by or on behalf of the educational establishment to its pupils or staff for the purposes of instruction for a non-commercial purpose.

(3)Sub-paragraph (2) only applies to a communication received outside the premises of the establishment if that communication is made by means of a secure electronic network accessible only by the establishment’s pupils and staff.

(4)Not more than 5% of a recording may be copied under this paragraph by or on behalf of an educational establishment in any period of 12 months.

(5)Acts which would otherwise be permitted by this paragraph are not permitted if, or to the extent that, licences are available authorising the acts in question and the educational establishment responsible for those acts knew or ought to have been aware of that fact.

(6)The terms of a licence granted to an educational establishment authorising acts permitted by this paragraph are of no effect so far as they purport to restrict the proportion of a recording which may be copied (whether on payment or free of charge) to less than that which would be permitted by this paragraph.

(7)If a recording made under this paragraph is subsequently dealt with—

(a)it is to be treated as an illicit recording for the purposes of that dealing, and

(b)if that dealing infringes any right conferred by this Chapter, it is to be treated as an illicit recording for all subsequent purposes.

(8)In this paragraph “dealt with” means—

(a)sold or let for hire,

(b)offered or exposed for sale or hire, or

(c)communicated otherwise than as permitted by sub-paragraph (2).

(9)Expressions used in this paragraph (other than “dealt with”) have the same meaning as in section 36 and any provision made under section 174(2) with respect to the application of that section also applies for the purposes of this paragraph.]

F899 [ Lending of copies by educational establishments ] U.K.

Textual Amendments

F899 + Sch. 2 para. 6A and crossheading inserted (1.12.1996) by S.I. 1996/2967 , reg. 20(3) (with Pt. III ) +

[F9006A(1)The rights conferred by [F901this Chapter] are not infringed by the lending of copies of a recording of a performance by an educational establishment.U.K.

(2)Expressions used in this paragraph have the same meaning as in section 36A; and any provision with respect to the application of that section made under section 174(2) (instruction given elsewhere than an educational establishment) applies also for the purposes of this paragraph.]

Textual Amendments

F900 + Sch. 2 para. 6A inserted (1.12.1996) by S.I. 1996/2967 , reg. 20(3) (with Pt. III ) +

F901 + Words in Sch. 2 para. 6A(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

F902 [ Lending of copies by libraries or archives ] U.K.

Textual Amendments

F902 + Sch. 2 para. 6B and crossheading inserted (1.12.1996) by S.I. 1996/2967 , reg. 20(3) (with Pt. III ) +

[F903 6B (1) The rights conferred by [F904 this Chapter ] are not infringed by the lending of copies of a recording of a performance by a F905 ... library or archive (other than a public library) which is not conducted for profit. U.K.

[F906(A1)The rights conferred by this Chapter are not infringed by the following acts by a public library in relation to a book within the public lending right scheme—

(a)lending the book;

(b)in relation to an audio-book or e-book, copying or issuing a copy of the book as an act incidental to lending it.

(A2)Expressions used in sub-paragraph (A1) have the same meaning as in section 40A(1).]

F907( 2 ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ].

Textual Amendments

F903 +Sch. 2 para. 6B inserted (1.12.1996) by S.I. 1996/2967, reg. 20(3) (with Pt. III) +

F904 +Words in Sch. 2 para. 6B(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 9 (with reg. 8) +

F906 +Sch. 2 para. 6B(A1)(A2) inserted (30.6.2014) by Digital Economy Act 2010 (c. 24), ss. 43(8)(a), 47(3)(d); S.I. 2014/1659, art. 2 +

Modifications etc. (not altering text)

C142 +Sch. 2 para. 6B modified (1.12.1996) by S.I. 1996/2967, reg. 35 (with Pt. III) +

[F908 Libraries and educational establishments etc : making recordings of performances available through dedicated terminals U.K.

Textual Amendments

6C.(1)The rights conferred by this Chapter in a recording of a performance are not infringed by an institution specified in sub-paragraph (2) communicating the recording to the public or making it available to the public by means of a dedicated terminal on its premises, if the conditions in sub-paragraph (3) are met.U.K.

(2)The institutions are—

(a)a library,

(b)an archive,

(c)a museum, and

(d)an educational establishment.

(3)The conditions are that the recording or a copy of the recording—

(a)has been lawfully acquired by the institution,

(b)is communicated or made available to individual members of the public for the purposes of research or private study, and

(c)is communicated or made available in compliance with any purchase or licensing terms to which the recording is subject.

Copying by librarians: supply of single copies to other librariesU.K.

6D.(1)A librarian may, if the conditions in sub-paragraph (2) are met, make a single copy of the whole or part of a published recording of a performance and supply it to another library, without infringing any rights conferred by this Chapter in the recording.U.K.

(2)The conditions are—

(a)the copy is supplied in response to a request from a library which is not conducted for profit, and

(b)at the time of making the copy the librarian does not know, or could not reasonably find out, the name and address of a person entitled to authorise the making of a copy of the recording.

(3)Where a library makes a charge for supplying a copy under this paragraph, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(4)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

Copying by librarians etc : replacement copies of recordings U.K.

6E.(1)A librarian, archivist or curator of a library, archive or museum may, without infringing any rights conferred by this Chapter, make a copy of a recording of a performance in that institution’s permanent collection—U.K.

(a)in order to preserve or replace that recording in that collection, or

(b)where a recording in the permanent collection of another library, archive or museum has been lost, destroyed or damaged, in order to replace the recording in the collection of that other library, archive or museum,

provided that the conditions in sub-paragraphs (2) and (3) are met.

(2)The first condition is that the recording is—

(a)included in the part of the collection kept wholly or mainly for the purposes of reference on the institution’s premises,

(b)included in a part of the collection not accessible to the public, or

(c)available on loan only to other libraries, archives or museums.

(3)The second condition is that it is not reasonably practicable to purchase a copy of the recording to achieve either of the purposes mentioned in sub-paragraph (1).

(4)The reference in sub-paragraph (1)(b) to a library, archive or museum is to a library, archive or museum which is not conducted for profit.

(5)Where an institution makes a charge for supplying a copy to another library, archive or museum under sub-paragraph (1)(b), the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(6)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

Copying by librarians: single copies of published recordingsU.K.

6F.(1)A librarian of a library which is not conducted for profit may, if the conditions in sub-paragraph (2) are met, make and supply a single copy of a reasonable proportion of a published recording without infringing any of the rights in the recording conferred by this Chapter.U.K.

(2)The conditions are—

(a)the copy is supplied in response to a request from a person who has provided the librarian with a declaration in writing which includes the information set out in sub-paragraph (3), and

(b)the librarian is not aware that the declaration is false in a material particular.

(3)The information which must be included in the declaration is—

(a)the name of the person who requires the copy and the material which that person requires,

(b)a statement that the person has not previously been supplied with a copy of that material by any library,

(c)a statement that the person requires the copy for the purposes of research for a non-commercial purpose or private study, will use it only for those purposes and will not supply the copy to any other person, and

(d)a statement that to the best of the person’s knowledge, no other person with whom the person works or studies has made, or intends to make, at or about the same time as the person’s request, a request for substantially the same material for substantially the same purpose.

(4)Where a library makes a charge for supplying a copy under this paragraph, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(5)Where a person (“P”) makes a declaration under this paragraph that is false in a material particular and is supplied with a copy of a recording which would have been an illicit recording if made by P—

(a)P is liable for infringement of the rights conferred by this Chapter as if P had made the copy, and

(b)the copy supplied to P is to be treated as an illicit recording for all purposes.

(6)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

Copying by librarians or archivists: single copies of unpublished recordingsU.K.

6G.(1)A librarian or archivist may make and supply a single copy of the whole or part of a recording without infringing any of the rights conferred by this Chapter in the recording, provided that—U.K.

(a)the copy is supplied in response to a request from a person who has provided the librarian or archivist with a declaration in writing which includes the information set out in sub-paragraph (2), and

(b)the librarian or archivist is not aware that the declaration is false in a material particular.

(2)The information which must be included in the declaration is—

(a)the name of the person who requires the copy and the material which that person requires,

(b)a statement that the person has not previously been supplied with a copy of that material by any library or archive, and

(c)a statement that the person requires the copy for the purposes of research for a non-commercial purpose or private study, will use it only for those purposes and will not supply the copy to any other person.

(3)But the rights conferred by this Chapter are infringed if—

(a)the recording had been published or communicated to the public before the date it was deposited in the library or archive, or

(b)the rights owner has prohibited the copying of the recording,

and at the time of making the copy the librarian or archivist is, or ought to be, aware of that fact.

(4)Where a library or archive makes a charge for supplying a copy under this paragraph, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(5)Where a person (“P”) makes a declaration under this paragraph that is false in a material particular and is supplied with a copy of a recording which would have been an illicit recording if made by P—

(a)P is liable for infringement of the rights conferred by this Chapter as if P had made the copy, and

(b)the copy supplied to P is to be treated as an illicit recording for all purposes.

Paragraphs 6B to 6G: interpretationU.K.

6H.U.K.Expressions used in paragraphs 6B to 6G have the same meaning as in sections 40A to 43.]

[F909Certain permitted uses of orphan worksU.K.

Textual Amendments

6I.(1)The rights conferred by this Chapter are not infringed by a relevant body in the circumstances set out in paragraph 1(2) of Schedule ZA1 (subject to paragraph 6 of that Schedule).U.K.

(2)“Relevant body” has the meaning given by that Schedule.]

Copy of work required to be made as condition of exportU.K.

7(1)If an article of cultural or historical importance or interest cannot lawfully be exported from the United Kingdom unless a copy of it is made and deposited in an appropriate library or archive, it is not an infringement of any right conferred by [F910this Chapter] to make that copy.U.K.

(2)Expressions used in this paragraph have the same meaning as in section 44.

Textual Amendments

F910 + Words in Sch. 2 para. 7(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

Parliamentary and judicial proceedingsU.K.

8(1)The rights conferred by [F911this Chapter] are not infringed by anything done for the purposes of parliamentary or judicial proceedings or for the purpose of reporting such proceedings.U.K.

(2)Expressions used in this paragraph have the same meaning as in section 45.

Textual Amendments

F911 + Words in Sch. 2 para. 8(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

Royal Commissions and statutory inquiriesU.K.

9(1)The rights conferred by [F912this Chapter] are not infringed by anything done for the purposes of the proceedings of a Royal Commission or statutory inquiry or for the purpose of reporting any such proceedings held in public.U.K.

(2)Expressions used in this paragraph have the same meaning as in section 46.

Textual Amendments

F912 + Words in Sch. 2 para. 9(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

Public recordsU.K.

10(1)Material which is comprised in public records within the meaning of the M58Public Records Act 1958, the M59Public Records (Scotland) Act 1937 or the M60Public Records Act (Northern Ireland) 1923 [F913, or in Welsh public records (as defined in [F914the Government of Wales Act 2006]), ] which are open to public inspection in pursuance of that Act, may be copied, and a copy may be supplied to any person, by or with the authority of any officer appointed under that Act, without infringing any right conferred by [F915this Chapter].U.K.

(2)Expressions used in this paragraph have the same meaning as in section 49.

Textual Amendments

F913 + Words in Sch. 2 para. 10(1) inserted (1.4.1999) by 1998 c. 38 , s. 125 , Sch. 12 para. 29 (with ss. 139(2) , 143(2) ); S.I. 1999/782 , art. 2 +

F914 + Words in Sch. 2 para. 10(1) substituted by Government of Wales Act 2006 (c. 32) , s. 160(1) , Sch. 10 para. 32 (with Sch. 11 para. 22 ), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(1)(4)(5) of the amending Act. +

F915 + Words in Sch. 2 para. 10(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

Marginal Citations

Acts done under statutory authorityU.K.

11(1)Where the doing of a particular act is specifically authorised by an Act of Parliament, whenever passed, then, unless the Act provides otherwise, the doing of that act does not infringe the rights conferred by [F916this Chapter] .U.K.

(2)Sub-paragraph (1) applies in relation to an enactment contained in Northern Ireland legislation as it applies to an Act of Parliament.

(3)Nothing in this paragraph shall be construed as excluding any defence of statutory authority otherwise available under or by virtue of any enactment.

(4)Expressions used in this paragraph have the same meaning as in section 50.

Textual Amendments

F916 + Words in Sch. 2 para. 11(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

Transfer of copies of works in electronic formU.K.

12(1)This paragraph applies where a recording of a performance in electronic form has been purchased on terms which, expressly or impliedly or by virtue of any rule of law, allow the purchaser to make further recordings in connection with his use of the recording.U.K.

(2)If there are no express terms—

(a)prohibiting the transfer of the recording by the purchaser, imposing obligations which continue after a transfer, prohibiting the assignment of any consent or terminating any consent on a transfer, or

(b)providing for the terms on which a transferee may do the things which the purchaser was permitted to do,

anything which the purchaser was allowed to do may also be done by a transferee without infringement of the rights conferred by [F917this Chapter], but any recording made by the purchaser which is not also transferred shall be treated as an illicit recording for all purposes after the transfer.

(3)The same applies where the original purchased recording is no longer usable and what is transferred is a further copy used in its place.

(4)The above provisions also apply on a subsequent transfer, with the substitution for references in sub-paragraph (2) to the purchaser of references to the subsequent transferor.

(5)This paragraph does not apply in relation to a recording purchased before the commencement of [F918this Chapter].

(6)Expressions used in this paragraph have the same meaning as in section 56.

Textual Amendments

F917 + Words in Sch. 2 para. 12(2) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 8 (with reg. 8 ) +

F918 + Words in Sch. 2 para. 12(5) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

Use of recordings of spoken works in certain casesU.K.

13(1)Where a recording of the reading or recitation of a literary work is made for the purpose—U.K.

(a)of reporting current events, or

(b)of [F919communicating to the public] the whole or part of the reading or recitation,

it is not an infringement of the rights conferred by [F920this Chapter] to use the recording (or to copy the recording and use the copy) for that purpose, provided the following conditions are met.

(2)The conditions are that—

(a)the recording is a direct recording of the reading or recitation and is not taken from a previous recording or from a broadcast F921. . . ;

(b)the making of the recording was not prohibited by or on behalf of the person giving the reading or recitation;

(c)the use made of the recording is not of a kind prohibited by or on behalf of that person before the recording was made; and

(d)the use is by or with the authority of a person who is lawfully in possession of the recording.

(3)Expressions used in this paragraph have the same meaning as in section 58.

Textual Amendments

F919 + Words in Sch. 2 para. 12 substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(1) , Sch. 1 para. 12(b) (with regs. 31-40 ) +

F920 + Words in Sch. 2 para. 13(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

F921 + Words in Sch. 2 para. 13(2)(a) repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(2) , Sch. 2 (with regs. 31-40 ) +

Recordings of folksongsU.K.

14(1)A recording of a performance of a song may be made for the purpose of including it in an archive maintained by a [F922body not established or conducted for profit] without infringing any of the rights conferred by [F923this Chapter] , provided the conditions in sub-paragraph (2) below are met.U.K.

(2)The conditions are that—

(a)the words are unpublished and of unknown authorship at the time the recording is made,

(b)the making of the recording does not infringe any copyright, and

(c)its making is not prohibited by any performer.

[F924(3)A single copy of a recording made in reliance on sub-paragraph (1) and included in an archive referred to in that sub-paragraph may be made and supplied by the archivist without infringing any right conferred by this Chapter, provided that—

(a)the copy is supplied in response to a request from a person who has provided the archivist with a declaration in writing which includes the information set out in sub-paragraph (4), and

(b)the archivist is not aware that the declaration is false in a material particular.

(4)The information which must be included in the declaration is—

(a)the name of the person who requires the copy and the recording which is the subject of the request,

(b)a statement that the person has not previously been supplied with a copy of that recording by any archivist, and

(c)a statement that the person requires the copy for the purposes of research for a non-commercial purpose or private study, will use it only for those purposes and will not supply the copy to any other person.

(5)Where an archive makes a charge for supplying a copy under this paragraph, the sum charged must be calculated by reference to the costs attributable to the production of the copy.

(6)Where a person (“P”) makes a declaration under this paragraph that is false in a material particular and is supplied with a copy of a recording which would have been an illicit recording if made by P—

(a)P is liable for infringement of the rights conferred by this Chapter as if P had made the copy, and

(b)the copy supplied to P is to be treated as an illicit recording for all purposes.

(7)In this paragraph references to an archivist include a person acting on behalf of an archivist.

(8)Expressions used in this paragraph have the same meaning as in section 61.]

Textual Amendments

F923 + Words in Sch. 2 para. 14(1)(3) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

F925 [ Lending of certain recordings ] U.K.

Textual Amendments

F925 + Sch. 2 para. 14A and crossheading inserted (1.12.1996) by S.I. 1996/2967 , reg. 20(3) (with Pt. III ) +

F92614A(1)The Secretary of State may by order provide that in such cases as may be specified in the order the lending to the public of copies of films or sound recordings shall be treated as licensed by the performer subject only to the payment of such reasonable royalty or other payment as may be agreed or determined in default of agreement by the Copyright Tribunal.U.K.

(2)No such order shall apply if, or to the extent that, there is a licensing scheme certified for the purposes of this paragraph under paragraph 16 of Schedule 2A providing for the grant of licences.

(3)An order may make different provision for different cases and may specify cases by reference to any factor relating to the work, the copies lent, the lender or the circumstances of the lending.

(4)An order shall be made by statutory instrument; and no order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(5)Nothing in this section affects any liability under section 184(1)(b) (secondary infringement: possessing or dealing with illicit recording) in respect of the lending of illicit recordings.

(6)Expressions used in this paragraph have the same meaning as in section 66.

Textual Amendments

F926 + Sch. 2 para. 14A inserted (1.12.1996) by S.I. 1996/2967 , reg. 20(3) (with Pt. III ) +

Playing of sound recordings for purposes of club, society, &cU.K.

15U.K.F927. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Incidental recording for purposes of broadcast F928. . . U.K.

Textual Amendments

F928 + Words in heading preceding Sch. 2 para. 16 repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(2) , Sch. 2 (with regs. 31-40 ) +

16(1)A person who proposes to broadcast a recording of a performance F929. . . in circumstances not infringing the rights conferred by [F930this Chapter] shall be treated as having consent for the purposes of [F931this Chapter] for the making of a further recording for the purposes of the broadcast F929. . . .U.K.

(2)That consent is subject to the condition that the further recording—

(a)shall not be used for any other purpose, and

(b)shall be destroyed within 28 days of being first used for broadcasting the performance F929. . . .

(3)A recording made in accordance with this paragraph shall be treated as an illicit recording—

(a)for the purposes of any use in breach of the condition mentioned in sub-paragraph (2)(a), and

(b)for all purposes after that condition or the condition mentioned in sub-paragraph (2)(b) is broken.

(4)Expressions used in this paragraph have the same meaning as in section 68.

Textual Amendments

F929 + Words in Sch. 2 para. 16(1)(2)(b) repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(2) , Sch. 2 (with regs. 31-40 ) +

F930 + Words in Sch. 2 para. 16(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

F931 + Words in Sch. 2 para. 16(1) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 10 (with reg. 8 ) +

Recordings for purposes of supervision and control of broadcasts and [F932other services]U.K.

Textual Amendments

F932 + Words in heading preceding Sch. 2 para. 17 substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(1) , Sch. 1 para. 2(1) (with regs. 31-40 ) +

17(1)The rights conferred by [F933this Chapter] are not infringed by the making or use by the British Broadcasting Corporation, for the purpose of maintaining supervision and control over programmes broadcast by them [F934or included in any on-demand programme service provided by them], of recordings of those programmes.U.K.

[F935(2)The rights conferred by [F933this Chapter] are not infringed by anything done in pursuance of—

[F936(a)section 167(1) of the Broadcasting Act 1990, section 115(4) or (6) or 117 of the Broadcasting Act 1996 or paragraph 20 of Schedule 12 to the Communications Act 2003;]

(b) a condition which, [F937 by virtue of section 334(1) of the Communications Act 2003 ] , is included in a licence granted under Part I or III of that Act or Part I or II of the Broadcasting Act 1996; F938 . . .

(c) a direction given under section 109(2) of the Broadcasting Act 1990 (power of [F939OFCOM] to require production of recordings etc ).

[F940(d)section 334(3) [F941, 368O(1) or (3)] of the Communications Act 2003.]

[F942(3) The rights conferred by [F933 this Chapter ] are not infringed by the use by OFCOM in connection with the performance of any of their functions under the Broadcasting Act 1990, the Broadcasting Act 1996 or the Communications Act 2003 of—

(a)any recording, script or transcript which is provided to them under or by virtue of any provision of those Acts; or

(b)any existing material which is transferred to them by a scheme made under section 30 of the Communications Act 2003.]]

(4)In subsection (3), “existing material” means—

(a)any recording, script or transcript which was provided to the Independent Television Commission or the Radio Authority under or by virtue of any provision of the Broadcasting Act 1990 or the Broadcasting Act 1996; and

(b)any recording or transcript which was provided to the Broadcasting Standards Commission under section 115(4) or (6) or 116(5) of the Broadcasting Act 1996.

[F943(5)Copyright is not infringed by the use by an appropriate regulatory authority designated under section 368B of the Communications Act 2003, in connection with the performance of any of their functions under that Act, of any recording, script or transcript which is provided to them under or by virtue of any provision of that Act.

(6) In this section “ on-demand programme service ” has the same meaning as in the Communications Act 2003 (see section 368A of that Act). ]

Textual Amendments

F933 + Words in Sch. 2 para. 17(1)(2)(3) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

F934 + Words in Sch. 2 para. 17(1) inserted (19.12.2009) by The Audiovisual Media Services Regulations 2009 (S.I. 2009/2979) , reg. 12(3)(a) +

F935 + Sch. 2 para. 17(2)(3) substituted (1.10.1996 for certain purposes and 1.4.1997 otherwise) by 1996 c. 55 , s. 148(1) , Sch. 10 Pt. III para. 32 (with s. 43(6) ); S.I. 1996/2120 , art. 4(1) , Sch. 1 ; S.I. 1997/1005 , art. 4 +

F936 + Sch. 2 para. 17(2)(a) substituted (29.12.2003) by Communications Act 2003 (c. 21) , ss. 406 , 411 , Sch. 17 para. 93(2)(a) (with Sch. 18 ); S.I. 2003/3142 , art. 3 , Sch. 1 (with art. 11 ) +

F937 + Words in Sch. 2 para. 17(2)(b) substituted (29.12.2003) by Communications Act 2003 (c. 21) , ss. 406 , 411 , Sch. 17 para. 93(2)(b) (with Sch. 18 ); S.I. 2003/3142 , art. 3 , Sch. 1 (with art. 11 ) +

F938 + Word in Sch. 2 para. 17(2)(b) repealed (29.12.2003) by Communications Act 2003 (c. 21) , ss. 406 , 411 , Sch. 19(1) (with Sch. 18 , Sch. 19(1) Note 1 ); S.I. 2003/3142 , art. 3 , Sch. 1 (with art. 11 ) +

F939 + Word in Sch. 2 para. 17(2)(c) substituted (29.12.2003) by Communications Act 2003 (c. 21) , ss. 406 , 411 , Sch. 17 para. 93(2)(c) (with Sch. 18 ); S.I. 2003/3142 , art. 3 , Sch. 1 (with art. 11 ) +

F940 + Sch. 2 para. 17(2)(d) inserted (29.12.2003) by Communications Act 2003 (c. 21) , ss. 406 , 411 , Sch. 17 para. 93(2)(d) (with Sch. 18 ); S.I. 2003/3142 , art. 3 , Sch. 1 (with art. 11 ) +

F941 + Words in Sch. 2 para. 17(2)(d) inserted (19.12.2009) by The Audiovisual Media Services Regulations 2009 (S.I. 2009/2979) , reg. 12(3)(b) +

F942 + Sch. 2 para. 17(3)(4) substituted (29.12.2003) for Sch. 2 para. 17(3) by Communications Act 2003 (c. 21) , ss. 406 , 411 , Sch. 17 para. 93(3) (with Sch. 18 ); S.I. 2003/3142 , art. 3 , Sch. 1 (with art. 11 ) +

F943 + Sch. 2 para. 17(5)(6) inserted (19.12.2009) by The Audiovisual Media Services Regulations 2009 (S.I. 2009/2979) , reg. 121(3)(c) +

Modifications etc. (not altering text)

[F944Recording for the purposes of time-shiftingU.K.

Textual Amendments

F944 +Sch. 2 para. 17A and preceding heading inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 19(3) (with regs. 31-40) +

17A(1)The making in domestic premises for private and domestic use of a recording of a broadcast solely for the purpose of enabling it to be viewed or listened to at a more convenient time does not infringe any right conferred by [F945this Chapter] in relation to a performance or recording included in the broadcast.U.K.

(2)Where a recording which would otherwise be an illicit recording is made in accordance with this paragraph but is subsequently dealt with—

(a)it shall be treated as an illicit recording for the purposes of that dealing; and

(b)if that dealing infringes any right conferred by [F945this Chapter] , it shall be treated as an illicit recording for all subsequent purposes.

(3) In sub-paragraph (2), “ dealt with ” means sold or let for hire, offered or exposed for sale or hire or communicated to the public.

(4)Expressions used in this paragraph have the same meaning as in section 70.]

Textual Amendments

F945 + Words in Sch. 2 para. 17A(1)(2)(b) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

[F946Photographs of broadcastsU.K.

Textual Amendments

F946 +Sch. 2 para. 17B and preceding heading inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 20(2) (with regs. 31-40) +

17B(1)The making in domestic premises for private and domestic use of a photograph of the whole or any part of an image forming part of a broadcast, or a copy of such a photograph, does not infringe any right conferred by [F947this Chapter] in relation to a performance or recording included in the broadcast.U.K.

(2)Where a recording which would otherwise be an illicit recording is made in accordance with this paragraph but is subsequently dealt with—

(a)it shall be treated as an illicit recording for the purposes of that dealing; and

(b)if that dealing infringes any right conferred by [F947this Chapter] , it shall be treated as an illicit recording for all subsequent purposes.

(3) In sub-paragraph (2), “ dealt with ” means sold or let for hire, offered or exposed for sale or hire or communicated to the public.

(4)Expressions used in this paragraph have the same meaning as in section 71.]

Textual Amendments

F947 + Words in Sch. 2 para. 17B(1)(2)(b) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

Free public showing or playing of broadcast F948. . . U.K.

Textual Amendments

F948 + Words in heading preceding Sch.2 para. 18 repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(2) , Sch. 2 (with regs. 31-40 ) +

18(1)The showing or playing in public of a broadcast F949. . . to an audience who have not paid for admission to the place where the broadcast F949. . . is to be seen or heard does not infringe any right conferred by [F950this Chapter] in relation to a performance or recording included in—U.K.

(a)the broadcast F949. . . , or

(b)any sound recording [F951(except so far as it is an excepted sound recording)] or film which is played or shown in public by reception of the broadcast F949. . . .

[F952(1A)The showing or playing in public of a broadcast to an audience who have not paid for admission to the place where the broadcast is to be seen or heard does not infringe any right conferred by [F950this Chapter] in relation to a performance or recording included in any excepted sound recording which is played in public by reception of the broadcast, if the playing or showing of that broadcast in public—

(a)F953 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)is necessary for the purposes of—

(i)repairing equipment for the reception of broadcasts;

(ii)demonstrating that a repair to such equipment has been carried out; or

(iii)demonstrating such equipment which is being sold or let for hire or offered or exposed for sale or hire.]

(2)The audience shall be treated as having paid for admission to a place—

(a)if they have paid for admission to a place of which that place forms part; or

(b)if goods or services are supplied at that place (or a place of which it forms part)—

(i)at prices which are substantially attributable to the facilities afforded for seeing or hearing the broadcast F954. . . , or

(ii)at prices exceeding those usually charged there and which are partly attributable to those facilities.

(3)The following shall not be regarded as having paid for admission to a place—

(a)persons admitted as residents or inmates of the place;

(b)persons admitted as members of a club or society where the payment is only for membership of the club or society and the provision of facilities for seeing or hearing broadcasts F954. . . is only incidental to the main purposes of the club or society.

(4)Where the making of the broadcast F954. . . was an infringement of the rights conferred by [F950this Chapter] in relation to a performance or recording, the fact that it was heard or seen in public by the reception of the broadcast F954. . . shall be taken into account in assessing the damages for that infringement.

(5)Expressions used in this paragraph have the same meaning as in section 72.

Textual Amendments

F949 + Words in Sch. 2 para. 18(1) repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(2) , Sch. 2 (with regs. 31-40 ) +

F950 + Words in Sch. 2 para. 18(1)(1A)(4) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18) , reg. 2 , Sch. para. 9 (with reg. 8 ) +

F951 + Words in Sch. 2 para. 18(1)(b) inserted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 21(2)(a) (with regs. 31-40 ) +

F954 + Words in Sch. 2 para. 18(2)(b)(i)(3)(4) repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(2) , Sch. 2 (with regs. 31-40 ) +

[F955Reception and re-transmission of [F956wireless broadcast by cable]]U.K.

Textual Amendments

F955 + Crossheading substituted (1.10.1996) by 1996 c. 55 , s. 138 , Sch. 9 para. 5 (with s. 43(6) ); S.I. 1996/2120 , art. 4(1) , Sch. 1 +

F956 + Words in heading preceding Sch. 2 para. 19 substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I.2003/2498) , reg. 22(3)(a) (with regs. 31-40 ) +

F95719U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F95819AU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Provision of sub-titled copies of broadcast F959. . . U.K.

Textual Amendments

F959 + Words in heading preceding Sch. 2 para. 20 repealed (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498) , reg. 2(2) , Sch. 2 (with regs. 31-40 ) +

F96020U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F961Recording of broadcast for archival purposesU.K.

Textual Amendments

21.(1)A recording of a broadcast or a copy of such a recording may be made for the purpose of being placed in an archive maintained by a body which is not established or conducted for profit without infringing any right conferred by this Chapter in relation to a performance or recording included in the broadcast.U.K.

(2)To the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this paragraph, would not infringe any right conferred by this Chapter, that term is unenforceable.

(3)Expressions used in this paragraph have the same meaning as in section 75.]

F962[SCHEDULE 2AU.K. LICENSING OF PERFORMERS’ F963 ... RIGHTS

Textual Amendments

F962 +Sch. 2A inserted (1.12.1996) by S.I. 1996/2967, reg. 22(2) (with Pt. III) +

F963 +Word in Sch. 2A heading omitted (25.4.2013) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(1), Sch. 22 para. 3 +

Licensing schemes and licensing bodiesU.K.

1(1)In [F964this Chapter] a “licensing scheme” means a scheme setting out—U.K.

(a)the classes of case in which the operator of the scheme, or the person on whose behalf he acts, is willing to grant performers’ property right licences, and

(b)the terms on which licences would be granted in those classes of case;

and for this purpose a “scheme” includes anything in the nature of a scheme, whether described as a scheme or as a tariff or by any other name.

(2)In [F964this Chapter] a “licensing body” means a society or other organisation which has as its main object, or one of its main objects, the negotiating or granting, whether as owner or prospective owner of a performer’s property rights or as agent for him, of performers’ property right licences, and whose objects include the granting of licences covering the performances of more than one performer.

(3)In this paragraph “performers’ property right licences” means licences to do, or authorise the doing of, any of the things for which consent is required under section 182A, [F965182B, 182C or 182CA] .

(4)References in [F966this Chapter] to licences or licensing schemes covering the performances of more than one performer do not include licences or schemes covering only—

(a)performances recorded in a single recording,

(b)performances recorded in more than one recording where—

(i)the performers giving the performances are the same, or

(ii)the recordings are made by, or by employees of or commissioned by, a single individual, firm, company or group of companies. For purpose a group of companies means a holding company and its subsidiaries within the meaning of [F967section 1159 of the Companies Act 2006].

[F968(5)Schedule A1 confers powers to provide for the regulation of licensing bodies.]

Textual Amendments

F964 +Words in Sch. 2A para. 1(1)(2) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 9 (with reg. 8) +

F965 +Words in Sch. 2A para. 1(3) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 7(4)(a) (with reg. 31-40) +

F966 +Words in Sch. 2A para. 1(4) substituted (1.2.2006) by The Performances (Moral Rights, etc.) Regulations 2006 (S.I. 2006/18), reg. 2, Sch. para. 8 (with reg. 8) +

[F969Power to provide for licensing of orphan rightsU.K.

Textual Amendments

F969 +Sch. 2A paras. 1A-1D and cross-heading inserted (25.4.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(1), Sch. 22 para. 5 +

1A(1)The Secretary of State may by regulations provide for the grant of licences to do, or authorise the doing of, acts to which section 182, 182A, 182B, 182C, 182CA, 183 or 184 applies in respect of a performance, where—U.K.

(a)the performer's consent would otherwise be required under that section, but

(b)the right to authorise or prohibit the act qualifies as an orphan right under the regulations.

(2)The regulations may—

(a)specify a person or a description of persons authorised to grant licences, or

(b)provide for a person designated in the regulations to specify a person or a description of persons authorised to grant licences.

(3)The regulations must provide that, for a right to qualify as an orphan right, it is a requirement that the owner of the right has not been found after a diligent search made in accordance with the regulations.

(4)The regulations must provide for any licence—

(a)to have effect as if granted by the missing owner;

(b)not to give exclusive rights;

(c)not to be granted to a person authorised to grant licences.

(5)The regulations may apply in a case where it is not known whether a performer's right subsists, and references to a right, to a missing owner and to an interest of a missing owner are to be read as including references to a supposed right, owner or interest.

Extended collective licensingU.K.

1B(1)The Secretary of State may by regulations provide for a licensing body that applies to the Secretary of State under the regulations to be authorised to grant licences to do, or authorise the doing of, acts to which section 182, 182A, 182B, 182C, 182CA, 183 or 184 applies in respect of a performance, where the right to authorise or prohibit the act is not owned by the body or a person on whose behalf the body acts.U.K.

(2)An authorisation must specify the acts to which any of those sections applies that the licensing body is authorised to license.

(3)The regulations must provide for the rights owner to have a right to limit or exclude the grant of licences by virtue of the regulations.

(4)The regulations must provide for any licence not to give exclusive rights.

General provision about licensingU.K.

1C(1)This paragraph and paragraph 1D apply to regulations under paragraphs 1A and 1B.U.K.

(2)The regulations may provide for a body to be or remain authorised to grant licences only if specified requirements are met, and for a question whether they are met to be determined by a person, and in a manner, specified in the regulations.

(3)The regulations may specify other matters to be taken into account in any decision to be made under the regulations as to whether to authorise a person to grant licences.

(4)The regulations must provide for the treatment of any royalties or other sums paid in respect of a licence, including—

(a)the deduction of administrative costs;

(b)the period for which sums must be held;

(c)the treatment of sums after that period (as bona vacantia or otherwise).

(5)The regulations must provide for circumstances in which an authorisation to grant licences may be withdrawn, and for determining the rights and obligations of any person if an authorisation is withdrawn.

(6)The regulations may include other provision for the purposes of authorisation and licensing, including in particular provision—

(a)for determining the rights and obligations of any person if a right ceases to qualify as an orphan right (or ceases to qualify by reference to any rights owner), or if a rights owner exercises the right referred to in paragraph 1B(3), while a licence is in force;

(b)about maintenance of registers and access to them;

(c)permitting the use of a work for incidental purposes including an application or search;

(d)for a right conferred by section 205C to be treated as having been asserted under section 205D;

(e)for the payment of fees to cover administrative expenses.

1D(1)The power to make regulations includes power—U.K.

(a)to make incidental, supplementary or consequential provision, including provision extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it;

(b)to make transitional, transitory or saving provision;

(c)to make different provision for different purposes.

(2)Regulations under any provision may amend this Part, or any other enactment or subordinate legislation passed or made before that provision comes into force, for the purpose of making consequential provision or extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it.

(3)Regulations may make provision by reference to guidance issued from time to time by any person.

(4)The power to make regulations is exercisable by statutory instrument.

(5)A statutory instrument containing regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.]

References and applications with respect to licensing schemesU.K.

2U.K.Paragraphs 3 to 8 (references and applications with respect to licensing schemes) apply to licensing schemes operated by licensing bodies in relation to a performer’s property rights which cover the performances of more than one performer, so far as they relate to licences for—

(a) copying a recording of the whole or any substantial part of a qualifying performance, F970 . . .

[F971(aa)making such a recording available to the public in the way mentioned in section 182CA(1), or.]

(b)renting or lending copies of a recording to the public;

and in those paragraphs “licensing scheme” means a licensing scheme of any of those descriptions.

Textual Amendments

F970 +Sch. 2A para. 2: word "or" appearing at the end of sub-para. (a) repealed (31.10.2003) by virtue of The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(2), Sch. 2 (with regs. 31-40) +

F971 +Sch. 2A para. 2(aa) substituted (31.10.2003) for word "or" appearing at the end of sub-para. (a) by virtue of The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 7(4)(b) (with regs. 31-40) +

Reference of proposed licensing scheme to tribunalU.K.

3(1)The terms of a licensing scheme proposed to be operated by a licensing body may be referred to the Copyright Tribunal by an organisation claiming to be representative of persons claiming that they require licences in cases of a description to which the scheme would apply, either generally or in relation to any description of case.U.K.

(2)The Tribunal shall first decide whether to entertain the reference, and may decline to do so on the ground that the reference is premature.

(3)If the Tribunal decides to entertain the reference it shall consider the matter referred and make such order, either confirming or varying the proposed scheme, either generally or so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(4)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Reference of licensing scheme to tribunalU.K.

4(1)If while a licensing scheme is in operation a dispute arises between the operator of the scheme and—U.K.

(a)a person claiming that he requires a licence in a case of a description to which the scheme applies, or

(b)an organisation claiming to be representative of such persons,

that person or organisation may refer the scheme to the Copyright Tribunal in so far as it relates to cases of that description.

(2)A scheme which has been referred to the Tribunal under this paragraph shall remain in operation until proceedings on the reference are concluded.

(3)The Tribunal shall consider the matter in dispute and make such order, either confirming or varying the scheme so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(4)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Further reference of scheme to tribunalU.K.

5(1)Where the Copyright Tribunal has on a previous reference of a licensing scheme under paragraph 3 or 4, or under this paragraph, made an order with respect to the scheme, then, while the order remains in force—U.K.

(a)the operator of the scheme,

(b)a person claiming that he requires a licence in a case of the description to which the order applies, or

(c)an organisation claiming to be representative of such persons,

may refer the scheme again to the Tribunal so far as it relates to cases of that description.

(2)A licensing scheme shall not, except with the special leave of the Tribunal, be referred again to the Tribunal in respect of the same description of cases—

(a)within twelve months from the date of the order on the previous reference, or

(b)if the order was made so as to be in force for 15 months or less, until the last three months before the expiry of the order.

(3)A scheme which has been referred to the Tribunal under this paragraph shall remain in operation until proceedings on the reference are concluded.

(4)The Tribunal shall consider the matter in dispute and make such order, either confirming, varying or further varying the scheme so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(5)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Application for grant of licence in connection with licensing schemeU.K.

6(1)A person who claims, in a case covered by a licensing scheme, that the operator of the scheme has refused to grant him or procure the grant to him of a licence in accordance with the scheme, or has failed to do so within a reasonable time after being asked, may apply to the Copyright Tribunal.U.K.

(2)A person who claims, in a case excluded from a licensing scheme, that the operator of the scheme either—

(a)has refused to grant him a licence or procure the grant to him of a licence, or has failed to do so within a reasonable time of being asked, and that in the circumstances it is unreasonable that a licence should not be granted, or

(b)proposes terms for a licence which are unreasonable,

may apply to the Copyright Tribunal.

(3)A case shall be regarded as excluded from a licensing scheme for the purposes of sub-paragraph (2) if—

(a)the scheme provides for the grant of licences subject to terms excepting matters from the licence and the case falls within such an exception, or

(b)the case is so similar to those in which licences are granted under the scheme that it is unreasonable that it should not be dealt with in the same way.

(4)If the Tribunal is satisfied that the claim is well-founded, it shall make an order declaring that, in respect of the matters specified in the order, the applicant is entitled to a licence on such terms as the Tribunal may determine to be applicable in accordance with the scheme or, as the case may be, to be reasonable in the circumstances.

(5)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Application for review of order as to entitlement to licenceU.K.

7(1)Where the Copyright Tribunal has made an order under paragraph 6 that a person is entitled to a licence under a licensing scheme, the operator of the scheme or the original applicant may apply to the Tribunal to review its order.U.K.

(2)An application shall not be made, except with the special leave of the Tribunal—

(a)within twelve months from the date of the order, or of the decision on a previous application under this paragraph, or

(b)if the order was made so as to be in force for 15 months or less, or as a result of the decision on a previous application under this paragraph is due to expire within 15 months of that decision, until the last three months before the expiry date.

(3)The Tribunal shall on an application for review confirm or vary its order as the Tribunal may determine to be reasonable having regard to the terms applicable in accordance with the licensing scheme or, as the case may be, the circumstances of the case.

Effect of order of tribunal as to licensing schemeU.K.

8(1)A licensing scheme which has been confirmed or varied by the Copyright Tribunal—U.K.

(a)under paragraph 3 (reference of terms of proposed scheme), or

(b)under paragraph 4 or 5 (reference of existing scheme to Tribunal),

shall be in force or, as the case may be, remain in operation, so far as it relates to the description of case in respect of which the order was made, so long as the order remains in force.

(2)While the order is in force a person who in a case of a class to which the order applies—

(a)pays to the operator of the scheme any charges payable under the scheme in respect of a licence covering the case in question or, if the amount cannot be ascertained, gives an undertaking to the operator to pay them when ascertained, and

(b)complies with the other terms applicable to such a licence under the scheme,

shall be in the same position as regards infringement of performers’ property rights as if he had at all material times been the holder of a licence granted by the rights owner in question in accordance with the scheme.

(3)The Tribunal may direct that the order, so far as it varies the amount of charges payable, has effect from a date before that on which it is made, but not earlier than the date on which the reference was made or, if later, on which the scheme came into operation.

If such a direction is made—

(a)any necessary repayments, or further payments, shall be made in respect of charges already paid, and

(b)the reference in sub-paragraph (2)(a) to the charges payable under the scheme shall be construed as a reference to the charges so payable by virtue of the order. No such direction may be made where sub-paragraph (4) below applies.

(4)An order of the Tribunal under paragraph 4 or 5 made with respect to a scheme which is certified for any purpose under paragraph 16 has effect, so far as it varies the scheme by reducing the charges payable for licences, from the date on which the reference was made to the Tribunal.

(5)Where the Tribunal has made an order under paragraph 6 (order as to entitlement to licence under licensing scheme) and the order remains in force, the person in whose favour the order is made shall if he—

(a)pays to the operator of the scheme any charges payable in accordance with the order or, if the amount cannot be ascertained, gives an undertaking to pay the charges when ascertained, and

(b)complies with the other terms specified in the order,

be in the same position as regards infringement of performers’ property rights as if he had at all material times been the holder of a licence granted by the rights owner in question on the terms specified in the order.

References and applications with respect to licensing by licensing bodiesU.K.

9U.K.Paragraphs 10 to 13 (references and applications with respect to licensing by licensing bodies) apply to licences relating to a performer’s property rights which cover the performance of more than one performer granted by a licensing body otherwise than in pursuance of a licensing scheme, so far as the licences authorise—

(a) copying a recording of the whole or any substantial part of a qualifying performance, F972 . . .

[F973(aa)making such a recording available to the public in the way mentioned in section 182CA(1), or.]

(b)renting or lending copies of a recording to the public;

and references in those paragraphs to a licence shall be construed accordingly.

Textual Amendments

F972 +Sch. 2A para. 9: word "or" appearing at the end of sub-para. (a) repealed (31.10.2003) by virtue of The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(2), Sch. 2 (with regs. 31-40) +

F973 +Sch. 2A para. 9(aa) substituted (31.10.2003) for word "or" appearing at the end of sub-para. (a) by virtue of The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 7(4)(b) (with regs. 31-40) +

Reference to tribunal of proposed licenceU.K.

10(1)The terms on which a licensing body proposes to grant a licence may be referred to the Copyright Tribunal by the prospective licensee.U.K.

(2)The Tribunal shall first decide whether to entertain the reference, and may decline to do so on the ground that the reference is premature.

(3)If the Tribunal decides to entertain the reference it shall consider the terms of the proposed licence and make such order, either confirming or varying the terms as it may determine to be reasonable in the circumstances.

(4)The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Reference to tribunal of expiring licenceU.K.

11(1)A licensee under a licence which is due to expire, by effluxion of time or as a result of notice given by the licensing body, may apply to the Copyright Tribunal on the ground that it is unreasonable in the circumstances that the licence should cease to be in force.U.K.

(2)Such an application may not be made until the last three months before the licence is due to expire.

(3)A licence in respect of which a reference has been made to the Tribunal shall remain in operation until proceedings on the reference are concluded.

(4)If the Tribunal finds the application well-founded, it shall make an order declaring that the licensee shall continue to be entitled to the benefit of the licence on such terms as the Tribunal may determine to be reasonable in the circumstances.

(5)An order of the Tribunal under this paragraph may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Application for review of order as to licenceU.K.

12(1)Where the Copyright Tribunal has made an order under paragraph 10 or 11, the licensing body or the person entitled to the benefit of the order may apply to the Tribunal to review its order.U.K.

(2)An application shall not be made, except with the special leave of the Tribunal—

(a)within twelve months from the date of the order or of the decision on a previous application under this paragraph, or

(b)if the order was made so as to be in force for 15 months or less, or as a result of the decision on a previous application under this paragraph is due to expire within 15 months of that decision, until the last three months before the expiry date.

(3)The Tribunal shall on an application for review confirm or vary its order as the Tribunal may determine to be reasonable in the circumstances.

Effect of order of tribunal as to licenceU.K.

13(1)Where the Copyright Tribunal has made an order under paragraph 10 or 11 and the order remains in force, the person entitled to the benefit of the order shall if he—U.K.

(a)pays to the licensing body any charges payable in accordance with the order or, if the amount cannot be ascertained, gives an undertaking to pay the charges when ascertained, and

(b)complies with the other terms specified in the order,

be in the same position as regards infringement of performers’ property rights as if he had at all material times been the holder of a licence granted by the rights owner in question on the terms specified in the order.

(2)The benefit of the order may be assigned—

(a)in the case of an order under paragraph 10, if assignment is not prohibited under the terms of the Tribunal’s order; and

(b)in the case of an order under paragraph 11, if assignment was not prohibited under the terms of the original licence.

(3)The Tribunal may direct that an order under paragraph 10 or 11, or an order under paragraph 12 varying such an order, so far as it varies the amount of charges payable, has effect from a date before that on which it is made, but not earlier than the date on which the reference or application was made or, if later, on which the licence was granted or, as the case may be, was due to expire.

If such a direction is made—

(a)any necessary repayments, or further payments, shall be made in respect of charges already paid, and

(b)the reference in sub-paragraph (1)(a) to the charges payable in accordance with the order shall be construed, where the order is varied by a later order, as a reference to the charges so payable by virtue of the later order.

General considerations: unreasonable discriminationU.K.

14(1)In determining what is reasonable on a reference or application under this Schedule relating to a licensing scheme or licence, the Copyright Tribunal shall have regard to—U.K.

(a)the availability of other schemes, or the granting of other licences, to other persons in similar circumstances, and

(b)the terms of those schemes or licences,

and shall exercise its powers so as to secure that there is no unreasonable discrimination between licensees, or prospective licensees, under the scheme or licence to which the reference or application relates and licensees under other schemes operated by, or other licences granted by, the same person.

(2)This does not affect the Tribunal’s general obligation in any case to have regard to all relevant circumstances.

Application to settle royalty or other sum payable for lendingU.K.

15(1)An application to settle the royalty or other sum payable in pursuance of paragraph 14A of Schedule 2 (lending of certain recordings) may be made to the Copyright Tribunal by the owner of a performer’s property rights or the person claiming to be treated as licensed by him.U.K.

(2)The Tribunal shall consider the matter and make such order as it may determine to be reasonable in the circumstances.

(3)Either party may subsequently apply to the Tribunal to vary the order, and the Tribunal shall consider the matter and make such order confirming or varying the original order as it may determine to be reasonable in the circumstances.

(4)An application under sub-paragraph (3) shall not, except with the special leave of the Tribunal, be made within twelve months from the date of the original order or of the order on a previous application under that sub-paragraph.

(5)An order under sub-paragraph (3) has effect from the date on which it is made or such later date as may be specified by the Tribunal.

Certification of licensing schemesU.K.

16(1) A person operating or proposing to operate a licensing scheme may apply to the Secretary of State to certify the scheme for the purposes of [F974 paragraph F975 ... 14A F976 ... of Schedule 2 ( F975 ... lending of certain recordings F976 ... ) ] . U.K.

(2)The Secretary of State shall by order made by statutory instrument certify the scheme if he is satisfied that it—

(a)enables the works to which it relates to be identified with sufficient certainty by persons likely to require licences, and

(b)sets out clearly the charges (if any) payable and the other terms on which licences will be granted.

(3)The scheme shall be scheduled to the order and the certification shall come into operation for the purposes of [F977the relevant paragraph] of Schedule 2—

(a)on such date, not less than eight weeks after the order is made, as may be specified in the order, or

(b)if the scheme is the subject of a reference under paragraph 3 (reference of proposed scheme), any later date on which the order of the Copyright Tribunal under that paragraph comes into force or the reference is withdrawn.

(4)A variation of the scheme is not effective unless a corresponding amendment of the order is made; and the Secretary of State shall make such an amendment in the case of a variation ordered by the Copyright Tribunal on a reference under paragraph 3, 4 or 5, and may do so in any other case if he thinks fit.

(5)The order shall be revoked if the scheme ceases to be operated and may be revoked if it appears to the Secretary of State that it is no longer being operated according to its terms.

Textual Amendments

F974 +Words in Sch. 2A para. 16(1) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1 para. 17(a) (with regs. 31-40) +

F977 +Words in Sch. 2A para. 16(3) substituted (31.10.2003) by The Copyright and Related Rights Regulations 2003 (S.I. 2003/2498), reg. 2(1), Sch. 1 para. 17(b) (with regs. 31-40) +

Powers exercisable in consequence of competition reportU.K.

17[F978(1) Sub-paragraph (1A) applies where whatever needs to be remedied, mitigated or prevented by the Secretary of State [F979 or (as the case may be) the Competition and Markets Authority ] under section 12(5) of the Competition Act 1980 or section 41(2), 55(2), 66(6), 75(2), 83(2), 138(2), 147(2)[F980, 147A(2) ] or 160(2) of, or paragraph 5(2) or 10(2) of Schedule 7 to, the Enterprise Act 2002 (powers to take remedial action following references to the [F981 Competition and Markets Authority ] in connection with public bodies and certain other persons, mergers or market investigations etc. ) consists of or includes— U.K.

(a)conditions in licences granted by the owner of a performer’s property rights restricting the use to which a recording may be put by the licensee or the right of the owner to grant other licenses, or

(b)a refusal of an owner of a performer’s property rights to grant licences on reasonable terms.

(1A)The powers conferred by Schedule 8 to the Enterprise Act 2002 include power to cancel or modify those conditions and, instead or in addition, to provide that licences in respect of the performer’s property rights shall be available as of right.

(2)The references to anything permitted by Schedule 8 to the Enterprise Act 2002 in section 12(5A) of the Competition Act 1980 and in sections 75(4)(a), 83(4)(a), 84(2)(a), 89(1), 160(4)(a), 161(3)(a) and 164(1) of, and paragraphs 5, 10 and 11 of Schedule 7 to, the Act of 2002 shall be construed accordingly.]]

(3)[F982The Secretary of State [F983or (as the case may be) the Competition and Markets Authority]] shall only exercise the powers available by virtue of this paragraph if he [F984or it] is satisfied that to do so does not contravene any Convention relating to performers’ rights to which the United Kingdom is a party.

(4)The terms of a licence available by virtue of this paragraph shall, in default of agreement, be settled by the Copyright Tribunal on an application by the person requiring the licence; and terms so settled shall authorise the licensee to do everything in respect of which a licence is so available.

(5)Where the terms of a licence are settled by the Tribunal, the licence has effect from the date on which the application to the Tribunal was made.

Textual Amendments

F978 +Sch. 2A para. 17(1)(1A)(2) substituted (20.6.2003 for certain purposes and 29.12.2004 otherwise) for Sch. 2A para. 17(1)(2) by 2002 c. 40, ss. 278(1), 279, Sch. 25 para. 18(5)(a); S.I. 2003/1397, arts. 2, 3(1), Sch. (with arts. 4-12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5) +

F982 +Words in Sch. 2A para. 17(3) substituted (20.6.2003 for certain purposes and 29.12.2004 otherwise) by 2002 c. 40, ss. 278(1), 279, Sch. 25 para. 18(5)(b)(i); S.I. 2003/1397, arts. 2, 3(1), Sch. (with arts. 4-12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5) +

F984 +Words in Sch. 2A para. 17(3) inserted (20.6.2003 for certain purposes and 29.12.2004 otherwise) by 2002 c. 40, ss. 278(1), 279, Sch. 25 para. 18(5)(b)(ii); S.I. 2003/1397, arts. 2, 3(1), Sch. (with arts. 4-12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5) +

Modifications etc. (not altering text)

Section 272.

SCHEDULE 3U.K. Registered designs: minor and consequential amendments of 1949 Act

Modifications etc. (not altering text)

C146 +Sch. 3 extended (with modifications) (Isle of Man) (9.12.2001) by S.I. 2001/3678, art. 3, Sch. 3 +

C147 +Sch. 3 extended (Isle of Man) (with modifications) (11.11.2013) by The Registered Designs (Isle of Man) Order 2013 (S.I. 2013/2533), arts. 1, 3(2), Sch. 2 +

Section 3: proceedings for registrationU.K.

F9851U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F985 +Sch. 3 para. 1 repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14) +

Section 4: registration of same design in respect of other articles, etc.U.K.

F9862U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F986 +Sch. 3 para. 2 repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14) +

Section 5: provisions for secrecy of certain designsU.K.

3(1)Section 5 of the Registered Designs Act 1949 is amended as follows.U.K.

(2)For “a competent authority” or “the competent authority”, wherever occurring, substitute “ the Secretary of State ”; and in subsection (3)(c) for “that authority” substitute “ he ”.

(3)For subsection (2) substitute—

“(2)The Secretary of State shall by rules make provision for securing that where such directions are given—

(a)the representation or specimen of the design, and

(b)any evidence filed in support of the applicant’s contention that the appearance of an article is material (for the purposes of section 1(3) of this Act),

shall not be open to public inspection at the Patent Office during the continuance in force of the directions.”

F987(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Omit subsection (5).

Textual Amendments

F987 +Sch. 3 para. 3(4) repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14) +

Section 6: provisions as to confidential disclosure, etc.U.K.

F9884U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F988 +Sch. 3 para. 4 repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14) +

Section 9: exemption of innocent infringer from liability for damagesU.K.

5U.K.In section 9 of the M61Registered Designs Act 1949 (exemption of innocent infringer from liability for damages), in subsections (1) and (2) for “copyright in a registered design” substitute “ the right in a registered design ”.

Marginal Citations

Section 11: cancellation of registrationU.K.

F9896U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F989 +Sch. 3 para. 6 repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14) +

Section 14: registration where application has been made in convention countryU.K.

7U.K.In section 14 of the Registered Designs Act 1949 (registration where application has been made in convention country), for subsections (2) and (3) substitute—

“(2)Where an application for registration of a design is made by virtue of this section, the application shall be treated, for the purpose of determining whether that or any other design is new, as made on the date of the application for protection in the convention country or, if more than one such application was made, on the date of the first such application.

(3)Subsection (2) shall not be construed as excluding the power to give directions under section 3(4) of this Act in relation to an application made by virtue of this section.”.

Section 15: extension of time for application under s.14 in certain casesU.K.

8U.K.In section 15(1) of the M62Registered Designs Act 1949 (power to make rules empowering registrar to extend time for applications under s.14) for “the Board of Trade are satisfied” substitute “ the Secretary of State is satisfied ” and for “they” substitute “ he ”.

Marginal Citations

Section 16: protection of designs communicated under international agreementsU.K.

F9909U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F990 +Sch. 3 para. 9 repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14) +

Section 19: registration of assignments, &c.U.K.

10U.K.In section 19 of the Registered Designs Act 1949 (registration of assignments, &c.), after subsection (3) insert—

“(3A)Where design right subsists in a registered design, the registrar shall not register an interest under subsection (3) unless he is satisfied that the person entitled to that interest is also entitled to a corresponding interest in the design right.

(3B)Where design right subsists in a registered design and the proprietor of the registered design is also the design right owner, an assignment of the design right shall be taken to be also an assignment of the right in the registered design, unless a contrary intention appears.”.

Section 20: rectification of the registerU.K.

11U.K.In section 20 of the Registered Designs Act 1949 (rectification of the register), after subsection (4) add—

“(5)A rectification of the register under this section has effect as follows—

(a)an entry made has effect from the date on which it should have been made,

(b)an entry varied has effect as if it had originally been made in its varied form, and

(c)an entry deleted shall be deemed never to have had effect,

nless, in any case, the court directs otherwise.”.

Section 22: inspection of registered designsU.K.

12(1)Section 22 of the Registered Designs Act 1949 (inspection of registered designs) is amended as follows.U.K.

(2)For subsection (1) substitute—

“(1)Where a design has been registered under this Act, there shall be open to inspection at the Patent Office on and after the day on which the certificate of registration is issued—

(a)the representation or specimen of the design, and

(b)any evidence filed in support of the applicant’s contention that the appearance of an article is material (for the purposes of section 1(3) of this Act).

This subsection has effect subject to the following provisions of this section and to any rules made under section 5(2) of this Act.”.

(3)In subsection (2), subsection (3) (twice) and subsection (4) for “representation or specimen of the design” substitute “ representation, specimen or evidence ”.

Section 23: information as to existence of right in registered designU.K.

13U.K.For section 23 of the M63Registered Designs Act 1949 (information as to existence of right in registered design) substitute—

“23 Information as to existence of right in registered design.

On the request of a person furnishing such information as may enable the registrar to identify the design, and on payment of the prescribed fee, the registrar shall inform him—

(a)whether the design is registered and, if so, in respect of what articles, and

(b)whether any extension of the period of the right in the registered design has been granted,

and shall state the date of registration and the name and address of the registered proprietor.”.

Marginal Citations

Section 25: certificate of contested validity of registrationU.K.

14U.K.In section 25 of the Registered Designs Act 1949 (certificate of contested validity of registration), in subsection (2) for “the copyright in the registered design”substitute “ the right in the registered design ”.

Section 26: remedy for groundless threats of infringement proceedingsU.K.

15(1)Section 26 of the Registered Designs Act 1949 (remedy for groundless threats of infringement proceedings) is amended as follows.U.K.

(2)In subsections (1) and (2) for “the copyright in a registered design” substitute “ the right in a registered design ”.

(3)After subsection (2) insert—

“(2A)Proceedings may not be brought under this section in respect of a threat to bring proceedings for an infringement alleged to consist of the making or importing of anything.”.

Section 27: the courtU.K.

16U.K.For section 27 of the Registered Designs Act 1949 (the court) substitute—

“27 The court.

(1)In this Act “the court” means—

(a)in England and Wales the High Court or any patents county court having jurisdiction by virtue of an order under section 287 of the Copyright, Designs and Patents Act 1988,

(b)in Scotland, the Court of Session, and

(c)in Northern Ireland, the High Court.

(2)Provision may be made by rules of court with respect to proceedings in the High Court in England and Wales for references and applications under this Act to be dealt with by such judge of that court as the Lord Chancellor may select for the purpose.”.

Section 28: the Appeal TribunalU.K.

17(1)Section 28 of the Registered Designs Act 1949 (the Appeal Tribunal) is amended as follows.U.K.

(2)For subsection (2) (members of Tribunal) substitute—

“(2)The Appeal Tribunal shall consist of—

(a)one or more judges of the High Court nominated by the Lord Chancellor, and

(b)one judge of the Court of Session nominated by the Lord President of that Court.”.

(3)In subsection (5) (costs), after “costs” (twice) insert “ or expenses ”, and for the words from “and any such order” to the end substitute—

“and any such order may be enforced—

(a)in England and Wales or Northern Ireland, in the same way as an order of the High Court;

(b)in Scotland, in the same way as a decree for expenses granted by the Court of Session.”.

(4)For subsection (10) (seniority of judges) substitute—

“(10)In this section “the High Court” means the High Court in England and Wales; and for the purposes of this section the seniority of judges shall be reckoned by reference to the dates on which they were appointed judges of that court or the Court of Session.”.

(5)The amendments to section 28 made by section 10(5) of the M64Administration of Justice Act 1970 (power to make rules as to right of audience) shall be deemed always to have extended to Northern Ireland.

Marginal Citations

Section 29: exercise of discretionary powers of registrarU.K.

18U.K.In section 29 of the M65Registered Designs Act 1949 (exercise of discretionary powers of registrar) for “the registrar shall give” substitute “ rules made by the Secretary of State under this Act shall require the registrar to give ”.

Marginal Citations

Section 30: costs and security for costsU.K.

19U.K.For section 30 of the Registered Designs Act 1949 (costs and security for costs) substitute—

“30 Costs and security for costs.

(1)Rules made by the Secretary of State under this Act may make provision empowering the registrar, in any proceedings before him under this Act—

(a)to award any party such costs as he may consider reasonable, and

(b)to direct how and by what parties they are to be paid.

(2)Any such order of the registrar may be enforced—

(a)in England and Wales or Northern Ireland, in the same way as an order of the High Court;

(b)in Scotland, in the same way as a decree for expenses granted by the Court of Session.

(3)Rules made by the Secretary of State under this Act may make provision empowering the registrar to require a person, in such cases as may be prescribed, to give security for the costs of—

(a)an application for cancellation of the registration of a design,

(b)an application for the grant of a licence in respect of a registered design, or

(c)an appeal from any decision of the registrar under this Act,

and enabling the application or appeal to be treated as abandoned in default of such security being given.”.

Section 31: evidence before registrarU.K.

20U.K.For section 31 of the M66Registered Designs Act 1949 (evidence before registrar) substitute—

“31 Evidence before registrar.

Rules made by the Secretary of State under this Act may make provision—

(a)as to the giving of evidence in proceedings before the registrar under this Act by affidavit or statutory declaration;

(b)conferring on the registrar the powers of an official referee of the Supreme Court as regards the examination of witnesses on oath and the discovery and production of documents; and

(c)applying in relation to the attendance of witnesses in proceedings before the registrar the rules applicable to the attendance of witnesses in proceedings before such a referee.”.

Marginal Citations

Section 32: power of registrar to refuse to deal with certain agentsU.K.

21U.K.Section 32 of the Registered Designs Act 1949 (power of registrar to refuse to deal with certain agents) is repealed.

Section 33: offences under s.5 (secrecy of certain designs)U.K.

22(1)Section 33 of the Registered Designs Act 1949 (offences under s.5 (secrecy of certain designs)) is amended as follows.U.K.

(2)In subsection (1), for paragraphs (a) and (b) substitute—

“(a)on conviction on indictment to imprisonment for a term not exceeding two years or a fine, or both;

(b)on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both.”.

(3)Omit subsection (2).

(4)The above amendments do not apply in relation to offences committed before the commencement of Part IV.

Section 34: falsification of register, &c.U.K.

23(1)In section 34 of the Registered Designs Act 1949 (falsification of register, &c.) for “shall be guilty of a misdemeanour” substitute—U.K.

“shall be guilty of an offence and liable—

(a)on conviction on indictment to imprisonment for a term not exceeding two years or a fine, or both;

(b)on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both.”.

(2)The above amendment does not apply in relation to offences committed before the commencement of Part IV.

Section 35: fine for falsely representing a design as registeredU.K.

24(1)Section 35 of the M67Registered Designs Act 1949 (fine for falsely representing a design as registered) is amended as follows.U.K.

(2)In subsection (1) for the words from “a fine not exceeding £50” substitute “ a fine not exceeding level 3 on the standard scale ”.

(3)In subsection (2)—

(a)for “the copyright in a registered design” substitute “ the right in a registered design ”;

(b)for “subsisting copyright in the design” substitute “ subsisting right in the design under this Act ”; and

(c)for the words from “a fine” to the end substitute “ a fine not exceeding level 1 on the standard scale ”.

(4)The amendment in sub-paragraph (2) does not apply in relation to offences committed before the commencement of Part IV.

Marginal Citations

Section 35A: offence by body corporate - liability of officersU.K.

25(1)In the Registered Designs Act 1949 after section 35 insert—U.K.

“35A Offence by body corporate: liability of officers.

(1)Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2)In relation to a body corporate whose affairs are managed by its members “director” means a member of the body corporate.”.

(2)The above amendment does not apply in relation to offences committed before the commencement of Part IV.

Section 36: general power to make rules, &c.U.K.

26(1)Section 36 of the Registered Designs Act 1949 (general power to make rules, &c.) is amended as follows.U.K.

(2)In subsection (1) for “the Board of Trade” and “the Board” substitute “ the Secretary of State ”, and for “as they think expedient” substitute “ as he thinks expedient ”.

(3)For the words in subsection (1) from “and in particular” to the end substitute the following subsections—

“(1A)Rules may, in particular, make provision—

(a)prescribing the form of applications for registration of designs and of any representations or specimens of designs or other documents which may be filed at the Patent Office, and requiring copies to be furnished of any such representations, specimens or documents;

(b)regulating the procedure to be followed in connection with any application or request to the registrar or in connection with any proceeding before him, and authorising the rectification of irregularities of procedure;

(c)providing for the appointment of advisers to assist the registrar in proceedings before him;

(d)regulating the keeping of the register of designs;

(e)authorising the publication and sale of copies of representations of designs and other documents in the Patent Office;

(f)prescribing anything authorised or required by this Act to be prescribed by rules.

(1B)The remuneration of an adviser appointed to assist the registrar shall be determined by the Secretary of State with the consent of the Treasury and shall be defrayed out of money provided by Parliament.”.

Section 37: provisions as to rules and OrdersU.K.

27(1)Section 37 of the M68Registered Designs Act 1949 (provisions as to rules and orders) is amended as follows.U.K.

(2)Omit subsection (1) (duty to advertise making of rules).

(3)In subsections (2), (3) and (4) for “the Board of Trade” substitute “ the Secretary of State ”.

Marginal Citations

Section 38: proceedings of the Board of TradeU.K.

28U.K.Section 38 of the Registered Designs Act 1949 (proceedings of the Board of Trade) is repealed.

Section 39: hours of business and excluded daysU.K.

29U.K.In section 39 of the Registered Designs Act 1949 (hours of business and excluded days), in subsection (1) for “the Board of Trade” substitute “ the Secretary of State ”.

Section 40: feesU.K.

30U.K.In section 40 of the Registered Designs Act 1949 (fees) for “the Board of Trade” substitute “ the Secretary of State ”.

Section 44: interpretationU.K.

31(1)In section 44 of the Registered Designs Act 1949 (interpretation), subsection (1) is amended as follows.U.K.

F991(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)At the appropriate place insert—

““author” in relation to a design, has the meaning given by section 2(3) and (4);”.

(4)Omit the definition of “copyright”.

F991(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)For the definition of “court” substitute—

““the court” shall be construed in accordance with section 27 of this Act;”.

(7)In the definition of “design” for “subsection (3) of section one of this Act” substitute “ section 1(1) of this Act ”.

(8)At the appropriate place insert—

““employee”, “employment” and “employer” refer to employment under a contract of service or of apprenticeship,”.

(9)Omit the definition of “Journal”.

(10)In the definition of “prescribed” for “the Board of Trade” substitute “ the Secretary of State ”.

Textual Amendments

F991 +Sch. 3 para. 31(2)(5) repealed (9.12.2001) by S.I. 2001/3949, reg. 9(2), Sch. 2 (with transitional provisions in regs. 10-14) +

Section 45: application to ScotlandU.K.

32U.K.In section 45 of the M69Registered Designs Act 1949 (application to Scotland), omit paragraphs (1) and (2).

Marginal Citations

Section 46: application to Northern IrelandU.K.

33(1)Section 46 of the Registered Designs Act 1949 (application to Northern Ireland) is amended as follows.U.K.

(2)Omit paragraphs (1) and (2).

(3)For paragraph (3) substitute—

“(3)References to enactments include enactments comprised in Northern Ireland legislation:”.

(4)After paragraph (3) insert—

“(3A)References to the Crown include the Crown in right of Her Majesty’s Government in Northern Ireland:”.

(5)In paragraph (4) for “a department of the Government of Northern Ireland” substitute “ a Northern Ireland department ”, and at the end add “ and in relation to a Northern Ireland department references to the Treasury shall be construed as references to the Department of Finance and Personnel ”.

Section 47: application to Isle of ManU.K.

34U.K.For section 47 of the Registered Designs Act 1949 (application to Isle of Man) substitute—

“47 Application to Isle of Man.

This Act extends to the Isle of Man, subject to any modifications contained in an Order made by Her Majesty in Council, and accordingly, subject to any such Order, references in this Act to the United Kingdom shall be construed as including the Isle of Man.”.

Section 47A: territorial waters and the continental shelfU.K.

35U.K.In the Registered Designs Act 1949, after section 47 insert—

“47A Territorial waters and the continental shelf.

(1)For the purposes of this Act the territorial waters of the United Kingdom shall be treated as part of the United Kingdom.

(2)This Act applies to things done in the United Kingdom sector of the continental shelf on a structure or vessel which is present there for purposes directly connected with the exploration of the sea bed or subsoil or the exploitation of their natural resources as it applies to things done in the United Kingdom.

(3)The United Kingdom sector of the continental shelf means the areas designated by order under section 1(7) of the Continental Shelf Act 1964.”.

Section 48: repeals, savings and transitional provisionsU.K.

36U.K.In section 48 of the Registered Designs Act 1949 (repeals, savings and transitional provisions), omit subsection (1) (repeals).

Schedule 1: provisions as to Crown use of registered designsU.K.

37(1)The First Schedule to the M70Registered Designs Act 1949 (provisions as to Crown use of registered designs) is amended as follows.U.K.

(2)In paragraph 2(1) after “copyright” insert “ or design right ”.

(3)In paragraph 3(1) omit “in such manner as may be prescribed by rules of court”.

(4)In paragraph 4(2) (definition of “period of emergency”) for the words from “the period ending” to “any other period” substitute “ a period ”.

(5)For paragraph 4(3) substitute—

“(3)No Order in Council under this paragraph shall be submitted to Her Majesty unless a draft of it has been laid before and approved by a resolution of each House of Parliament.”.

Marginal Citations

Schedule 2: enactments repealedU.K.

38U.K.Schedule 2 to the Registered Designs Act 1949 (enactments repealed) is repealed.

Section 273.

SCHEDULE 4U.K. The Registered Designs Act 1949 as amended Arrangement of Sections

Modifications etc. (not altering text)

C148 +Sch. 4 extended (with modifications) (Isle of Man) (9.12.2001) by S.I. 2001/3678, art. 3, Sch. 3 +

C149 +Sch. 4 extended (Isle of Man) (with modifications) (11.11.2013) by The Registered Designs (Isle of Man) Order 2013 (S.I. 2013/2533), arts. 1, 3(2), Sch. 2 +

Registrable designs and proceedings for registrationU.K.

1U.K.Designs registrable under Act.

2U.K.Proprietorship of designs.

3U.K.Proceedings for registration.

4U.K.Registration of same design in respect of other articles.

5U.K.Provision for secrecy of certain designs.

6U.K.Provisions as to confidential disclosure, &c.

Effect of registration, &c.U.K.

7U.K.Right given by registration.

8U.K.Duration of right in registered design.

8AU.K.Restoration of lapsed right in design.

8BU.K.Effect of order for restoration of right.

9U.K.Exemption of innocent infringer from liability for damages.

10U.K.Compulsory licence in respect of registered design.

11U.K.Cancellation of registration.

11AU.K.Powers exercisable for protection of the public interest.

11BU.K.Undertaking to take licence of right in infringement proceedings.

12U.K.Use for services of the Crown.

International arrangementsU.K.

13U.K.Orders in Council as to convention countries.

14U.K.Registration of design where application for protection in convention country has been made.

15U.K.Extension of time for applications under s.14 in certain cases.

16U.K.Protection of designs communicated under international agreements.

Register of designs, &c.U.K.

17U.K.Register of designs.

18U.K.Certificate of registration.

19U.K.Registration of assignments, &c.

20U.K.Rectification of register.

21U.K.Power to correct clerical errors.

22U.K.Inspection of registered designs.

23U.K.Information as to existence of right in registered design.

24U.K.... ... ... ... ... ... ...

Legal proceedings and appealsU.K.

25U.K.Certificate of contested validity of registration.

26U.K.Remedy for groundless threats of infringement proceedings.

27U.K.The court.

28U.K.The Appeal Tribunal.

Powers and duties of registrarU.K.

29U.K.Exercise of discretionary powers of registrar.

30U.K.Costs and security for costs.

31U.K.Evidence before registrar.

32U.K.... ... ... ... ... ... ...

33U.K.Offences under s.5.

34U.K.Falsification of register, &c.

35U.K.Fine for falsely representing a design as registered.

35AU.K.Offence by body corporate: liability of officers.

Rules, &c.U.K.

36U.K.General power of Secretary of State to make rules, &c.

37U.K.Provisions as to rules and Orders.

38U.K.... ... ... ... ... ... ...

SupplementalU.K.

39U.K.Hours of business and excluded days.

40U.K.Fees.

41U.K.Service of notices, &c., by post.

42U.K.Annual report of registrar.

43U.K.Savings.

44U.K.Interpretation.

45U.K.Application to Scotland.

46U.K.Application to Northern Ireland.

47U.K.Application to Isle of Man.

47AU.K.Territorial waters and the continental shelf.

48U.K.Repeals, savings and transitional provisions.

49U.K.Short title and commencement.

Schedules:

Schedule 1—Provisions as to the use of registered designs for the services of the Crown and as to rights of third parties in respect of such use.

Schedule 2—... ... ... ... ... ... ...

An Act to consolidate certain enactments relating to registered designs.

[16th December 1949]

Registrable designs and proceedings for registrationU.K.

Designs registrable under Act.U.K.

1(1)In this Act “design” means features of shape, configuration, pattern or ornament applied to an article by any industrial process, being features which in the finished article appeal to and are judged by the eye, but does not include—

(a)a method or principle of construction, or

(b)features of shape or configuration of an article which—

(i)are dictated solely by the function which the article has to perform, or

(ii)are dependent upon the appearance of another article of which the article is intended by the author of the design to form an integral part.

(2)A design which is new may, upon application by the person claiming to be the proprietor, be registered under this Act in respect of any article, or set of articles, specified in the application.

(3)A design shall not be registered in respect of an article if the appearance of the article is not material, that is, if aesthetic considerations are not normally taken into account to a material extent by persons acquiring or using articles of that description, and would not be so taken into account if the design were to be applied to the article.

(4)A design shall not be regarded as new for the purposes of this Act if it is the same as a design—

(a)registered in respect of the same or any other article in pursuance of a prior application, or

(b)published in the United Kingdom in respect of the same or any other article before the date of the application,

or if it differs from such a design only in immaterial details or in features which are variants commonly used in the trade.

This subsection has effect subject to the provisions of sections 4, 6 and 16 of this Act.

(5)The Secretary of State may by rules provide for excluding from registration under this Act designs for such articles of a primarily literary or artistic character as the Secretary of State thinks fit.

Proprietorship of designs.U.K.

2(1)The author of a design shall be treated for the purposes of this Act as the original proprietor of the design, subject to the following provisions.

(1A)Where a design is created in pursuance of a commission for money or money’s worth, the person commissioning the design shall be treated as the original proprietor of the design.

(1B)Where, in a case not falling within subsection (1A), a design is created by an employee in the course of his employment, his employer shall be treated as the original proprietor of the design.

(2)Where a design, or the right to apply a design to any article, becomes vested, whether by assignment, transmission or operation of law, in any person other than the original proprietor, either alone or jointly with the original proprietor, that other person, or as the case may be the original proprietor and that other person, shall be treated for the purposes of this Act as the proprietor of the design or as the proprietor of the design in relation to that article.

(3)In this Act the “author” of a design means the person who creates it.

(4)In the case of a design generated by computer in circumstances such that there is no human author, the person by whom the arrangements necessary for the creation of the design are made shall be taken to be the author.

Proceedings for registration.U.K.

3(1)An application for the registration of a design shall be made in the prescribed form and shall be filed at the Patent Office in the prescribed manner.

(2)An application for the registration of a design in which design right subsists shall not be entertained unless made by the person claiming to be the design right owner.

(3)For the purpose of deciding whether a design is new, the registrar may make such searches, if any, as he thinks fit.

(4)The registrar may, in such cases as may be prescribed, direct that for the purpose of deciding whether a design is new an application shall be treated as made on a date earlier or later than that on which it was in fact made.

(5)The registrar may refuse an application for the registration of a design or may register the design in pursuance of the application subject to such modifications, if any, as he thinks fit; and a design when registered shall be registered as of the date on which the application was made or is treated as having been made.

(6)An application which, owing to any default or neglect on the part of the applicant, has not been completed so as to enable registration to be effected within such time as may be prescribed shall be deemed to be abandoned.

(7)An appeal lies from any decision of the registrar under this section.

Registration of same design in respect of other articles, etc.U.K.

4(1)Where the registered proprietor of a design registered in respect of any article makes an application—

(a)for registration in respect of one or more other articles, of the registered design, or

(b)for registration in respect of the same or one or more other articles, of a design consisting of the registered design with modifications or variations not sufficient to alter the character or substantially to affect the identity thereof,

the application shall not be refused and the registration made on that application shall not be invalidated by reason only of the previous registration or publication of the registered design:

Provided that the right in a design registered by virtue of this section shall not extend beyond the end of the period, and any extended period, for which the right subsists in the original registered design.

(2)Where any person makes an application for the registration of a design in respect of any article and either—

(a)that design has been previously registered by another person in respect of some other article; or

(b)the design to which the application relates consists of a design previously registered by another person in respect of the same or some other article with modifications or variations not sufficient to alter the character or substantially to affect the identity thereof,

then, if at any time while the application is pending the applicant becomes the registered proprietor of the design previously registered, the foregoing provisions of this section shall apply as if at the time of making the application the applicant had been the registered proprietor of that design.

Provisions for secrecy of certain designs.U.K.

5(1)Where, either before or after the commencement of this Act, an application for the registration of a design has been made, and it appears to the registrar that the design is one of a class notified to him by the Secretary of State as relevant for defence purposes, he may give directions for prohibiting or restricting the publication of information with respect to the design, or the communication of such information to any person or class of persons specified in the directions.

(2)The Secretary of State shall by rules make provision for securing that where such directions are given—

(a)the representation or specimen of the design, and

(b)any evidence filed in support of the applicant’s contention that the appearance of an article is material (for the purposes of section 1(3) of this Act),

shall not be open to public inspection at the Patent Office during the continuance in force of the directions.

(3)Where the registrar gives any such directions as aforesaid, he shall give notice of the application and of the directions to the Secretary of State, and thereupon the following provisions shall have effect, that is to say:—

(a)the Secretary of State shall, upon receipt of such notice, consider whether the publication of the design would be prejudicial to the defence of the realm and unless a notice under paragraph (c) of this subsection has previously been given by that authority to the registrar, shall reconsider that question before the expiration of nine months from the date of filing of the application for registration of the design and at least once in every subsequent year;

(b)for the purpose aforesaid, the Secretary of State may, at any time after the design has been registered or, with the consent of the applicant, at any time before the design has been registered, inspect the representation or specimen of the design, or any such evidence as is mentioned in subsection (2)(b) above, filed in pursuance of the application;

(c)if upon consideration of the design at any time it appears to the Secretary of State that the publication of the design would not, or would no longer, be prejudicial to the defence of the realm, he shall give notice to the registrar to that effect;

(d)on the receipt of any such notice the registrar shall revoke the directions and may, subject to such conditions, if any, as he thinks fit, extend the time for doing anything required or authorised to be done by or under this Act in connection with the application or registration, whether or not that time has previously expired.

(4)No person resident in the United Kingdom shall, except under the authority of a written permit granted by or on behalf of the registrar, make or cause to be made any application outside the United Kingdom for the registration of a design of any class prescribed for the purposes of this subsection unless—

(a)an application for registration of the same design has been made in the United Kingdom not less than six weeks before the application outside the United Kingdom; and

(b)either no directions have been given under subsection (1) of this section in relation to the application in the United Kingdom or all such directions have been revoked:

Provided that this subsection shall not apply in relation to a design for which an application for protection has first been filed in a country outside the United Kingdom by a person resident outside the United Kingdom.

... ... ... ...

Provisions as to confidential disclosure, etc.U.K.

6(1)An application for the registration of a design shall not be refused, and the registration of a design shall not be invalidated, by reason only of—

(a)the disclosure of the design by the proprietor to any other person in such circumstances as would make it contrary to good faith for that other person to use or publish the design;

(b)the disclosure of the design in breach of good faith by any person other than the proprietor of the design; or

(c)in the case of a new or original textile design intended for registration, the acceptance of a first and confidential order for goods bearing the design.

(2)An application for the registration of a design shall not be refused and the registration of a design shall not be invalidated by reason only—

(a)that a representation of the design, or any article to which the design has been applied, has been displayed, with the consent of the proprietor of the design, at an exhibition certified by the Secretary of State for the purposes of this subsection;

(b)that after any such display as aforesaid, and during the period of the exhibition, a representation of the design or any such article as aforesaid has been displayed by any person without the consent of the proprietor; or

(c)that a representation of the design has been published in consequence of any such display as is mentioned in paragraph (a) of this subsection,

if the application for registration of the design is made not later than six months after the opening of the exhibition.

(3)An application for the registration of a design shall not be refused, and the registration of a design shall not be invalidated, by reason only of the communication of the design by the proprietor thereof to a government department or to any person authorised by a government department to consider the merits of the design, or of anything done in consequence of such a communication.

(4)Where an application is made by or with the consent of the owner of copyright in an artistic work for the registration of a corresponding design, the design shall not be treated for the purposes of this Act as being other than new by reason only of any use previously made of the artistic work, subject to subsection (5).

(5)Subsection (4) does not apply if the previous use consisted of or included the sale, letting for hire or offer or exposure for sale or hire of articles to which had been applied industrially—

(a)the design in question, or

(b)a design differing from it only in immaterial details or in features which are variants commonly used in the trade,

and that previous use was made by or with the consent of the copyright owner.

(6)The Secretary of State may make provision by rules as to the circumstances in which a design is to be regarded for the purposes of this section as “applied industrially” to articles, or any description of articles.

Effect of registration, &c.U.K.

Right given by registration.U.K.

7(1)The registration of a design under this Act gives the registered proprietor the exclusive right—

(a)to make or import—

(i)for sale or hire, or

(ii)for use for the purposes of a trade or business, or

(b)to sell, hire or offer or expose for sale or hire,

an article in respect of which the design is registered and to which that design or a design not substantially different from it has been applied.

(2)The right in the registered design is infringed by a person who without the licence of the registered proprietor does anything which by virtue of subsection (1) is the exclusive right of the proprietor.

(3)The right in the registered design is also infringed by a person who, without the licence of the registered proprietor makes anything for enabling any such article to be made, in the United Kingdom or elsewhere, as mentioned in subsection (1).

(4)The right in the registered design is also infringed by a person who without the licence of the registered proprietor—

(a)does anything in relation to a kit that would be an infringement if done in relation to the assembled article (see subsection (1)), or

(b)makes anything for enabling a kit to be made or assembled, in the United Kingdom or elsewhere, if the assembled article would be such an article as is mentioned in subsection (1);

and for this purpose a “kit” means a complete or substantially complete set of components intended to be assembled into an article.

(5)No proceedings shall be taken in respect of an infringement committed before the date on which the certificate of registration of the design under this Act is granted.

(6)The right in a registered design is not infringed by the reproduction of a feature of the design which, by virtue of section 1(1)(b), is left out of account in determining whether the design is registrable.

Duration of right in registered design.U.K.

8(1)The right in a registered design subsists in the first instance for a period of five years from the date of the registration of the design.

(2)The period for which the right subsists may be extended for a second, third, fourth and fifth period of five years, by applying to the registrar for an extension and paying the prescribed renewal fee.

(3)If the first, second, third or fourth period expires without such application and payment being made, the right shall cease to have effect; and the registrar shall, in accordance with rules made by the Secretary of State, notify the proprietor of that fact.

(4)If during the period of six months immediately following the end of that period an application for extension is made and the prescribed renewal fee and any prescribed additional fee is paid, the right shall be treated as if it had never expired, with the result that—

(a)anything done under or in relation to the right during that further period shall be treated as valid,

(b)an act which would have constituted an infringement of the right if it had not expired shall be treated as an infringement, and

(c)an act which would have constituted use of the design for the services of the Crown if the right had not expired shall be treated as such use.

(5)Where it is shown that a registered design—

(a)was at the time it was registered a corresponding design in relation to an artistic work in which copyright subsists, and

(b)by reason of a previous use of that work would not have been registrable but for section 6(4) of this Act (registration despite certain prior applications of design),

the right in the registered design expires when the copyright in that work expires, if that is earlier than the time at which it would otherwise expire, and it may not thereafter be renewed.

(6)The above provisions have effect subject to the proviso to section 4(1) (registration of same design in respect of other articles, &c.).

Restoration of lapsed right in design.U.K.

8A(1)Where the right in a registered design has expired by reason of a failure to extend, in accordance with section 8(2) or (4), the period for which the right subsists, an application for the restoration of the right in the design may be made to the registrar within the prescribed period.

(2)The application may be made by the person who was the registered proprietor of the design or by any other person who would have been entitled to the right in the design if it had not expired; and where the design was held by two or more persons jointly, the application may, with the leave of the registrar, be made by one or more of them without joining the others.

(3)Notice of the application shall be published by the registrar in the prescribed manner.

(4)If the registrar is satisfied that the proprietor took reasonable care to see that the period for which the right subsisted was extended in accordance with section 8(2) or (4), he shall, on payment of any unpaid renewal fee and any prescribed additional fee, order the restoration of the right in the design.

(5)The order may be made subject to such conditions as the registrar thinks fit, and if the proprietor of the design does not comply with any condition the registrar may revoke the order and give such consequential directions as he thinks fit.

(6)Rules altering the period prescribed for the purposes of subsection (1) may contain such transitional provisions and savings as appear to the Secretary of State to be necessary or expedient.

Effect of order for restoration of right.U.K.

8B(1)The effect of an order under section 8A for the restoration of the right in a registered design is as follows.

(2)Anything done under or in relation to the right during the period between expiry and restoration shall be treated as valid.

(3)Anything done during that period which would have constituted an infringement if the right had not expired shall be treated as an infringement—

(a)if done at a time when it was possible for an application for extension to be made under section 8(4); or

(b)if it was a continuation or repetition of an earlier infringing act.

(4)If after it was no longer possible for such an application for extension to be made, and before publication of notice of the application for restoration, a person—

(a)began in good faith to do an act which would have constituted an infringement of the right in the design if it had not expired, or

(b)made in good faith effective and serious preparations to do such an act,

he has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the restoration of the right in the design; but this does not extend to granting a licence to another person to do the act.

(5)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (4) may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(6)Where an article is disposed of to another in exercise of the rights conferred by subsection (4) or subsection (5), that other and any person claiming through him may deal with the article in the same way as if it had been disposed of by the registered proprietor of the design.

(7)The above provisions apply in relation to the use of a registered design for the services of the Crown as they apply in relation to infringement of the right in the design.

Exemption of innocent infringer from liability for damages.U.K.

9(1)In proceedings for the infringement of the right in a registered design damages shall not be awarded against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable ground for supposing, that the design was registered; and a person shall not be deemed to have been aware or to have had reasonable grounds for supposing as aforesaid by reason only of the marking of an article with the word “registered” or any abbreviation thereof, or any word or words expressing or implying that the design applied to the article has been registered, unless the number of the design accompanied the word or words or the abbreviation in question.

(2)Nothing in this section shall affect the power of the court to grant an injunction in any proceedings for infringement of the right in a registered design.

Compulsory licence in respect of registered design.U.K.

10(1)At any time after a design has been registered any person interested may apply to the registrar for the grant of a compulsory licence in respect of the design on the ground that the design is not applied in the United Kingdom by any industrial process or means to the article in respect of which it is registered to such an extent as is reasonable in the circumstances of the case; and the registrar may make such order on the application as he thinks fit.

(2)An order for the grant of a licence shall, without prejudice to any other method of enforcement, have effect as if it were a deed executed by the registered proprietor and all other necessary parties, granting a licence in accordance with the order.

(3)No order shall be made under this section which would be at variance with any treaty, convention, arrangement or engagement applying to the United Kingdom and any convention country.

(4)An appeal shall lie from any order of the registrar under this section.

Cancellation of registration.U.K.

11(1)The registrar may, upon a request made in the prescribed manner by the registered proprietor, cancel the registration of a design.

(2)At any time after a design has been registered any person interested may apply to the registrar for the cancellation of the registration of the design on the ground that the design was not, at the date of the registration thereof, new..., or on any other ground on which the registrar could have refused to register the design; and the registrar may make such order on the application as he thinks fit.

(3)At any time after a design has been registered, any person interested may apply to the registrar for the cancellation of the registration on the ground that—

(a)the design was at the time it was registered a corresponding design in relation to an artistic work in which copyright subsisted, and

(b)the right in the registered design has expired in accordance with section 8(4) of this Act (expiry of right in registered design on expiry of copyright in artistic work);

and the registrar may make such order on the application as he thinks fit.

(4)A cancellation under this section takes effect—

(a)in the case of cancellation under subsection (1), from the date of the registrar’s decision,

(b)in the case of cancellation under subsection (2), from the date of registration,

(c)in the case of cancellation under subsection (3), from the date on which the right in the registered design expired,

or, in any case, from such other date as the registrar may direct.

(5)An appeal lies from any order of the registrar under this section.

Powers exercisable for protection of the public interest.U.K.

11A(1)Where a report of the Monopolies and Mergers Commission has been laid before Parliament containing conclusions to the effect—

(a)on a monopoly reference, that a monopoly situation exists and facts found by the Commission operate or may be expected to operate against the public interest,

(b)on a merger reference, that a merger situation qualifying for investigation has been created and the creation of the situation, or particular elements in or consequences of it specified in the report, operate or may be expected to operate against the public interest,

(c)on a competition reference, that a person was engaged in an anti-competitive practice which operated or may be expected to operate against the public interest, or

(d)on a reference under section 11 of the Competition Act 1980 (reference of public bodies and certain other persons), that a person is pursuing a course of conduct which operates against the public interest,

the appropriate Minister or Ministers may apply to the registrar to take action under this section.

(2)Before making an application the appropriate Minister or Ministers shall publish, in such manner as he or they think appropriate, a notice describing the nature of the proposed application and shall consider any representations which may be made within 30 days of such publication by persons whose interests appear to him or them to be affected.

(3)If on an application under this section it appears to the registrar that the matters specified in the Commission’s report as being those which in the Commission’s opinion operate, or operated or may be expected to operate, against the public interest include—

(a)conditions in licences granted in respect of a registered design by its proprietor restricting the use of the design by the licensee or the right of the proprietor to grant other licences, or

(b)a refusal by the proprietor of a registered design to grant licences on reasonable terms,

he may by order cancel or modify any such condition or may, instead or in addition, make an entry in the register to the effect that licences in respect of the design are to be available as of right.

(4)The terms of a licence available by virtue of this section shall, in default of agreement, be settled by the registrar on an application by the person requiring the licence; and terms so settled shall authorise the licensee to do everything which would be an infringement of the right in the registered design in the absence of a licence.

(5)Where the terms of a licence are settled by the registrar, the licence has effect from the date on which the application to him was made.

(6)An appeal lies from any order of the registrar under this section.

(7)In this section “the appropriate Minister or Ministers” means the Minister or Ministers to whom the report of the Monopolies and Mergers Commission was made.

Undertaking to take licence of right in infringement proceedings.U.K.

11B(1)If in proceedings for infringement of the right in a registered design in respect of which a licence is available as of right under section 11A of this Act the defendant undertakes to take a licence on such terms as may be agreed or, in default of agreement, settled by the registrar under that section—

(a)no injunction shall be granted against him, and

(b)the amount recoverable against him by way of damages or on an account of profits shall not exceed double the amount which would have been payable by him as licensee if such a licence on those terms had been granted before the earliest infringement.

(2)An undertaking may be given at any time before final order in the proceedings, without any admission of liability.

(3)Nothing in this section affects the remedies available in respect of an infringement committed before licences of right were available.

Use for services of the Crown.U.K.

12The provisions of the First Schedule to this Act shall have effect with respect to the use of registered designs for the services of the Crown and the rights of third parties in respect of such use.

International ArrangementsU.K.

Orders in Council as to convention countries.U.K.

13(1)His Majesty may, with a view to the fulfilment of a treaty, convention, arrangement or engagement, by Order in Council declare that any country specified in the Order is a convention country for the purposes of this Act:

Provided that a declaration may be made as aforesaid for the purposes either of all or of some only of the provisions of this Act, and a country in the case of which a declaration made for the purposes of some only of the provisions of this Act is in force shall be deemed to be a convention country for the purposes of those provisions only.

(2)His Majesty may by Order in Council direct that any of the Channel Islands, any colony,... shall be deemed to be a convention country for the purposes of all or any of the provisions of this Act; and an Order made under this subsection may direct that any such provisions shall have effect, in relation to the territory in question, subject to such conditions or limitations, if any, as may be specified in the Order.

(3)For the purposes of subsection (1) of this section, every colony, protectorate, territory subject to the authority or under the suzerainty of another country, and territory administered by another country... under the trusteeship system of the United Nations, shall be deemed to be a country in the case of which a declaration may be made under that subsection.

Registration of design where application for protection in convention country has been made.U.K.

14(1)An application for registration of a design in respect of which protection has been applied for in a convention country may be made in accordance with the provisions of this Act by the person by whom the application for protection was made or his personal representative or assignee:

Provided that no application shall be made by virtue of this section after the expiration of six months from the date of the application for protection in a convention country or, where more than one such application for protection has been made, from the date of the first application.

(2)Where an application for registration of a design is made by virtue of this section, the application shall be treated, for the purpose of determining whether that or any other design is new, as made on the date of the application for protection in the convention country or, if more than one such application was made, on the date of the first such application.

(3)Subsection (2) shall not be construed as excluding the power to give directions under section 3(4) of this Act in relation to an application made by virtue of this section.

(4)Where a person has applied for protection for a design by an application which—

(a)in accordance with the terms of a treaty subsisting between two or more convention countries, is equivalent to an application duly made in any one of those convention countries; or

(b)in accordance with the law of any convention country, is equivalent to an application duly made in that convention country,

he shall be deemed for the purposes of this section to have applied in that convention country.

Extension of time for applications under s.14 in certain cases.U.K.

15(1)If the Secretary of State is satisfied that provision substantially equivalent to the provision to be made by or under this section has been or will be made under the law of any convention country, he may make rules empowering the registrar to extend the time for making application under subsection (1) of section 14 of this Act for registration of a design in respect of which protection has been applied for in that country in any case where the period specified in the proviso to that subsection expires during a period prescribed by the rules.

(2)Rules made under this section—

(a)may, where any agreement or arrangement has been made between His Majesty’s Government in the United Kingdom and the government of the convention country for the supply or mutual exchange of information or articles, provide, either generally or in any class of case specified in the rules, that an extension of time shall not be granted under this section unless the design has been communicated in accordance with the agreement or arrangement;

(b)may, either generally or in any class of case specified in the rules, fix the maximum extension which may be granted under this section;

(c)may prescribe or allow any special procedure in connection with applications made by virtue of this section;

(d)may empower the registrar to extend, in relation to an application made by virtue of this section, the time limited by or under the foregoing provisions of this Act for doing any act, subject to such conditions, if any, as may be imposed by or under the rules;

(e)may provide for securing that the rights conferred by registration on an application made by virtue of this section shall be subject to such restrictions or conditions as may be specified by or under the rules and in particular to restrictions and conditions for the protection of persons (including persons acting on behalf of His Majesty) who, otherwise than as the result of a communication made in accordance with such an agreement or arrangement as is mentioned in paragraph (a) of this subsection, and before the date of the application in question or such later date as may be allowed by the rules, may have imported or made articles to which the design is applied or may have made any application for registration of the design.

Protection of designs communicated under international agreements.U.K.

16(1)Subject to the provisions of this section, the Secretary of State may make rules for securing that, where a design has been communicated in accordance with an agreement or arrangement made between His Majesty’s Government in the United Kingdom and the government of any other country for the supply or mutual exchange of information or articles,—

(a)an application for the registration of the design made by the person from whom the design was communicated or his personal representative or assignee shall not be prejudiced, and the registration of the design in pursuance of such an application shall not be invalidated, by reason only that the design has been communicated as aforesaid or that in consequence thereof—

(i)the design has been published or applied, or

(ii)an application for registration of the design has been made by any other person, or the design has been registered on such an application;

(b)any application for the registration of a design made in consequence of such a communication as aforesaid may be refused and any registration of a design made on such an application may be cancelled.

(2)Rules made under subsection (1) of this section may provide that the publication or application of a design, or the making of any application for registration thereof shall, in such circumstances and subject to such conditions or exceptions as may be prescribed by the rules, be presumed to have been in consequence of such a communication as is mentioned in that subsection.

(3)The powers of the Secretary of State under this section, so far as they are exercisable for the benefit of persons from whom designs have been communicated to His Majesty’s Government in the United Kingdom by the government of any other country, shall only be exercised if and to the extent that the Secretary of State is satisfied that substantially equivalent provision has been or will be made under the law of that country for the benefit of persons from whom designs have been communicated by His Majesty’s Government in the United Kingdom to the government of that country.

(4)References in the last foregoing subsection to the communication of a design to or by His Majesty’s Government or the government of any other country shall be construed as including references to the communication of the design by or to any person authorised in that behalf by the government in question.

Register of designs, etc.U.K.

Register of designs.U.K.

17(1)The registrar shall maintain the register of designs, in which shall be entered—

(a)the names and addresses of proprietors of registered designs;

(b)notices of assignments and of transmissions of registered designs; and

(c)such other matters as may be prescribed or as the registrar may think fit.

(2)No notice of any trust, whether express, implied or constructive, shall be entered in the register of designs, and the registrar shall not be affected by any such notice.

(3)The register need not be kept in documentary form.

(4)Subject to the provisions of this Act and to rules made by the Secretary of State under it, the public shall have a right to inspect the register at the Patent Office at all convenient times.

(5)Any person who applies for a certified copy of an entry in the register or a certified extract from the register shall be entitled to obtain such a copy or extract on payment of a fee prescribed in relation to certified copies and extracts; and rules made by the Secretary of State under this Act may provide that any person who applies for an uncertified copy or extract shall be entitled to such a copy or extract on payment of a fee prescribed in relation to uncertified copies and extracts.

(6)Applications under subsection (5) above or rules made by virtue of that subsection shall be made in such manner as may be prescribed.

(7)In relation to any portion of the register kept otherwise than in documentary form—

(a)the right of inspection conferred by subsection (4) above is a right to inspect the material on the register; and

(b)the right to a copy or extract conferred by subsection (5) above or rules is a right to a copy or extract in a form in which it can be taken away and in which it is visible and legible.

(8)Subject to subsection (11) below, the register shall be prima facie evidence of anything required or authorised to be entered in it and in Scotland shall be sufficient evidence of any such thing.

(9)A certificate purporting to be signed by the registrar and certifying that any entry which he is authorised by or under this Act to make has or has not been made, or that any other thing which he is so authorised to do has or has not been done, shall be prima facie evidence, and in Scotland shall be sufficient evidence, of the matters so certified.

(10)Each of the following—

(a)a copy of an entry in the register or an extract from the register which is supplied under subsection (5) above;

(b)a copy or any representation, specimen or document kept in the Patent Office or an extract from any such document,

which purports to be a certified copy or certified extract shall, subject to subsection (11) below, be admitted in evidence without further proof and without production of any original; and in Scotland such evidence shall be sufficient evidence.

(11)In the application of this section to England and Wales nothing in it shall be taken as detracting from section 69 or 70 of the Police and Criminal Evidence Act 1984 or any provision made by virtue of either of them.

(12)In this section “certified copy” and “certified extract” means a copy and extract certified by the registrar and sealed with the seal of the Patent Office.

Certificate of registration.U.K.

18(1)The registrar shall grant a certificate of registration in the prescribed form to the registered proprietor of a design when the design is registered.

(2)The registrar may, in a case where he is satisfied that the certificate of registration has been lost or destroyed, or in any other case in which he thinks it expedient, furnish one or more copies of the certificate.

Registration of assignments, etc.U.K.

19(1)Where any person becomes entitled by assignment, transmission or operation of law to a registered design or to a share in a registered design, or becomes entitled as mortgagee, licensee or otherwise to any other interest in a registered design, he shall apply to the registrar in the prescribed manner for the registration of his title as proprietor or co-proprietor or, as the case may be, of notice of his interest, in the register of designs.

(2)Without prejudice to the provisions of the foregoing subsection, an application for the registration of the title of any person becoming entitled by assignment to a registered design or a share in a registered design, or becoming entitled by virtue of a mortgage, licence or other instrument to any other interest in a registered design, may be made in the prescribed manner by the assignor, mortgagor, licensor or other party to that instrument, as the case may be.

(3)Where application is made under this section for the registration of the title of any person, the registrar shall, upon proof of title to his satisfaction—

(a)where that person is entitled to a registered design or a share in a registered design, register him in the register of designs as proprietor or co-proprietor of the design, and enter in that register particulars of the instrument or event by which he derives title; or

(b)where that person is entitled to any other interest in the registered design, enter in that register notice of his interest, with particulars of the instrument (if any) creating it.

(3A)Where design right subsists in a registered design, the registrar shall not register an interest under subsection (3) unless he is satisfied that the person entitled to that interest is also entitled to a corresponding interest in the design right.

(3B)Where design right subsists in a registered design and the proprietor of the registered design is also the design right owner, an assignment of the design right shall be taken to be also an assignment of the right in the registered design, unless a contrary intention appears.

(4)Subject to any rights vested in any other person of which notice is entered in the register of designs, the person or persons registered as proprietor of a registered design shall have power to assign, grant licences under, or otherwise deal with the design, and to give effectual receipts for any consideration for any such assignment, licence or dealing.

Provided that any equities in respect of the design may be enforced in like manner as in respect of any other personal property.

(5)Except for the purposes of an application to rectify the register under the following provisions of this Act, a document in respect of which no entry has been made in the register of designs under subsection (3) of this section shall not be admitted in any court as evidence of the title of any person to a registered design or share of or interest in a registered design unless the court otherwise directs.

Rectification of register.U.K.

20(1)The court may, on the application of any person aggrieved, order the register of designs to be rectified by the making of any entry therein or the variation or deletion of any entry therein.

(2)In proceedings under this section the court may determine any question which it may be necessary or expedient to decide in connection with the rectification of the register.

(3)Notice of any application to the court under this section shall be given in the prescribed manner to the registrar, who shall be entitled to appear and be heard on the application, and shall appear if so directed by the court.

(4)Any order made by the court under this section shall direct that notice of the order shall be served on the registrar in the prescribed manner; and the registrar shall, on receipt of the notice, rectify the register accordingly.

(5)A rectification of the register under this section has effect as follows—

(a)an entry made has effect from the date on which it should have been made,

(b)an entry varied has effect as if it had originally been made in its varied form, and

(c)an entry deleted shall be deemed never to have had effect,

unless, in any case, the court directs otherwise.

Power to correct clerical errors.U.K.

21(1)The registrar may, in accordance with the provisions of this section, correct any error in an application for the registration or in the representation of a design, or any error in the register of designs.

(2)A correction may be made in pursuance of this section either upon a request in writing made by any person interested and accompanied by the prescribed fee, or without such a request.

(3)Where the registrar proposes to make any such correction as aforesaid otherwise than in pursuance of a request made under this section, he shall give notice of the proposal to the registered proprietor or the applicant for registration of the design, as the case may be, and to any other person who appears to him to be concerned, and shall give them an opportunity to be heard before making the correction.

Inspection of registered designs.U.K.

22(1)Where a design has been registered under this Act, there shall be open to inspection at the Patent Office on and after the day on which the certificate of registration is issued—

(a)the representation or specimen of the design, and

(b)any evidence filed in support of the applicant’s contention that the appearance of an article is material (for the purposes of section 1(3) of this Act).

This subsection has effect subject to the following provisions of this section and to any rules made under section 5(2) of this Act.

(2)In the case of a design registered in respect of an article of any class prescribed for the purposes of this subsection, no representation, specimen or evidence filed in pursuance of the application shall, until the expiration of such period after the day on which the certificate of registration is issued as may be prescribed in relation to articles of that class, be open to inspection at the Patent Office except by the registered proprietor, a person authorised in writing by the registered proprietor, or a person authorised by the registrar or by the court:

Provided that where the registrar proposes to refuse an application for the registration of any other design on the ground that it is the same as the first-mentioned design or differs from that design only in immaterial details or in features which are variants commonly used in the trade, the applicant shall be entitled to inspect the representation or specimen of the first-mentioned design filed in pursuance of the application for registration of that design.

(3)In the case of a design registered in respect of an article of any class prescribed for the purposes of the last foregoing subsection, the representation, specimen or evidence shall not, during the period prescribed as aforesaid, be inspected by any person by virtue of this section except in the presence of the registrar or of an officer acting under him; and except in the case of an inspection authorised by the proviso to that subsection, the person making the inspection shall not be entitled to take a copy of the representation, specimen or evidence or any part thereof.

(4)Where an application for the registration of a design has been abandoned or refused, neither the application for registration nor any representation, specimen or evidence filed in pursuance thereof shall at any time be open to inspection at the Patent Office or be published by the registrar.

Information as to existence of right in registered design.U.K.

23On the request of a person furnishing such information as may enable the registrar to identify the design, and on payment of the prescribed fee, the registrar shall inform him—

(a)whether the design is registered and, if so, in respect of what articles, and

(b)whether any extension of the period of the right in the registered design has been granted,

and shall state the date of registration and the name and address of the registered proprietor.

... ... ... ... ... ... ...

Legal proceedings and appealsU.K.

Certificate of contested validity of registration.U.K.

25(1)If in any proceedings before the court the validity of the registration of a design is contested, and it is found by the court that the design is validly registered, the court may certify that the validity of the registration of the design was contested in those proceedings.

(2)Where any such certificate has been granted, then if in any subsequent proceedings before the court for infringement of the right in the registered design or for cancellation of the registration of the design, a final order or judgment is made or given in favour of the registered proprietor, he shall, unless the court otherwise directs, be entitled to his costs as between solicitor and client:

Provided that this subsection shall not apply to the costs of any appeal in any such proceedings as aforesaid.

Remedy for groundless threats of infringement proceedings.U.K.

26(1)Where any person (whether entitled to or interested in a registered design or an application for registration of a design or not) by circulars, advertisements or otherwise threatens any other person with proceedings for infringement of the right in a registered design, any person aggrieved thereby may bring an action against him for any such relief as is mentioned in the next following subsection.

(2)Unless in any action brought by virtue of this section the defendant proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute, an infringement of the right in a registered design the registration of which is not shown by the plaintiff to be invalid, the plaintiff shall be entitled to the following relief, that is to say:—

(a)a declaration to the effect that the threats are unjustifiable;

(b)an injunction against the continuance of the threats; and

(c)such damages, if any, as he has sustained thereby.

(2A)Proceedings may not be brought under this section in respect of a threat to bring proceedings for an infringement alleged to consist of the making or importing of anything.

(3)For the avoidance of doubt it is hereby declared that a mere notification that a design is registered does not constitute a threat of proceedings within the meaning of this section.

The court.U.K.

27(1)In this Act “the court” means—

(a)in England and Wales, the High Court or any patents county court having jurisdiction by virtue of an order under section 287 of the Copyright, Designs and Patents Act 1988,

(b)in Scotland, the Court of Session, and

(c)in Northern Ireland, the High Court.

(2)Provision may be made by rules of court with respect to proceedings in the High Court in England and Wales for references and applications under this Act to be dealt with by such judge of that court as the Lord Chancellor may select for the purpose.

The Appeal Tribunal.U.K.

28(1)Any appeal from the registrar under this Act shall lie to the Appeal Tribunal.

(2)The Appeal Tribunal shall consist of—

(a)one or more judges of the High Court nominated by the Lord Chancellor, and

(b)one judge of the Court of Session nominated by the Lord President of that Court.

(2A)At any time when it consists of two or more judges, the jurisdiction of the Appeal Tribunal—

(a)where in the case of any particular appeal the senior of those judges so directs, shall be exercised in relation to that appeal by both of the judges, or (if there are more than two) by two of them, sitting together, and

(b)in relation to any appeal in respect of which no such direction is given, may be exercised by any one of the judges;

and, in the exercise of that jurisdiction, different appeals may be heard at the same time by different judges.

(3)The expenses of the Appeal Tribunal shall be defrayed and the fees to be taken therein may be fixed as if the Tribunal were a court of the High Court.

(4)The Appeal Tribunal may examine witnesses on oath and administer oaths for that purpose.

(5)Upon any appeal under this Act the Appeal Tribunal may by order award to any party such costs or expenses as the Tribunal may consider reasonable and direct how and by what parties the costs or expenses are to be paid; and any such order may be enforced—

(a)in England and Wales or Northern Ireland, in the same way as an order of the High Court;

(b)in Scotland, in the same way as a decree for expenses granted by the Court of Session.

... ... ... ... ... ... ...

(7)Upon any appeal under this Act the Appeal Tribunal may exercise any power which could have been exercised by the registrar in the proceeding from which the appeal is brought.

(8)Subject to the foregoing provisions of this section the Appeal Tribunal may make rules for regulating all matters relating to proceedings before it under this Act, including right of audience.

(8A)At any time when the Appeal Tribunal consists of two or more judges, the power to make rules under subsection (8) of this section shall be exercisable by the senior of those judges:

Provided that another of those judges may exercise that power if it appears to him that it is necessary for rules to be made and that the judge (or, if more than one, each of the judges) senior to him is for the time being prevented by illness, absence or otherwise from making them.

(9)An appeal to the Appeal Tribunal under this Act shall not be deemed to be a proceeding in the High Court.

(10)In this section “the High Court” means the High Court in England and Wales; and for the purposes of this section the seniority of judges shall be reckoned by reference to the dates on which they were appointed judges of that court or the Court of Session.

Powers and duties of RegistrarU.K.

Exercise of discretionary powers of registrar.U.K.

29Without prejudice to any provisions of this Act requiring the registrar to hear any party to proceedings thereunder, or to give to any such party an opportunity to be heard, rules made by the Secretary of State under this Act shall require the registrar to give to any applicant for registration of a design an opportunity to be heard before exercising adversely to the applicant any discretion vested in the registrar by or under this Act.

Costs and security for costs.U.K.

30(1)Rules made by the Secretary of State under this Act may make provision empowering the registrar, in anyproceedings before him under this Act—

(a)to award any party such costs as he may consider reasonable, and

(b)to direct how and by what parties they are to be paid.

(2)Any such order of the registrar may be enforced—

(a)in England and Wales or Northern Ireland, in the same way as an order of the High Court;

(b)in Scotland, in the same way as a decree for expenses granted by the Court of Session.

(3)Rules made by the Secretary of State under this Act may make provision empowering the registrar to require a person, in such cases as may be prescribed, to give security for the costs of—

(a)an application for cancellation of the registration of a design,

(b)an application for the grant of a licence in respect of a registered design, or

(c)an appeal from any decision of the registrar under this Act,

and enabling the application or appeal to be treated as abandoned in default of such security being given.

Evidence before registrar.U.K.

31Rules made by the Secretary of State under this Act may make provision—

(a)as to the giving of evidence in proceedings before the registrar under this Act by affidavit or statutory declaration;

(b)conferring on the registrar the powers of an official referee of the [F992 Senior Courts] as regards the examination of witnesses on oath and the discovery and production of documents; and

(c)applying in relation to the attendance of witnesses in proceedings before the registrar the rules applicable to the attendance of witnesses in proceedings before such a referee.

... ... ... ... ... ... ...

Textual Amendments

F992 +Sch. 4 para. 31(b): words substituted (1.10.2009) by Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 4; S.I. 2009/1604, art. 2 +

OffencesU.K.

Offences under s.5.U.K.

33(1)If any person fails to comply with any direction given under section five of this Act or makes or causes to be made an application for the registration of a design in contravention of that section, he shall be guilty of an offence and liable—

(a)on conviction on indictment to imprisonment for a term not exceeding two years or a fine, or both;

(b)on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both.

... ... ... ... ... ... ...

Falsification of register, etc.U.K.

34If any person makes or causes to be made a false entry in the register of designs, or a writing falsely purporting to be a copy of an entry in that register, or produces or tenders or causes to be produced or tendered in evidence any such writing, knowing the entry or writing to be false, he shall be guilty of an offence and liable—

(a)on conviction on indictment to imprisonment for a term not exceeding two years or a fine, or both;

(b)on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both.

Fine for falsely representing a design as registered.U.K.

35(1)If any person falsely represents that a design applied to any article sold by him is registered in respect of that article, he shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and for the purposes of this provision a person who sells an article having stamped, engraved or impressed thereon or otherwise applied thereto the word “registered”, or any other word expressing or implying that the design applied to the article is registered, shall be deemed to represent that the design applied to the article is registered in respect of that article.

(2)If any person, after the right in a registered design has expired, marks any article to which the design has been applied with the word “registered”, or any word or words implying that there is a subsisting right in the design under this Act, or causes any such article to be so marked, he shall be liable on summary conviction to a fine not exceeding level 1 on the standard scale.

Offence by body corporate: liability of officers.U.K.

35A(1)Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2)In relation to a body corporate whose affairs are managed by its members “director” means a member of the body corporate.

Rules, etc.U.K.

General power of Secretary of State to make rules, etc.U.K.

36(1)Subject to the provisions of this Act, the Secretary of State may make such rules as he thinks expedient for regulating the business of the Patent Office in relation to designs and for regulating all matters by this Act placed under the direction or control of the registrar or the Secretary of State.

(1A)Rules may, in particular, make provision—

(a)prescribing the form of applications for registration of designs and of any representations or specimens of designs or other documents which may be filed at the Patent Office, and requiring copies to be furnished of any such representations, specimens or documents;

(b)regulating the procedure to be followed in connection with any application or request to the registrar or in connection with any proceeding before him, and authorising the rectification of irregularities of procedure;

(c)providing for the appointment of advisers to assist the registrar in proceedings before him;

(d)regulating the keeping of the register of designs;

(e)authorising the publication and sale of copies of representations of designs and other documents in the Patent Office;

(f)prescribing anything authorised or required by this Act to be prescribed by rules.

(1B)The remuneration of an adviser appointed to assist the registrar shall be determined by the Secretary of State with the consent of the Treasury and shall be defrayed out of money provided by Parliament.

(2)Rules made under this section may provide for the establishment of branch offices for designs and may authorise any document or thing required by or under this Act to be filed or done at the Patent Office to be filed or done at the branch office at Manchester or any other branch office established in pursuance of the rules.

Provisions as to rules and Orders.U.K.

37(1)... ... ... ... ... ... ...

(2)Any rules made by the Secretary of State in pursuance of section 15 or section 16 of this Act, and any order made, direction given, or other action taken under the rules by the registrar, may be made, given or taken so as to have effect as respects things done or omitted to be done on or after such date, whether before or after the coming into operation of the rules or of this Act, as may be specified in the rules.

(3)Any power to make rules conferred by this Act on the Secretary of State or on the Appeal Tribunal shall be exercisable by statutory instrument; and the Statutory Instruments Act 1946 shall apply to a statutory instrument containing rules made by the Appeal Tribunal in like manner as if the rules had been made by a Minister of the Crown.

(4)Any statutory instrument containing rules made by the Secretary of State under this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5)Any Order in Council made under this Act may be revoked or varied by a subsequent Order in Council.

... ... ... ... ... ... ...

SupplementalU.K.

Hours of business and excluded days.U.K.

39(1)Rules made by the Secretary of State under this Act may specify the hour at which the Patent Office shall be deemed to be closed on any day for purposes of the transaction by the public of business under this Act or of any class of such business, and may specify days as excluded days for any such purposes.

(2)Any business done under this Act on any day after the hour specified as aforesaid in relation to business of that class, or on a day which is an excluded day in relation to business of that class, shall be deemed to have been done on the next following day not being an excluded day; and where the time for doing anything under this Act expires on an excluded day, that time shall be extended to the next following day not being an excluded day.

Fees.U.K.

40There shall be paid in respect of the registration of designs and applications therefor, and in respect of other matters relating to designs arising under this Act, such fees as may be prescribed by rules made by the Secretary of State with the consent of the Treasury.

Service of notices, &c., by post.U.K.

41Any notice required or authorised to be given by or under this Act, and any application or other document so authorised or required to be made or filed, may be given, made or filed by post.

Annual report of registrar.U.K.

42The Comptroller-General of Patents, Designs and Trade Marks shall, in his annual report with respect to the execution of the Patents Act 1977, include a report with respect to the execution of this Act as if it formed a part of or was included in that Act.

Savings.U.K.

43(1)Nothing in this Act shall be construed as authorising or requiring the registrar to register a design the use of which would, in his opinion, be contrary to law or morality.

(2)Nothing in this Act shall affect the right of the Crown or of any person deriving title directly or indirectly from the Crown to sell or use articles forfeited under the laws relating to customs or excise.

Interpretation.U.K.

44(1)In this Act, except where the context otherwise requires, the following expressions have the meanings hereby respectively assigned by them, that is to say—

  • “Appeal Tribunal” means the Appeal Tribunal constituted and acting in accordance with section 28 of this Act as amended by the Administration of Justice Act 1969;

  • “article” means any article of manufacture and includes any part of an article if that part is made and sold separately;

  • “artistic work” has the same meaning as in Part I of the Copyright, Designs and Patents Act 1988;

  • “assignee” includes the personal representative of a deceased assignee, and references to the assignee of any person include references to the assignee of the personal representative or assignee of that person;

  • “author”, in relation to a design, has the meaning given by section 2(3) and (4);

  • ... ... ... ... ... ... ...

  • “corresponding design”, in relation to an artistic work, means a design which if applied to an article would produce something which would be treated for the purposes of Part I of the Copyright, Designs and Patents Act 1988 as a copy of that work;

  • “the court” shall be construed in accordance with section 27 of this Act;

  • “design” has the meaning assigned to it by section 1(1) of this Act;

  • “employee”, “employment” and “employer” refer to employment under a contract of service or of apprenticeship;

  • ... ... ... ... ... ... ...

  • “prescribed” means prescribed by rules made by the Secretary of State under this Act;

  • “proprietor” has the meaning assigned to it by section two of this Act;

  • “registered proprietor” means the person or persons for the time being entered in the register of designs as proprietor of the design;

  • “registrar” means the Comptroller-General of Patents Designs and Trade Marks;

  • “set of articles” means a number of articles of the same general character ordinarily on sale or intended to be used together, to each of which the same design, or the same design with modifications or variations not sufficient to alter the character or substantially to affect the identity thereof, is applied.

(2)Any reference in this Act to an article in respect of which a design is registered shall, in the case of a design registered in respect of a set of articles, be construed as a reference to any article of that set.

(3)Any question arising under this Act whether a number of articles constitute a set of articles shall be determined by the registrar; and notwithstanding anything in this Act any determination of the registrar under this subsection shall be final.

(4)For the purposes of subsection (1) of section 14 and of section 16 of this Act, the expression “personal representative”, in relation to a deceased person, includes the legal representative of the deceased appointed in any country outside the United Kingdom.

Application to Scotland.U.K.

45In the application of this Act to Scotland—

... ... ... ... ... ... ...

(3)

The expression “injunction” means “interdict”; the expression “arbitrator”means “arbiter”;

  • the expression “plaintiff” means “pursuer”; the expression “defendant” means “defender”.

Application to Northern Ireland.U.K.

46In the application of this Act to Northern Ireland—

... ... ... ... ... ... ...

(3)References to enactments include enactments comprised in Northern Ireland legislation:

(3A)References to the Crown include the Crown in right of Her Majesty’s Government in Northern Ireland:

(4)References to a government department shall be construed as including references to a Northern Ireland department, and in relation to a Northern Ireland department references to the Treasury shall be construed as references to the Department of Finance and Personnel.

... ... ... ... ... ... ...

Application to Isle of Man.U.K.

47This Act extends to the Isle of Man, subject to any modifications contained in an Order made by Her Majesty in Council, and accordingly, subject to any such Order, references in this Act to the United Kingdom shall be construed as including the Isle of Man.

Territorial waters and the continental shelf.U.K.

47A(1)For the purposes of this Act the territorial waters of the United Kingdom shall be treated as part of the United Kingdom.

(2)This Act applies to things done in the United Kingdom sector of the continental shelf on a structure or vessel which is present there for purposes directly connected with theexploration of the sea bed or subsoil or the exploitation of their natural resources as it applies to things done in the United Kingdom.

(3)The United Kingdom sector of the continental shelf means the areas designated by order under section 1(7) of the Continental Shelf Act 1964.

Repeals, savings, and transitional provisions.U.K.

48(1)... ... ... ... ... ... ...

(2)Subject to the provisions of this section, any Order in Council, rule, order, requirement, certificate, notice, decision, direction, authorisation, consent, application, request or thing made, issued, given or done under any enactment repealed by this Act shall, if in force at the commencement of this Act, and so far as it could have been made, issued, given or done under this Act, continue in force and have effect as if made, issued, given or done under the corresponding enactment of this Act.

(3)Any register kept under the Patents and Designs Act 1907 shall be deemed to form part of the corresponding register under this Act.

(4)Any design registered before the commencement of this Act shall be deemed to be registered under this Act in respect of articles of the class in which it is registered.

(5)Where, in relation to any design, the time for giving notice to the registrar under section 59 of the Patents and Designs Act 1907 expired before the commencement of this Act and the notice was not given, subsection (2) of section 6 of this Act shall not apply in relation to that design or any registration of that design.

(6)Any document referring to any enactment repealed by this Act shall be construed as referring to the corresponding enactment of this Act.

(7)Nothing in the foregoing provisions of this section shall be taken as prejudicing the operation of section 38 of the Interpretation Act 1889 (which relates to the effect of repeals).

Short title and commencement.U.K.

49(1)This Act may be cited as the Registered Designs Act 1949.

(2)This Act shall come into operation on the first day of January, nineteen hundred and fifty, immediately after the coming into operation of the Patents and Designs Act 1949.

FIRST SCHEDULE U.K.

Provisions as to the Use of Registered Designs for the Services of the Crown and as to the Rights of Third Parties in Respect of such Use

Use of registered designs for services of the CrownU.K.

1(1)Notwithstanding anything in this Act, any Government department, and any person authorised in writing by a Government department, may use any registered design for the services of the Crown in accordance with the following provisions of this paragraph.U.K.

(2)If and so far as the design has before the date of registration thereof been duly recorded by or applied by or on behalf of a Government department otherwise than in consequence of the communication of the design directly or indirectly by the registered proprietor or any person from whom he derives title, any use of the design by virtue of this paragraph may be made free of any royalty or other payment to the registered proprietor.

(3)If and so far as the design has not been so recorded or applied as aforesaid, any use of the design made by virtue of this paragraph at any time after the date of registration thereof, or in consequence of any such communication as aforesaid, shall be made upon such terms as may be agreed upon, either before or after the use, between the Government department and the registered proprietor with the approval of the Treasury, or as may in default of agreement be determined by the court on a reference under paragraph 3 of this Schedule.

(4)The authority of a Government department in respect of a design may be given under this paragraph either before or after the design is registered and either before or after the acts in respect of which the authority is given are done, and may be given to any person whether or not he is authorised directly or indirectly by the registered proprietor to use the design.

(5)Where any use of a design is made by or with the authority of a Government department under this paragraph, then, unless it appears to the department that it would be contrary to the public interest so to do, the department shall notify the registered proprietor as soon as practicable after the use is begun, and furnish him with such information as to the extent of the use as he may from time to time require.

(6)For the purposes of this and the next following paragraph “the services of the Crown” shall be deemed to include—

(a)the supply to the government of any country outside the United Kingdom, in pursuance of an agreement or arrangement between Her Majesty’s Government in the United Kingdom and the government of that country, of articles required—

(i)for the defence of that country; or

(ii)for the defence of any other country whose government is party to any agreement or arrangement with Her Majesty’s said Government in respect of defence matters;

(b)the supply to the United Nations, or the government of any country belonging to that organisation, in pursuance of an agreement or arrangement between Her Majesty’s Government and that organisation or government, of articles required for any armed forces operating in pursuance of a resolution of that organisation or any organ of that organisation;

and the power of a Government department or a person authorised by a Government department under this paragraph to use a design shall include power to sell to any such government or to the said organisation any articles the supply of which is authorised by this sub-paragraph, and to sell to any person any articles made in the exercise of the powers conferred by this paragraph which are no longer required for the purpose for which they were made.

(7)The purchaser of any articles sold in the exercise of powers conferred by this paragraph, and any person claiming through him, shall have power to deal with them in the same manner as if the rights in the registered design were held on behalf of His Majesty.

Rights of third parties in respect of Crown useU.K.

2(1)In relation to any use of a registered design, or a design in respect of which an application for registration is pending, made for the services of the Crown—U.K.

(a)by a Government department or a person authorised by a Government department under the last foregoing paragraph; or

(b)by the registered proprietor or applicant for registration to the order of a Government department,

the provisions of any licence, assignment or agreement made, whether before or after the commencement of this Act, between the registered proprietor or applicant for registration or any person who derives title from him or from whom he derives title and any person other than a Government department shall be of no effect so far as those provisions restrict or regulate the use of the design, or any model, document or information relating thereto, or provide for the making of payments in respect of any such use, or calculated by reference thereto; and the reproduction or publication of any model or document in connection with the said use shall not be deemed to be an infringement of any copyright or design right subsisting in the model or document.

(2)Where an exclusive licence granted otherwise than for royalties or other benefits determined by reference to the use of the design is in force under the registered design then—

(a)in relation to any use of the design which, but for the provisions of this and the last foregoing paragraph, would constitute an infringement of the rights of the licensee, sub-paragraph (3) of the last foregoing paragraph shall have effect as if for the reference to the registered proprietor there were substituted a reference to the licensee; and

(b)in relation to any use of the design by the licensee by virtue of an authority given under the last foregoing paragraph, that paragraph shall have effect as if the said sub-paragraph (3) were omitted.

(3)Subject to the provisions of the last foregoing sub-paragraph, where the registered design or the right to apply for or obtain registration of the design has been assigned to the registered proprietor in consideration of royalties or other benefits determined by reference to the use of the design, then—

(a)in relation to any use of the design by virtue of paragraph 1 of this Schedule, sub-paragraph (3) of that paragraph shall have effect as if the reference to the registered proprietor included a reference to the assignor, and any sum payable by virtue of that sub-paragraph shall be divided between the registered proprietor and the assignor in such proportion as may be agreed upon between them or as may in default of agreement be determined by the court on a reference under the next following paragraph; and

(b)in relation to any use of the design made for the services of the Crown by the registered proprietor to the order of a Government department, sub-paragraph (3) of paragraph 1 of this Schedule shall have effect as if that use were made by virtue of an authority given under that paragraph.

(4)Where, under sub-paragraph (3) of paragraph 1 of this Schedule, payments are required to be made by a Government department to a registered proprietor in respect of any use of a design, any person being the holder of an exclusive licence under the registered design (not being such a licence as is mentioned in sub-paragraph (2) of this paragraph) authorising him to make that use of the design shall be entitled to recover from the registered proprietor such part (if any) of those payments as may be agreed upon between that person and the registered proprietor, or as may in default of agreement be determined by the court under the next following paragraph to be just having regard to any expenditure incurred by that person—

(a)in developing the said design; or

(b)in making payments to the registered proprietor, other than royalties or other payments determined by reference to the use of the design, in consideration of the licence;

and if, at any time before the amount of any such payment has been agreed upon between the Government department and the registered proprietor, that person gives notice in writing of his interest to the department, any agreement as to the amount of that payment shall be of no effect unless it is made with his consent.

(5)In this paragraph “exclusive licence” means a licence from a registered proprietor which confers on the licensee, or on the licensee and persons authorised by him, to the exclusion of all other persons (including the registered proprietor), any right in respect of the registered design.

Compensation for loss of profitU.K.

2A(1)Where Crown use is made of a registered design, the government department concerned shall pay—U.K.

(a)to the registered proprietor, or

(b)if there is an exclusive licence in force in respect of the design, to the exclusive licensee,

compensation for any loss resulting from his not being awarded a contract to supply the articles to which the design is applied.

(2)Compensation is payable only to the extent that such a contract could have been fulfilled from his existing manufacturing capacity; but is payable notwithstanding the existence of circumstances rendering him ineligible for the award of such a contract.

(3)In determining the loss, regard shall be had to the profit which would have been made on such a contract and to the extent to which any manufacturing capacity was under-used.

(4)No compensation is payable in respect of any failure to secure contracts for the supply of articles to which the design is applied otherwise than for the services of the Crown.

(5)The amount payable under this paragraph shall, if not agreed between the registered proprietor or licensee and the government department concerned with the approval of the Treasury, be determined by the court on a reference under paragraph 3; and it is in addition to any amount payable under paragraph 1 or 2 of this schedule.

(6)In this paragraph—

  • “Crown use”, in relation to a design, means the doing of anything by virtue of paragraph 1 which would otherwise be an infringement of the right in the design; and

  • “the government department concerned”, in relation to such use, means the government department by whom or on whose authority the act was done.

Reference of disputes as to Crown useU.K.

3(1)Any dispute as to—U.K.

(a)the exercise by a Government department, or a person authorised by a Government department, of the powers conferred by paragraph 1 of this Schedule,

(b)terms for the use of a design for the services of the Crown under that paragraph,

(c)the right of any person to receive any part of a payment made under paragraph 1(3), or

(d)the right of any person to receive a payment under paragraph 2A,

may be referred to the court by either party to the dispute.

(2)In any proceedings under this paragraph to which a Government department are a party, the department may—

(a)if the registered proprietor is a party to the proceedings, apply for cancellation of the registration of the design upon any ground upon which the registration of a design may be cancelled on an application to the court under section twenty of this Act;

(b)in any case, put in issue the validity of the registration of the design without applying for its cancellation.

(3)If in such proceedings as aforesaid any question arises whether a design has been recorded or applied as mentioned in paragraph 1 of this Schedule, and the disclosure of any document recording the design, or of any evidence of the application thereof, would in the opinion of the department be prejudicial to the public interest, the disclosure may be made confidentially to counsel for the other party or to an independent expert mutually agreed upon.

(4)In determining under this paragraph any dispute between a Government department and any person as to terms for the use of a design for the services of the Crown, the court shall have regard to any benefit or compensation which that person or any person from whom he derives title may have received, or may be entitled to receive, directly or indirectly from any Government department in respect of the design in question.

(5)In any proceedings under this paragraph the court may at any time order the whole proceedings or any question or issue of fact arising therein to be referred to a special or official referee or an arbitrator on such terms as the court may direct; and references to the court in the foregoing provisions of this paragraph shall be construed accordingly.

Special provisions as to Crown use during emergencyU.K.

4(1)During any period of emergency within the meaning of this paragraph, the powers exercisable in relation to a design by a Government department, or a person authorised by a Government department under paragraph 1 of this Schedule shall include power to use the design for any purpose which appears to the department necessary or expedient—U.K.

(a)for the efficient prosecution of any war in which His Majesty may be engaged;

(b)for the maintenance of supplies and services essential to the life of the community;

(c)for securing a sufficiency of supplies and services essential to the well-being of the community;

(d)for promoting the productivity of industry, commerce and agriculture;

(e)for fostering and directing exports and reducing imports, or imports of any classes, from all or any countries and for redressing the balance of trade;

(f)generally for ensuring that the whole resources of the community are available for use, and are used, in a manner best calculated to serve the interests of the community; or

(g)for assisting the relief of suffering and the restoration and distribution of essential supplies and services in any part of His Majesty’s dominions or any foreign countries that are in grave distress as the result of war;

and any reference in this Schedule to the services of the Crown shall be construed as including a reference to the purposes aforesaid.

(2)In this paragraph the expression “period of emergency” means a period beginning on such date as may be declared by Order in Council to be the commencement, and ending on such date as may be so declared to be the termination, of a period of emergency for the purposes of this paragraph.

(3)No Order in Council under this paragraph shall be submitted to Her Majesty unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

... ... ... ... ... ... ...

Section 295.

SCHEDULE 5U.K. Patents: miscellaneous amendments

Withdrawal of application before publication of specificationU.K.

1U.K.In section 13(2) of the M71Patents Act 1949 (duty of comptroller to advertise acceptance of and publish complete specification) after the word “and”, in the first place where it occurs, insert “, unless the application is withdrawn,”.

Marginal Citations

Correction of clerical errorsU.K.

2(1)In section 15 of the M72Patents Act 1977 (filing of application), after subsection (3) insert—U.K.

“(3A)Nothing in subsection (2) or (3) above shall be construed as affecting the power of the comptroller under section 117(1) below to correct errors or mistakes with respect to the filing of drawings.”.

(2)The above amendment applies only in relation to applications filed after the commencement of this paragraph.

Marginal Citations

Supplementary searchesU.K.

3(1)Section 17 of the Patents Act 1977 (preliminary examination and search) is amended as follows.U.K.

(2)In subsection (7) (supplementary searches) for “subsection (4) above” substitute “subsections (4) and (5) above” and for “it applies” substitute “they apply”.

(3)After that subsection add—

“(8)A reference for a supplementary search in consequence of—

(a)an amendment of the application made by the applicant under section 18(3) or 19(1) below, or

(b)a correction of the application, or of a document filed in connection with the application, under section 117 below,

shall be made only on payment of the prescribed fee, unless the comptroller directs otherwise.”.

4U.K.In section 18 of the Patents Act 1977 (substantive examination and grant or refusal of patent), after subsection (1) insert—

“(1A)If the examiner forms the view that a supplementary search under section 17 above is required for which a fee is payable, he shall inform the comptroller, who may decide that the substantive examination should not proceed until the fee is paid; and if he so decides, then unless within such period as he may allow—

(a)the fee is paid, or

(b)the application is amended so as to render the supplementary search unnecessary,

he may refuse the application.”.

5U.K.In section 130(1) of the Patents Act 1977 (interpretation), in the definition of “search fee”, for “section 17 above” substitute “section 17(1) above”.

Application for restoration of lapsed patentU.K.

6(1)Section 28 of the Patents Act 1977 (restoration of lapsed patents) is amended as follows.U.K.

(2)For subsection (1) (application for restoration within period of one year) substitute—

“(1)Where a patent has ceased to have effect by reason of a failure to pay any renewal fee, an application for the restoration of the patent may be made to the comptroller within the prescribed period.

(1A)Rules prescribing that period may contain such transitional provisions and savings as appear to the Secretary of State to be necessary or expedient.”.

(3)After subsection (2) insert—

“(2A)Notice of the application shall be published by the comptroller in the prescribed manner.”.

(4)In subsection (3), omit paragraph (b) (requirement that failure to renew is due to circumstances beyond proprietor’s control) and the word “and” preceding it.

This amendment does not apply to a patent which has ceased to have effect in accordance with section 25(3) of the M73Patents Act 1977 (failure to renew within prescribed period) and in respect of which the period referred to in subsection (4) of that section (six months’ period of grace for renewal) has expired before commencement.

(5)Omit subsections (5) to (9) (effect of order for restoration).

Marginal Citations

7U.K.After that section insert—

“28A Effect of order for restoration of patent.

(1)The effect of an order for the restoration of a patent is as follows.

(2)Anything done under or in relation to the patent during the period between expiry and restoration shall be treated as valid.

(3)Anything done during that period which would have constituted an infringement if the patent had not expired shall be treated as an infringement—

(a)if done at a time when it was possible for the patent to be renewed under section 25(4), or

(b)if it was a continuation or repetition of an earlier infringing act.

(4)If after it was no longer possible for the patent to be so renewed, and before publication of notice of the application for restoration, a person—

(a)began in good faith to do an act which would have constituted an infringement of the patent if it had not expired, or

(b)made in good faith effective and serious preparations to do such an act,

he has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the restoration of the patent; but this right does not extend to granting a licence to another person to do the act.

(5)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (4) may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(6)Where a product is disposed of to another in exercise of the rights conferred by subsection (4) or (5), that other and any person claiming through him may deal with the product in the same way as if it had been disposed of by the registered proprietor of the patent.

(7)The above provisions apply in relation to the use of a patent for the services of the Crown as they apply in relation to infringement of the patent.”.

8U.K.In consequence of the above amendments—

(a)in section 60(6)(b) of the M74Patents Act 1977, for “section 28(6)” substitute “section 28A(4) or (5)”; and

(b)in sections 77(5), 78(6) and 80(4) of that Act, for the words from “section 28(6)” to the end substitute “section 28A(4) and (5) above, and subsections (6) and (7) of that section shall apply accordingly.”.

Marginal Citations

Determination of right to patent after grantU.K.

9(1)Section 37 of the Patents Act 1977 (determination of right to patent after grant) is amended as follows.U.K.

(2)For subsection (1) substitute—

“(1)After a patent has been granted for an invention any person having or claiming a proprietary interest in or under the patent may refer to the comptroller the question—

(a)who is or are the true proprietor or proprietors of the patent,

(b)whether the patent should have been granted to the person or persons to whom it was granted, or

(c)whether any right in or under the patent should be transferred or granted to any other person or persons;

and the comptroller shall determine the question and make such order as he thinks fit to give effect to the determination.”.

(3)Substitute “this section”—

(a)in subsections (4) and (7) for “subsection (1)(a) above”, and

(b)in subsection (8) for “subsection (1) above”.

10U.K.In section 74(6) (meaning of “entitlement proceedings”), for “section 37(1)(a) above” substitute “section 37(1) above”.

Employees’ inventionsU.K.

11(1)In section 39 of the Patents Act 1977 (right to employees’ inventions), after subsection (2) add—U.K.

“(3)Where by virtue of this section an invention belongs, as between him and his employer, to an employee, nothing done—

(a)by or on behalf of the employee or any person claiming under him for the purposes of pursuing an application for a patent, or

(b)by any person for the purpose of performing or working the invention,

shall be taken to infringe any copyright or design right to which, as between him and his employer, his employer is entitled in any model or document relating to the invention.”.

(2)In section 43 of the M75Patents Act 1977 (supplementary provisions with respect to employees’ inventions), in subsection (4) (references to patents to include other forms of protection, whether in UK or elsewhere) for “in sections 40 to 42” substitute “in sections 39 to 42.”.

Marginal Citations

Undertaking to take licence in infringement proceedingsU.K.

12(1)Section 46 of the Patents Act 1977 (licences of right) is amended as follows.U.K.

(2)In subsection (3)(c) (undertaking to take licence in infringement proceedings) after the words “(otherwise than by the importation of any article” insert “from a country which is not a member State of the European Economic Community”.

(3)After subsection (3) insert—

“(3A)An undertaking under subsection (3)(c) above may be given at any time before final order in the proceedings, without any admission of liability.”.

Power of comptroller on grant of compulsory licenceU.K.

13U.K.In section 49 of the Patents Act 1977 (supplementary provisions with respect to compulsory licences), omit subsection (3) (power to order that licence has effect to revoke existing licences and deprive proprietor of power to work invention or grant licences).

Powers exercisable in consequence of report of Monopolies and Mergers CommissionU.K.

14U.K.For section 51 of the Patents Act 1977 (licences of right: application by Crown in consequence of report of Monopolies and Mergers Commission) substitute—

“51 Powers exercisable in consequence of report of Monopolies and Mergers Commission.

(1)Where a report of the Monopolies and Mergers Commission has been laid before Parliament containing conclusions to the effect—

(a)on a monopoly reference, that a monopoly situation exists and facts found by the Commission operate or may be expected to operate against the public interest,

(b)on a merger reference, that a merger situation qualifying for investigation has been created and the creation of the situation, or particular elements in or consequences of it specified in the report, operate or may be expected to operate against the public interest,

(c)on a competition reference, that a person was engaged in an anti-competitive practice which operated or may be expected to operate against the public interest, or

(d)on a reference under section 11 of the Competition Act 1980 (reference of public bodies and certain other persons), that a person is pursuing a course of conduct which operates against the public interest,

the appropriate Minister or Ministers may apply to the comptroller to take action under this section.

(2)Before making an application the appropriate Minister or Ministers shall publish, in such manner as he or they think appropriate, a notice describing the nature of the proposed application and shall consider any representations which may be made within 30 days of such publication by persons whose interests appear to him or them to be affected.

(3)If on an application under this section it appears to the comptroller that the matters specified in the Commission’s report as being those which in the Commission’s opinion operate, or operated or may be expected to operate, against the public interest include—

(a)conditions in licences granted under a patent by its proprietor restricting the use of the invention by the licensee or the right of the proprietor to grant other licences, or

(b)a refusal by the proprietor of a patent to grant licences on reasonable terms

he may by order cancel or modify any such condition or may, instead or in addition, make an entry in the register to the effect that licences under the patent are to be available as of right.

(4)In this section “the appropriate Minister or Ministers” means the Minister or Ministers to whom the report of the Commission was made.”.

Compulsory licensing: reliance on statements in competition reportU.K.

15U.K.In section 53(2) of the M76Patents Act 1977 (compulsory licensing: reliance on statements in reports of Monopolies and Mergers Commission)—

(a)for “application made in relation to a patent under sections 48 to 51 above” substitute “application made under section 48 above in respect of a patent”; and

(b)after “Part VIII of the Fair Trading Act 1973” insert “or section 17 of the Competition Act 1980”.

Marginal Citations

Crown use: compensation for loss of profitU.K.

16(1)In the Patents Act 1977, after section 57 insert—U.K.

“57A Compensation for loss of profit.

(1)Where use is made of an invention for the services of the Crown, the government department concerned shall pay—

(a)to the proprietor of the patent, or

(b)if there is an exclusive licence in force in respect of the patent, to the exclusive licensee,

compensation for any loss resulting from his not being awarded a contract to supply the patented product or, as the case may be, to perform the patented process or supply a thing made by means of the patented process.

(2)Compensation is payable only to the extent that such a contract could have been fulfilled from his existing manufacturing or other capacity; but is payable notwithstanding the existence of circumstances rendering him ineligible for the award of such a contract.

(3)In determining the loss, regard shall be had to the profit which would have been made on such a contract and to the extent to which any manufacturing or other capacity was under-used.

(4)No compensation is payable in respect of any failure to secure contracts to supply the patented product or, as the case may be, to perform the patented process or supply a thing made by means of the patented process, otherwise than for the services of the Crown.

(5)The amount payable shall, if not agreed between the proprietor or licensee and the government department concerned with the approval of the Treasury, be determined by the court on a reference under section 58, and is in addition to any amount payable under section 55 or 57.

(6)In this section “the government department concerned”, in relation to any use of an invention for the services of the Crown, means the government department by whom or on whose authority the use was made.

(7)In the application of this section to Northern Ireland, the reference in subsection (5) above to the Treasury shall, where the government department concerned is a department of the Government of Northern Ireland, be construed as a reference to the Department of Finance and Personnel.”.

(2)In section 58 of the M77Patents Act 1977 (reference of disputes as to Crown use), for subsection (1) substitute—

“(1)Any dispute as to—

(a)the exercise by a government department, or a person authorised by a government department, of the powers conferred by section 55 above,

(b)terms for the use of an invention for the services of the Crown under that section,

(c)the right of any person to receive any part of a payment made in pursuance of subsection (4) of that section, or

(d)the right of any person to receive a payment under section 57A,

may be referred to the court by either party to the dispute after a patent has been granted for the invention.”;

and in subsection (4) for “under this section” substitute “under subsection (1)(a), (b) or (c) above”.

(3)In section 58(11) of the Patents Act 1977 (exclusion of right to compensation for Crown use if relevant transaction, instrument or event not registered), after “section 57(3) above)” insert “, or to any compensation under section 57A above,”.

(4)The above amendments apply in relation to any use of an invention for the services of the Crown after the commencement of this section, even if the terms for such use were settled before commencement.

Marginal Citations

Right to continue use begun before priority dateU.K.

17U.K.For section 64 of the Patents Act 1977 (right to continue use begun before priority date) substitute—

“64 Right to continue use begun before priority date.

(1)Where a patent is granted for an invention, a person who in the United Kingdom before the priority date of the invention—

(a)does in good faith an act which would constitute an infringement of the patent if it were in force, or

(b)makes in good faith effective and serious preparations to do such an act,

has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the grant of the patent; but this right does not extend to granting a licence to another person to do the act.

(2)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (1) may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(3)Where a product is disposed of to another in exercise of the rights conferred by subsection (1) or (2), that other and any person claiming through him may deal with the product in the same way as if it had been disposed of by the registered proprietor of the patent.”.

Revocation on grounds of grant to wrong personU.K.

18U.K.In section 72(1) of the M78Patents Act 1977 (grounds for revocation of patent), for paragraph (b) substitute—

“(b)that the patent was granted to a person who was not entitled to be granted that patent;”.

Marginal Citations

Revocation where two patents granted for same inventionU.K.

19U.K.In section 73 of the Patents Act 1977 (revocation on initiative of comptroller), for subsections (2) and (3) (revocation of patent where European patent (UK) granted in respect of same invention) substitute—

“(2)If it appears to the comptroller that a patent under this Act and a European patent (UK) have been granted for the same invention having the same priority date, and that the applications for the patents were filed by the same applicant or his successor in title, he shall give the proprietor of the patent under this Act an opportunity of making observations and of amending the specification of the patent, and if the proprietor fails to satisfy the comptroller that there are not two patents in respect of the same invention, or to amend the specification so as to prevent there being two patents in respect of the same invention, the comptroller shall revoke the patent.

(3)The comptroller shall not take action under subsection (2) above before—

(a)the end of the period for filing an opposition to the European patent (UK) under the European Patent Convention, or

(b)if later, the date on which opposition proceedings are finally disposed of;

and he shall not then take any action if the decision is not to maintain the European patent or if it is amended so that there are not two patents in respect of the same invention.

(4)The comptroller shall not take action under subsection (2) above if the European patent (UK) has been surrendered under section 29(1) above before the date on which by virtue of section 25(1) above the patent under this Act is to be treated as having been granted or, if proceedings for the surrender of the European patent (UK) have been begun before that date, until those proceedings are finally disposed of; and he shall not then take any action if the decision is to accept the surrender of the European patent.”.

Applications and amendments not to include additional matterU.K.

20U.K.For section 76 of the M79Patents Act 1977 (amendments of applications and patents not to include added matter) substitute—

“76 Amendments of applications and patents not to include added matter.

(1)An application for a patent which—

(a)is made in respect of matter disclosed in an earlier application, or in the specification of a patent which has been granted, and

(b)discloses additional matter, that is, matter extending beyond that disclosed in the earlier application, as filed, or the application for the patent, as filed,

may be filed under section 8(3), 12 or 37(4) above, or as mentioned in section 15(4) above, but shall not be allowed to proceed unless it is amended so as to exclude the additional matter.

(2)No amendment of an application for a patent shall be allowed under section 17(3), 18(3) or 19(1) if it results in the application disclosing matter extending beyond that disclosed in the application as filed.

(3)No amendment of the specification of a patent shall be allowed under section 27(1), 73 or 75 if it—

(a)results in the specification disclosing additional matter, or

(b)extends the protection conferred by the patent.”.

Marginal Citations

Effect of European patent (UK)U.K.

21(1)Section 77 of the Patents Act 1977 (effect of European patent (UK)) is amended as follows.U.K.

(2)For subsection (3) (effect of finding of partial validity on pending proceedings) substitute—

“(3)Where in the case of a European patent (UK)—

(a)proceedings for infringement, or proceedings under section 58 above, have been commenced before the court or the comptroller and have not been finally disposed of, and

(b)it is established in proceedings before the European Patent Office that the patent is only partially valid,

the provisions of section 63 or, as the case may be, of subsections (7) to (9) of section 58 apply as they apply to proceedings in which the validity of a patent is put in issue and in which it is found that the patent is only partially valid.”.

(3)For subsection (4) (effect of amendment or revocation under European Patent Convention) substitute—

“(4)Where a European patent (UK) is amended in accordance with the European Patent Convention, the amendment shall have effect for the purposes of Parts I and III of this Act as if the specification of the patent had been amended under this Act; but subject to subsection (6)(b) below.

(4A)Where a European patent (UK) is revoked in accordance with the European Patent Convention, the patent shall be treated for the purposes of Parts I and III of this Act as having been revoked under this Act.”.

(4)In subsection (6) (filing of English translation), in paragraph (b) (amendments) for “a translation of the amendment into English” substitute “a translation into English of the specification as amended”.

(5)In subsection (7) (effect of failure to file translation) for the words from “a translation” to “above” substitute “such a translation is not filed”.

The state of the art: material contained in patent applicationsU.K.

22U.K.In section 78 of the M80Patents Act 1977 (effect of filing an application for a European patent (UK)), for subsection (5) (effect of withdrawal of application, &c.) substitute—

“(5)Subsections (1) to (3) above shall cease to apply to an application for a European patent (UK), except as mentioned in subsection (5A) below, if—

(a)the application is refused or withdrawn or deemed to be withdrawn, or

(b)the designation of the United Kingdom in the application is withdrawn or deemed to be withdrawn,

but shall apply again if the rights of the applicant are re-established under the European Patent Convention, as from their re-establishment.

(5A)The occurrence of any of the events mentioned in subsection (5)(a) or (b) shall not affect the continued operation of section 2(3) above in relation to matter contained in an application for a European patent (UK) which by virtue of that provision has become part of the state of the art as regards other inventions.”.

Marginal Citations

Jurisdiction in certain proceedingsU.K.

23U.K.Section 88 of the Patents Act 1977 (jurisdiction in legal proceedings in connection with Community Patent Convention) is repealed.

Effect of filing international application for patentU.K.

24(1)Section 89 of the Patents Act 1977 (effect of filing international application for patent) is amended as follows.U.K.

(2)After subsection (3) insert—

“(3A)If the relevant conditions are satisfied with respect to an application which is amended in accordance with the Treaty and the relevant conditions are not satisfied with respect to any amendment, that amendment shall be disregarded.”.

(3)After subsection (4) insert—

“(4A)In subsection (4)(a) “a copy of the application” includes a copy of the application published in accordance with the Treaty in a language other than that in which it was filed.”.

(4)For subsection (10) (exclusion of certain applications subject to European Patent Convention) substitute—

“(10)The foregoing provisions of this section do not apply to an application which falls to be treated as an international application for a patent (UK) by reason only of its containing an indication that the applicant wishes to obtain a European patent (UK); but without prejudice to the application of those provisions to an application which also separately designates the United Kingdom.”.

(5)The amendments in this paragraph shall be deemed always to have had effect.

(6)This paragraph shall be repealed by the order bringing the following paragraph into force.

25U.K.For section 89 of the M81Patents Act 1977 (effect of filing international application for patent) substitute—

“89 Effect of international application for patent.

(1)An international application for a patent (UK) for which a date of filing has been accorded under the Patent Co-operation Treaty shall, subject to—

  • section 89A (international and national phases of application), and

  • section 89B (adaptation of provisions in relation to international application),

be treated for the purposes of Parts I and III of this Act as an application for a patent under this Act.

(2)If the application, or the designation of the United Kingdom in it, is withdrawn or (except as mentioned in subsection (3)) deemed to be withdrawn under the Treaty, it shall be treated as withdrawn under this Act.

(3)An application shall not be treated as withdrawn under this Act if it, or the designation of the United Kingdom in it, is deemed to be withdrawn under the Treaty—

(a)because of an error or omission in an institution having functions under the Treaty, or

(b)because, owing to circumstances outside the applicant’s control, a copy of the application was not received by the International Bureau before the end of the time limited for that purpose under the Treaty,

or in such other circumstances as may be prescribed.

(4)For the purposes of the above provisions an application shall not be treated as an international application for a patent (UK) by reason only of its containing an indication that the applicant wishes to obtain a European patent (UK), but an application shall be so treated if it also separately designates the United Kingdom.

(5)If an international application for a patent which designates the United Kingdom is refused a filing date under the Treaty and the comptroller determines that the refusal was caused by an error or omission in an institution having functions under the Treaty, he may direct that the application shall be treated as an application under this Act, having such date of filing as he may direct.

89A International and national phases of application.

(1)The provisions of the Patent Co-operation Treaty relating to publication, search, examination and amendment, and not those of this Act, apply to an international application for a patent (UK) during the international phase of the application.

(2)The international phase of the application means the period from the filing of the application in accordance with the Treaty until the national phase of the application begins.

(3)The national phase of the application begins—

(a)when the prescribed period expires, provided any necessary translation of the application into English has been filed at the Patent Office and the prescribed fee has been paid by the applicant; or

(b)on the applicant expressly requesting the comptroller to proceed earlier with the national phase of the application, filing at the Patent Office—

(i)a copy of the application, if none has yet been sent to the Patent Office in accordance with the Treaty, and

(ii)any necessary translation of the application into English,

and paying the prescribed fee.

For this purpose a “copy of the application” includes a copy published in accordance with the Treaty in a language other than that in which it was originally filed.

(4)If the prescribed period expires without the conditions mentioned in subsection (3)(a) being satisfied, the application shall be taken to be withdrawn.

(5)Where during the international phase the application is amended in accordance with the Treaty, the amendment shall be treated as made under this Act if—

(a)when the prescribed period expires, any necessary translation of the amendment into English has been filed at the Patent Office, or

(b)where the applicant expressly requests the comptroller to proceed earlier with the national phase of the application, there is then filed at the Patent Office—

(i)a copy of the amendment, if none has yet been sent to the Patent Office in accordance with the Treaty, and

(ii)any necessary translation of the amendment into English;

otherwise the amendment shall be disregarded.

(6)The comptroller shall on payment of the prescribed fee publish any translation filed at the Patent Office under subsection (3) or (5) above.

89B Adaptation of provisions in relation to international application.

(1)Where an international application for a patent (UK) is accorded a filing date under the Patent Co-operation Treaty—

(a)that date, or if the application is re-dated under the Treaty to a later date that later date, shall be treated as the date of filing the application under this Act,

(b)any declaration of priority made under the Treaty shall be treated as made under section 5(2) above, and where in accordance with the Treaty any extra days are allowed, the period of 12 months specified in section 5(2) shall be treated as altered accordingly, and

(c)any statement of the name of the inventor under the Treaty shall be treated as a statement filed under section 13(2) above.

(2)If the application, not having been published under this Act, is published in accordance with the Treaty it shall be treated, for purposes other than those mentioned in subsection (3), as published under section 16 above when the conditions mentioned in section 89A(3)(a) are complied with.

(3)For the purposes of section 55 (use of invention for service of the Crown) and section 69 (infringement of rights conferred by publication) the application, not having been published under this Act, shall be treated as published under section 16 above—

(a)if it is published in accordance with the Treaty in English, on its being so published; and

(b)if it is so published in a language other than English—

(i)on the publication of a translation of the application in accordance with section 89A(6) above, or

(ii)on the service by the applicant of a translation into English of the specification of the application on the government department concerned or, as the case may be, on the person committing the infringing act.

The reference in paragraph (b)(ii) to the service of a translation on a government department or other person is to its being sent by post or delivered to that department or person.

(4)During the international phase of the application, section 8 above does not apply (determination of questions of entitlement in relation to application under this Act) and section 12 above (determination of entitlement in relation to foreign and convention patents) applies notwithstanding the application; but after the end of the international phase, section 8 applies and section 12 does not.

(5)When the national phase begins the comptroller shall refer the application for so much of the examination and search under section 17 and 18 above as he considers appropriate in view of any examination or search carried out under the Treaty.”.

Marginal Citations

Proceedings before the court or the comptrollerU.K.

26U.K.In the M82Patents Act 1977, after section 99 (general powers of the court) insert—

“99A Power of Patents Court to order report.

(1)Rules of court shall make provision empowering the Patents Court in any proceedings before it under this Act, on or without the application of any party, to order the Patent Office to inquire into and report on any question of fact or opinion.

(2)Where the court makes such an order on the application of a party, the fee payable to the Patent Office shall be at such rate as may be determined in accordance with rules of court and shall be costs of the proceedings unless otherwise ordered by the court.

(3)Where the court makes such an order of its own motion, the fee payable to the Patent Office shall be at such rate as may be determined by the Lord Chancellor with the approval of the Treasury and shall be paid out of money provided by Parliament.

99B Power of Court of Session to order report.

(1)In any proceedings before the Court of Session under this Act the court may, either of its own volition or on the application of any party, order the Patent Office to inquire into and report on any question of fact or opinion.

(2)Where the court makes an order under subsection (1) above of its own volition the fee payable to the Patent Office shall be at such rate as may be determined by the Lord President of the Court of Session with the consent of the Treasury and shall be defrayed out of moneys provided by Parliament.

(3)Where the court makes an order under subsection (1) above on the application of a party, the fee payable to the Patent Office shall be at such rate as may be provided for in rules of court and shall be treated as expenses in the cause.”.

Marginal Citations

27U.K.For section 102 of the M83Patents Act 1977 (right of audience in patent proceedings) substitute—

“102 Right of audience, &c. in proceedings before comptroller.

(1)A party to proceedings before the comptroller under this Act, or under any treaty or international convention to which the United Kingdom is a party, may appear before the comptroller in person or be represented by any person whom he desires to represent him.

(2)No offence is committed under the enactments relating to the preparation of documents by persons not legally qualified by reason only of the preparation by any person of a document, other than a deed, for use in such proceedings.

(3)Subsection (1) has effect subject to rules made under section 281 of the Copyright, Designs and Patents Act 1988 (power of comptroller to refuse to recognise certain agents).

(4)In its application to proceedings in relation to applications for, or otherwise in connection with, European patents, this section has effect subject to any restrictions imposed by or under the European Patent Convention.

102A Right of audience, &c. in proceedings on appeal from the comptroller.

(1)A solicitor of the Supreme Court may appear and be heard on behalf of any party to an appeal under this Act from the comptroller to the Patents Court.

(2)A registered patent agent or a member of the Bar not in actual practice may do, in or in connection with proceedings on an appeal under this Act from the comptroller to the Patents Court, anything which a solicitor of the Supreme Court might do, other than prepare a deed.

(3)The Lord Chancellor may by regulations—

(a)provide that the right conferred by subsection (2) shall be subject to such conditions and restrictions as appear to the Lord Chancellor to be necessary or expedient, and

(b)apply to persons exercising that right such statutory provisions, rules of court and other rules of law and practice applying to solicitors as may be specified in the regulations;

and different provision may be made for different descriptions of proceedings.

(4)Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5)This section is without prejudice to the right of counsel to appear before the High Court.”.

Marginal Citations

Provision of informationU.K.

28U.K.In section 118 of the M84Patents Act 1977 (information about patent applications, &c.), in subsection (3) (restriction on disclosure before publication of application: exceptions) for “section 22(6)(a) above” substitute “section 22(6) above”.

Marginal Citations

Power to extend time limitsU.K.

29U.K.In section 123 of the Patents Act 1977 (rules), after subsection (3) insert—

“(3A)It is hereby declared that rules—

(a)authorising the rectification of irregularities of procedure, or

(b)providing for the alteration of any period of time,

may authorise the comptroller to extend or further extend any period notwithstanding that the period has already expired.”.

Availability of samples of micro-organismsU.K.

30U.K.In the Patents Act 1977 after section 125 insert—

“125A Disclosure of invention by specification: availability of samples of micro-organisms.

(1)Provision may be made by rules prescribing the circumstances in which the specification of an application for a patent, or of a patent, for an invention which requires for its performance the use of a micro-organism is to be treated as disclosing the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art.

(2)The rules may in particular require the applicant or patentee—

(a)to take such steps as may be prescribed for the purposes of making available to the public samples of the micro-organism, and

(b)not to impose or maintain restrictions on the uses to which such samples may be put, except as may be prescribed.

(3)The rules may provide that, in such cases as may be prescribed, samples need only be made available to such persons or descriptions of persons as may be prescribed; and the rules may identify a description of persons by reference to whether the comptroller has given his certificate as to any matter.

(4)An application for revocation of the patent under section 72(1)(c) above may be made if any of the requirements of the rules cease to be complied with.”.

Section 296ZE

[F993SCHEDULE 5AU.K.PERMITTED ACTS TO WHICH SECTION 296ZE APPLIES

Textual Amendments

PART 1U.K.Copyright exceptions

section 29 (research and private study)

[F994section 29A (copies for text and data analysis for non-commercial research)]

Textual Amendments

section 31A [F995(disabled persons: copies of works for personal use)”]

Textual Amendments

section 31B [F996(making and supply of accessible copies by authorised bodies)]

Textual Amendments

[F997section 31BA (making and supply of intermediate copies by authorised bodies)]

Textual Amendments

[F998section 32 (illustration for instruction)]

Textual Amendments

section 35 (recording by educational establishments of broadcasts)

[F999section 36 (copying and use of extracts of works by educational establishments)]

Textual Amendments

F1000 ...

Textual Amendments

F1000 ...

Textual Amendments

F1000 ...

Textual Amendments

[F994section 41 (copying by librarians: supply of single copies to other libraries)]

Textual Amendments

F1000 ...

Textual Amendments

[F994 section 42 (copying by librarians etc : replacement copies of works) ]

Textual Amendments

[F994section 42A (copying by librarians: single copies of published works)]

Textual Amendments

F1000 ...

Textual Amendments

[F994section 43 (copying by librarians or archivists: single copies of unpublished works)]

Textual Amendments

section 44 (copy of work required to be made as condition of export)

section 45 (Parliamentary and judicial proceedings)

section 46 (Royal Commissions and statutory inquiries)

section 47 (material open to public inspection or on official register)

section 48 (material communicated to the Crown in the course of public business)

section 49 (public records)

section 50 (acts done under statutory authority)

section 61 (recordings of folksongs)

section 68 (incidental recording for purposes of broadcast)

section 69 (recording for purposes of supervision and control of broadcasts)

section 70 (recording for purposes o

f time-shifting)

section 71 (photographs of broadcasts)

F1001 ...

Textual Amendments

[F1002section 75 (recording of broadcast for archival purposes)]

Textual Amendments

PART 2U.K.Rights in performances exceptions

[F1003paragraph 1C of Schedule 2 (research and private study)][F1003paragraph 1D of Schedule 2 (copies for text and data analysis for non-commercial research)][F1004[F1005paragraph 3A of Schedule 2 (disabled persons: copies of recordings for personal use)][F1005paragraph 3B of Schedule 2 (making and supply of accessible copies by authorised bodies)] [F1005paragraph 3C of Schedule 2 (making and supply of intermediate copies by authorised bodies)]paragraph 4 of Schedule 2 (illustration for instruction)] [F1006paragraph 6 of Schedule 2 (recording by educational establishments of broadcasts)] [F1003paragraph 6ZA of Schedule 2 (copying and use of extracts of recordings by educational establishments)][F1003paragraph 6D of Schedule 2 (copying by librarians: supply of single copies to other libraries)][F1003paragraph 6E of Schedule 2 (copying by librarians etc: replacement copies of   recordings)][F1003paragraph 6F of Schedule 2 (copying by librarians: single copies of published   recordings)][F1003paragraph 6G of Schedule 2 (copying by librarians or archivists: single copies of unpublished recordings)]paragraph 7 of Schedule 2 (copy of work required to be made as condition of export)paragraph 8 of Schedule 2 (Parliamentary and judicial proceedings) paragraph 9 of Schedule 2 (Royal Commissions and statutory inquiries) paragraph 10 of Schedule 2 (public records) paragraph 11 of Schedule 2 (acts done under statutory authority) paragraph 14 of Schedule 2 (recordings of folksongs) paragraph 16 of Schedule 2 (incidental recording for purposes of broadcast) paragraph 17 of Schedule 2 (recordings for purposes of supervision and control of broadcasts)paragraph 17A of Schedule 2 (recording for the purposes of time-shifting) paragraph 17B of Schedule 2 (photographs of broadcasts) F1007... paragraph 21 of Schedule 2 (recording of broadcast for archival purposes)]

Textual Amendments

PART 3U.K.Database right exceptions

regulation 20 of and Schedule 1 to the Copyright and Rights in Databases Regulations 1997 ( S.I. 1997/3032)

Section 301.

SCHEDULE 6U.K. Provisions for the Benefit of [F1008Great Ormond Street Hospital for Children]

Textual Amendments

F1008 +Words in Sch. 6 heading substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(5), 5(3) +

InterpretationU.K.

1(1)In this Schedule—U.K.

  • [F1009 “GOSH Children's Charity” means Great Ormond Street Hospital Children's Charity (company registration number 9338724);]

  • “the Hospital” means [F1010Great Ormond Street Hospital for Children],

  • F1011...

  • “the work” means the play “Peter Pan” by Sir James Matthew Barrie.

(2)Expressions used in this Schedule which are defined for the purposes of Part I of this Act (copyright) have the same meaning as in that Part.

Textual Amendments

F1009 +Definition in Sch. 6 para. 1(1) inserted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(7)(a), 5(3) +

F1010 +Words in Sch. 6 para. 1(1) substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(7)(b), 5(3) +

F1011 +Definition in Sch. 6 para. 1(1) omitted (23.5.2016) by virtue of NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(7)(c), 5(3) +

Entitlement to royaltyU.K.

2(1)[F1012GOSH Children's Charity is] entitled, subject to the following provisions of this Schedule, to a royalty in respect of any public performance, commercial publication [F1013or communication to the public] of the whole or any substantial part of the work or an adaptation of it.U.K.

(2)Where [F1014GOSH Children's Charity is] or would be entitled to a royalty, another form of remuneration may be agreed.

Textual Amendments

F1012 +Words in Sch. 6 para. 2(1) substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(8)(a), 5(3) +

F1014 +Words in Sch. 6 para. 2(2) substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(8)(b), 5(3) +

Modifications etc. (not altering text)

C150 +Sch. 6 para. 2: power to amend conferred (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), s. 5(3), Sch. 2 para. 5(2)(a) +

ExceptionsU.K.

3U.K.No royalty is payable in respect of—

(a)anything which immediately before copyright in the work expired on 31st December 1987 could lawfully have been done without the licence, or further licence, of the [F1015copyright owner at that time]; or

(b) anything which if copyright still subsisted in the work could, by virtue of any provision of Chapter III of Part I of this Act (acts permitted notwithstanding copyright), be done without infringing copyright.

Textual Amendments

F1015 +Words in Sch. 6 para. 3(a) substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(9), 5(3) +

SavingU.K.

4U.K.No royalty is payable in respect of anything done in pursuance of arrangements made before the passing of this Act.

Procedure for determining amount payableU.K.

5(1)In default of agreement application may be made to the Copyright Tribunal which shall consider the matter and make such order regarding the royalty or other remuneration to be paid as it may determine to be reasonable in the circumstances.U.K.

(2)Application may subsequently be made to the Tribunal to vary its order, and the Tribunal shall consider the matter and make such order confirming or varying the original order as it may determine to be reasonable in the circumstances.

(3)An application for variation shall not, except with the special leave of the Tribunal, be made within twelve months from the date of the original order or of the order on a previous application for variation.

(4)A variation order has effect from the date on which it is made or such later date as may be specified by the Tribunal.

F1016[(5) The provisions of Chapter VIII of Part I (general provisions relating to the Copyright Tribunal) apply in relation to the Tribunal when exercising any jurisdiction under this paragraph.]

Textual Amendments

F1016 +Sch. 6 para. 5(5) added (1.12.1996) by S.I. 1996/2967, reg. 24(3) (with Pt. III) +

[F1017 Sums received to be held for the benefit of the HospitalU.K.

Textual Amendments

F1017 +Sch. 6 para. 6 and crossheading substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(10), 5(3) +

6U.K.The sums received by GOSH Children's Charity by virtue of this Schedule, after deduction of any relevant expenses, are to be held by it for the purposes of the Hospital.]

Right only for the benefit of the HospitalU.K.

7(1)The right of [F1018GOSH Children's Charity] under this Schedule may not be assigned and shall cease if [F1019GOSH Children's Charity purports] to assign or charge it.U.K.

(2)The right F1020... shall cease if the Hospital ceases to have a separate identity or ceases to have purposes which include the care of sick children.

F1021(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1018 +Words in Sch. 6 para. 7(1) substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(11)(a)(i), 5(3) +

F1019 +Words in Sch. 6 para. 7(1) substituted (23.5.2016) by NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(11)(a)(ii), 5(3) +

F1020 +Words in Sch. 6 para. 7(2) omitted (23.5.2016) by virtue of NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(11)(b), 5(3) +

F1021 +Sch. 6 para. 7(3) omitted (23.5.2016) by virtue of NHS (Charitable Trusts Etc) Act 2016 (c. 10), ss. 3(11)(c), 5(3) +

Section 303(1).

SCHEDULE 7U.K. Consequential amendments: general

British Mercantile Marine Uniform Act 1919 (c.62)U.K.

1U.K.For section 2 of the British Mercantile Marine Uniform Act 1919 (copyright in distinctive marks of uniform) substitute—

2 Right in registered design of distinctive marks of uniform.

The right of the Secretary of State in any design forming part of the British mercantile marine uniform which is registered under the Registered Designs Act 1949 is not limited to the period prescribed by section 8 of that Act but shall continue to subsist so long as the design remains on the register.”.

Chartered Associations (Protection of Names and Uniforms) Act 1926 (c.26)U.K.

2U.K. In section 1(5) of the Chartered Associations (Protection of Names and Uniforms) Act 1926 for “the copyright in respect thereof” substitute “ the right in the registered design ” .

Patents, Designs, Copyright and Trade Marks (Emergency) Act 1939 (c.107)U.K.

3(1)The Patents, Designs, Copyright and Trade Marks (Emergency) Act 1939 is amended as follows.U.K.

(2)In section 1 (effect of licence where owner is enemy or enemy subject)—

(a) in subsection (1) after “a copyright” and “the copyright” insert “ or design right ” ;

(b) in subsection (2) after “the copyright” insert “ or design right ” and for “or copyright” substitute “ , copyright or design right ” .

(3)In section 2 (power of comptroller to grant licences)—

(a) in subsection (1) after “a copyright”, “the copyright” (twice) and “the said copyright” insert “ or design right ” and for “or copyright” (twice) substitute “ , copyright or design right ” ;

(b) in subsections (2) and (3) for “, or copyright” substitute “ , copyright or design right ” ;

(c) in subsection (4) and in subsection (5) (twice), after “the copyright” insert “ or design right ” ;

(d) in subsection (8)(c) for “or work in which copyright subsists” substitute “ work in which copyright subsists or design in which design right subsists ” .

(4)In section 5 (effect of war on international arrangements)—

(a) in subsection (1) for “section twenty-nine of the Copyright Act 1911” substitute “ section 159 or 256 of the Copyright, Designs and Patents Act 1988 (countries enjoying reciprocal copyright or design right protection) ” ;

(b) in subsection (2) after “copyright” (four times) insert “ or design right ” and for “the Copyright Act 1911” (twice) substitute “ Part I or III of the Copyright, Designs and Patents Act 1988 ” .

(5)In section 10(1) (interpretation) omit the definition of “copyright”, and for the definitions of “design”, “invention”, “patent” and “patentee” substitute—

“ “ design ” has in reference to a registered design the same meaning as in the Registered Designs Act 1949, and in reference to design right the same meaning as in Part III of the Copyright, Designs and Patents Act 1988;

“ invention ” and “ patent ” have the same meaning as in the Patents Act 1977. ”.

Crown Proceedings Act 1947 (c.44)U.K.

4(1)In the Crown Proceedings Act 1947 for section 3 (provisions as to industrial property) substitute—U.K.

3 Infringement of intellectual property rights.

(1)Civil proceedings lie against the Crown for an infringement committed by a servant or agent of the Crown, with the authority of the Crown, of—

(a)a patent,

(b)a registered trade mark or registered service mark,

(c)the right in a registered design,

(d)design right, or

(e)copyright;

but save as provided by this subsection no proceedings lie against the Crown by virtue of this Act in respect of an infringement of any of those rights.

(2)Nothing in this section, or any other provision of this Act, shall be construed as affecting—

(a)the rights of a government department under section 55 of the Patents Act 1977, Schedule 1 to the Registered Designs Act 1949 or section 240 of the Copyright, Designs and Patents Act 1988 (Crown use of patents and designs), or

(b)the rights of the Secretary of State under section 22 of the Patents Act 1977 or section 5 of the Registered Designs Act 1949 (security of information prejudicial to defence or public safety).”.

(2)In the application of sub-paragraph (1) to Northern Ireland—

(a)the reference to the Crown Proceedings Act 1947 is to that Act as it applies to the Crown in right of Her Majesty’s Government in Northern Ireland, as well as to the Crown in right of Her Majesty’s Government in the United Kingdom, and

(b)in the substituted section 3 as it applies in relation to the Crown in right of Her Majesty’s Government in Northern Ireland, subsection (2)(b) shall be omitted.

Patents Act 1949 (c.87)U.K.

5U.K. In section 47 of the Patents Act 1949 (rights of third parties in respect of Crown use of patent), in the closing words of subsection (1) (which relate to the use of models or documents), after “copyright” insert “ or design right ” .

Public Libraries (Scotland) Act 1955 (c.27)U.K.

F1022 6 U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1022 +Sch. 7 para. 6 repealed (1.12.1996) by S.I. 1996/2967, reg. 11(7) (with Pt. III) +

London County Council (General Powers) Act 1958 (c.xxi)U.K.

7U.K.In section 36 of the London County Council (General Powers) Act 1958 (power as to libraries: provision and repair of things other than books) for subsection (5) substitute—

“(5)Nothing in this section shall be construed as authorising an infringement of copyright.”.

Public Libraries and Museums Act 1964 (c.75)U.K.

F1023 8 U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1023 +Sch. 7 para. 8 repealed (1.12.1996) by S.I. 1996/2967, reg. 11(7) (with Pt. III) +

Marine, &c., Broadcasting (Offences) Act 1967 (c.41)U.K.

9U.K.F1024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1024 +Sch. 7 para. 9 repealed (8.2.2007) by Wireless Telegraphy Act 2006 (c. 36), ss. 124, 125(1), 126(2), Sch. 9 Pt. 1 (with Sch. 8 Pt. 1) +

Medicines Act 1968 (c.67)U.K.

10(1)Section 92 of the Medicines Act 1968 (scope of provisions restricting promotion of sales of medicinal products) is amended as follows.U.K.

(2) In subsection (1) (meaning of “advertisement”) for the words from “or by the exhibition” to “service” substitute “ or by means of a photograph, film, sound recording, broadcast or cable programme, ” .

(3)F1025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)For subsection (6) substitute—

“(6)In this section “film”, “sound recording”, “broadcast”, “cable programme”, “cable programme service”, and related expressions, have the same meaning as in Part I of the Copyright, Designs and Patents Act 1988 (copyright).”.

Textual Amendments

Post Office Act 1969 (c.48)U.K.

11U.K. In Schedule 10 to the Post Office Act 1969 (special transitional provisions relating to use of patents and registered designs), in the closing words of paragraphs 8(1) and 18(1) (which relate to the use of models and documents), after “copyright” insert “ or design right ” .

Merchant Shipping Act 1970 (c.36)U.K.

12U.K.In section 87 of the Merchant Shipping Act 1970 (merchant navy uniform), for subsection (4) substitute—

“(4)Where any design forming part of the merchant navy uniform has been registered under the Registered Designs Act 1949 and the Secretary of State is the proprietor of the design, his right in the design is not limited to the period prescribed by section 8 of that Act but shall continue to subsist so long as the design remains registered.”.

Taxes Management Act 1970 (c.9)U.K.

13U.K.In section 16 of the Taxes Management Act 1970 (returns to be made in respect of certain payments)—

(a)in subsection (1)(c), and

(b)in subsection (2)(b),

for “or public lending right” substitute “ , public lending right, right in a registered design or design right ” .

Tribunals and Inquiries Act 1971 (c.62)U.K.

F1026 14 U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1026 +Sch. 7 para. 14 repealed (1.10.1992) by Tribunals and Inquiries Act 1992 (c. 53), ss. 18(2), 19(2), Sch. 4 Pt.I +

Fair Trading Act 1973 (c.41)U.K.

15U.K.F1027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1027 +Sch. 7 para. 15 repealed (20.6.2003) by 2002 c. 40, ss. 278(2), 279, Sch. 26; S.I. 2003/1397, art. 2(1), Sch. +

House of Commons Disqualification Act 1975 (c.24)U.K.

16U.K. In Part II of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert “ The Copyright Tribunal ” .

Northern Ireland Assembly Disqualification Act 1975 (c.25)U.K.

17U.K. In Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert “ The Copyright Tribunal ” .

Restrictive Trade Practices Act 1976 (c.34)U.K.

18(1)The Restrictive Trade Practices Act 1976 is amended as follows.U.K.

(2)In Schedule 1 (excluded services) for paragraph 10 (services of patent agents) substitute—

“10The services of registered patent agents (within the meaning of Part V of the Copyright, Designs and Patents Act 1988) in their capacity as such.”;

and in paragraph 10A (services of European patent attorneys) for “section 84(7) of the Patents Act 1977” substitute “ Part V of the Copyright, Designs and Patents Act 1988 ” .

(3)In Schedule 3 (excepted agreements), after paragraph 5A insert—

Design rightU.K.

5B(1)This Act does not apply to—

(a)a licence granted by the owner or a licensee of any design right,

(b)an assignment of design right, or

(c)an agreement for such a licence or assignment,

if the licence, assignment or agreement is one under which no such restrictions as are described in section 6(1) above are accepted, or no such information provisions as are described in section 7(1) above are made, except in respect of articles made to the design; but subject to the following provisions.

(2)Sub-paragraph (1) does not exclude a licence, assignment or agreement which is a design pooling agreement or is granted or made (directly or indirectly) in pursuance of a design pooling agreement.

(3) In this paragraph a “ design pooling agreement ” means an agreement—

(a)to which the parties are or include at least three persons(the “principal parties”) each of whom has an interest in one or more design rights, and

(b)by which each principal party agrees, in respect of design right in which he has, or may during the currency of the agreement acquire, an interest to grant an interest (directly or indirectly) to one or more of the other principal parties, or to one or more of those parties and to other persons.

(4)In this paragraph—

  • “ assignment ”, in Scotland, means assignation; and

  • “ interest ” means an interest as owner or licensee of design right.

(5)This paragraph applies to an interest held by or granted to more than one person jointly as if they were one person.

(6)References in this paragraph to the granting of an interest to a person indirectly are to its being granted to a third person for the purpose of enabling him to make a grant to the person in question.”.

Resale Prices Act 1976 (c. 53)U.K.

19U.K. In section 10(4) of the Resale Prices Act 1976 (patented articles: articles to be treated in same way), in paragraph (a) after “protected” insert “ by design right or ” .

Patents Act 1977 (c. 37)U.K.

20U.K. In section 57 of the Patents Act 1977 (rights of third parties in respect of Crown use of patent), in the closing words of subsection (1) (which relate to the use of models or documents), after “copyright” insert “ or design right ” .

21U.K.In section 105 of the Patents Act 1977 (privilege in Scotland for communications relating to patent proceedings), omit “within the meaning of section 104 above”, make the existing text subsection (1) and after it insert—

“(2)In this section—

  • “ patent proceedings ” means proceedings under this Act or any of the relevant conventions, before the court, the comptroller or the relevant convention court, whether contested or uncontested and including an application for a patent; and

  • “ the relevant conventions ” means the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty. ”.

22U.K.In section 123(7) of the Patents Act 1977 (publication of case reports by the comptroller)—

(a) for “and registered designs” substitute “ registered designs or design right ” ,

(b) for “and copyright” substitute “ , copyright and design right ” .

23U.K.In section 130(1) of the Patents Act 1977 (interpretation), in the definition of “court”, for paragraph (a) substitute—

“(a)as respects England and Wales, the High Court or any patents county court having jurisdiction by virtue of an order under section 287 of the Copyright, Designs and Patents Act 1988;”.

Unfair Contract Terms Act 1977 (c. 50)U.K.

24U.K. In paragraph 1 of Schedule 1 to the Unfair Contract Terms Act 1977 (scope of main provisions: excluded contracts), in paragraph (c) (contracts relating to grant or transfer of interest in intellectual property) after “copyright” insert “ or design right ” .

Judicature (Northern Ireland) Act 1978 (c. 23)U.K.

25U.K. In section 94A of the Judicature (Northern Ireland) Act 1978 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property), in subsection (5) (meaning of “intellectual property”) after “copyright” insert “ or design right ” .

Capital Gains Tax Act 1979 (c. 14)U.K.

F1028 26 U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1028 +Sch. 7 para. 26 repealed (6.3.1992 with effect as mentioned in s. 289(1)(2) of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with s. 201(3), Sch. 11 paras. 22, 26(2), 27) +

British Telecommunications Act 1981 (c. 38)U.K.

27U.K.F1029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1029 +Sch. 7 para. 27 repealed (25.7.2003 for specified purposes and 29.12.2003 otherwise) by Communications Act 2003 (c. 21), ss. 406, 408, 411, Sch. 19(1) (with Sch. 18, Sch. 19(1) Note 1); S.I. 2003/1900, arts. 1(2), 2(1), 3(1), Sch. 1 (with art. 3(2) (as amended (8.12.2003) by S.I. 2003/3142, art. 1(3))); S.I. 2003/3142, art. 3, Sch. 1 (with art. 11) +

[F1030Senior Courts Act 1981] (c. 54)U.K.

Textual Amendments

F1030 +Sch. 7 para. 28 cross-heading: words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 1(2); S.I. 2009/1604, art. 2 +

28(1)The [F1031Senior Courts Act 1981] is amended as follows.U.K.

(2) In section 72 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property), in subsection (5) (meaning of “intellectual property”) after “copyright” insert “ , design right ” .

(3) In Schedule 1 (distribution of business in the High Court), in paragraph 1(i) (business assigned to the Chancery Division: causes and matters relating to certain intellectual property) for “or copyright” substitute “ , copyright or design right ” .

Textual Amendments

F1031 +Sch. 7 para. 28: words wherever they occur in any enactment substituted (1.10.2009) by virtue of Constitutional Reform Act 2005 (c. 4), ss. 59, 148, Sch. 11 para. 1(2); S.I. 2009/1604, art. 2 +

F1032 29 , 30.U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1032 +Sch. 7 paras. 29, 30 repealed by Broadcasting Act 1990 (c. 42, SIF 96), s. 203(3), Sch. 21 (the repeal being in force subject, as to para. 29, as mentioned in S.I. 1990/2347 art. 3(3)) +

Companies Act 1985 (c. 6)U.K.

[F103331(1)Part XII of the Companies Act 1985 (registration of charges) is amended as follows.U.K.

(2) In section 396 (registration of charges in England and Wales: charges which must be registered), in subsection (1)(j) for the words from “on a patent” to the end substitute “ or on any intellectual property ” , and after subsection (3) insert—

“(3A) The following are “ intellectual property ” for the purposes of this section—

(a)any patent, trade mark, service mark, registered design, copyright or design right;

(b)any licence under or in respect of any such right.”.

(3)In section 410 (registration of charges in Scotland: charges which must be registered), in subsection (4)(c) (incorporeal moveable property) after subparagraph (vi) insert—

“(vii)a registered design or a licence in respect of such a design,

(viii)a design right or a licence under a design right,”.]

Textual Amendments

F1033 +Sch. 7 para. 31 repealed (prosp.) by Companies Act 1989 (c. 40, SIF 27), ss. 212, 215(2), Sch. 24 +

Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (c. 73)U.K.

32U.K. In section 15 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property), in subsection (5) (meaning of “intellectual property”) after “copyright” insert “ or design right ” .

Atomic Energy Authority Act 1986 (c. 3)U.K.

33U.K. In section 8(2) of the Atomic Energy Authority Act 1986 (powers of Authority as to exploitation of research: meaning of “intellectual property”), after “copyrights” insert “ , design rights ” .

Education and Libraries (Northern Ireland) Order 1986 ( S.I. 1986/594 (N.I.3)) U.K.

F1034 34 U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1034 +Sch. 7 para. 34 repealed (16.1.1994) by S.I. 1993/2810 (N.I. 12), arts. 1(2), 50(2), Sch.5 and expressed to be repealed (1.12.1996) by S.I. 1996/2967, reg. 11(7) (with Pt. III) +

Companies (Northern Ireland) Order 1986 ( S.I. 1986/1032 (N.I.6)) U.K.

35U.K.F1035 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Income and Corporation Taxes Act 1988 (c. 1)U.K.

36(1)The Income and Corporation Taxes Act 1988 is amended as follows.U.K.

(2) In section 83 (fees and expenses deductible in computing profits and gains of trade) for “the extension of the period of copyright in a design” substitute “ an extension of the period for which the right in a registered design subsists ” .

(3)F1036 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)F1037 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)F1037 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)F1037 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)In section 821 (payments made under deduction of tax before passing of Act imposing income tax for that year), in subsection (3) (payments subject to adjustment) after paragraph (a) insert—

“(aa)any payment for or in respect of a right in a design to which section 537B applies; and”.

(8)In Schedule 19 (apportionment of income of close companies), in paragraph 10(4) (cessation or liquidation: debts taken into account although creditor is participator or associate), in paragraph (c) (payments for use of certain property) for the words from “tangible property” to “extend)” substitute—

“(i)tangible property,

(ii)copyright in a literary, dramatic, musical or artistic work within the meaning of Part I of the Copyright, Designs and Patents Act 1988 (or any similar right under the law of a country to which that Part does not extend), or

(iii)design right,”.

(9) In Schedule 25 (taxation of UK-controlled foreign companies: exempt activities), in paragraph 9(1)(a) (investment business: holding of property) for “patents or copyrights” substitute “ or intellectual property ” and after that subparagraph insert—

“(1A) In sub-paragraph (1)(a) above “ intellectual property ” means patents, registered designs, copyright and design right (or any similar rights under the law of a country outside the United Kingdom). ”.

Textual Amendments

F1036 +Sch. 7 para. 36(3) repealed (6.4.2005 with effect as mentioned in s. 883 of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), ss. 883, 884, Sch. 3 (with savings and transitional provisions in Sch. 2) +

F1037 +Sch. 7 para. 36(4)(5)(6) repealed (6.4.2007 with effect as mentioned in s. 1034 of the repealing Act) by Income Tax Act 2007 (c. 3), ss. 1031, 1034, Sch. 3 Pt. 1 (with savings and transitional provisions in Sch. 2) +

Section 303(2).

SCHEDULE 8U.K. Repeals

1939 c. 107.Patents, Designs, Copyright and Trade Marks (Emergency) Act 1939.In section 10(1), the definition of “copyright”.
1945 c. 16.Limitation (Enemies and War Prisoners) Act 1945.In sections 2(1) and 4(a), the reference to section 10 of the Copyright Act 1911.
1949 c. 88.Registered Designs Act 1949.In section 3(2), the words “or original”.
Section 5(5).
In section 11(2), the words “or original”.
In section 14(3), the words “or the Isle of Man”.
Section 32.
Section 33(2).
Section 37(1).
Section 38.
In section 44(1), the definitions of “copyright” and “Journal”.
In section 45, paragraphs (1) and (2).
In section 46, paragraphs (1) and (2).
1949 c. 88.—cont.Registered Designs Act 1949.—cont.Section 48(1).
In Schedule 1, in paragraph 3(1), the words “in such manner as may be prescribed by rules of court”.
Schedule 2.
1956 c. 74.Copyright Act 1956.The whole Act.
1957 c. 6.Ghana Independence Act 1957.In Schedule 2, paragraph 12.
1957 c. 60.Federation of Malaya Independence Act 1957.In Schedule 1, paragraphs 14 and 15.
1958 c. 44.Dramatic and Musical Performers’ Protection Act 1958.The whole Act.
1958 c. 51.Public Records Act 1958.Section 11.
Schedule 3.
1960 c. 52.Cyprus Independence Act 1960.In the Schedule, paragraph 13.
1960 c. 55.Nigeria Independence Act 1960.In Schedule 2, paragraphs 12 and 13.
1961 c. 1.Tanganyika Independence Act 1961.In Schedule 2, paragraphs 13 and 14.
1961 c. 16.Sierra Leone Independence Act 1961.In Schedule 3, paragraphs 13 and 14.
1961 c. 25.Patents and Designs (Renewals, Extensions and Fees) Act 1961.The whole Act.
1962 c. 40.Jamaica Independence Act 1962.In Schedule 2, paragraph 13.
1962 c. 54.Trinidad and Tobago Independence Act 1962.In Schedule 2, paragraph 13.
1963 c. 53.Performers’ Protection Act 1963.The whole Act.
1964 c. 46.Malawi Independence Act 1964.In Schedule 2, paragraph 13.
1964 c. 65.Zambia Independence Act 1964.In Schedule 1, paragraph 9.
. . . F1038.
1964 c. 93.Gambia Independence Act 1964.In Schedule 2, paragraph 12.
1966 c. 24.Lesotho Independence Act 1966.In the Schedule, paragraph 9.
1966 c. 37.Barbados Independence Act 1966.In Schedule 2, paragraph 12.
1967 c. 80.Criminal Justice Act 1967.In Parts I and IV of Schedule 3, the entries relating to the Registered Designs Act 1949.
1968 c. 56.Swaziland Independence Act 1968.In the Schedule, paragraph 9.
1968 c. 67.Medicines Act 1968.In section 92(2)(a), the words from “or embodied” to “film”.
Section 98.
1968 c. 68.Design Copyright Act 1968.The whole Act.
1971 c. 4.Copyright (Amendment) Act 1971.The whole Act.
1971 c. 23.Courts Act 1971.In Schedule 9, the entry relating to the Copyright Act 1956.
1971 c. 62.Tribunals and Inquiries Act 1971.In Schedule 1, paragraph 24.
1972 c. 32.Performers’ Protection Act 1972.The whole Act.
1975 c. 24.House of Commons Disqualification Act 1975.In Part II of Schedule 1, the entry relating to the Performing Right Tribunal.
1975 c. 25.Northern Ireland Assembly Disqualification Act 1975.In Part II of Schedule 1, the entry relating to the Performing Right Tribunal.
1977 c. 37.Patents Act 1977.Section 14(4) and (8).
In section 28(3), paragraph (b) and the word “and” preceding it.
Section 28(5) to (9).
Section 49(3).
Sections 72(3).
Sections 84 and 85.
Section 88.
Section 104.
In section 105, the words “within the meaning of section 104 above”.
Sections 114 and 115.
Section 123(2)(k).
In section 130(1), the definition of “patent agent”.
In section 130(7), the words “88(6) and (7),”.
In Schedule 5, paragraphs 1 and 2, in paragraph 3 the words “and 44(1)” and “in each case”, and paragraphs 7 and 8.
1979 c. 2.Customs and Excise Management Act 1979.In Schedule 4, the entry relating to the Copyright Act 1956.
1980 c. 21.Competition Act 1980.Section 14.
1981 c. 68.Broadcasting Act 1981.Section 20(9)(a).
1982 c. 35.Copyright Act 1956 (Amendment) Act 1982.The whole Act.
1983 c. 42.Copyright (Amendment) Act 1983.The whole Act.
1984 c. 46.Cable and Broadcasting Act 1984.Section 8(8).
Section 16(4) and (5).
Sections 22 to 24.
Section 35(2) and (3).
Sections 53 and 54.
In section 56(2), the definition of “the 1956 Act”.
In Schedule 5, paragraphs 6, 7, 13 and 23.
1985 c. 21.Films Act 1985.Section 7(2).
1985 c. 41.Copyright (Computer Software) Amendment Act 1985.The whole Act.
1985 c. 61.Administration of Justice Act 1985.Section 60.
1986 c. 39.Patents, Designs and Marks Act 1986.In Schedule 2, paragraph 1(2)(a), in paragraph 1(2)(k) the words “subsection (1)(j) of section 396 and” and in paragraph 1(2)(1) the words “subsection (2)(i) of section 93”.
1988 c. 1.Income and Corporation Taxes Act 1988.In Schedule 29, paragraph 5.]

Textual Amendments

F1038 +In Sch. 8 entry relating to the Malta Independence Act 1964 repealed (5.11.1993) by 1993 c. 50 s. 1(1), Sch. 1 Pt.XVI +

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\ No newline at end of file diff --git a/raw/uk/database-rights-regs-1997 b/raw/uk/database-rights-regs-1997 new file mode 100644 index 0000000..cf7fedc --- /dev/null +++ b/raw/uk/database-rights-regs-1997 @@ -0,0 +1,94 @@ + + + +The Copyright and Rights in Databases Regulations 1997 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +

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Statutory Instruments

1997 No. 3032

COPYRIGHT

RIGHTS IN DATABASES

The Copyright and Rights in Databases Regulations 1997

Made

18th December 1997

Coming into force

1st January 1998

Whereas a draft of the following Regulations has been approved by a resolution of each House of Parliament:

Now, therefore, the Secretary of State, being a Minister designated for the purposes of section 2(2) of the European Communities Act 1972(1) in relation to measures relating to copyright(2) and measures relating to the prevention of unauthorised extraction of the contents of a database and of unauthorised re-utilisation of those contents(3), in exercise of the powers conferred by section 2(2) and (4) of that Act, hereby makes the following Regulations:—

PART IU.K.INTRODUCTORY PROVISIONS

Citation, commencement and extentU.K.

1.—(1) These Regulations may be cited as the Copyright and Rights in Databases Regulations 1997.

(2) These Regulations come into force on 1st January 1998.

(3) These Regulations extend to the whole of the United Kingdom.

Commencement Information

I1Reg. 1 in force at 1.1.1998, see reg. 1(2)

Implementation of DirectiveU.K.

2.—(1) These Regulations make provision for the purpose of implementing—

(a)Council Directive No. 96/9/EC of 11 March 1996(4) on the legal protection of databases, F1...

(b)certain obligations of the United Kingdom created by or arising under the EEA Agreement so far as relating to the implementation of that Directive [F2, and]

[F3(c)an Agreement(5) in the form of an exchange of letters between the United Kingdom of Great Britain and Northern Ireland on behalf of the Isle of Man and the European Community extending to the Isle of Man the legal protection of databases as provided for in Chapter III of that Directive.]

(2) In this Regulation “the EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992(5), as adjusted by the Protocol signed at Brussels on 17th March 1993(6).

Textual Amendments

Commencement Information

I2Reg. 2 in force at 1.1.1998, see reg. 1(2)

InterpretationU.K.

3.  In these Regulations “the 1988 Act” means the Copyright, Designs and Patents Act 1988(7).

Commencement Information

I3Reg. 3 in force at 1.1.1998, see reg. 1(2)

Scheme of the RegulationsU.K.

4.—(1) The 1988 Act is amended in accordance with the provisions of Part II of these Regulations, subject to the savings and transitional provisions in Part IV of these Regulations.

(2) Part III of these Regulations has effect subject to those savings and transitional provisions.

Commencement Information

I4Reg. 4 in force at 1.1.1998, see reg. 1(2)

PART IIU.K.AMENDMENT OF THE COPYRIGHT, DESIGNS AND PATENTS ACT 1988

Copyright in databasesU.K.

5.  In section 3(1), in the definition of “literary work”—

(a)in paragraph (a) after “compilation” insert “other than a database”;

(b)at the end of paragraph (b) leave out “and”;

(c)at the end of paragraph (c) insert “and (d) a database;”.

Commencement Information

I5Reg. 5 in force at 1.1.1998, see reg. 1(2)

Meaning of “database”U.K.

6.  After section 3 insert—

Databases

3A.—(1) In this Part “database” means a collection of independent works, data or other materials which—

(a)are arranged in a systematic or methodical way, and

(b)are individually accessible by electronic or other means.

(2) For the purposes of this Part a literary work consisting of a database is original if, and only if, by reason of the selection or arrangement of the contents of the database the database constitutes the author’s own intellectual creation.”.

Commencement Information

I6Reg. 6 in force at 1.1.1998, see reg. 1(2)

Meaning of “adaptation” in relation to databaseU.K.

7.  In section 21 (infringement by making adaptation or act done in relation to adaptation), in subsection (3)—

(a)in paragraph (a), for “other than a computer program or” substitute “other than a computer program or a database, or in relation to a”, and

(b)after paragraph (ab) insert—

“(ac)in relation to a database, means an arrangement or altered version of the database or a translation of it;”.

Commencement Information

I7Reg. 7 in force at 1.1.1998, see reg. 1(2)

ResearchU.K.

8.—(1) In section 29 (research and private study), in subsection (1), after “literary” insert “work, other than a database, or a”.

(2) After subsection (1) of that section insert—

“(1A) Fair dealing with a database for the purposes of research or private study does not infringe any copyright in the database provided that the source is indicated.”.

(3) After subsection (4) of that section insert—

“(5) The doing of anything in relation to a database for the purposes of research for a commercial purpose is not fair dealing with the database.”.

Commencement Information

I8Reg. 8 in force at 1.1.1998, see reg. 1(2)

Permitted acts in relation to databasesU.K.

9.  After section 50C insert—

“Databases: permitted actsU.K.

Acts permitted in relation to databases.

50D.—(1) It is not an infringement of copyright in a database for a person who has a right to use the database or any part of the database, (whether under a licence to do any of the acts restricted by the copyright in the database or otherwise) to do, in the exercise of that right, anything which is necessary for the purposes of access to and use of the contents of the database or of that part of the database.

(2) Where an act which would otherwise infringe copyright in a database is permitted under this section, it is irrelevant whether or not there exists any term or condition in any agreement which purports to prohibit or restrict the act (such terms being, by virtue of section 296B, void).”.

Commencement Information

I9Reg. 9 in force at 1.1.1998, see reg. 1(2)

Avoidance of certain termsU.K.

10.  After section 296A insert—

“DatabasesU.K.

Avoidance of certain terms relating to databases

296B.  Where under an agreement a person has a right to use a database or part of a database, any term or condition in the agreement shall be void in so far as it purports to prohibit or restrict the performance of any act which would but for section 50D infringe the copyright in the database.”.

Commencement Information

I10Reg. 10 in force at 1.1.1998, see reg. 1(2)

Defined expressionsU.K.

11.  In section 179 (index of defined expressions), in the appropriate place in alphabetical order insert—

“databasesection 3A(1)”
“original (in relation to a database)section 3A(2)”.

Commencement Information

I11Reg. 11 in force at 1.1.1998, see reg. 1(2)

PART IIIU.K.DATABASE RIGHT

InterpretationU.K.

12.—(1) In this Part—

  • “database” has the meaning given by section 3A(1) of the 1988 Act (as inserted by Regulation 6);

  • “extraction”, in relation to any contents of a database, means the permanent or temporary transfer of those contents to another medium by any means or in any form;

  • “insubstantial”, in relation to part of the contents of a database, shall be construed subject to Regulation 16(2);

  • “investment” includes any investment, whether of financial, human or technical resources;

  • “jointly”, in relation to the making of a database, shall be construed in accordance with Regulation 14(6);

  • “lawful user”, in relation to a database, means any person who (whether under a licence to do any of the acts restricted by any database right in the database or otherwise) has a right to use the database;

  • “maker”, in relation to a database, shall be construed in accordance with Regulation 14;

  • [F4“Marrakesh beneficiary” has the meaning given by section 296ZE(1) of the 1988 Act];

  • [F5“national of the United Kingdom” has the meaning given by section 178 of the 1988 Act];

  • “re-utilisation”, in relation to any contents of a database, means making those contents available to the public by any means;

  • “substantial”, in relation to any investment, extraction or re-utilisation, means substantial in terms of quantity or quality or a combination of both.

(2) The making of a copy of a database available for use, on terms that it will or may be returned, otherwise than for direct or indirect economic or commercial advantage, through an establishment which is accessible to the public shall not be taken for the purposes of this Part to constitute extraction or re-utilisation of the contents of the database.

(3) Where the making of a copy of a database available through an establishment which is accessible to the public gives rise to a payment the amount of which does not go beyond what is necessary to cover the costs of the establishment, there is no direct or indirect economic or commercial advantage for the purposes of paragraph (2).

(4) Paragraph (2) does not apply to the making of a copy of a database available for on-the-spot reference use.

(5) Where a copy of a database has been sold within the EEA [F6, the United Kingdom] [F7or the Isle of Man] by, or with the consent of, the owner of the database right in the database, the further sale within the EEA [F6, the United Kingdom] [F7or the Isle of Man] of that copy shall not be taken for the purposes of this Part to constitute extraction or re-utilisation of the contents of the database.

Textual Amendments

Commencement Information

I12Reg. 12 in force at 1.1.1998, see reg. 1(2)

Database rightU.K.

13.—(1) A property right (“database right”) subsists, in accordance with this Part, in a database if there has been a substantial investment in obtaining, verifying or presenting the contents of the database.

(2) For the purposes of paragraph (1) it is immaterial whether or not the database or any of its contents is a copyright work, within the meaning of Part I of the 1988 Act.

(3) This Regulation has effect subject to Regulation 18.

Commencement Information

I13Reg. 13 in force at 1.1.1998, see reg. 1(2)

The maker of a databaseU.K.

14.—(1) Subject to paragraphs (2) to (4), the person who takes the initiative in obtaining, verifying or presenting the contents of a database and assumes the risk of investing in that obtaining, verification or presentation shall be regarded as the maker of, and as having made, the database.

(2) Where a database is made by an employee in the course of his employment, his employer shall be regarded as the maker of the database, subject to any agreement to the contrary.

(3) Subject to paragraph (4), where a database is made by Her Majesty or by an officer or servant of the Crown in the course of his duties, Her Majesty shall be regarded as the maker of the database.

(4) Where a database is made by or under the direction or control of the House of Commons or the House of Lords—

(a)the House by whom, or under whose direction or control, the database is made shall be regarded as the maker of the database, and

(b)if the database is made by or under the direction or control of both Houses, the two Houses shall be regarded as the joint makers of the database.

[F8(4A) Where a database is made by or under the direction or control of the Scottish Parliament, the Scottish Parliamentary Corporate Body shall be regarded as the maker of the database.]

(5) For the purposes of this Part a database is made jointly if two or more persons acting together in collaboration take the initiative in obtaining, verifying or presenting the contents of the database and assume the risk of investing in that obtaining, verification or presentation.

(6) References in this Part to the maker of a database shall, except as otherwise provided, be construed, in relation to a database which is made jointly, as references to all the makers of the database.

Textual Amendments

Commencement Information

I14Reg. 14 in force at 1.1.1998, see reg. 1(2)

First ownership of database rightU.K.

15.  The maker of a database is the first owner of database right in it.

Commencement Information

I15Reg. 15 in force at 1.1.1998, see reg. 1(2)

Acts infringing database rightU.K.

16.—(1) Subject to the provisions of this Part, a person infringes database right in a database if, without the consent of the owner of the right, he extracts or re-utilises all or a substantial part of the contents of the database.

(2) For the purposes of this Part, the repeated and systematic extraction or re-utilisation of insubstantial parts of the contents of a database may amount to the extraction or re-utilisation of a substantial part of those contents.

Commencement Information

I16Reg. 16 in force at 1.1.1998, see reg. 1(2)

Term of protectionU.K.

17.—(1) Database right in a database expires at the end of the period of fifteen years from the end of the calendar year in which the making of the database was completed.

(2) Where a database is made available to the public before the end of the period referred to in paragraph (1), database right in the database shall expire fifteen years from the end of the calendar year in which the database was first made available to the public.

(3) Any substantial change to the contents of a database, including a substantial change resulting from the accumulation of successive additions, deletions or alterations, which would result in the database being considered to be a substantial new investment shall qualify the database resulting from that investment for its own term of protection.

(4) This Regulation has effect subject to Regulation 30.

Commencement Information

I17Reg. 17 in force at 1.1.1998, see reg. 1(2)

Qualification for database rightU.K.

18.—(1) Database right does not subsist in a database unless, at the material time, its maker, or if it was made jointly, one or more of its makers, was—

(a)an individual who was a national of [F9 the United Kingdom] or habitually resident within [F10the United Kingdom],

(b)a body which was incorporated under the law of [F11any part of the United Kingdom] and which, at that time, satisfied one of the conditions in paragraph (2), F12...

(c)a partnership or other unincorporated body which was formed under the law of [F13any part of the United Kingdom] and which, at that time, satisfied the condition in paragraph (2)(a)[F14,]

[F15(d)an individual who was habitually resident within the Isle of Man,

(e)a body which was incorporated under the law of the Isle of Man and which, at that time, satisfied one of the conditions in paragraph (2A), or

(f)a partnership or other unincorporated body which was formed under the law of the Isle of Man and which, at that time, satisfied the condition in paragraph (2A)(a).]

(2) The conditions mentioned in paragraphs (1)(b) and (c) are—

(a)that the body has its central administration or principal place of business within [F16the United Kingdom], or

(b)that the body has its registered office within [F10the United Kingdom] and the body’s operations are linked on an ongoing basis with the economy of [F16the United Kingdom].

[F17(2A) The conditions mentioned in paragraphs (1)(e) and (f) are—

(a)that the body has its central administration or principal place of business within the Isle of Man, or

(b)that the body has its registered office within the Isle of Man and the body’s operations are linked on an ongoing basis with the economy of the Isle of Man.]

(3) Paragraph (1) does not apply in any case falling within Regulation 14(4).

(4) In this Regulation—

F18(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)“the material time” means the time when the database was made, or if the making extended over a period, a substantial part of that period.

Textual Amendments

Commencement Information

I18Reg. 18 in force at 1.1.1998, see reg. 1(2)

Avoidance of certain terms affecting lawful usersU.K.

19.—(1) A lawful user of a database which has been made available to the public in any manner shall be entitled to extract or re-utilise insubstantial parts of the contents of the database for any purpose.

(2) Where under an agreement a person has a right to use a database, or part of a database, which has been made available to the public in any manner, any term or condition in the agreement shall be void in so far as it purports to prevent that person from extracting or re-utilising insubstantial parts of the contents of the database, or of that part of the database, for any purpose.

Commencement Information

I19Reg. 19 in force at 1.1.1998, see reg. 1(2)

Exceptions to database rightU.K.

20.—(1) Database right in a database which has been made available to the public in any manner is not infringed by fair dealing with a substantial part of its contents if—

(a)that part is extracted from the database by a person who is apart from this paragraph a lawful user of the database,

(b)it is extracted for the purpose of illustration for teaching or research and not for any commercial purpose, and

(c)the source is indicated.

(2) The provisions of Schedule 1 specify other acts which may be done in relation to a database notwithstanding the existence of database right.

Commencement Information

I20Reg. 20 in force at 1.1.1998, see reg. 1(2)

[F19Exceptions to database right: deposit librariesU.K.

20A.—(1) Database right in a database is not infringed by the copying of a work from the internet by a deposit library or person acting on its behalf if—

(a)the work is of a description prescribed by regulations under section 10(5) of the 2003 Act,

(b)its publication on the internet, or a person publishing it there, is connected with the United Kingdom in a manner so prescribed, and

(c)the copying is done in accordance with any conditions so prescribed.

(2) Database right in a database is not infringed by the doing of anything in relation to relevant material permitted to be done under regulations under section 7 of the 2003 Act.

(3) Regulations under section 44A(3) of the 1988 Act exclude the application of paragraph (2) in relation to prescribed activities in relation to relevant material as (and to the extent that) they exclude the application of section 44A(2) of that Act in relation to those activities.

(4) In this Regulation—

(a)“the 2003 Act” means the Legal Deposit Libraries Act 2003;

(b)“deposit library” and “relevant material” have the same meaning as in section 7 of the 2003 Act.]

Textual Amendments

F19Reg. 20A inserted (30.10.2003 for specified purposes, 1.2.2004 in so far as not already in force) by Legal Deposit Libraries Act 2003 (c. 28), ss. 8(2), 16(1) (with s. 16(4)); S.I. 2004/130, art. 2

[F20Exceptions to database right: Marrakesh beneficiariesU.K.

20B.  Database right in a database is not infringed by the making of an accessible copy of a work under sections 31A, 31B or 31BA of, or paragraphs 3A, 3B or 3C of Schedule 2 to, the 1988 Act for the benefit of a Marrakesh beneficiary.]

Textual Amendments

Acts permitted on assumption as to expiry of database rightU.K.

21.—(1) Database right in a database is not infringed by the extraction or re-utilisation of a substantial part of the contents of the database at a time when, or in pursuance of arrangements made at a time when—

(a)it is not possible by reasonable inquiry to ascertain the identity of the maker, and

(b)it is reasonable to assume that database right has expired.

(2) In the case of a database alleged to have been made jointly, paragraph (1) applies in relation to each person alleged to be one of the makers.

Commencement Information

I21Reg. 21 in force at 1.1.1998, see reg. 1(2)

Presumptions relevant to database rightU.K.

22.—(1) The following presumptions apply in proceedings brought by virtue of this Part of these Regulations with respect to a database.

(2) Where a name purporting to be that of the maker appeared on copies of the database as published, or on the database when it was made, the person whose name appeared shall be presumed, until the contrary is proved—

(a)to be the maker of the database, and

(b)to have made it in circumstances not falling within Regulation 14(2) to (4).

(3) Where copies of the database as published bear a label or a mark stating—

(a)that a named person was the maker of the database, or

(b)that the database was first published in a specified year,

the label or mark shall be admissible as evidence of the facts stated and shall be presumed to be correct until the contrary is proved.

(4) In the case of a database alleged to have been made jointly, paragraphs (2) and (3), so far as is applicable, apply in relation to each person alleged to be one of the makers.

Modifications etc. (not altering text)

Commencement Information

I22Reg. 22 in force at 1.1.1998, see reg. 1(2)

Application of copyright provisions to database rightU.K.

[F2123.  The following provisions of the 1988 Act apply in relation to database right and databases in which that right subsists as they apply in relation to copyright and copyright works—

  • sections 90 to 93 (dealing with rights in copyright works)

  • sections 96 to 102 (rights and remedies of copyright owner and exclusive licensee)

  • sections 113 and 114 (supplementary provisions relating to delivery up)

  • section 115 (jurisdiction of county court and sheriff court).]

Textual Amendments

Commencement Information

I23Reg. 23 in force at 1.1.1998, see reg. 1(2)

Licensing of database rightU.K.

24.  The provisions of Schedule 2 have effect with respect to the licensing of database right.

Commencement Information

I24Reg. 24 in force at 1.1.1998, see reg. 1(2)

Database right: jurisdiction of Copyright TribunalU.K.

25.—(1) The Copyright Tribunal has jurisdiction under this Part to hear and determine proceedings under the following provisions of Schedule 2—

(a)paragraph 3, 4 or 5 (reference of licensing scheme);

(b)paragraph 6 or 7 (application with respect to licence under licensing scheme);

(c)paragraph 10, 11 or 12 (reference or application with respect to licence by licensing body).

(2) The provisions of Chapter VIII of Part I of the 1988 Act (general provisions relating to the Copyright Tribunal) apply in relation to the Tribunal when exercising any jurisdiction under this Part.

(3) Provision shall be made by rules under section 150 of the 1988 Act prohibiting the Tribunal from entertaining a reference under paragraph 3, 4 or 5 of Schedule 2 (reference of licensing scheme) by a representative organisation unless the Tribunal is satisfied that the organisation is reasonably representative of the class of persons which it claims to represent.

Commencement Information

I25Reg. 25 in force at 1.1.1998, see reg. 1(2)

PART IVU.K.SAVINGS AND TRANSITIONAL PROVISIONS

IntroductoryU.K.

[F2226.  Expressions used in this Part which are defined for the purposes of Part I of the 1988 Act have the same meaning as in that Part.]

Textual Amendments

Commencement Information

I26Reg. 26 in force at 1.1.1998, see reg. 1(2)

General ruleU.K.

27.  Subject to Regulations 28 and 29, these Regulations apply to databases made before or after [F231st January 1998].

Textual Amendments

Commencement Information

I27Reg. 27 in force at 1.1.1998, see reg. 1(2)

General savingsU.K.

[F2428.—(1) Nothing in these Regulations affects any agreement made before 1st January 1998.

(2) Nothing in these Regulations affects any agreement made after 31st December 1997 and before 1st November 2003 in so far as the effect would only arise as a result of the amendment of these Regulations by the Copyright and Rights in Databases (Amendment) Regulations 2003.

(3) No act done in respect of any database, in which database right subsists by virtue of the maker of the database (or one or more of its makers) falling within one of the provisions contained in Regulations 14(4) and 18(1)(a), (b) and (c),—

(a)before 1st January 1998, or

(b)after 31st December 1997, in pursuance of an agreement made before 1st January 1998,

shall be regarded as an infringement of database right in the database.

(4) No act done in respect of any database, in which database right subsists by virtue of its maker (or one or more of its makers) falling within one of the provisions contained in Regulation 18(1)(d), (e) and (f),—

(a)before 1st November 2003, or

(b)after 31st October 2003, in pursuance of an agreement made before 1st November 2003,

shall be regarded as an infringement of database right in the database.]

Textual Amendments

Commencement Information

I28Reg. 28 in force at 1.1.1998, see reg. 1(2)

Saving for copyright in certain existing databasesU.K.

29.—(1) Where a database—

(a)was created on or before 27th March 1996, and

(b)is a copyright work immediately before [F251st January 1998],

copyright shall continue to subsist in the database for the remainder of its copyright term.

(2) In this Regulation “copyright term” means the period of the duration of copyright under section 12 of the 1988 Act (duration of copyright in literary, dramatic, musical or artistic works).

Textual Amendments

Commencement Information

I29Reg. 29 in force at 1.1.1998, see reg. 1(2)

Database right: term applicable to certain existing databasesU.K.

[F2630.  Where—

(a)the making of any database is completed on or after 1st January 1983, and before 1st January 1998, and

(b)either—

(i)the database is a database in which database right subsists by virtue of the maker of the database (or one or more of its makers) falling within one of the provisions contained in Regulations 14(4) and 18(1)(a), (b) and (c) and database right begins to subsist in the database on 1st January 1998, or

(ii)the database is a database in which database right subsists by virtue of its maker (or one or more of its makers) falling within one of the provisions contained in Regulation 18(1)(d), (e) and (f) and database right begins to subsist in the database on 1st November 2003,

then database right shall subsist in the database for a period of fifteen years beginning with 1st January 1998.]

Textual Amendments

Commencement Information

I30Reg. 30 in force at 1.1.1998, see reg. 1(2)

Ian McCartney,

Minister of State,

Department of Trade and Industry

Regulation 20(2).

SCHEDULE 1U.K.EXCEPTIONS TO DATABASE RIGHT FOR PUBLIC ADMINISTRATION

Parliamentary and judicial proceedingsU.K.

1.  Database right in a database is not infringed by anything done for the purposes of parliamentary or judicial proceedings or for the purposes of reporting such proceedings.U.K.

Commencement Information

I31Sch. 1 para. 1 in force at 1.1.1998, see reg. 1(2)

Royal Commissions and statutory inquiriesU.K.

2.—(1) Database right in a database is not infringed by anything done for—U.K.

(a)the purposes of the proceedings of a Royal Commission or statutory inquiry, or

(b)the purpose of reporting any such proceedings held in public.

(2) Database right in a database is not infringed by the issue to the public of copies of the report of a Royal Commission or statutory inquiry containing the contents of the database.

(3) In this paragraph “Royal Commission” and “statutory inquiry” have the same meaning as in section 46 of the 1988 Act.

Commencement Information

I32Sch. 1 para. 2 in force at 1.1.1998, see reg. 1(2)

Material open to public inspection or on official registerU.K.

3.—(1) Where the contents of a database are open to public inspection pursuant to a statutory requirement, or are on a statutory register, database right in the database is not infringed by the extraction of all or a substantial part of the contents containing factual information of any description, by or with the authority of the appropriate person, for a purpose which does not involve re-utilisation of all or a substantial part of the contents.U.K.

(2) Where the contents of a database are open to public inspection pursuant to a statutory requirement, database right in the database is not infringed by the extraction or re-utilisation of all or a substantial part of the contents, by or with the authority of the appropriate person, for the purpose of enabling the contents to be inspected at a more convenient time or place or otherwise facilitating the exercise of any right for the purpose of which the requirement is imposed.

(3) Where the contents of a database which is open to public inspection pursuant to a statutory requirement, or which is on a statutory register, contain information about matters of general scientific, technical, commercial or economic interest, database right in the database is not infringed by the extraction or re-utilisation of all or a substantial part of the contents, by or with the authority of the appropriate person, for the purpose of disseminating that information.

(4) In this paragraph—

“appropriate person” means the person required to make the contents of the database open to public inspection or, as the case may be, the person maintaining the register;

“statutory register” means a register maintained in pursuance of a statutory requirement; and

“statutory requirement” means a requirement imposed by provision made by or under an enactment.

[F27(5) In sub-paragraph (4) the reference to an enactment includes any enactment contained in Part 3 of the Regulatory Reform (Scotland) Act 2014.]

Textual Amendments

Commencement Information

I33Sch. 1 para. 3 in force at 1.1.1998, see reg. 1(2)

Material communicated to the Crown in the course of public businessU.K.

4.—(1) This paragraph applies where the contents of a database have in the course of public business been communicated to the Crown for any purpose, by or with the licence of the owner of the database right and a document or other material thing recording or embodying the contents of the database is owned by or in the custody or control of the Crown.U.K.

(2) The Crown may, for the purpose for which the contents of the database were communicated to it, or any related purpose which could reasonably have been anticipated by the owner of the database right in the database, extract or re-utilise all or a substantial part of the contents without infringing database right in the database.

(3) The Crown may not re-utilise the contents of a database by virtue of this paragraph if the contents have previously been published otherwise than by virtue of this paragraph.

(4) In sub-paragraph (1) “public business” includes any activity carried on by the Crown.

(5) This paragraph has effect subject to any agreement to the contrary between the Crown and the owner of the database right in the database.

Commencement Information

I34Sch. 1 para. 4 in force at 1.1.1998, see reg. 1(2)

Public recordsU.K.

5.  The contents of a database which are comprised in public records within the meaning of the Public Records Act 1958(8), the Public Records (Scotland) Act 1937(9) or the Public Records Act (Northern Ireland) 1923(10) which are open to public inspection in pursuance of that Act, may be re-utilised by or with the authority of any officer appointed under that Act, without infringement of database right in the database.U.K.

Commencement Information

I35Sch. 1 para. 5 in force at 1.1.1998, see reg. 1(2)

Acts done under statutory authorityU.K.

6.—(1) Where the doing of a particular act is specifically authorised by an Act of Parliament, whenever passed, then, unless the Act provides otherwise, the doing of that act does not infringe database right in a database.U.K.

(2) Sub-paragraph (1) applies in relation to an enactment contained in Northern Ireland legislation as it applies in relation to an Act of Parliament.

[F28(2A) Sub-paragraph (1) applies in relation to an enactment contained in Part 3 of the Regulatory Reform (Scotland) Act 2014 as it applies in relation to an Act of Parliament.]

(3) Nothing in this paragraph shall be construed as excluding any defence of statutory authority otherwise available under or by virtue of any enactment [F29or other statutory provision].

Textual Amendments

Modifications etc. (not altering text)

Commencement Information

I36Sch. 1 para. 6 in force at 1.1.1998, see reg. 1(2)

Regulation 24.

SCHEDULE 2U.K.LICENSING OF DATABASE RIGHT

Licensing scheme and licensing bodiesU.K.

1.—(1) In this Schedule a “licensing scheme” means a scheme setting out—U.K.

(a)the classes of case in which the operator of the scheme, or the person on whose behalf he acts, is willing to grant database right licences, and

(b)the terms on which licences would be granted in those classes of case;

and for this purpose a “scheme” includes anything in the nature of a scheme, whether described as a scheme or as a tariff or by any other name.

(2) In this Schedule a “licensing body” means a society or other organisation which has as its main object, or one of its main objects, the negotiating or granting, whether as owner or prospective owner of a database right or as agent for him, of database right licences, and whose objects include the granting of licences covering the databases of more than one maker.

(3) In this paragraph “database right licences” means licences to do, or authorise the doing of, any of the things for which consent is required under Regulation 16.

Commencement Information

I37Sch. 2 para. 1 in force at 1.1.1998, see reg. 1(2)

2.  Paragraphs 3 to 8 apply to licensing schemes which are operated by licensing bodies and cover databases of more than one maker so far as they relate to licences for extracting or re-utilising all or a substantial part of the contents of a database; and references in those paragraphs to a licensing scheme shall be construed accordingly.U.K.

Commencement Information

I38Sch. 2 para. 2 in force at 1.1.1998, see reg. 1(2)

Reference of proposed licensing scheme to tribunalU.K.

3.—(1) The terms of a licensing scheme proposed to be operated by a licensing body may be referred to the Copyright Tribunal by an organisation claiming to be representative of persons claiming that they require licences in cases of a description to which the scheme would apply, either generally or in relation to any description of case.U.K.

(2) The Tribunal shall first decide whether to entertain the reference, and may decline to do so on the ground that the reference is premature.

(3) If the Tribunal decides to entertain the reference it shall consider the matter referred and make such order, either confirming or varying the proposed scheme, either generally or so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(4) The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Commencement Information

I39Sch. 2 para. 3 in force at 1.1.1998, see reg. 1(2)

Reference of licensing scheme to tribunalU.K.

4.—(1) If while a licensing scheme is in operation a dispute arises between the operator of the scheme and—U.K.

(a)a person claiming that he requires a licence in a case of a description to which the scheme applies, or

(b)an organisation claiming to be representative of such persons,

that person or organisation may refer the scheme to the Copyright Tribunal in so far as it relates to cases of that description.

(2) A scheme which has been referred to the Tribunal under this paragraph shall remain in operation until proceedings on the reference are concluded.

(3) The Tribunal shall consider the matter in dispute and make such order, either confirming or varying the scheme so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(4) The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Commencement Information

I40Sch. 2 para. 4 in force at 1.1.1998, see reg. 1(2)

Further reference of scheme to tribunalU.K.

5.—(1) Where the Copyright Tribunal has on a previous reference of a licensing scheme under paragraph 3 or 4, or under this paragraph, made an order with respect to the scheme, then, while the order remains in force—U.K.

(a)the operator of the scheme,

(b)a person claiming that he requires a licence in a case of the description to which the order applies, or

(c)an organisation claiming to be representative of such persons,

may refer the scheme again to the Tribunal so far as it relates to cases of that description.

(2) A licensing scheme shall not, except with the special leave of the Tribunal, be referred again to the Tribunal in respect of the same description of cases—

(a)within twelve months from the date of the order on the previous reference, or

(b)if the order was made so as to be in force for 15 months or less, until the last three months before the expiry of the order.

(3) A scheme which has been referred to the Tribunal under this section shall remain in operation until proceedings on the reference are concluded.

(4) The Tribunal shall consider the matter in dispute and make such order, either confirming, varying or further varying the scheme so far as it relates to cases of the description to which the reference relates, as the Tribunal may determine to be reasonable in the circumstances.

(5) The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Commencement Information

I41Sch. 2 para. 5 in force at 1.1.1998, see reg. 1(2)

Application for grant of licence in connection with licensing schemeU.K.

6.—(1) A person who claims, in a case covered by a licensing scheme, that the operator of the scheme has refused to grant him or procure the grant to him of a licence in accordance with the scheme, or has failed to do so within a reasonable time after being asked, may apply to the Copyright Tribunal.U.K.

(2) A person who claims, in a case excluded from a licensing scheme, that the operator of the scheme either—

(a)has refused to grant him a licence or procure the grant to him of a licence, or has failed to do so within a reasonable time of being asked, and that in the circumstances it is unreasonable that a licence should not be granted, or

(b)proposes terms for a licence which are unreasonable,

may apply to the Copyright Tribunal.

(3) A case shall be regarded as excluded from a licensing scheme for the purposes of sub-paragraph (2) if—

(a)the scheme provides for the grant of licences subject to terms excepting matters from the licence and the case falls within such an exception, or

(b)the case is so similar to those in which licences are granted under the scheme that it is unreasonable that it should not be dealt with in the same way.

(4) If the Tribunal is satisfied that the claim is well-founded, it shall make an order declaring that, in respect of the matters specified in the order, the applicant is entitled to a licence on such terms as the Tribunal may determine to be applicable in accordance with the scheme or, as the case may be, to be reasonable in the circumstances.

(5) The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Commencement Information

I42Sch. 2 para. 6 in force at 1.1.1998, see reg. 1(2)

Application for review of order as to entitlement to licenceU.K.

7.—(1) Where the Copyright Tribunal has made an order under paragraph 6 that a person is entitled to a licence under a licensing scheme, the operator of the scheme or the original applicant may apply to the Tribunal to review its order.U.K.

(2) An application shall not be made, except with the special leave of the Tribunal—

(a)within twelve months from the date of the order, or of the decision on a previous application under this section, or

(b)if the order was made so as to be in force for 15 months or less, or as a result of the decision on a previous application under this section is due to expire within 15 months of that decision, until the last three months before the expiry date.

(3) The Tribunal shall on an application for review confirm or vary its order as the Tribunal may determine to be reasonable having regard to the terms applicable in accordance with the licensing scheme or, as the case may be, the circumstances of the case.

Commencement Information

I43Sch. 2 para. 7 in force at 1.1.1998, see reg. 1(2)

Effect of order of tribunal as to licensing schemeU.K.

8.—(1) A licensing scheme which has been confirmed or varied by the Copyright Tribunal—U.K.

(a)under paragraph 3 (reference of terms of proposed scheme), or

(b)under paragraph 4 or 5 (reference of existing scheme to Tribunal),

shall be in force or, as the case may be, remain in operation, so far as it relates to the description of case in respect of which the order was made, so long as the order remains in force.

(2) While the order is in force a person who in a case of a class to which the order applies—

(a)pays to the operator of the scheme any charges payable under the scheme in respect of a licence covering the case in question or, if the amount cannot be ascertained, gives an undertaking to the operator to pay them when ascertained, and

(b)complies with the other terms applicable to such a licence under the scheme,

shall be in the same position as regards infringement of database right as if he had at all material times been the holder of a licence granted by the owner of the database right in question in accordance with the scheme.

(3) The Tribunal may direct that the order, so far as it varies the amount of charges payable, has effect from a date before that on which it is made, but not earlier than the date on which the reference was made or, if later, on which the scheme came into operation.

  • If such a direction is made—

    (a)

    any necessary repayments, or further payments, shall be made in respect of charges already paid, and

    (b)

    the reference in sub-paragraph (2)(a) to the charges payable under the scheme shall be construed as a reference to the charges so payable by virtue of the order.

  • No such direction may be made where sub-paragraph (4) below applies.

(4) Where the Tribunal has made an order under paragraph 6 (order as to entitlement to licence under licensing scheme) and the order remains in force, the person in whose favour the order is made shall if he—

(a)pays to the operator of the scheme any charges payable in accordance with the order or, if the amount cannot be ascertained, gives an undertaking to pay the charges when ascertained, and

(b)complies with the other terms specified in the order,

be in the same position as regards infringement of database right as if he had at all material times been the holder of a licence granted by the owner of the database right in question on the terms specified in the order.

Commencement Information

I44Sch. 2 para. 8 in force at 1.1.1998, see reg. 1(2)

References and applications with respect to licences by licensing bodiesU.K.

9.  Paragraphs 10 to 13 (references and applications with respect to licensing by licensing bodies) apply to licences relating to database right which cover databases of more than one maker granted by a licensing body otherwise than in pursuance of a licensing scheme, so far as the licences authorise extracting or re-utilising all or a substantial part of the contents of a database; and references in those paragraphs to a licence shall be construed accordingly.U.K.

Commencement Information

I45Sch. 2 para. 9 in force at 1.1.1998, see reg. 1(2)

Reference to tribunal of proposed licenceU.K.

10.—(1) The terms on which a licensing body proposes to grant a licence may be referred to the Copyright Tribunal by the prospective licensee.U.K.

(2) The Tribunal shall first decide whether to entertain the reference, and may decline to do so on the ground that the reference is premature.

(3) If the Tribunal decides to entertain the reference it shall consider the terms of the proposed licence and make such order, either confirming or varying the terms, as it may determine to be reasonable in the circumstances.

(4) The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Commencement Information

I46Sch. 2 para. 10 in force at 1.1.1998, see reg. 1(2)

Reference to tribunal of expiring licenceU.K.

11.—(1) A licensee under a licence which is due to expire, by effluxion of time or as a result of notice given by the licensing body, may apply to the Copyright Tribunal on the ground that it is unreasonable in the circumstances that the licence should cease to be in force.U.K.

(2) Such an application may not be made until the last three months before the licence is due to expire.

(3) A licence in respect of which a reference has been made to the Tribunal shall remain in operation until proceedings on the reference are concluded.

(4) If the Tribunal finds the application well-founded, it shall make an order declaring that the licensee shall continue to be entitled to the benefit of the licence on such terms as the Tribunal may determine to be reasonable in the circumstances.

(5) An order of the Tribunal under this section may be made so as to be in force indefinitely or for such period as the Tribunal may determine.

Commencement Information

I47Sch. 2 para. 11 in force at 1.1.1998, see reg. 1(2)

Application for review of order as to licenceU.K.

12.—(1) Where the Copyright Tribunal has made an order under paragraph 10 or 11, the licensing body or the person entitled to the benefit of the order may apply to the Tribunal to review its order.U.K.

(2) An application shall not be made, except with the special leave of the Tribunal—

(a)within twelve months from the date of the order or of the decision on a previous application under this paragraph, or

(b)if the order was made so as to be in force for 15 months or less, or as a result of the decision on a previous application under this section is due to expire within 15 months of that decision, until the last three months before the expiry date.

(3) The Tribunal shall on an application for review confirm or vary its order as the Tribunal may determine to be reasonable in the circumstances.

Commencement Information

I48Sch. 2 para. 12 in force at 1.1.1998, see reg. 1(2)

Effect of order of tribunal as to licenceU.K.

13.—(1) Where the Copyright Tribunal has made an order under paragraph 10 or 11 and the order remains in force, the person entitled to the benefit of the order shall if he—U.K.

(a)pays to the licensing body any charges payable in accordance with the order or, if the amount cannot be ascertained, gives an undertaking to pay the charges when ascertained, and

(b)complies with the other terms specified in the order,

be in the same position as regards infringement of database right as if he had at all material times been the holder of a licence granted by the owner of the database right in question on the terms specified in the order.

(2) The benefit of the order may be assigned—

(a)in the case of an order under paragraph 10, if assignment is not prohibited under the terms of the Tribunal’s order; and

(b)in the case of an order under paragraph 11, if assignment was not prohibited under the terms of the original licence.

(3) The Tribunal may direct that an order under paragraph 10 or 11, or an order under paragraph 12 varying such an order, so far as it varies the amount of charges payable, has effect from a date before that on which it is made, but not earlier than the date on which the reference or application was made or, if later, on which the licence was granted or, as the case may be, was due to expire.

  • If such a direction is made—

    (a)

    any necessary repayments, or further payments, shall be made in respect of charges already paid, and

    (b)

    the reference in sub-paragraph (1)(a) to the charges payable in accordance with the order shall be construed, where the order is varied by a later order, as a reference to the charges so payable by virtue of the later order.

Commencement Information

I49Sch. 2 para. 13 in force at 1.1.1998, see reg. 1(2)

General considerations: unreasonable discriminationU.K.

14.  In determining what is reasonable on a reference or application under this Schedule relating to a licensing scheme or licence, the Copyright Tribunal shall have regard to—U.K.

(a)the availability of other schemes, or the granting of other licences, to other persons in similar circumstances, and

(b)the terms of those schemes or licences,

and shall exercise its powers so as to secure that there is no unreasonable discrimination between licensees, or prospective licensees, under the scheme or licence to which the reference or application relates and licensees under other schemes operated by, or other licences granted by, the same person.

Commencement Information

I50Sch. 2 para. 14 in force at 1.1.1998, see reg. 1(2)

Powers exercisable in consequence of competition reportU.K.

15.—[F30(1) Sub-paragraph (1A) applies where whatever needs to be remedied, mitigated or prevented by the Secretary of State [F31or (as the case may be) the Competition and Markets Authority] under section 12(5) of the Competition Act 1980 or section 41(2), 55(2), 66(6), 75(2), 83(2), 138(2), 147(2) [F32, 147A(2)] or 160(2) of, or paragraph 5(2) or 10(2) of Schedule 7 to, the Enterprise Act 2002 (powers to take remedial action following references [F33to the chair of the Competition and Markets Authority for the constitution of a group] in connection with public bodies and certain other persons, mergers or market investigations) or article 12(7) of, or paragraph 5(2) or 10(2) of Schedule 2 to, the Enterprise Act 2002 (Protection of Legitimate Interests) Order 2003 (power to take remedial action following references [F33to the chair of the Competition and Markets Authority for the constitution of a group] in connection with European mergers) consists of or includes—U.K.

(a)conditions in licences granted by the owner of database right in a database restricting the use of the database by the licensee or the right of the owner of the database right to grant other licences; or

(b)a refusal of an owner of database right to grant licences on reasonable terms.

(1A) The powers conferred by Schedule 8 to the Enterprise Act 2002 include power to cancel or modify those conditions and, instead or in addition, to provide that licences in respect of the database right shall be available as of right.

(2) The references to anything permitted by Schedule 8 to the Enterprise Act 2002 in section 12(5A) of the Competition Act 1980 and in sections 75(4)(a), 83(4)(a), 84(2)(a), 89(1), 160(4)(a), 161(3)(a) and 164(1) of, and paragraphs 5, 10 and 11 of Schedule 7 to, the Act of 2002 and paragraphs 5, 10 and 11 of Schedule 2 to the Enterprise Act 2002 (Protection of Legitimate Interests) Order 2003 shall be construed accordingly.]

(3) The terms of a licence available by virtue of this paragraph shall, in default of agreement, be settled by the Copyright Tribunal on an application by the person requiring the licence; and terms so settled shall authorise the licensee to do everything in respect of which a licence is so available.

(4) Where the terms of a licence are settled by the Tribunal, the licence has effect from the date on which the application to the Tribunal was made.

Textual Amendments

F30Sch. 2 para. 15(1)-(2) substituted for Sch. 2 para. 15(1)(2) (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 31(2) (with art. 3(1))

Commencement Information

I51Sch. 2 para. 15 in force at 1.1.1998, see reg. 1(2)

Explanatory Note

(This note is not part of the Regulations)

These Regulations implement the provisions of Council Directive No. 96/9/EC of 11 March 1996 (O.J. No. L77, 27.3.96, page 20) on the legal protection of databases (“the Directive”). The Regulations come into force on 1st January 1998.

The Directive harmonises the laws of member states relating to the protection of copyright in databases and also introduces a new sui generis right to prevent extraction and re-utilisation of the contents of a database (“database right”).

The Copyright, Designs and Patents Act 1988 (“the Act”) makes no specific provision for databases. The Act currently makes provision for protection of copyright in compilations. A database may fall to be considered as a type of compilation. The Directive requires that a database be defined and that copyright protection should only be accorded to a database which by virtue of the selection or arrangement of the contents constitutes the author’s own intellectual creation.

In relation to copyright in databases, Part II of the Regulations (Regulations 5—11) amend and modify Part I of the Act in order to properly align its provisions with those of the Directive for those matters where the Act makes no specific provision or makes different provision. In particular, the Regulations—

(a)modify the definition of literary work in section 3 by including database, as defined in the Directive (regulations 5 and 6);

(b)introduce new section 3A defining the meaning of “original” in relation to databases so that a database is only accorded copyright protection where the conditions of that section are satisfied (regulation 6);

(c)make provision for adaptation and translation in relation to a database at section 21 (regulation 7);

(d)amend section 29 so as to remove research for a commercial purpose from the general application of the fair dealing provision in relation to a database (regulation 8);

(e)introduce new section 50D containing specific exceptions to the exclusive rights of the copyright owner which permit any person having a right to use a database to do any acts that are necessary for access to and use of the contents of the database without infringing copyright (regulation 9);

(f)introduce new section 296B which renders void any term in an agreement which seeks to prohibit or restrict the doing of any act permitted under section 50D (regulation 10).

In relation to database right, the Directive provides a right for the maker of a database in which there has been a substantial investment in the obtaining, verification or presentation of the contents of the database to prevent extraction and/or re-utilisation of the whole or a substantial part of the contents of the database. Database right is to apply irrespective of the eligibility of the database for protection by copyright and without prejudice to rights existing in the contents of the database.

Part III of the Regulations (Regulations 12—25) provide for database right and in particular—

(a)make provision for the interpretation of certain terms, in particular database, extraction, insubstantial, investment, jointly, lawful user, maker, re-utilisation and substantial; and exclude public lending from database right (regulation 12);

(b)create a new property right, “database right” for a database in respect of which there has been a substantial investment (regulation 13);

(c)provide that the maker of a database is the person who takes the initiative and risk of investing in obtaining, verifying or presenting the contents and that the maker is the first owner of database right (regulations 14 and 15);

(d)provide for the acts infringing database right (regulation 16);

(e)provide that the duration of the term of protection of database right is to be 15 years from the end of the calendar year in which the making of the database was completed and that substantial changes give rise to a further term of protection (regulation 17);

(f)provide that database right does not subsist in a database unless when the database was made, or if the making extended over a period, a substantial part of that period, its maker or one of its makers meets the qualifying conditions for database right to subsist (regulation 18);

(g)provide that lawful users are entitled to extract or re-utilise insubstantial parts of a database and render void any term or condition in an agreement which seeks to prohibit or restrict such extraction or re-utilisation (regulations 19 and 20);

(h)provide specific exceptions to database right for a lawful user and other acts which may be done in relation to a database (regulation 20 and Schedule 1);

(i)provide for acts permitted on assumption as to expiry of database right and certain presumptions relevant to database right (regulations 21 and 22);

(j)apply in relation to database right certain provisions of Part I of the Act as they apply to copyright in particular dealing with the rights in copyright works, rights and remedies of rights owners and exclusive licensees (regulation 23);

(k)provide for licensing of database right and extension of the jurisdiction of the Copyright Tribunal to hear and determine proceedings relating to the licensing of database right (regulations 24 and 25 and Schedule 2).

These Regulations apply to databases made before and after the 1st January 1998. However, there is a general saving in relation to agreements made before commencement; in particular acts done in pursuance of such agreements whether before or after commencement are not regarded as infringing database right (regulations 27 and 28). In relation to a database which was created on or before 27th March 1996 (the date of publication of the Directive) and which is a copyright work immediately before commencement, copyright will continue to subsist in such a database for the remainder of the term of copyright (regulation 29). In relation to a database which was completed on or after 1st January 1983 in which database right subsists at 1 January 1998, such a database qualifies for a term of protection of 15 years from 1st January 1998 (regulation 30).

A Compliance Cost Assessment is available, copies of which have been placed in the libraries of both Houses of Parliament. Copies of the assessment are available to the public from the Copyright Directorate of The Patent Office, 25 Southampton Buildings, London WC2A 1AY.

(1)

1972 c. 68; by virtue of the amendment of section 1(2) of that Act by section 1 of the European Economic Area Act 1993 (c. 51) regulations may be made under section 2(2) to implement obligations of the United Kingdom arising under the EEA Agreement.

(2)

S.I. 1993/595.

(3)

S.I. 1996/3155.

(4)

O.J. No. L77, 27.3.96 p.20.

(5)

Cm 2073.

(6)

Cm 2183.

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Employment Rights Act 1996

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  1. Introductory Text

  2. Part I Employment particulars

    1. Right to statements of employment particulars

      1. 1.Statement of initial employment particulars.

      2. 2.Statement of initial particulars: supplementary.

      3. 3.Note about disciplinary procedures and pensions.

      4. 4.Statement of changes.

      5. 5.Exclusion from rights to statements.

      6. 6.Reasonably accessible document or collective agreement.

      7. 7.Power to require particulars of further matters.

      8. 7A.Use of alternative documents to give particulars

      9. 7B.Giving of alternative documents before start of employment

    2. Right to itemised pay statement

      1. 8.Itemised pay statement.

      2. 9.Standing statement of fixed deductions.

      3. 10.Power to amend provisions about pay and standing statements.

    3. Enforcement

      1. 11.References to employment tribunals.

      2. 12.Determination of references.

  3. Part II Protection of wages

    1. Deductions by employer

      1. 13.Right not to suffer unauthorised deductions.

      2. 14.Excepted deductions.

    2. Payments to employer

      1. 15.Right not to have to make payments to employer.

      2. 16.Excepted payments.

    3. Cash shortages and stock deficiencies in retail employment

      1. 17.Introductory.

      2. 18.Limits on amount and time of deductions.

      3. 19.Wages determined by reference to shortages etc.

      4. 20.Limits on method and timing of payments.

      5. 21.Limit on amount of payments.

      6. 22.Final instalments of wages.

    4. Enforcement

      1. 23.Complaints to employment tribunals.

      2. 24.Determination of complaints.

      3. 25.Determinations: supplementary.

      4. 26.Complaints and other remedies.

    5. Supplementary

      1. 27.Meaning of “wages” etc.

  4. PART 2A Zero hours workers

    1. 27A.Exclusivity terms unenforceable in zero hours contracts

    2. 27B.Power to make further provision in relation to zero hours workers

  5. PART 2B TIPS, GRATUITIES AND SERVICE CHARGES

    1. Requirement to deal with tips, gratuities and service charges

      1. 27C.Qualifying tips, gratuities and service charges

      2. 27D.How tips etc must be dealt with

      3. 27E.Non-public places of business

      4. 27F.Independent troncs

      5. 27G.When tips etc must be dealt with

      6. 27H.Agency workers

    2. Information

      1. 27I.Written policy

      2. 27J.Records

    3. Enforcement

      1. 27K.Complaints to employment tribunal about tips etc

      2. 27L.Determination of complaints about tips etc

      3. 27M.Compensation: dealing with tips etc

      4. 27N.Complaints to employment tribunal about information

      5. 27O.Determination of complaints about information

    4. Code of practice about tips etc

      1. 27P.Issue of code of practice

      2. 27Q.Procedure for issue of code of practice

      3. 27R.Consequential revision of code of practice

      4. 27S.Revocation of code of practice

      5. 27T.Failure to comply with code of practice

    5. General

      1. 27U.No restitution claims by employer

      2. 27V.Relationship with contractual rights

      3. 27W.Restrictions on contracting out of this Part

      4. 27X.Interpretation

      5. 27Y.Application

  6. Part III Guarantee payments

    1. 28.Right to guarantee payment.

    2. 29.Exclusions from right to guarantee payment.

    3. 30.Calculation of guarantee payment.

    4. 31.Limits on amount of and entitlement to guarantee payment.

    5. 32.Contractual remuneration.

    6. 33.Power to modify provisions about guarantee payments.

    7. 34.Complaints to employment tribunals.

    8. 35.Exemption orders.

  7. Part IV Sunday working for shop and betting workers

    1. Protected shop workers and betting workers

      1. 36.Protected shop workers and betting workers.

      2. 37.Contractual requirements relating to Sunday work.

      3. 38.Contracts with guaranteed hours.

      4. 39.Reduction of pay etc.

    2. Opting-out of Sunday work

      1. 40.Notice of objection to Sunday working.

      2. 41.Opted-out shop workers and betting workers.

      3. 41A.Notice of objection by shop workers to working additional hours on Sunday

      4. 41B.Explanatory statement: persons who become shop workers

      5. 41C.Explanatory statement: shop workers at commencement date

      6. 41D.Failure to give explanatory statement under section 41B or 41C

      7. 42.Explanatory statement : betting workers.

      8. 43.Contractual requirements relating to Sunday work : opting-out notices.

      9. 43ZA.Contractual requirements relating to working additional hours on Sundays: objection notices

      10. 43ZB.Interpretation

  8. Part IVA Protected disclosures

    1. 43A.Meaning of “protected disclosure”.

    2. 43B.Disclosures qualifying for protection.

    3. 43C.Disclosure to employer or other responsible person.

    4. 43D.Disclosure to legal adviser.

    5. 43E.Disclosure to Minister of the Crown.

    6. 43F.Disclosure to prescribed person.

    7. 43FA.Prescribed persons: duty to report on disclosures of information

    8. 43G.Disclosure in other cases.

    9. 43H.Disclosure of exceptionally serious failure.

    10. 43J.Contractual duties of confidentiality.

    11. 43K.Extension of meaning of “worker” etc. for Part IVA.

    12. 43KA.Application of this Part and related provisions to police

    13. 43L.Other interpretative provisions.

  9. Part V Protection from suffering detriment in employment

    1. Rights not to suffer detriment

      1. 43M.Jury service

      2. 44.Health and safety cases.

      3. 45.Sunday working for shop and betting workers.

      4. 45ZA.Sunday working for shop workers: additional hours

      5. 45A.Working time cases.

      6. 46.Trustees of occupational pension schemes.

      7. 47.Employee representatives.

      8. 47A.Employees exercising right to time off work for study or training.

      9. 47B.Protected disclosures.

      10. 47C.Leave for family and domestic reasons.

      11. 47D.Tax credits

      12. 47E.Flexible working

      13. 47F.Study and training

      14. 47G.Employee shareholder status

    2. Enforcement

      1. 48.Complaints to employment tribunals.

      2. 49.Remedies.

    3. Application to police of rights relating to health and safety

      1. 49A.Application to police of section 44 and related provisions.

  10. PART 5A Protection for applicants for employment etc in the health service

    1. 49B.Regulations prohibiting discrimination because of protected disclosure

  11. PART 5B Redundancy during a protected period of pregnancy

    1. 49D.Redundancy during a protected period of pregnancy

  12. Part VI Time off work

    1. Public duties

      1. 50.Right to time off for public duties.

      2. 51.Complaints to employment tribunals.

    2. Looking for work and making arrangements for training

      1. 52.Right to time off to look for work or arrange training.

      2. 53.Right to remuneration for time off under section 52.

      3. 54.Complaints to employment tribunals.

    3. Ante-natal care

      1. 55.Right to time off for ante-natal care.

      2. 56.Right to remuneration for time off under section 55.

      3. 57.Complaints to employment tribunals.

    4. Ante-natal care: agency workers

      1. 57ZA.Right to time off for ante-natal care (agency workers)

      2. 57ZB.Right to remuneration for time off under section 57ZA

      3. 57ZC.Complaint to employment tribunal: agency workers

      4. 57ZD.Agency workers: supplementary

    5. Accompanying to ante-natal appointments

      1. 57ZE.Right to time off to accompany to ante-natal appointment

      2. 57ZF.Complaint to employment tribunal

    6. Accompanying to ante-natal appointments: agency workers

      1. 57ZG.Right to time off to accompany to ante-natal appointment: agency workers

      2. 57ZH.Complaint to employment tribunal: agency workers

      3. 57ZI.Agency workers: supplementary

    7. Adoption appointments

      1. 57ZJ.Right to paid time off to attend adoption appointments

      2. 57ZK.Right to remuneration for time off under section 57ZJ

      3. 57ZL.Right to unpaid time off to attend adoption appointments

      4. 57ZM.Complaint to employment tribunal

    8. Adoption appointments: agency workers

      1. 57ZN.Right to paid time off to attend adoption appointments: agency workers

      2. 57ZO.Right to remuneration for time off under section 57ZN

      3. 57ZP.Right to unpaid time off to attend adoption meetings: agency workers

      4. 57ZQ.Complaint to employment tribunal: agency workers

      5. 57ZR.Agency workers: supplementary

      6. 57ZS.Placement of looked after children with prospective adopters

    9. Dependants

      1. 57A.Time off for dependants.

      2. 57B.Complaint to employment tribunal.

    10. Occupational pension scheme trustees

      1. 58.Right to time off for pension scheme trustees.

      2. 59.Right to payment for time off under section 58.

      3. 60.Complaints to employment tribunals.

    11. Employee representatives

      1. 61.Right to time off for employee representatives.

      2. 62.Right to remuneration for time off under section 61.

      3. 63.Complaints to employment tribunals.

      4. 63A.Right to time off for young person in Wales or Scotland for study or training.

      5. 63B.Right to remuneration for time off under section 63A.

      6. 63C.Complaints to employment tribunals.

  13. Part 6A Study and training

    1. 63D.Statutory right to make request in relation to study or training

    2. 63E.Section 63D application: supplementary

    3. 63F.Employer's duties in relation to application

    4. 63G.Regulations about dealing with applications

    5. 63H.Employee's duties in relation to agreed study or training

    6. 63I.Complaints to employment tribunals

    7. 63J.Remedies

    8. 63K.Supplementary

  14. Part VII Suspension from work

    1. Suspension on medical grounds

      1. 64.Right to remuneration on suspension on medical grounds.

      2. 65.Exclusions from right to remuneration.

    2. Suspension on maternity grounds

      1. 66.Meaning of suspension on maternity grounds.

      2. 67.Right to offer of alternative work.

      3. 68.Right to remuneration.

    3. Ending the supply of an agency worker on maternity grounds

      1. 68A.Meaning of ending the supply of an agency worker on maternity grounds

      2. 68B.Right to offer of alternative work

      3. 68C.Right to remuneration

      4. 68D.Agency workers: supplementary

    4. General

      1. 69.Calculation of remuneration.

      2. 69A.Calculation of remuneration (agency workers)

      3. 70.Complaints to employment tribunals.

      4. 70A.Complaints to employment tribunals: agency workers

  15. Part VIII

    1. Chapter I MATERNITY LEAVE

      1. 71.(1) An employee may, provided that she satisfies any conditions...

      2. 72.Compulsory maternity leave.

      3. 73.Additional maternity leave.

      4. 74.Redundancy and dismissal.

      5. 75.Sections 71 to 73: supplemental.

    2. Chapter 1A Adoption leave

      1. 75A.Ordinary adoption leave

      2. 75B.Additional adoption leave

      3. 75C.Redundancy and dismissal

      4. 75D.Chapter 1A: supplemental

    3. CHAPTER 1B Shared parental leave

      1. 75E.Entitlement to shared parental leave: birth

      2. 75F.Entitlement to leave under section 75E: further provision

      3. 75G.Entitlement to shared parental leave: adoption

      4. 75H.Entitlement to leave under section 75G: further provision

      5. 75I.Rights during and after shared parental leave

      6. 75J.Redundancy and dismissal

      7. 75K.Chapter 1B: supplemental

    4. Chapter II PARENTAL LEAVE

      1. 76.Entitlement to parental leave.

      2. 77.Rights during and after parental leave.

      3. 78.Special cases.

      4. 79.Supplemental.

      5. 80.Complaint to employment tribunal.

    5. Chapter 3 Paternity leave

      1. 80A.Entitlement to ... paternity leave: birth

      2. 80AA.Entitlement to additional paternity leave: birth

      3. 80B.Entitlement to ... paternity leave: adoption

      4. 80BB.Entitlement to additional paternity leave: adoption

      5. 80C.Rights during and after paternity leave

      6. 80D.Special cases

      7. 80E.Chapter 3: supplemental

    6. CHAPTER 4 Parental bereavement leave

      1. 80EA.Parental bereavement leave

      2. 80EB.Rights during and after bereavement leave

      3. 80EC.Special cases

      4. 80ED.Chapter 4: supplemental

      5. 80EE.Application in relation to stillbirths

    7. CHAPTER 5 Neonatal care leave

      1. 80EF.Neonatal care leave

      2. 80EG.Rights during and after neonatal care leave

      3. 80EH.Special cases

      4. 80EI.Chapter 5: supplemental

  16. Part 8A Flexible working

    1. 80F.Statutory right to request contract variation

    2. 80G.Employer’s duties in relation to application under section 80F

    3. 80H.Complaints to employment tribunals

    4. 80I.Remedies

  17. PART 8B Carer’s leave

    1. 80J.Carer’s leave

    2. 80K.Rights during and after carer’s leave

    3. 80L.Special cases

    4. 80M.Part 8B: supplemental

    5. 80N.Complaint to employment tribunal

  18. Part IX Termination of employment

    1. Minimum period of notice

      1. 86.Rights of employer and employee to minimum notice.

      2. 87.Rights of employee in period of notice.

      3. 88.Employments with normal working hours.

      4. 89.Employments without normal working hours.

      5. 90.Short-term incapacity benefit , contributory employment and support allowance and industrial injury benefit.

      6. 91.Supplementary.

    2. Written statement of reasons for dismissal

      1. 92.Right to written statement of reasons for dismissal.

      2. 93.Complaints to employment tribunal.

  19. Part X Unfair dismissal

    1. Chapter I Right not to be unfairly dismissed

      1. The right

        1. 94.The right.

      2. Dismissal

        1. 95.Circumstances in which an employee is dismissed.

        2. 96. Unfair dismissal

        3. 97.Effective date of termination.

      3. Fairness

        1. 98.General.

      4. Retirement

        1. 98ZA.No normal retirement age: dismissal before 65

        2. 98ZB.No normal retirement age: dismissal at or after 65

        3. 98ZC.Normal retirement age: dismissal before retirement age

        4. 98ZD.Normal retirement age 65 or higher: dismissal at or after retirement age

        5. 98ZE.Normal retirement age below 65: dismissal at or after retirement age

        6. 98ZF.Reason for dismissal: particular matters

        7. 98ZG.Retirement dismissals: fairness

        8. 98ZH.Interpretation

      5. Other dismissals

        1. 98A.Procedural fairness

        2. 98B.Jury service

        3. 99.Leave for family reasons.

        4. 100.Health and safety cases.

        5. 101.Shop workers and betting workers who refuse Sunday work.

        6. 101ZA.Shop workers who refuse to work additional hours on Sunday

        7. 101A.Working time cases.

        8. 102.Trustees of occupational pension schemes.

        9. 103.Employee representatives.

        10. 103A.Protected disclosure.

        11. 104.Assertion of statutory right.

        12. 104A.The national minimum wage.

        13. 104B.Tax credits

        14. 104C.Flexible working

        15. 104D.Pension enrolment

        16. 104E.Study and training

        17. 104F.Blacklists

        18. 104G.Employee shareholder status

        19. 105.Redundancy.

        20. 106.Replacements.

        21. 107.Pressure on employer to dismiss unfairly.

      6. Exclusion of right

        1. 108.Qualifying period of employment.

        2. 109.Upper age limit.

        3. 110.Dismissal procedures agreements.

    2. Chapter II Remedies for unfair dismissal

      1. Introductory

        1. 111.Complaints to employment tribunal.

        2. 111A.Confidentiality of negotiations before termination of employment

        3. 112.The remedies: orders and compensation.

      2. Orders for reinstatement or re-engagement

        1. 113.The orders.

        2. 114.Order for reinstatement.

        3. 115.Order for re-engagement.

        4. 116.Choice of order and its terms.

        5. 117.Enforcement of order and compensation.

      3. Compensation

        1. 118.General.

        2. 119.Basic award.

        3. 120.Basic award: minimum in certain cases.

        4. 121.Basic award of two weeks’ pay in certain cases.

        5. 122.Basic award: reductions.

        6. 123.Compensatory award.

        7. 124.Limit of compensatory award etc.

        8. 124A.Adjustments under the Employment Act 2002

        9. 125. Unfair dismissal

        10. 126.Acts which are both unfair dismissal and discrimination.

        11. 127. Unfair dismissal

        12. 127A.Internal appeal procedures.

        13. 127B. Unfair dismissal

      4. Interim relief

        1. 128.Interim relief pending determination of complaint.

        2. 129.Procedure on hearing of application and making of order.

        3. 130.Order for continuation of contract of employment.

        4. 131.Application for variation or revocation of order.

        5. 132.Consequence of failure to comply with order.

    3. Chapter III Supplementary

      1. 133.Death of employer or employee.

      2. 134.Teachers in aided schools.

      3. 134A.Application to police.

  20. Part XI Redundancy payments etc.

    1. Chapter I Right to redundancy payment

      1. 135.The right.

    2. Chapter II Right on dismissal by reason of redundancy

      1. Dismissal by reason of redundancy

        1. 136.Circumstances in which an employee is dismissed.

        2. 137.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

        3. 138.No dismissal in cases of renewal of contract or re-engagement.

        4. 139.Redundancy.

      2. Exclusions

        1. 140.Summary dismissal.

        2. 141.Renewal of contract or re-engagement.

        3. 142.Employee anticipating expiry of employer’s notice.

        4. 143.Strike during currency of employer’s notice.

        5. 144.Provisions supplementary to section 143.

      3. Supplementary

        1. 145.The relevant date.

        2. 146.Provisions supplementing sections 138 and 141.

    3. Chapter III Right by reason of lay-off or short-time

      1. Lay-off and short-time

        1. 147.Meaning of “lay-off” and “short-time”.

        2. 148.Eligibility by reason of lay-off or short-time.

      2. Exclusions

        1. 149.Counter-notices.

        2. 150.Resignation.

        3. 151.Dismissal.

        4. 152.Likelihood of full employment.

      3. Supplementary

        1. 153.The relevant date.

        2. 154.Provisions supplementing sections 148 and 152.

    4. Chapter IV General exclusions from right

      1. 155.Qualifying period of employment.

      2. 156.Upper age limit.

      3. 157.Exemption orders.

      4. 158.Pension rights.

      5. 159.Public offices etc.

      6. 160.Overseas government employment.

      7. 161.Domestic servants.

    5. Chapter V Other provisions about redundancy payments

      1. 162.Amount of a redundancy payment.

      2. 163.References to employment tribunals.

      3. 164.Claims for redundancy payment.

      4. 165.Written particulars of redundancy payment.

    6. Chapter VI Payments by Secretary of State

      1. 166.Applications for payments.

      2. 167.Making of payments.

      3. 168.Amount of payments.

      4. 169.Information relating to applications for payments.

      5. 170.References to employment tribunals.

    7. Chapter VII Supplementary

      1. Application of Part to particular cases

        1. 171.Employment not under contract of employment.

        2. 172.Termination of employment by statute.

        3. 173.Employees paid by person other than employer.

      2. Death of employer or employee

        1. 174.Death of employer: dismissal.

        2. 175.Death of employer: lay-off and short-time.

        3. 176.Death of employee.

      3. Equivalent payments

        1. 177.References to employment tribunals.

      4. Other supplementary provisions

        1. 178.Old statutory compensation schemes.

        2. 179.Notices.

        3. 180.Offences.

        4. 181.Interpretation.

  21. Part XII Insolvency of employers

    1. 182.Employee’s rights on insolvency of employer.

    2. 183.Insolvency.

    3. 184.Debts to which Part applies.

    4. 185.The appropriate date.

    5. 186.Limit on amount payable under section 182.

    6. 187.Role of relevant officer.

    7. 188.Complaints to employment tribunals.

    8. 189.Transfer to Secretary of State of rights and remedies.

    9. 190.Power to obtain information.

  22. Part XIII Miscellaneous

    1. Chapter I Particular types of employment

      1. Crown employment etc.

        1. 191.Crown employment.

        2. 192.Armed forces.

        3. 193.National security.

      2. Parliamentary staff

        1. 194.House of Lords staff.

        2. 195.House of Commons staff.

      3. Excluded classes of employment

        1. 196. Miscellaneous

        2. 197.Fixed-term contracts.

        3. 198.Short-term employment.

        4. 199.Mariners.

        5. 200.Police officers.

      4. Offshore employment

        1. 201.Power to extend employment legislation to offshore employment.

    2. Chapter II Other miscellaneous matters

      1. Restrictions on disclosure of information

        1. 202.National security.

      2. Contracting out etc. and remedies

        1. 203.Restrictions on contracting out.

        2. 204.Law governing employment.

        3. 205.Remedy for infringement of certain rights.

      3. Employee shareholder status

        1. 205A.Employee shareholders

      4. General provisions about death of employer or employee

        1. 206.Institution or continuance of tribunal proceedings.

        2. 207.Rights and liabilities accruing after death.

      5. Mediation in certain cross-border dispute

        1. 207A.Extension of time limits because of mediation in certain cross-border disputes

        2. 207B.Extension of time limits to facilitate conciliation before institution of proceedings

      6. Modifications of Act

        1. 208. Miscellaneous

        2. 209.Powers to amend Act.

  23. Part XIV Interpretation

    1. Chapter I Continuous employment

      1. 210.Introductory.

      2. 211.Period of continuous employment.

      3. 212.Weeks counting in computing period.

      4. 213.Intervals in employment.

      5. 214.Special provisions for redundancy payments.

      6. 215.Employment abroad etc.

      7. 216.Industrial disputes.

      8. 217.Reinstatement after military service.

      9. 218.Change of employer.

      10. 219.Reinstatement or re-engagement of dismissed employee.

    2. Chapter II A week’s pay

      1. Introductory

        1. 220.Introductory.

      2. Employments with normal working hours

        1. 221.General.

        2. 222.Remuneration varying according to time of work.

        3. 223.Supplementary.

      3. Employments with no normal working hours

        1. 224.Employments with no normal working hours.

      4. The calculation date

        1. 225.Rights during employment.

        2. 226.Rights on termination.

      5. Maximum amount of week’s pay

        1. 227.Maximum amount.

      6. Miscellaneous

        1. 228.New employments and other special cases.

        2. 229.Supplementary.

    3. Chapter III Other interpretation provisions

      1. 230.Employees, workers etc.

      2. 231.Associated employers.

      3. 232.Shop workers.

      4. 233.Betting workers

      5. 234.Normal working hours.

      6. 235.Other definitions.

  24. Part XV General and supplementary

    1. General

      1. 236.Orders and regulations.

      2. 237.Financial provisions.

    2. Reciprocal arrangements

      1. 238.Reciprocal arrangements with Northern Ireland.

      2. 239.Reciprocal arrangements with Isle of Man.

    3. Final provisions

      1. 240.Consequential amendments.

      2. 241.Transitionals, savings and transitory provisions.

      3. 242.Repeals and revocations.

      4. 243.Commencement.

      5. 244.Extent.

      6. 245.Short title.

  25. SCHEDULES

    1. SCHEDULE 1

      Consequential amendments

      1. 1.(1) Section 1 of the Equal Pay Act 1970 is...

      2. The Atomic Energy Authority Act 1971 (c.11)

        1. 2.(1) Section 10 of the Atomic Energy Authority Act 1971...

      3. The Attachment of Earnings Act 1971 (c.32)

        1. 3.Paragraph 3 of Part I of Schedule 3 to the...

      4. The British Library Act 1972 (c.54)

        1. 4.In paragraph 13(3)(a) of the Schedule to the British Library...

      5. The Health and Safety at Work etc. Act 1974 (c.37)

        1. 5.In section 80(2A) of the Health and Safety at Work...

      6. The Sex Discrimination Act 1975 (c.65)

        1. 6.(1) The Sex Discrimination Act 1975 is amended as follows....

      7. The Scottish Development Agency Act 1975 (c.69)

        1. 7.In paragraph 6 of Schedule 3 to the Scottish Development...

      8. The Welsh Development Agency Act 1975 (c.70)

        1. 8.In paragraph 7 of Schedule 2 to the Welsh Development...

      9. The Lotteries and Amusements Act 1976 (c.32)

        1. 9.In section 23(1) of the Lotteries and Amusements Act 1976,...

      10. The Race Relations Act 1976 (c.74)

        1. 10.(1) The Race Relations Act 1976 is amended as follows....

      11. The Development of Rural Wales Act 1976 (c.75)

        1. 11.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

      12. The New Towns (Scotland) Act 1977 (c.16)

        1. 12.In section 3(6) of the New Towns (Scotland) Act 1977,...

      13. The National Health Service (Scotland) Act 1978 (c.29)

        1. 13.In section 12C(3) of the National Health Service (Scotland) Act...

      14. The House of Commons (Administration) Act 1978 (c.36)

        1. 14.In paragraph 1 of Schedule 2 to the House of...

      15. The New Towns Act 1981 (c.64)

        1. 15.In section 54(5) of the New Towns Act 1981, for...

      16. The Wildlife and Countryside Act 1981 (c.69)

        1. 16.In paragraph 8(4) of Schedule 13 to the Wildlife and...

      17. The Hops Marketing Act 1982 (c.5)

        1. 17.In section 2(7) of the Hops Marketing Act 1982, for...

      18. The Oil and Gas (Enterprise) Act 1982 (c.23)

        1. 18.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

      19. The Local Government Finance Act 1982 (c.32)

        1. 19.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

      20. The Administration of Justice Act 1982 (c.53)

        1. 20.In section 10(d) of the Administration of Justice Act 1982—...

      21. The Health and Social Services and Social Security Adjudications Act 1983 (c.41)

        1. 21.In paragraph 23 of Part II of Schedule 3 to...

      22. The National Audit Act 1983 (c.44)

        1. 22.

      23. The National Heritage Act 1983 (c.47)

        1. 23.In— (a) paragraph 5(5) of Part I of Schedule 1,...

      24. The National Heritage (Scotland) Act 1985 (c.16)

        1. 24.In— (a) paragraph 5(5) of Part I, and

      25. The Prosecution of Offences Act 1985 (c.23)

        1. 25.(1) The Prosecution of Offences Act 1985 is amended as...

      26. The Local Government Act 1985 (c.51)

        1. 26.(1) The Local Government Act 1985 is amended as follows....

      27. The Trustee Savings Banks Act 1985 (c.58)

        1. 27.In section 3(7) of the Trustee Savings Banks Act 1985,...

      28. The Housing (Consequential Provisions) Act 1985 (c.71)

        1. 28.In paragraph 7(2)(b) of Schedule 4 to the Housing (Consequential...

      29. The Insolvency Act 1986 (c.45)

        1. 29.In paragraph 13 of Schedule 6 to the Insolvency Act...

      30. The Legal Aid (Scotland) Act 1986 (c.47)

        1. 30.In paragraph 10(1) of Schedule 1 to the Legal Aid...

      31. The Debtors (Scotland) Act 1987 (c.18)

        1. 31.In section 73(3)(g) of the Debtors (Scotland) Act 1987, for...

      32. The Pilotage Act 1987 (c.21)

        1. 32.In section 25(6) of the Pilotage Act 1987, for “Schedule...

      33. The Housing (Scotland) Act 1987 (c.26)

        1. 33.In paragraph 10(2)(b) of Schedule 22 to the Housing (Scotland)...

      34. The Consumer Protection Act 1987 (c.43)

        1. 34.In section 22(5) of the Consumer Protection Act 1987, for...

      35. The Income and Corporation Taxes Act 1988 (c.1)

        1. 35.(1) The Income and Corporation Taxes Act 1988 is amended...

      36. The Legal Aid Act 1988 (c.34)

        1. 36.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

      37. The Education Reform Act 1988 (c.40)

        1. 37.(1) The Education Reform Act 1988 is amended as follows....

      38. The Local Government Finance Act 1988 (c.41)

        1. 38.In paragraph 6(4) of Schedule 11 to the Local Government...

      39. The Housing (Scotland) Act 1988 (c.43)

        1. 39.In paragraph 12(1) of Schedule 1 to the Housing (Scotland)...

      40. The Health and Medicines Act 1988 (c.49)

        1. 40.In section 18 of the Health and Medicines Act 1988,...

      41. The Housing Act 1988 (c.50)

        1. 41.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

      42. The Dock Work Act 1989 (c.13)

        1. 42.In section 6(3) of the Dock Work Act 1989—

      43. The Electricity Act 1989 (c.29)

        1. 43.(1) The Electricity Act 1989 is amended as follows.

      44. The Local Government and Housing Act 1989 (c.42)

        1. 44.In section 10 of the Local Government and Housing Act...

      45. The National Health Service and Community Care Act 1990 (c.19)

        1. 45.(1) The National Health Service and Community Care Act 1990...

      46. The Enterprise and New Towns (Scotland) Act 1990 (c.35)

        1. 46.In paragraph 17(1) of Schedule 1 to the Enterprise and...

      47. The Environmental Protection Act 1990 (c.43)

        1. 47.In paragraph 15 of Schedule 10 to the Environmental Protection...

      48. The Natural Heritage (Scotland) Act 1991 (c.28)

        1. 48.In paragraph 4 of Schedule 4 to the Natural Heritage...

      49. The Coal Mining Subsidence Act 1991 (c.45)

        1. 49.In section 30(7) of the Coal Mining Subsidence Act 1991—...

      50. The Ports Act 1991 (c.52)

        1. 50.In section 24(8) of the Ports Act 1991, for the...

      51. The Social Security Contributions and Benefits Act 1992 (c.4)

        1. 51.(1) The Social Security Contributions and Benefits Act 1992 is...

      52. The Further and Higher Education Act 1992 (c.13)

        1. 52.(1) The Further and Higher Education Act 1992 is amended...

      53. The Timeshare Act 1992 (c.35)

        1. 53.In section 1 of the Timeshare Act 1992—

      54. The Further and Higher Education (Scotland) Act 1992 (c.37)

        1. 54.In section 33(3)(b) of the Further and Higher Education (Scotland)...

      55. The Museums and Galleries Act 1992 (c.44)

        1. 55.In section 1(7) of the Museums and Galleries Act 1992,...

      56. The Trade Union and Labour Relations (Consolidation) Act 1992 (c.52)

        1. 56.(1) The Trade Union and Labour Relations (Consolidation) Act 1992...

      57. The Tribunals and Inquiries Act 1992 (c.53)

        1. 57.In section 11(2) of the Tribunals and Inquiries Act 1992,...

      58. The Social Security Act 1993 (c.3)

        1. 58.In section 2(4)(b) of the Social Security Act 1993, for...

      59. The Education Act 1993 (c.35)

        1. 59.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

      60. The Railways Act 1993 (c.43)

        1. 60.(1) The Railways Act 1993 is amended as follows.

      61. The Pension Schemes Act 1993 (c.48)

        1. 61.(1) The Pension Schemes Act 1993 is amended as follows....

      62. The Finance Act 1994 (c.9)

        1. 62.In paragraph 27 of Schedule 24 to the Finance Act...

      63. The Local Government (Wales) Act 1994 (c.19)

        1. 63.(1) The Local Government (Wales) Act 1994 is amended as...

      64. The Coal Industry Act 1994 (c.21)

        1. 64.In paragraph 4(11) of Schedule 5 to the Coal Industry...

      65. The Criminal Justice and Public Order Act 1994 (c.33)

        1. 65.In section 126(2) of the Criminal Justice and Public Order...

      66. The Local Government etc. (Scotland) Act 1994 (c.39)

        1. 66.(1) The Local Government etc. (Scotland) Act 1994 is amended...

      67. The Jobseekers Act 1995 (c.18)

        1. 67.(1) The Jobseekers Act 1995 is amended as follows.

      68. The Environment Act 1995 (c.25)

        1. 68.In paragraph 3 of Schedule 2 to the Environment Act...

      69. The Disability Discrimination Act 1995 (c.50)

        1. 69.(1) The Disability Discrimination Act 1995 is amended as follows....

    2. SCHEDULE 2

      Transitional provisions, savings and transitory provisions

      1. Part I Transitional provisions and savings

        1. General transitionals and savings

          1. 1.The substitution of this Act for the provisions repealed or...

          2. 2.(1) Anything done, or having effect as done, (including the...

          3. 3.Any reference (express or implied) in this Act or any...

          4. 4.(1) Any reference (express or implied) in any enactment, or...

          5. 5.Paragraphs 1 to 4 have effect in place of section...

        2. Preservation of old transitionals and savings

          1. 6.(1) The repeal by this Act of an enactment previously...

        3. Employment particulars for pre-TURERA employees

          1. 7.(1) In this paragraph “pre-TURERA employee” means an employee whose...

        4. Employment particulars for pre-6 April 2020 employees

          1. 7A.(1) In this paragraph an “existing employee” means an employee...

        5. Request for employment particulars by pre-6 April 2020 employee or pre- TURERA employee

          1. 7B.(1) Where an existing employee (as defined in paragraph 7A(1))...

        6. Monetary limits in old cases

          1. 8.In relation to any case in which (but for this...

        7. Shop workers and betting workers to whom old maternity provisions applied

          1. 9.(1) This paragraph applies where an employee exercised a right...

        8. Validity of provisions deriving from certain regulations

          1. 10.Any question as to the validity of any of sections...

        9. Unfair dismissal

          1. 11.Part X does not apply to a dismissal from employment...

        10. Redundancy payments

          1. 12.(1) Section 135 does not apply to an employee who...

        11. Periods of employment

          1. 13.(1) The reference in section 215(2)(b) to a person being...

          2. 14.(1) Subject to paragraph 13 and sub-paragraphs (2) and (3)...

      2. Part II Transitory provisions

        1. Occupational pension scheme trustees

          1. 15.(1) If sections 42 to 46 of the Pensions Act...

        2. Armed forces

          1. 16.(1) If section 31 of the Trade Union Reform and...

          2. 17.(1) If Part XI of the Reserve Forces Act 1996...

        3. Disability discrimination

          1. 18.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    3. SCHEDULE 3

      Repeals and revocations

      1. Part I Repeals

      2. Part II Revocations

        1. TABLE OF DERIVATIONS

          1. 1.Notes:

          2. 2.The following abbreviations are used in the Table— BGLA =...

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\ No newline at end of file diff --git a/raw/uk/itepa-2003-part-2-ch-8 b/raw/uk/itepa-2003-part-2-ch-8 new file mode 100644 index 0000000..ddc3490 --- /dev/null +++ b/raw/uk/itepa-2003-part-2-ch-8 @@ -0,0 +1,110 @@ + + + +Income Tax (Earnings and Pensions) Act 2003 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +

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Legislation Crest

Income Tax (Earnings and Pensions) Act 2003

2003 CHAPTER 1

An Act to restate, with minor changes, certain enactments relating to income tax on employment income, pension income and social security income; and for connected purposes.

[6th March 2003]

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:—

Modifications etc. (not altering text)

Part 1U.K.Overview

1Overview of contents of this ActU.K.

(1)This Act imposes charges to income tax on—

(a)employment income (see Parts 2 to [F17A] ),

(b)pension income (see Part 9), and

(c)social security income (see [F2Chapters 1 to 7 of] Part 10).

F3(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)This Act also—

(a)confers certain reliefs in respect of liabilities of former employees (see Part 8),

[F4(aa)makes provision for the high income child benefit charge (see Chapter 8 of Part 10),]

(b)provides for the assessment, collection and recovery of income tax in respect of employment, pension or social security income that is PAYE income (see Part 11), F5...

[F6(ba)allows deductions to be made from such income in respect of certain debts payable to the Commissioners for Her Majesty’s Revenue and Customs (see Part 11), and]

(c)allows deductions to be made from such income in respect of payroll giving (see Part 12).

Textual Amendments

F1Word in s. 1(1)(a) substituted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 3

F2Words in s. 1(1)(c) inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 5(2)(a)

F4S. 1(3)(aa) inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 5(2)(b)

2Abbreviations and general index in Schedule 1U.K.

(1)Schedule 1 (abbreviations and defined expressions) applies for the purposes of this Act.

(2)In Schedule 1—

(a)Part 1 gives the meaning of the abbreviated references to Acts and instruments used in this Act, and

(b)Part 2 lists the places where expressions used in this Act are defined or otherwise explained.

(3)Part 2 of Schedule 1 does not apply to expressions used in Chapters 6 to 9 of Part 7 (share incentive plans and other arrangements for acquiring shares): separate indexes relating to these Chapters appear at the end of Schedules 2 to 5.

Part 2U.K.Employment income: charge to tax

Modifications etc. (not altering text)

C2Pt. 2 applied (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 969(4)(a), 1329(1) (with Sch. 2 Pts. 1, 2)

Chapter 1U.K.Introduction

3Structure of employment income PartsU.K.

(1)The structure of the employment income Parts is as follows—

  • this Part imposes the charge to tax on employment income, and sets out—

    • (a) how the amount charged to tax for a tax year is to be calculated, and

    • (b) who is liable for the tax charged;

  • Part 3 sets out what are earnings and provides for amounts to be treated as earnings;

  • Part 4 deals with exemptions from the charge to tax under this Part (and, in some cases, from other charges to tax);

  • Part 5 deals with deductions from taxable earnings;

  • Part 6 deals with employment income other than earnings or share-related income; and

  • Part 7 deals with [F7income and exemptions relating to securities and securities options acquired in connection with an employment].

  • [F8Part 7A deals with employment income provided through third parties.]

(2)In this Act “the employment income Parts” means this Part and Parts 3 to [F97A] .

Textual Amendments

F7Words in s. 3(1) substituted (16.4.2003 with effect in accordance with Sch. 22 para. 16(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 16(1)

F8Words in s. 3(1) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 4(2)

F9Word in s. 3(2) substituted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 4(3)

4“Employment” for the purposes of the employment income PartsU.K.

(1)In the employment income Parts “employment” includes in particular—

(a)any employment under a contract of service,

(b)any employment under a contract of apprenticeship, and

(c)any employment in the service of the Crown.

(2)In those Parts “employed”, “employee” and “employer” have corresponding meanings.

5Application to offices and office-holdersU.K.

(1)The provisions of the employment income Parts that are expressed to apply to employments apply equally to offices, unless otherwise indicated.

(2)In those provisions as they apply to an office—

(a)references to being employed are to being the holder of the office;

(b)“employee” means the office-holder;

(c)“employer” means the person under whom the office-holder holds office.

(3)In the employment income Parts “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

Chapter 2U.K.Tax on employment income

6Nature of charge to tax on employment incomeU.K.

(1)The charge to tax on employment income under this Part is a charge to tax on—

(a)general earnings, and

(b)specific employment income.

The meaning of “employment income”, “general earnings” and “specific employment income” is given in section 7.

(2)The amount of general earnings or specific employment income which is charged to tax in a particular tax year is set out in section 9.

(3)The rules in Chapters 4 and 5 of this Part, which are concerned with—

(a)the residence F10... of an employee in a tax year, F11...

[F12(aa)whether section 809B, 809D or 809E of ITA 2007 (remittance basis) [F13applied] to an employee for a tax year, and]

(b)the tax year in which amounts are received or remitted to the United Kingdom,

apply for the purposes of the charge to tax on general earnings but not that on specific employment income.

[F14(3A)The rules in [F15Chapter 5B], which are concerned with the matters mentioned in subsection (3)(a) to (b), apply for the purposes of the charge to tax on certain specific employment income arising under Part 7 (securities etc).]

(4)The person who is liable for any tax charged on employment income is set out in section 13.

(5)Employment income is not charged to tax under this Part if it is within the charge to tax under

[F16(a) Part 2 of ITTOIA 2005 (trading income) by virtue of section 15 (divers and diving supervisors), 16A (voluntary office-holders: compensation for lost profits), 16B (payments to company directors) or 16C (professionals in practice: incidental income from an office or employment) of that Act, or

(b)Part 3 of CTA 2009 (trading income) by virtue of section 40A (payments to company directors) or 40B (professionals in practice: incidental income from an office or employment) of that Act.]

Textual Amendments

F10Words in s. 6(3)(a) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(2)(a)

F11Word in s. 6(3)(a) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 3(2)

F12S. 6(3)(aa) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 3(2)

F13Word in s. 6(3)(aa) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(2)(b)

F14S. 6(3A) inserted (with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 3(3)

F15Words in s. 6(3A) substituted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 3, 47

7Meaning of “employment income”, “general earnings” and “specific employment income”U.K.

(1)This section gives the meaning for the purposes of the Tax Acts of “employment income”, “general earnings” and “specific employment income”.

(2)“Employment income” means—

(a)earnings within Chapter 1 of Part 3,

(b)any amount treated as earnings (see subsection (5)), or

(c)any amount which counts as employment income (see subsection (6)).

(3)“General earnings” means—

(a)earnings within Chapter 1 of Part 3, or

(b)any amount treated as earnings (see subsection (5)),

excluding in each case any exempt income.

(4)“Specific employment income” means any amount which counts as employment income (see subsection (6)), excluding any exempt income.

(5)Subsection (2)(b) or (3)(b) refers to any amount treated as earnings under—

[F17(a)Chapters 7 to [F1810] of this Part (agency workers, workers under arrangements made by intermediaries, and workers providing services through managed service companies),]

(b)Chapters 2 to [F1910] of Part 3 (the benefits code),

(c)Chapter 12 of Part 3 (payments treated as earnings),

[F20(ca)section 402B (termination payments, and other benefits, that cannot benefit from section 403 threshold),] or

(d)section 262 of CAA 2001 (balancing charges to be given effect by treating them as earnings).

(6)Subsection (2)(c) or (4) refers to any amount which counts as employment income by virtue of—

(a)Part 6 (income which is not earnings or share-related),

(b)Part 7 [F21(income and exemptions relating to securities and securities options)]

[F22(ba)Part 7A (employment income provided through third parties), or]

(c)any other enactment.

Textual Amendments

F17S. 7(5)(a) substituted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), s. 25(2), Sch. 3 para. 2

F18Word in s. 7(5)(a) substituted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 10

F19Word in s. 7(5)(b) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 2

F20S. 7(5)(ca) inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(2)

F21Words in s. 7(6)(b) substituted (16.4.2003 with effect in accordance with Sch. 22 para. 17(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 17(1)

F22S. 7(6)(ba) substituted for word (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 5

8Meaning of “exempt income”U.K.

For the purposes of the employment income Parts, an amount of employment income within paragraph (a), (b) or (c) of section 7(2) is “exempt income” if, as a result of any exemption in Part 4 or elsewhere, no liability to income tax arises in respect of it as such an amount.

Chapter 3U.K.Operation of tax charge

9Amount of employment income charged to taxU.K.

(1)The amount of employment income which is charged to tax under this Part for a particular tax year is as follows.

(2)In the case of general earnings, the amount charged is the net taxable earnings from an employment in the year.

(3)That amount is calculated under section 11 by reference to any taxable earnings from the employment in the year (see section 10(2)).

(4)In the case of specific employment income, the amount charged is the net taxable specific income from an employment for the year.

(5)That amount is calculated under section 12 by reference to any taxable specific income from the employment for the year (see section 10(3)).

(6)Accordingly, no amount of employment income is charged to tax under this Part for a particular tax year unless—

(a)in the case of general earnings, they are taxable earnings from an employment in that year, or

(b)in the case of specific employment income, it is taxable specific income from an employment for that year.

10Meaning of “taxable earnings” and “taxable specific income”U.K.

(1)This section explains what is meant by “taxable earnings” and “taxable specific income” in the employment income Parts.

(2)“Taxable earnings from an employment in a tax year are to be determined in accordance with [F23Chapters 4 and 5 of this Part].

(3)“Taxable specific income from an employment for a tax year means the full amount of any specific employment income which, by virtue of Part 6 [F24, 7 or 7A] or any other enactment, counts as employment income for that year in respect of the employment.

[F25(4)Subsection (3) is subject to [F26Chapter 5B (taxable specific income from employment-related securities etc: internationally mobile employees)].]

[F27(5)Subsection (3) is also subject to sections 554Z9 to 554Z11 (employment income under Part 7A: remittance basis).]

Textual Amendments

F23Words in s. 10(2) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 4(2)

F24Words in s. 10(3) substituted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 6(2)

F25S. 10(4) inserted (with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 4(3)

F26Words in s. 10(4) substituted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 para. 4, 47

F27S. 10(5) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 6(3)

11Calculation of “net taxable earnings”U.K.

(1)For the purposes of this Part the “net taxable earnings” from an employment in a tax year are given by the formula—

where—

TE means the total amount of any taxable earnings from the employment in the tax year, and

DE means the total amount of any deductions allowed from those earnings under provisions listed in section 327(3) to (5) (deductions from earnings: general).

(2)If the amount calculated under subsection (1) is negative, the net taxable earnings from the employment in the year are to be taken to be nil instead.

(3)Relief may be available under [F28section 128 of ITA 2007] (set-off against general income)—

(a)where TE is negative, or

(b)in certain exceptional cases where the amount calculated under subsection (1) is negative.

(4)If a person has more than one employment in a tax year, the calculation under subsection (1) must be carried out in relation to each of the employments.

Textual Amendments

F28Words in s. 11(3) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 427 (with Sch. 2)

12Calculation of “net taxable specific income”U.K.

(1)For the purposes of this Part the “net taxable specific income” from an employment for a tax year is given by the formula—

where—

TSI means the amount of any taxable specific income from the employment for the tax year, and

DSI means the total amount of any deductions allowed from that income under provisions of the Tax Acts not included in the lists in section 327 (3) and (4) (deductions from earnings: general).

(2)If the amount calculated under subsection (1) is negative, the net taxable specific income from the employment for the year is to be taken to be nil instead.

(3)If a person has more than one kind of specific employment income from an employment for a tax year, the calculation under subsection (1) must be carried out in relation to each of those kinds of specific employment income; and in such a case the “net taxable specific income” from the employment for that year is the total of all the amounts so calculated.

13Person liable for taxU.K.

(1)The person liable for any tax on employment income under this Part is the taxable person mentioned in subsection (2) or (3).

This is subject to subsection (4).

(2)If the tax is on general earnings, “the taxable person” is the person to whose employment the earnings relate.

(3)If the tax is on specific employment income, “the taxable person” is the person in relation to whom the income is, by virtue of Part 6 [F29, 7 or 7A] or any other enactment, to count as employment income.

(4)If the tax is on general earnings received, or remitted to the United Kingdom, after the death of the person to whose employment the earnings relate, the person’s personal representatives are liable for the tax.

[F30(4A)If the tax is on specific employment income received, or remitted to the United Kingdom, after the death of the person in relation to whom the income is, by virtue of Part 7, to count as employment income, the person's personal representatives are liable for the tax.]

[F31(4B)Subject to section 554Z12, if—

(a)the tax is on specific employment income under Chapter 2 of Part 7A, and

(b)the relevant step is taken, or (if relevant) the income is remitted to the United Kingdom, after the death of A,

A's personal representatives are liable for the tax.

(4C)Terms used in subsection (4B) have the same meaning as in Part 7A.]

(5)[F32If subsection (4) [F33, (4A) or (4B) or section 554Z12(3)] applies,] the tax is accordingly to be assessed on the personal representatives and is a debt due from and payable out of the estate.

Textual Amendments

F29Words in s. 13(3) substituted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 7(2)

F30S. 13(4A) inserted (with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 5(2)

F31S. 13(4B)(4C) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 7(3)

F32Words in s. 13(5) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 5(3)

F33Words in s. 13(5) substituted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 7(4)

Chapter 4U.K.[F34Taxable earnings: UK resident employees]

Textual Amendments

F34Pt. 2 Ch. 4 heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 6

Taxable earningsU.K.

14Taxable earnings under this Chapter: introductionU.K.

(1)This Chapter sets out for the purposes of this Part what are taxable earnings from an employment in a tax year in cases where section 15 (earnings for year when employee [F35UK resident]) applies to general earnings for a tax year.

(2)In this Chapter—

(a)sections 16 and 17 deal with the year for which general earnings are earned, and

(b)sections 18 and 19 deal with the time when general earnings are received.

(3)In the employment income Parts any reference to the charging provisions of this Chapter is a reference to section 15.

Textual Amendments

F35Words in s. 14(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 7

[F36UK resident employees ]U.K.

Textual Amendments

F36S. 15 cross-heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 8

15Earnings for year when employee [F37UK resident] U.K.

[F38(1)This section applies to general earnings for a tax year for which the employee is UK resident except that, in the case of a split year, it does not apply to any part of those earnings that is excluded.

(1A)General earnings are “excluded” if they—

(a)are attributable to the overseas part of the split year, and

(b)are neither—

(i)general earnings in respect of duties performed in the United Kingdom, nor

(ii)general earnings from overseas Crown employment subject to United Kingdom tax.]

(2)The full amount of any general earnings within subsection (1) which are received in a tax year is an amount of “taxable earnings” from the employment in that year.

[F39(3)Subsection (2) applies whether or not the employment is held when the earnings are received.]

[F40(4)Any attribution required for the purposes of subsection (1A)(a) is to be done on a just and reasonable basis.

(5)The following provisions of Chapter 5 of this Part apply for the purposes of subsection (1A)(b) as for the purposes of section 27(2)—

(a)section 28 (which defines “general earnings from overseas Crown employment subject to United Kingdom tax”), F41...

(b)sections 38 to 41 (which contain rules for determining the place of performance of duties of employment) [F42, and

(c)section 41ZA (which is about determining the extent to which general earnings are in respect of United Kingdom duties).]

(6)Subject to any provision made in an order under section 28(5) for the purposes of subsection (1A)(b), provisions made in an order under that section for the purposes of section 27(2) apply for the purposes of subsection (1A)(b) too.]

Textual Amendments

F37Words in s. 15 heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 9(4)

F38S. 15(1)(1A) substituted for s. 15(1) (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 58(1)

F39S. 15(3) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 9(3)

F40S. 15(4)-(6) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 58(2)

F41Word in s. 15(5) omitted (with effect in accordance with Sch. 6 para. 7 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 6 para. 2(a)

F42S. 15(5)(c) and word inserted (with effect in accordance with Sch. 6 para. 7 of the amending Act) by Finance Act 2013 (c. 29), Sch. 6 para. 2(b)

Year for which general earnings are earnedU.K.

16Meaning of earnings “for” a tax yearU.K.

(1)This section applies for determining whether general earnings are general earnings “for” a particular tax year for the purposes of this Chapter.

(2)General earnings that are earned in, or otherwise in respect of, a particular period are to be regarded as general earnings for that period.

(3)If that period consists of the whole or part of a single tax year, the earnings are to be regarded as general earnings “for” that tax year.

(4)If that period consists of the whole or parts of two or more tax years, the part of the earnings that is to be regarded as general earnings “for” each of those tax years is to be determined on a just and reasonable apportionment.

(5)This section does not apply to any amount which is required by a provision of Part 3 to be treated as earnings for a particular tax year.

17Treatment of earnings for year in which employment not heldU.K.

(1)This section applies for the purposes of this Chapter in a case where general earnings from an employment would otherwise fall to be regarded as general earnings for a tax year in which the employee does not hold the employment.

(2)If that year falls before the first tax year in which the employment is held, the earnings are to be treated as general earnings for that first tax year.

(3)If that year falls after the last tax year in which the employment was held, the earnings are to be treated as general earnings for that last tax year.

(4)This section does not apply in connection with determining the year for which amounts are to be treated as earnings under Chapters 2 to [F4310] of Part 3 (the benefits code).

Textual Amendments

F43Word in s. 17(4) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 3

When general earnings are receivedU.K.

18Receipt of money earningsU.K.

(1)General earnings consisting of money are to be treated for the purposes of this Chapter as received at the earliest of the following times—

Rule 1

The time when payment is made of or on account of the earnings.

Rule 2

The time when a person becomes entitled to payment of or on account of the earnings.

Rule 3

If the employee is a director of a company and the earnings are from employment with the company (whether or not as director), whichever is the earliest of—

(a)the time when sums on account of the earnings are credited in the company’s accounts or records (whether or not there is any restriction on the right to draw the sums);

(b)if the amount of the earnings for a period is determined by the end of the period, the time when the period ends;

(c)if the amount of the earnings for a period is not determined until after the period has ended, the time when the amount is determined.

(2)Rule 3 applies if the employee is a director of the company at any time in the tax year in which the time mentioned falls.

(3)In this section “director” means—

(a)in relation to a company whose affairs are managed by a board of directors or similar body, a member of that body,

(b)in relation to a company whose affairs are managed by a single director or similar person, that director or person, and

(c)in relation to a company whose affairs are managed by the members themselves, a member of the company,

and includes any person in accordance with whose directions or instructions the directors of the company (as defined above) are accustomed to act.

(4)For the purposes of subsection (3) a person is not to be regarded as a person in accordance with whose directions or instructions the directors of the company are accustomed to act merely because the directors act on advice given by that person in a professional capacity.

(5)Where this section applies—

(a)to a payment on account of general earnings, or

(b)to sums on account of general earnings,

it so applies for the purpose of determining the time when an amount of general earnings corresponding to the amount of that payment or those sums is to be treated as received for the purposes of this Chapter.

19Receipt of non-money earningsU.K.

(1)General earnings not consisting of money are to be treated for the purposes of this Chapter as received at the following times.

(2)If an amount is treated as earnings for a particular tax year under any of the following provisions, the earnings are to be treated as received in that year—

  • section 81 (taxable benefits: cash vouchers),

  • section 94 [F44or 94A] (taxable benefits: credit-tokens),

  • Chapter 5 of Part 3 (taxable benefits: living accommodation),

  • Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits),

  • Chapter 7 of Part 3 (taxable benefits: loans),

  • F45...

  • F45...

  • Chapter 10 of Part 3 (taxable benefits: residual liability to charge),

  • section 222 (payments treated as earnings: payments on account of tax where deduction not possible),

  • section 223 (payments treated as earnings: payments on account of director’s tax).

  • [F46section 226A (amount treated as earnings: employee shareholder shares). ] ,

(3)If an amount is treated as earnings under section 87 [F47or 87A] (taxable benefits: non-cash vouchers), the earnings are to be treated as received in the tax year mentioned in section 88.

(4)If subsection (2) or (3) does not apply, the earnings are to be treated as received at the time when the benefit is provided.

Textual Amendments

F44Words in s. 19(2) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 50(2)

F45S. 19(2) entries repealed (with effect in accordance with Sch. 22 para. 18(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 18(1), Sch. 43 Pt. 3(4)

F46Words in s. 19(2) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 2, 38; S.I. 2013/1755, art. 2

F47Words in s. 19(3) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 50(3)

Chapter 5U.K.[F48Taxable earnings: remittance basis rules and rules for non-uk resident employees]

Textual Amendments

F48Pt. 2 Ch. 5 title substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 10

Taxable earningsU.K.

20Taxable earnings under this Chapter: introductionU.K.

[F49(1)This Chapter contains provision for determining how much of the following are taxable earnings from an employment in a tax year—

(a)general earnings that are for a tax year for which section 809B, 809D or 809E of ITA 2007 (remittance basis) applied to the employee (being a tax year before tax year 2025-26), and

(b)general earnings that are for a tax year for which the employee is non-UK resident.]

(2)In this Chapter—

(a)sections 29 and 30 deal with the year for which general earnings are earned,

F50(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F51(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)sections 38 to 41 deal with the place where the duties of an employment are performed.

(3)In the employment income Parts any reference to the charging provisions of this Chapter is a reference to any of [F52sections 22, 26 and 27].

Textual Amendments

F49S. 20(1) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(3)

F50S. 20(2)(b) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 11(3)

F51S. 20(2)(c) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 11(3)

F52Words in s. 20(3) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 11(4)

[F53Remittance basis rules for [F54employees outside section 26]] U.K.

Textual Amendments

F53S. 21 cross-heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 12

F54Words in cross-heading substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 7(2)(b) (with Sch. 46 para. 26)

21Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earningsU.K.

(1)This section applies to general earnings for a tax year in which the employee is resident and ordinarily resident, but not domiciled, in the United Kingdom except to the extent that they are chargeable overseas earnings for that year.

(2)The full amount of any general earnings within subsection (1) which are received in a tax year is an amount of “taxable earnings” from the employment in that year.

(3)Subsection (2) applies—

(a)whether the earnings are for that year or for some other tax year, and

(b)whether or not the employment is held at the time when the earnings are received.

(4)Section 23 applies for calculating how much of an employee’s general earnings are “chargeable overseas earnings” for a tax year, and are therefore within section 22(1) rather than subsection (1) above.

22Chargeable overseas earnings for year when [F55remittance basis [F56applied] and employee [F57outside section 26]]U.K.

(1)This section applies to general earnings for a tax year [F58, to the extent that they are chargeable overseas earnings for that year, if—

(a)section 809B, 809D or 809E of ITA 2007 (remittance basis) [F59applied] to the employee for that year, and

[F60(b)the employee [F61did not] meet the requirement of section 26A for that year.]]

(2)The full amount of any general earnings within subsection (1) which are remitted to the United Kingdom in a tax year is an amount of “taxable earnings” from the employment in that year.

[F62(3)Subsection (2) applies whether or not the employment is held when the earnings are remitted.]

(4)Section 23 applies for calculating how much of an employee’s general earnings are “chargeable overseas earnings” for a tax year F63....

(5)Where any chargeable overseas earnings are taxable earnings under subsection (2), any deduction taken into account under section 23(3) in calculating the amount of the chargeable overseas earnings—

(a)cannot then be deducted under section 11 from those taxable earnings, but

(b)may be deducted under that section from any taxable earnings under [F64section 15].

[F65(6)See Chapter A1 of Part 14 of ITA 2007 for the meaning of “remitted to the United Kingdom” etc.

[F66(7)Section 15(1) does not apply to general earnings within subsection (1).]]

Textual Amendments

F55Words in s. 22 heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 14(7) (with Sch. 7 para. 82)

F56Word in s. 22 heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(4)(a)

F57Words in s. 22 heading substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 7(2)(a) (with Sch. 46 para. 26)

F58Words in s. 22(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 14(2) (with Sch. 7 para. 82)

F59Word in s. 22(1)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(4)(a)

F60S. 22(1)(b) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 7(1) (with Sch. 46 para. 26)

F61Words in s. 22(1)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(4)(b)

F62S. 22(3) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 14(3) (with Sch. 7 para. 82)

F63Words in s. 22(4) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 14(4) (with Sch. 7 para. 82)

F64Words in s. 22(5)(b) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 14(5) (with Sch. 7 para. 82)

F65S. 22(6)(7) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 14(6) (with Sch. 7 para. 82)

F66S. 22(7) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 59

Modifications etc. (not altering text)

C4S. 22 applied by 2007 c. 3, s. 809F(2) (as inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 1 (with s. 809F(6)))

C5S. 22 applied (20.3.2025) by Finance Act 2025 (c. 8), Sch. 10 para. 2(3)

23Calculation of “chargeable overseas earnings”U.K.

(1)This section applies for calculating how much of an employee’s general earnings for a tax year are “chargeable overseas earnings” for the purposes of [F67section] 22.

[F68(1A)But none of an employee's general earnings from an employment for a tax year are to be “chargeable overseas earnings” if section 24A applies in relation to the employment for the tax year.]

(2)General earnings for a tax year are “overseas earnings” for that year if—

[F69(a)section 809B, 809D or 809E of ITA 2007 (remittance basis) [F70applied] to the employee for that year,

[F71(aa)the employee [F72did not] meet the requirement of section 26A for that year,]]

(b)the employment [F73was] with a foreign employer, and

(c)the duties of the employment [F74were] performed wholly outside the United Kingdom.

(3)To calculate the amount of “chargeable overseas earnings” for a tax year—

[F75Step 1

Identify—

(a)in the case of a tax year that is not a split year, the full amount of the overseas earnings for that year, and

(b)in the case of a split year, so much of the full amount of the overseas earnings for that year as is attributable to the UK part of the year.]

Step 2

Subtract any amounts that would (assuming they were taxable earnings) be allowed to be deducted from [F76the earnings identified under step 1] under—

(a)section 232 or Part 5 (deductions allowed from earnings),

[F77(b) sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or]

(d)section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions from earnings).

Step 3

Apply any limit imposed by section 24 (limit where duties of associated employment performed in UK).

The result is the chargeable overseas earnings for the tax year.

[F78(4)Any attribution required for the purposes of step 1 or step 2 in subsection (3) is to be done on a just and reasonable basis.]

Textual Amendments

F67Word in s. 23(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 15(2)

F68S. 23(1A) inserted (with effect in accordance with Sch. 3 para. 7(1) of the amending Act) by Finance Act 2014 (c. 26), Sch. 3 para. 2

F69S. 23(2)(a)(aa) substituted for s. 23(2)(a) (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 15(3)

F70Word in s. 23(2)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(5)(a)

F71S. 23(2)(aa) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 8 (with Sch. 46 para. 26)

F72Words in s. 23(2)(aa) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(5)(b)

F73Word in s. 23(2)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(5)(c)

F74Word in s. 23(2)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(5)(d)

F75Words in s. 23(3) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 60(2)

F76Words in s. 23(3) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 60(3)

F77Words in s. 23(3) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 55 (with Sch. 36)

F78S. 23(4) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 60(4)

24Limit on chargeable overseas earnings where duties of associated employment performed in UKU.K.

(1)This section imposes a limit on how much of an employee’s general earnings are chargeable overseas earnings for a tax year under section 23 if—

(a)in that year the employee holds associated employments as well as the employment to which subsection (2) of that section applies (“the relevant employment”), and

(b)the duties of the associated employments are not performed wholly outside the United Kingdom.

(2)The limit is the proportion of the aggregate earnings for that year from all the employments concerned that is reasonable having regard to—

(a)the nature of and time devoted to each of the following—

(i)the duties performed outside the United Kingdom, and

(ii)those performed in the United Kingdom, and

(b)all other relevant circumstances.

[F79(2A)If the tax year is a split year as respects the employee, subsection (2) has effect as if for “the aggregate earnings for that year from all the employments concerned” there were substituted “ so much of the aggregate earnings for that year from all the employments concerned as is attributable to the UK part of that year ”.]

(3)For the purposes of subsection (2) “the aggregate earnings for a year from all the employments concerned” means the amount produced by aggregating the full amount of earnings from each of those employments for the year mentioned in subsection (1) so far as remaining after subtracting any amounts of the kind mentioned in step 2 in section 23(3).

[F80(3A)Any attribution required for the purposes of subsection (2A) is to be done on a just and reasonable basis.]

(4)In this section—

(a)“the employments concerned” means the relevant employment and the associated employments;

(b)“associated employments” means employments with the same employer or with associated employers.

(5)The following rules apply to determine whether employers are associated—

Rule A

An individual is associated with a partnership or company if that individual has control of the partnership or company.

Rule B

A partnership is associated with another partnership or with a company if one has control of the other or both are under the control of the same person or persons.

Rule C

A company is associated with another company if one has control of the other or both are under the control of the same person or persons.

(6)In subsection (5)—

(a)in rules A and B “control” has the meaning given by [F81section 995 of ITA 2007] (in accordance with section 719 of this Act), and

(b)in rule C “control” means control within the meaning [F82given by sections 450 and 451 of CTA 2010] (meaning of expressions relating to close companies).

(7)If an amount of chargeable overseas earnings is reduced under step 3 in section 23(3) as a result of applying any limit imposed by this section, the amount of general earnings corresponding to the reduction remains an amount of general earnings within [F83section 15(1)].

Textual Amendments

F79S. 24(2A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 61(2)

F80S. 24(3A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 61(3)

F81Words in s. 24(6)(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 428 (with Sch. 2)

F82Words in s. 24(6)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 379 (with Sch. 2)

F83Words in s. 24(7) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 16

[F8424ARestrictions on remittance basisU.K.

(1)This section applies in relation to an employment (“the relevant employment”) for a tax year (“the relevant tax year”) if—

(a)one or more of the paragraphs in subsection (5) applies,

(b)conditions 1 to 4 are met, and

(c)condition 5 is not met.

(2)The consequences of this section applying are set out in sections 23(1A), 41C(4A), 41H(5) and 554Z9(1A).

(3)But, for the purpose of determining if, and the extent to which, any provision of Part 11 (PAYE), or of PAYE regulations, applies in relation to any income, the application of any provision mentioned in subsection (2) in relation to the income is to be ignored.

(4)In this section—

(a)“the relevant employee” means the employee in respect of the relevant employment,

(b)“the relevant employer” means the employer in respect of the relevant employment, and

(c)“UK employment” means an employment the duties of which are not performed wholly outside the United Kingdom and “UK employer” is to be read accordingly,

and the rules in section 24(5) (“associated” persons) apply for the purposes of this section.

(5)The paragraphs referred to in subsection (1)(a) are—

(a)general earnings from the relevant employment which are for the relevant tax year would, apart from section 23(1A) and step 3 in section 23(3), be “chargeable overseas earnings” under section 23(3);

(b)employment income in respect of the relevant employment which is treated as accruing in the relevant tax year under section 41C(2) would, apart from sections 41C(4A), 41D and 41E, be “foreign” under section 41C(3);

(c)employment income in respect of the relevant employment which is treated as accruing in the relevant tax year under section 41H(2) would, apart from sections 41H(5), 41I and 41L, be “chargeable foreign securities income” under section 41H(3);

(d)section 554Z9(2) would, apart from section 554Z9(1A) and (4) and (5), apply to employment income in respect of the relevant employment which corresponds to the value of a relevant step, or a part of the value of a relevant step, which is “for” the relevant tax year as determined under section 554Z4.

(6)Condition 1 is that the relevant employee holds a UK employment—

(a)at a time in the relevant tax year when the relevant employee also holds the relevant employment, or

(b)if the relevant tax year is a split year as respects the relevant employee, at a time in the UK part of the relevant tax year when the relevant employee also holds the relevant employment.

(7)Condition 2 is that the UK employer is the same as, or is associated with, the relevant employer.

(8)Condition 3 is that the UK employment and the relevant employment are related to each other.

(9)Without prejudice to the generality of subsection (8), the UK employment and the relevant employment are to be assumed to be related to each other if one or more of the following paragraphs applies—

(a)it is reasonable to suppose that—

(i)the relevant employee would not hold one employment without holding the other employment, or

(ii)the employments will cease at the same time or one employment will cease in consequence of the other employment ceasing;

(b)the terms of one employment operate to any extent by reference to the other employment;

(c)the performance of duties of one employment is (wholly or partly) dependent upon, or otherwise linked (directly or indirectly) to, the performance of duties of the other employment;

(d)the duties of the employments are wholly or mainly of the same type (ignoring the fact that they may be performed (wholly or partly) in different locations);

(e)the duties of the employments involve (wholly or partly) the provision of goods or services to the same customers or clients;

(f)the relevant employee is—

(i)a director (as defined in section 67) of the UK employer or the relevant employer who has a material interest (as defined in section 68) in the UK employer or the relevant employer,

(ii)a senior employee of the UK employer or the relevant employer, or

(iii)one of the employees of the UK employer or the relevant employer who receives the higher or highest levels of remuneration.

(10)In subsection (9)(f) references to the UK employer or the relevant employer include references to—

(a)any person with which the UK employer or the relevant employer (as the case may be) is associated, and

(b)if the UK employer or the relevant employer (as the case may be) is a company, the following companies taken together as if they were one company—

(i)the UK employer or the relevant employer (as the case may be), and

(ii)all the companies with which the UK employer or the relevant employer (as the case may be) is associated.

(11)The Treasury may by regulations amend this section so as to add to, reduce or modify the cases in which the UK employment and the relevant employment are to be assumed to be related to each other.

(12)A statutory instrument containing regulations under subsection (11) may not be made unless a draft has been laid before, and approved by a resolution of, the House of Commons.

(13)Condition 4 is that X% is less than Y%.

(14)“X%” is given by the following formula—

See section 24B for the definitions of “C” and “I”.

(15)“Y%” is 65% of the additional rate for the relevant tax year.

(16)The Treasury may by regulations amend this section so as to amend the definition of “Y%”.

(17)Condition 5 is that—

(a)were the duties of the relevant employment to be duties of the UK employment instead, all or substantially all of them could not lawfully be performed in the relevant territory (whether on the meeting of any condition or otherwise) by virtue of any regulatory requirements imposed by or under the law of that territory, and

(b)were the UK duties of the UK employment to be duties of the relevant employment instead, all or substantially all of them could not lawfully be performed in the part of the United Kingdom in which they are performed (whether on the meeting of any condition or otherwise) by virtue of any regulatory requirements imposed by or under the law of that part of the United Kingdom.

(18)In subsection (17)—

  • “the relevant territory” means the territory in which the duties of the relevant employment are performed, and

  • “UK duties” means duties performed in the United Kingdom.

Textual Amendments

F84Ss. 24A, 24B inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 3 para. 3

24BDefinitions of “C” and “I” for the purposes of section 24A(14)U.K.

(1)This section applies for the purposes of section 24A(14).

(2)“C” is the total amount of credit which would be allowed under section 18(2) of TIOPA 2010 (double taxation relief by way of credit) against income tax in respect of all the employment income falling within section 24A(5)(a) to (d) were none of that income to be, as relevant—

(a)“chargeable overseas earnings”,

(b)“foreign”,

(c)“chargeable foreign securities income”, or

(d)income to which section 554Z9(2) applies.

(3)For this purpose, assume—

(a)that all relief is claimed within the applicable time limit given by section 19 of TIOPA 2010, and

(b)that all reasonable steps are taken to minimise any amounts of tax payable as mentioned in section 33 of that Act.

(4)“I” is the total amount of all the employment income falling within section 24A(5)(a) to (d).]

Textual Amendments

F84Ss. 24A, 24B inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 3 para. 3

[F85Remittance basis rules: employees [F86who [F87met] section 26A requirement]] U.K.

Textual Amendments

F85S. 25 cross-heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 17

F86Words in cross-heading substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 9(2)(b) (with Sch. 46 para. 26)

F87Word in s. 25 cross-heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(6)

F8825UK-based earnings for year when employee resident, but not ordinarily resident, in UKU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F88S. 25 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 18

26Foreign earnings for year when [F89remittance basis [F90applied and employee met] [F91 section 26A requirement]]U.K.

(1)This section applies to general earnings for a tax year [F92where section 809B, 809D or 809E of ITA 2007 (remittance basis) [F93applied] to the employee for that year and the employee [F94[F95met] the requirement of section 26A for] that year, ] [F96if the general earnings meet all of the following conditions—

(a)they are neither—

(i)general earnings in respect of duties performed in the United Kingdom, nor

(ii)general earnings from overseas Crown employment subject to United Kingdom tax, and

(b)if the tax year is a split year as respects the employee, they are attributable to the UK part of the year.]

(2)The full amount of any general earnings within subsection (1) which are remitted to the United Kingdom in a tax year is an amount of “taxable earnings” from the employment in that year.

[F97(3)Subsection (2) applies whether or not the employment is held when the earnings are remitted.]

(4)Section 28 explains what is meant by “general earnings from overseas Crown employment subject to United Kingdom tax”.

[F98(5)See Chapter A1 of Part 14 of ITA 2007 for the meaning of “remitted to the United Kingdom” etc.

[F99(5A)Any attribution required for the purposes of subsection (1)(b) is to be done on a just and reasonable basis.]

[F100(6)Section 15(1) does not apply to general earnings within subsection (1).]]

Textual Amendments

F89Words in s. 26 heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 19(5) (with Sch. 7 para. 82)

F90Words in s. 26 heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(7)(a)

F91Words in s. 26 heading substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 9(2)(a) (with Sch. 46 para. 26)

F92Words in s. 26(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 19(2) (with Sch. 7 para. 82)

F93Word in s. 26(1) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(7)(b)(i)

F94Words in s. 26(1) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 9(1) (with Sch. 46 para. 26)

F95Word in s. 26(1) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(7)(b)(ii)

F96Words in s. 26(1) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 62(2)

F97S. 26(3) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 19(3) (with Sch. 7 para. 82)

F98S. 26(5)(6) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 19(4) (with Sch. 7 para. 82)

F99S. 26(5A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 62(3)

F100S. 26(6) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 62(4)

Modifications etc. (not altering text)

C6S. 26 applied by 2007 c. 3, s. 809F(2) (as inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 1 (with s. 809F(6)))

C7S. 26 applied (20.3.2025) by Finance Act 2025 (c. 8), Sch. 10 para. 2(3)

[F10126ASection 26: requirement for 3-year period of non-residenceU.K.

(1)An employee meets the requirement of this section for a tax year if the employee was—

(a)non-UK resident for the previous 3 tax years, or

(b)UK resident for the previous tax year but non-UK resident for the 3 tax years before that, or

(c)UK resident for the previous 2 tax years but non-UK resident for the 3 tax years before that, or

(d)non-UK resident for the previous tax year, UK resident for the tax year before that and non-UK resident for the 3 tax years before that.

(2)The residence status of the employee before the 3 years of non-UK residence is not relevant for these purposes.]

Textual Amendments

F101S. 26A inserted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 10 (with Sch. 46 para. 26)

Employees not resident in UKU.K.

27UK-based earnings for year when employee not resident in UKU.K.

(1)This section applies to general earnings for a tax year [F102for which] the employee is not resident in the United Kingdom if they are—

(a)general earnings in respect of duties performed in the United Kingdom, F103...

(b)general earnings from overseas Crown employment subject to United Kingdom tax [F104, or

(c)general earnings to which section 402B (termination payments, and other benefits, that cannot benefit from the section 403 threshold, to be treated as earnings) applies.]

(2)The full amount of any general earnings within subsection [F105(1)(a) or (b)] which are received in a tax year is an amount of “taxable earnings” from the employment in that year.

[F106(2A)The percentage of the general earnings within subsection (1)(c) that are an amount of “taxable earnings” from the employment in the tax year in which they are received is given by—

where—

B is the total amount of general earnings from the employment that it is reasonable to assume the employee would have received in respect of the post-employment notice period (within the meaning given by section 402E(5)) if the employee's employment had not been terminated until the end of that period, and

A is the total amount of those general earnings that it is reasonable to assume would have been taxable earnings by virtue of subsection (1)(a) or (b).]

[F107(3)[F108Subsections (2) and (2A) apply] whether or not the employment is held when the earnings are received.]

(4)Section 28 explains what is meant by “general earnings from overseas Crown employment subject to United Kingdom tax”.

[F109(5)Sections 18 and 19 (time when earnings are received) apply for the purposes of this section.]

Textual Amendments

F102Words in s. 27(1) substituted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 45 para. 149

F103Word in s. 27(1)(a) omitted (with effect in accordance with s. 22(8) of the amending Act) by virtue of Finance Act 2021 (c. 26), s. 22(2)(a)

F104S. 27(1)(c) and word inserted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(2)(b)

F105Words in s. 27(2) substituted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(3)

F106S. 27(2A) inserted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(4)

F107S. 27(3) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 20(2)

F108Words in s. 27(3) substituted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(5)

F109S. 27(5) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 20(3)

Special class of earnings for purposes of sections 25 to 27U.K.

28Meaning of “general earnings from overseas Crown employment subject to UK tax”U.K.

(1)This section explains for the purposes of sections 25 to 27 what is meant by “general earnings from overseas Crown employment subject to United Kingdom tax”.

(2)“Crown employment” means employment under the Crown—

(a)which is of a public nature, and

(b)the earnings from which are payable out of the public revenue of the United Kingdom or of [F110Wales, Scotland or] Northern Ireland.

(3)“General earnings from overseas Crown employment” means general earnings from such employment in respect of duties performed outside the United Kingdom.

(4)Such earnings are to be taken as being “subject to United Kingdom tax” unless they fall within any exception contained in an order under subsection (5).

(5)[F111the Commissioners for Her Majesty’s Revenue and Customs] may make an order excepting from the operation of sections 25(2) and 27(2)—

(a)general earnings of any description of employee specified in the order;

(b)general earnings from any description of employment so specified.

(6)The [F112Commissioners] may make the order if they consider that such earnings should not be subject to those provisions having regard to the international obligations of Her Majesty’s Government and such other matters as appear to them to be relevant.

(7)An order may make provision by reference to all or any of the following—

(a)the residence or nationality of the employee;

(b)whether the employee was engaged in or outside the United Kingdom;

(c)the nature of the post, the rate of remuneration and any other terms and conditions applying to it.

(8)Subsection (7) does not affect the generality of the power to make provision by reference to such factors as the Board consider appropriate.

Textual Amendments

F110Words in s. 28(2)(b) inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(2) (with Sch. 8 Pt. 3)

Year for which general earnings are earnedU.K.

29Meaning of earnings “for” a tax yearU.K.

(1)This section applies for determining whether general earnings are general earnings “for” a particular tax year for the purposes of this Chapter.

(2)General earnings that are earned in, or otherwise in respect of, a particular period are to be regarded as general earnings for that period.

(3)If that period consists of the whole or part of a single tax year, the earnings are to be regarded as general earnings “for” that tax year.

(4)If that period consists of the whole or parts of two or more tax years, the part of the earnings that is to be regarded as general earnings “for” each of those tax years is to be determined on a just and reasonable apportionment.

(5)This section does not apply to any amount which is required by a provision of Part 3 to be treated as earnings for a particular tax year.

30Treatment of earnings for year in which employment not heldU.K.

(1)This section applies for the purposes of this Chapter in a case where general earnings from an employment would otherwise fall to be regarded as general earnings for a tax year in which the employee does not hold the employment.

(2)If that year falls before the first tax year in which the employment is held, the earnings are to be treated as general earnings for that first tax year.

(3)If that year falls after the last tax year in which the employment was held, the earnings are to be treated as general earnings for that last tax year.

(4)This section does not apply in connection with determining the year for which amounts are to be treated as earnings under Chapters 2 to [F11310] of Part 3 (the benefits code).

Textual Amendments

F113Word in s. 30(4) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 4

F114...U.K.

Textual Amendments

F114S. 31 cross-heading omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 21

F11531Receipt of money earningsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11532Receipt of non-money earningsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11533Earnings remitted to UKU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11534Earnings remitted to UK: further provisions about UK-linked debtsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relief for delayed remittancesU.K.

F11535Relief for delayed remittancesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F115Ss. 31-37 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 21

F11536Election in respect of delayed remittancesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F115Ss. 31-37 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 21

F11537Claims for relief on delayed remittancesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F115Ss. 31-37 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 21

Place of performance of duties of employmentU.K.

38Earnings for period of absence from employmentU.K.

(1)This section applies if a person ordinarily performs the whole or part of the duties of an employment in the United Kingdom.

(2)General earnings for a period of absence from the employment are to be treated for the purposes of this Chapter as general earnings for duties performed in the United Kingdom except in so far as they would, but for that absence, have been general earnings for duties performed outside the United Kingdom.

39Duties in UK merely incidental to duties outside UKU.K.

(1)This section applies if in a tax year an employment is in substance one whose duties fall to be performed outside the United Kingdom.

(2)Duties of the employment performed in the United Kingdom whose performance is merely incidental to the performance of duties outside the United Kingdom are to be treated for the purposes of this Chapter as performed outside the United Kingdom.

(3)This section does not affect any question as to—

(a)where any duties are performed, or

(b)whether a person is absent from the United Kingdom,

for the purposes of section 378 (deduction from seafarers' earnings: eligibility), and section 383 (place of performance of incidental duties) applies instead.

40Duties on board vessel or aircraftU.K.

(1)Duties which a person performs on a vessel engaged on a voyage not extending to a port outside the United Kingdom are to be treated for the purposes of this Chapter as performed in the United Kingdom.

(2)Duties which a person resident in the United Kingdom performs on a vessel or aircraft engaged—

(a)on a voyage or journey beginning or ending in the United Kingdom, or

(b)on a part beginning or ending in the United Kingdom of any other voyage or journey,

are to be treated as performed in the United Kingdom for the purposes of this Chapter.

(3)Subsection (2) does not, however, apply for the purposes of section 24(1)(b) (limit on chargeable overseas earnings under section 23 where duties of associated employment performed in UK) in relation to any duties of a person’s employment if—

(a)the employment is as a seafarer, and

(b)the duties are performed on a ship.

(4)Instead, any duties of the employment which are performed on a ship engaged—

(a)on a voyage beginning or ending outside the United Kingdom (but excluding any part of it beginning and ending there), or

(b)on a part beginning or ending outside the United Kingdom of any other voyage,

are to be treated as performed outside the United Kingdom for the purposes of section 24(1)(b).

(5)For the purposes of subsections (3) and (4)—

(a)employment “as a seafarer” means an employment consisting of the performance of duties on a ship or of such duties and others incidental to them;

[F116(b)“ship” does not include an offshore installation;]

(c)the areas designated under section 1(7) of the Continental Shelf Act 1964 (c. 29) are treated as part of the United Kingdom.

Textual Amendments

F116S. 40(5)(b) substituted (with effect in accordance with Sch. 27 para. 16 of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 12

41Employment in UK sector of continental shelfU.K.

(1)General earnings in respect of duties performed in the UK sector of the continental shelf in connection with exploration or exploitation activities are to be treated for the purposes of this Chapter as general earnings in respect of duties performed in the United Kingdom.

(2)In this section—

  • “the UK sector of the continental shelf” means the areas designated under section 1(7) of the Continental Shelf Act 1964, and

  • “exploration or exploitation activities” means activities carried on in connection with the exploration or exploitation of so much of the seabed and subsoil and their natural resources as is situated in the United Kingdom or the UK sector of the continental shelf.

[F117Apportionment of earningsU.K.

Textual Amendments

F117S. 41ZA and cross-heading inserted (with effect in accordance with Sch. 6 para. 7 of the amending Act) by Finance Act 2013 (c. 29), Sch. 6 para. 3

41ZABasis of apportionmentU.K.

The extent to which general earnings are in respect of duties performed in the United Kingdom is to be determined under this Chapter on a just and reasonable basis.]

[F118Chapter 5AU.K.Taxable specific income: effect of remittance basis

Textual Amendments

F118Pt. 2 Ch. 5B substituted (with effect in accordance with Sch. 3 para. 7(3), Sch. 9 para. 48 of the amending Act) for Pt. 2 Ch. 5A by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 5, 47

41ATaxable specific income from employment-related securities: effect of remittance basisU.K.

(1)This section applies if—

(a)an amount within subsection (2) counts as employment income of an individual for a tax year in respect of an employment (“the securities income”), and

(b)any part of the relevant period (see section 41B) is within a tax year for which section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual.

(2)An amount is within this subsection if it counts as employment income under any provision of any of Chapters 2, 3 and 3C to 5 of Part 7 (employment-related securities etc) except section 446UA.

(3)The reference in subsection (2) to an amount that counts as employment income under any of the provisions mentioned there does not include an amount which counts as employment income by virtue of any provision of Chapter 3A or 3B of Part 7.

(4)An amount equal to—

is an amount of “taxable specific income” from the employment for the tax year mentioned in subsection (1)(a).

(5)In subsection (4)—

(a)SI is the amount of the securities income, and

(b)FSI is the amount of the securities income that is “foreign” (see sections 41C to 41E).

(6)The full amount of any of the foreign securities income which is remitted to the United Kingdom in a tax year is an amount of “taxable specific income” from the employment for that year.

(7)Subsection (6) applies whether or not the employment is held when the foreign securities income is remitted.

(8)For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis), treat the relevant securities or securities option as deriving from the foreign securities income.

(9)But where—

(a)the chargeable event is the disposal of the relevant securities or the assignment or release of the relevant securities option, and

(b)the individual receives consideration for the disposal, assignment or release of an amount equal to or exceeding the market value of the relevant securities or securities option,

for the purposes of that Chapter treat the consideration (and not the relevant securities or securities option) as deriving from the foreign securities income.

(10)In this section and section 41B—

  • “the chargeable event” means the event giving rise to the securities income, and

  • “the relevant securities” or “the relevant securities option” means the employment-related securities or employment-related securities option by virtue of which the amount mentioned in subsection (1)(a) counts as employment income.

(11)See Chapter A1 of Part 14 of ITA 2007 for the meaning of “remitted to the United Kingdom” etc.

41BSection 41A: the relevant periodU.K.

(1)“The relevant period” is to be determined as follows.

(2)In the case of an amount that counts as employment income by virtue of Chapter 2 (restricted securities) or Chapter 3 (convertible securities), the relevant period—

(a)begins with the day of the acquisition, and

(b)ends with the day of the chargeable event.

(3)In the case of an amount that counts as employment income by virtue of section 446U (securities acquired for less than market value: discharge of notional loan)—

(a)if the relevant securities were acquired by virtue of the exercise of a securities option (“the option”), the relevant period—

(i)begins with the day of the acquisition of the option, and

(ii)ends with the day the option vests, and

(b)otherwise, the relevant period is—

(i)the tax year in which the notional loan (within the meaning of Chapter 3C) is treated as made, or

(ii)if the chargeable event occurs in that year, the period beginning at the beginning of that year and ending with the day of that event.

(4)In the case of an amount that counts as employment income by virtue of—

(a)Chapter 3D (securities disposed of for more than market value), or

(b)Chapter 4 (post-acquisition benefits from securities),

the relevant period is the tax year in which the chargeable event occurs.

(5)In the case of an amount that counts as employment income by virtue of Chapter 5 (employment-related securities options), the relevant period—

(a)begins with the day of the acquisition, and

(b)ends with the day of the chargeable event or, if earlier, the day the relevant securities option vests.

(6)In this section “the acquisition” has the same meaning as in Chapters 2 to 4 or Chapter 5 (see section 421B or 471).

(7)For the purposes of this section an option “vests” when it is first capable of being exercised.

(8)References in this section to a Chapter are to a Chapter of Part 7.

41CSection 41A: foreign securities incomeU.K.

(1)The extent to which the securities income is “foreign” is to be determined as follows.

(2)Treat an equal amount of the securities income as accruing on each day of the relevant period.

(3)If any part of the relevant period is within a tax year to which subsection (4) applies, the securities income treated as accruing in that part of the relevant period is “foreign”.

This is subject to section 41D (limit where duties of associated employment performed in UK).

(4)This subsection applies to a tax year if—

(a)section 809B, 809D or 809E of ITA 2007 applies to the individual for the year,

[F119(b)the individual does not meet the requirement of section 26A for the year (reading references there to the employee as references to the individual),]

(c)the employment is with a foreign employer, and

(d)the duties of the employment are performed wholly outside the United Kingdom.

[F120(4A)But subsection (4) does not apply to a tax year if section 24A applies in relation to the employment for the tax year.]

(5)If any part of the relevant period is within a tax year to which subsection (6) applies—

(a)if the duties of the employment are performed wholly outside the United Kingdom, the securities income treated as accruing in that part of the relevant period is “foreign”, and

(b)if some but not all of those duties are performed outside the United Kingdom—

(i)the securities income mentioned in paragraph (a) is to be apportioned (on a just and reasonable basis) between duties performed in the United Kingdom and duties performed outside the United Kingdom, and

(ii)the income apportioned in respect of duties performed outside the United Kingdom is “foreign”.

(6)This subsection applies to a tax year if—

(a)section 809B, 809D or 809E of ITA 2007 applies to the individual for the year,

[F121(b)the individual meets the requirement of section 26A for the year (reading references there to the employee as references to the individual), and]

(c)some or all of the duties of the employment are performed outside the United Kingdom.

(7)If the individual is not resident in the United Kingdom in a tax year, for the purposes of this section treat section 809B of ITA 2007 as applying to the individual for that year.

(8)This section is subject to section 41E (foreign securities income: just and reasonable apportionment).

[F122(9)If subsection (4) does not apply to a tax year by virtue of subsection (4A), it is to be assumed for the purposes of section 41E that it is just and reasonable for none of the securities income treated as accruing in the tax year to be “foreign”.]

Textual Amendments

F119S. 41C(4)(b) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 11(2) (with Sch. 46 para. 26)

F120S. 41C(4A) inserted (with effect in accordance with Sch. 3 para. 7(2) of the amending Act) by Finance Act 2014 (c. 26), Sch. 3 para. 4(2)

F121S. 41C(6)(b) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 11(3) (with Sch. 46 para. 26)

F122S. 41C(9) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 3 para. 4(3)

41DLimit on foreign securities income where duties of associated employment performed in UKU.K.

(1)This section imposes a limit on the extent to which section 41C(3) applies in relation to a period when—

(a)the individual holds associated employments as well as the employment in relation to which section 41C(4) applies, and

(b)the duties of the associated employments are not performed wholly outside the United Kingdom.

(2)The amount of the securities income for the period that is to be regarded as “foreign” is limited to such amount as is just and reasonable, having regard to—

(a)the employment income for the period from all the employments mentioned in subsection (1)(a),

(b)the proportion of that income that is general earnings to which section 22 applies (chargeable overseas earnings),

(c)the nature of and time devoted to the duties performed outside the United Kingdom, and those performed in the United Kingdom, in the period, and

(d)all other relevant circumstances.

(3)In this section “associated employments” means employments with the same employer or with associated employers.

(4)Section 24(5) and (6) (meaning of “associated employer”) apply for the purposes of this section.

41EForeign securities income: just and reasonable apportionmentU.K.

(1)This section applies if the proportion of the securities income that would otherwise be regarded as “foreign” is not, having regard to all the circumstances, one that is just and reasonable.

(2)The amount of the securities income that is “foreign” is such amount as is just and reasonable (rather than the amount calculated in accordance with section 41C).]

[F123CHAPTER 5BU.K.Taxable specific income from employment-related securities etc: internationally mobile employees

Textual Amendments

F123Pt. 2 Ch. 5B substituted (with effect in accordance with Sch. 3 para. 7(3), Sch. 9 para. 48 of the amending Act) for Pt. 2 Ch. 5A by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 5, 47

41FTaxable specific income: internationally mobile employees etcU.K.

(1)This section applies if—

(a)an amount counts under Chapters 2 to 5 of Part 7 (employment-related securities etc) as employment income of an individual for a tax year (“the securities income”) in respect of an employment (“the relevant employment”), and

(b)one or more of the international mobility conditions is met in relation to the individual (see subsection (2)).

(2)The “international mobility conditions” are—

(a)that any part of the relevant period (see section 41G) is within a tax year for which section 809B, 809D or 809E of ITA 2007 (remittance basis) [F124applied] to the individual;

(b)that any part of the relevant period is within a tax year for which the individual is not UK resident;

(c)that any part of the relevant period is within the overseas part of a tax year that is a split year with respect to the individual.

(3)An amount equal to—

is an amount of “taxable specific income” from the relevant employment for the tax year mentioned in subsection (1)(a).

(4)In subsection (3)—

(a)SI is the amount of the securities income, and

(b)FSI is the amount of the securities income that is “foreign”.

(5)The amount of the securities income that is “foreign” is the sum of any chargeable foreign securities income and any unchargeable foreign securities income (see sections 41H to 41L).

(6)The full amount of any chargeable foreign securities income which is remitted to the United Kingdom in a tax year is an amount of “taxable specific income” from the relevant employment for that year.

(7)Subsection (6) applies whether or not the relevant employment is held when the chargeable foreign securities income is remitted.

(8)For the purposes of Chapter A1 of Part 14 of ITA 2007 (remittance basis), treat the relevant securities or relevant securities option as deriving from the chargeable foreign securities income.

(9)But where—

(a)the chargeable event is the disposal of the relevant securities or the assignment or release of the relevant securities option, and

(b)the individual receives consideration for the disposal, assignment or release of an amount equal to or exceeding the market value of the relevant securities or relevant securities option,

for the purposes of that Chapter treat the consideration (and not the relevant securities or relevant securities option) as deriving from the chargeable foreign securities income.

(10)See Chapter A1 of Part 14 of ITA 2007 for the meaning of “remitted to the United Kingdom”.

(11)In this section and section 41G—

  • “the chargeable event” means the event giving rise to the securities income, and

  • “the relevant securities” or “the relevant securities option” means the employment-related securities or employment-related securities option by virtue of which the amount mentioned in subsection (1)(a) counts as employment income.

Textual Amendments

F124Word in s. 41F(2)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(8)

Modifications etc. (not altering text)

C8S. 41F applied (20.3.2025) by Finance Act 2025 (c. 8), Sch. 10 para. 2(3)

41GSection 41F: the relevant periodU.K.

(1)“The relevant period” is to be determined as follows.

(2)In the case of an amount that counts as employment income by virtue of Chapter 2 of Part 7 (restricted securities) (other than where subsection (4) applies) or Chapter 3 of that Part (convertible securities), the relevant period—

(a)begins with the day of the acquisition, and

(b)ends with the day of the chargeable event.

(3)In the case of an amount that counts as employment income by virtue of section 446B (securities with artificially depressed market value: charge on acquisition), the relevant period is the tax year in which the acquisition occurs.

(4)In a case within subsection (1)(aa) or (b) of section 446E (securities with artificially depressed market value: charge on restricted securities) where an amount counts as employment income by virtue of that section, the relevant period—

(a)begins at the beginning of the tax year in which the chargeable event is treated as occurring, and

(b)ends with the day on which the chargeable event is treated as occurring.

(5)In the case of an amount that counts as employment income by virtue of section 446L (securities with artificially enhanced market value), the relevant period—

(a)begins at the beginning of the tax year in which the valuation date (within the meaning of that section) falls, and

(b)ends with the valuation date.

(6)In the case of an amount that counts as employment income by virtue of section 446U (securities acquired for less than market value: discharge of notional loan) or 446UA (avoidance cases in respect of such securities)—

(a)if the relevant securities were acquired by virtue of the exercise of a securities option (“the option”), the relevant period—

(i)begins with the day of the acquisition of the option, and

(ii)ends with the day the option vests, and

(b)otherwise, the relevant period is—

(i)the tax year in which the notional loan (within the meaning of Chapter 3C of Part 7) is treated as made, or

(ii)if the chargeable event occurs in that year, the period beginning at the beginning of that year and ending with the day of that event.

(7)In the case of an amount that counts as employment income by virtue of—

(a)Chapter 3D of Part 7 (securities disposed of for more than market value), or

(b)Chapter 4 of that Part (post-acquisition benefits from securities),

the relevant period is the tax year in which the chargeable event occurs.

(8)In the case of an amount that counts as employment income by virtue of Chapter 5 of Part 7 (employment-related securities options), the relevant period—

(a)begins with the day of the acquisition, and

(b)ends with the day of the chargeable event or, if earlier, the day the relevant securities option vests.

(9)If the relevant period determined in accordance with subsections (2) to (8) would not, in all the circumstances, be just and reasonable, the relevant period is to be such period as is just and reasonable.

(10)In this section “the acquisition” has the same meaning as in Chapters 2 to 4 or Chapter 5 of Part 7 (see section 421B or 471).

(11)For the purposes of this section an option “vests”—

(a)when it becomes exercisable, or

(b)if earlier, when it becomes exercisable subject only to a period of time expiring.

(12)See section 41F(11) for the definitions of “the chargeable event”, “the relevant securities” and “the relevant securities option”.

41HSection 41F: chargeable and unchargeable foreign securities incomeU.K.

(1)The extent to which the securities income is “chargeable foreign securities income” or “unchargeable foreign securities income” is to be determined as follows.

(2)Treat an equal amount of the securities income as accruing on each day of the relevant period.

(3)If any part of the relevant period is within a tax year to which subsection (4) applies, the securities income treated as accruing in that part of the relevant period is “chargeable foreign securities income”.

This is subject to subsection (9) and section 41I (limit where duties of associated employment performed in UK).

(4)This subsection applies to a tax year if—

(a)section 809B, 809D or 809E of ITA 2007 [F125applied] to the individual for the year,

(b)the individual [F126did not] meet the requirement of section 26A for the year (reading references there to the employee as references to the individual),

(c)the relevant employment [F127was] with a foreign employer, and

(d)the duties of the relevant employment [F128were] performed wholly outside the United Kingdom in the year.

(5)But subsection (4) does not apply to a tax year if section 24A applies in relation to the relevant employment for the tax year.

(6)If any part of the relevant period is within a tax year to which subsection (7) applies—

(a)if the duties of the relevant employment are performed wholly outside the United Kingdom, the securities income treated as accruing in that part of the relevant period is “chargeable foreign securities income”, and

(b)if some, but not all, of those duties are performed outside the United Kingdom—

(i)the securities income mentioned in paragraph (a) is to be apportioned (on a just and reasonable basis) between duties performed in the United Kingdom and duties performed outside the United Kingdom, and

(ii)the income apportioned in respect of duties performed outside the United Kingdom is “chargeable foreign securities income”.

This is subject to subsection (9).

(7)This subsection applies to a tax year if—

(a)section 809B, 809D or 809E of ITA 2007 [F129applied] to the individual for the year,

(b)the individual [F130met] the requirement of section 26A for the year (reading references there to the employee as references to the individual), and

(c)some or all of the duties of the relevant employment [F131were] performed outside the United Kingdom in the year.

(8)If any part of the relevant period is within a tax year for which the individual is not UK resident—

(a)if the duties of the relevant employment are performed wholly outside the United Kingdom in that year, the securities income treated as accruing in that part of the relevant period is “unchargeable foreign securities income”, or

(b)if some, but not all, of those duties are performed outside the United Kingdom in that year—

(i)the securities income mentioned in paragraph (a) is to be apportioned (on a just and reasonable basis) between duties performed in the United Kingdom and duties performed outside the United Kingdom, and

(ii)the income apportioned in respect of duties performed outside the United Kingdom is “unchargeable foreign securities income”.

(9)If any part of the relevant period is within the overseas part of a tax year that is a split year with respect to the individual—

(a)if the duties of the relevant employment are performed wholly outside the United Kingdom in that overseas part, the securities income treated as accruing in that part of the relevant period is “unchargeable foreign securities income”, or

(b)if some, but not all, of those duties are performed outside the United Kingdom in that overseas part—

(i)the securities income mentioned in paragraph (a) is to be apportioned (on a just and reasonable basis) between duties performed in the United Kingdom and duties performed outside the United Kingdom, and

(ii)the income apportioned in respect of duties performed outside the United Kingdom is “unchargeable foreign securities income”.

(10)If subsection (4) does not apply to a tax year by virtue of subsection (5), it is to be assumed for the purposes of section 41L that it is just and reasonable for none of the securities income treated as accruing in the tax year to be “chargeable foreign securities income”.

(11)See section 41J for further provision about the location of employment duties.

(12)This section is subject to—

(a)section 41K (securities income from overseas Crown employment), and

(b)section 41L (chargeable and unchargeable foreign securities income: just and reasonable apportionment).

Textual Amendments

F125Word in s. 41H(4)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(9)(a)(i)

F126Words in s. 41H(4)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(9)(a)(ii)

F127Word in s. 41H(4)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(9)(a)(iii)

F128Word in s. 41H(4)(d) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(9)(a)(iv)

F129Word in s. 41H(7)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(9)(b)(i)

F130Word in s. 41H(7)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(9)(b)(ii)

F131Word in s. 41H(7)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(9)(b)(iii)

41ILimit on “chargeable foreign securities income” where duties of associated employment performed in UKU.K.

(1)This section imposes a limit on the extent to which section 41H(3) applies in relation to a period when—

(a)the individual holds associated employments as well as the relevant employment, and

(b)the duties of the associated employments are not performed wholly outside the United Kingdom.

(2)The amount of the securities income for the period that is to be regarded as “chargeable foreign securities income” is limited to such amount as is just and reasonable, having regard to—

(a)the employment income for the period from all the employments mentioned in subsection (1)(a),

(b)the proportion of that income that is general earnings to which section 22 applies (chargeable overseas earnings),

(c)the nature of, and time devoted to, the duties performed outside the United Kingdom, and those performed in the United Kingdom, in the period, and

(d)all other relevant circumstances.

(3)In this section “associated employments” means employments with the same employer or with associated employers.

(4)Section 24(5) and (6) (meaning of “associated employer”) applies for the purposes of this section.

41JLocation of employment dutiesU.K.

(1)The following provisions apply for the purposes of this Chapter—

(a)section 39(1) and (2), and

(b)section 40 (but as if in subsections (3) and (4) of that section references to section 24(1)(b) were to section 41I(1)(b)).

(2)Duties of an employment performed in the UK sector of the continental shelf in connection with exploration or exploitation activities are to be treated for the purposes of this Chapter as being performed in the United Kingdom.

(3)In subsection (2) “the UK sector of the continental shelf” and “exploration or exploitation activities” have the same meaning as in section 41 (treatment of general earnings from employment in the UK sector of the continental shelf).

41KSecurities income from overseas Crown employmentU.K.

(1)If securities income is from overseas Crown employment subject to United Kingdom tax, it is (notwithstanding any other provision of this Chapter) not “foreign”.

(2)“Securities income from overseas Crown employment” means securities income from Crown employment (within the meaning given by section 28(2)) in respect of duties performed outside the United Kingdom.

(3)Such securities income is to be taken as being “subject to United Kingdom tax” unless, by virtue of subsection (4), it falls within an exception contained in an order under section 28(5).

(4)Subject to any provision made in an order under section 28(5) for the purposes of this section, provisions made in an order under that section for the purposes of excepting general earnings from overseas Crown employment from the operation of section 27(2) also have effect for the purposes of excepting securities income from such employment from the operation of subsection (1).

(5)For the purposes of this section, if securities income is partly from overseas Crown employment subject to United Kingdom tax, a just and reasonable proportion of the securities income is to be taken to be from such employment.

41LChargeable and unchargeable foreign securities income: just and reasonable apportionmentU.K.

(1)This section applies if the proportion of the securities income that would otherwise be regarded as “chargeable foreign securities income” or “unchargeable foreign securities income” is not, having regard to all the circumstances, just and reasonable.

(2)The amounts of the securities income that are “chargeable foreign securities income” and “unchargeable foreign securities income” are such amounts as are just and reasonable (rather than the amounts calculated in accordance with section 41H).]

[F132Chapter 5CU.K.Relief for new residents on foreign employment income

Textual Amendments

F132Pt. 2 Ch. 5C inserted (20.3.2025 for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(1)(3) (with Sch. 8 Pt. 3)

Foreign employment electionU.K.

41MForeign employment election for qualifying new residentsU.K.

(1)This Chapter applies if an individual is a qualifying new resident for a tax year (the “qualifying year”).

(2)An individual is a qualifying new resident for a tax year for the purposes of this Chapter if the individual is a qualifying new resident for the tax year for the purposes of Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).

(3)The individual may make an election for the qualifying year under this section (“a foreign employment election”).

(4)Section 41P makes provision about a claim for relief—

(a)which an individual can make for the qualifying year or any subsequent tax year, where the individual has made a foreign employment election, and

(b)which entitles the individual to relief in that year calculated by reference to employment income that is in respect of the qualifying year.

(5)Sections 41Q (amount of relief available) and 41R (limit on relief) set out how to determine the amount of relief to which the individual is entitled.

(6)See also—

(a)sections 845C to 845E of ITTOIA 2005, which set out some income tax consequences of a foreign employment election, and

(b)section 1K of TCGA 1992, which provides for the loss of the individual’s annual exempt amount for capital gains tax where a foreign employment election is made.

(7)A foreign employment election must be made in a return.

(8)A foreign employment election for the qualifying year must be made before the end of the period of 12 months beginning with 31 January after the end of the qualifying year.

(9)A foreign employment election may not be made as a consequential claim (within the meaning of section 43C(5) of TMA 1970) if the circumstances which give rise to the consequential claim result from a loss of tax brought about carelessly or deliberately by the individual or a person acting on the individual’s behalf.

(10)For the purposes of this Chapter—

(a)“return” means a return under section 8 of TMA 1970 (personal return),

(b)references to a claim or election being included in a return include a claim or election being so included as a result of an amendment of the return, and

(c)subsections (5) to (7) of section 118 of TMA 1970 (loss of tax brought about carelessly or deliberately) apply as they apply for the purposes of that Act.

Key definitionsU.K.

41NKey definitionsU.K.

(1)This section sets out some definitions that apply for the purposes of this Chapter.

(2)“Qualifying employment income” means—

(a)qualifying general earnings,

(b)qualifying third party income, and

(c)qualifying securities income.

(3)“Qualifying foreign employment income” means—

(a)qualifying foreign general earnings,

(b)qualifying foreign third party income, and

(c)qualifying foreign securities income.

(4)Section 41T defines what it means—

(a)for general earnings to be “qualifying general earnings”, and

(b)for qualifying general earnings to be “qualifying foreign general earnings”.

(5)Section 41U defines what it means—

(a)for third party income to be “qualifying third party income”, and

(b)for qualifying third party income to be “qualifying foreign third party income”.

(6)Section 41V defines what it means—

(a)for securities income to be “qualifying securities income”, and

(b)for qualifying securities income to be “qualifying foreign securities income”.

Claim for reliefU.K.

41PClaim for relief for qualifying new residentsU.K.

(1)Where an individual has made a foreign employment election, the individual may make a claim for relief for the qualifying year or any subsequent tax year (“a foreign employment relief claim”).

(2)Where an individual makes a foreign employment relief claim for a tax year, the individual is entitled to relief that is equal to so much of the net taxable employment income for that year as—

(a)reflects qualifying foreign employment income (see section 41Q), and

(b)is identified as such in the claim.

(3)But subsection (2) only applies to the extent the total amount of the relief given does not exceed the limit (see section 41R).

(4)The relief is given by deducting the amount of the relief in calculating the individual's net income for the tax year for which the claim is made (see Step 2 of the calculation in section 23 of ITA 2007).

(5)A foreign employment relief claim must be made in a return.

(6)A foreign employment relief claim for a tax year must be made before the end of the period of 12 months beginning with 31 January after the end of that tax year.

(7)A foreign employment relief claim may not be made as a consequential claim (within the meaning of section 43C(5) of TMA 1970) if the circumstances which give rise to the consequential claim result from a loss of tax brought about carelessly or deliberately by the individual or a person acting on the individual’s behalf.

(8)For the purposes of this Chapter “net taxable employment income”, in relation to a tax year, means the employment income on which the individual is charged to tax for the tax year (see section 9(1)).

41QAmount of relief availableU.K.

(1)For the purposes of section 41P(2), the amount of net taxable employment income for a tax year that “reflects” qualifying foreign employment income is the total of—

(a)the total of the amount of the net taxable earnings from each employment in the tax year that reflects qualifying foreign general earnings (see subsections (2) to (5)), and

(b)the total of the amount of the net taxable specific income from each employment for the tax year that reflects qualifying foreign third party income or qualifying foreign securities income (see subsection (6)).

(2)The amount of the net taxable earnings from an employment in a tax year that “reflects” qualifying foreign general earnings is—

(a)the amount of the taxable earnings from the employment in the tax year that are qualifying foreign general earnings, minus

(b)the amount of the qualifying deductions.

(3)If the amount calculated under subsection (2) is nil or a negative amount, then none of the net taxable earnings from the employment in the tax year reflect qualifying foreign general earnings.

(4)If the foreign employment relief claim is for the qualifying year, the amount of the qualifying deductions is the proportion of the total deductions that is the same as the proportion of the claim year taxable earnings that are qualifying foreign general earnings.

(5)If the foreign employment relief claim is for a subsequent tax year, the amount of the qualifying deductions is the amount resulting from the following steps—

  • Step 1

    Deduct the claim year taxable earnings from the total deductions.

    If the result is nil or a negative amount, there are no qualifying deductions.

  • Step 2

    Deduct any other taxable earnings that are not qualifying foreign general earnings.

    If the result is nil or a negative amount, there are no qualifying deductions.

(6)The proportion of the net taxable specific income from an employment for a tax year that “reflects” qualifying foreign third party income or qualifying foreign securities income is the same as the proportion of the taxable specific income for the employment in that year that is qualifying foreign third party income or qualifying foreign securities income.

(7)In this section—

  • “claim year taxable earnings” means the taxable earnings from the employment in the tax year that are “for” the year for which the claim is made determined in accordance with section 16 and 17;

  • “total deductions” means the total amount of any deductions allowed from the taxable earnings from the employment in the tax year under provisions listed in section 327(3) to (5) (see section 11(1)).

41RLimit on reliefU.K.

(1)This section sets out how to determine the limit on the amount of relief the individual is entitled to when making a foreign employment relief claim for a year for the purposes of section 41P(3).

(2)The limit is the lesser of—

(a)30% of the relevant qualifying employment income, and

(b)£300,000.

(3)For the purposes of this section “relevant qualifying employment income” means—

(a)so much of the net taxable employment income for the tax year for which the claim is made as reflects qualifying employment income, and

(b)if the foreign employment relief claim is for a tax year that is subsequent to the qualifying year, so much of any net taxable employment income for any earlier tax year (but not any tax year before the qualifying year) as would reflect qualifying employment income if that earlier year was the year for which the claim was made.

(4)If the foreign employment relief claim is for a tax year that is subsequent to the qualifying year, the limit is reduced by the total of any amounts reflecting qualifying foreign employment income that have previously been relieved under section 41P.

(5)To determine the amounts mentioned in subsection (3)(a) and (b), apply section 41Q, but as if—

(a)the references in that section to qualifying foreign employment income were to qualifying employment income,

(b)the references in that section to qualifying foreign general earnings were to qualifying general earnings, and

(c)the references in that section to qualifying foreign third party income and qualifying foreign securities income were references to qualifying third party income and qualifying securities income.

41SEffect of claim on relief for contributions to registered pension schemesU.K.

(1)This section applies where an individual who is an active member of a registered pension scheme for the purposes of section 188 of FA 2004 (relief for contributions) makes a foreign employment relief claim for a tax year.

(2)For the purposes of sections 189(1)(a) and 190 of that Act, references to the amount of the individual’s relevant UK earnings chargeable to income tax for that year are to be read as references to that amount minus the relieved amount.

(3)The “relieved amount” is the amount of the relief to which the individual is entitled under section 41P(2) of this Act as a result of making the foreign employment relief claim.

41TForeign employment relief ignored for purposes of determining adjusted net incomeU.K.

(1) Subsection (2) applies for the purpose of determining the adjusted net income under section 58 of ITA 2007 of an individual for a tax year for which the individual is entitled to relief under section 41P.

(2)The adjusted net income is to be determined as if the relief had not been deducted in calculating the individual’s net income for the tax year.

Qualifying foreign employment incomeU.K.

41UQualifying foreign general earningsU.K.

(1)General earnings are “qualifying general earnings” if they are—

(a)“for” the qualifying year determined in accordance with sections 16 and 17,

(b)if the qualifying year is a split year as respects the individual, attributable to the UK part of the year, and

(c)from an employment the duties of which are performed wholly or partly outside the UK during the qualifying year.

(2)Any attribution required for the purposes of subsection (1)(b) is to be done on a just and reasonable basis.

(3)Qualifying general earnings are “qualifying foreign general earnings” if they are neither—

(a)in respect of duties performed in the United Kingdom, nor

(b)from overseas Crown employment subject to United Kingdom tax (see section 41W).

(4)For the purposes of subsection (3), the extent to which qualifying general earnings are in respect of duties performed in the United Kingdom is to be determined on a just and reasonable basis.

41VQualifying foreign third party incomeU.K.

(1)For the purposes of this Chapter, “third party income” is an amount that counts under Chapter 2 of Part 7A (treatment of relevant step for income tax purposes) as employment income in respect of an employment.

(2)Third party income is “qualifying third party income”—

(a)if it is in respect of an employment the duties of which are performed wholly or partly outside the UK during the qualifying year, and

(b)to the extent that the value of the relevant step that counts as employment income (see section 554Z3) is—

(i)“for” the qualifying year determined in accordance with section 554Z4(2), and

(ii)if the qualifying year is a split year as respects the individual, attributable to the UK part of the year.

(3)Any attribution required for the purposes of subsection (2)(b)(ii) is to be done on a just and reasonable basis.

(4)Qualifying third party income is “qualifying foreign third party income” to the extent that it is not in respect of duties performed in the United Kingdom.

(5)The extent to which qualifying third party income is not in respect of duties performed in the United Kingdom is to be determined on a just and reasonable basis.

41WQualifying foreign securities incomeU.K.

(1)For the purpose of this Chapter, “securities income” is an amount that counts under Chapters 2 to 5 of Part 7 (employment-related securities etc) as employment income in respect of an employment (the “relevant employment”).

(2)Securities income is “qualifying securities income”—

(a)if the duties of the relevant employment are performed wholly or partly outside the UK during the qualifying year, and

(b)to the extent that it—

(i)accrues during the qualifying year, or

(ii)if the qualifying year is a split year as respects the individual, accrues during the UK part of the year.

(3)To determine when securities income accrues treat an equal amount of the securities income as accruing on each day of the relevant period determined in accordance with section 41G.

(4)But if the proportion of the securities income that would be regarded as qualifying securities income by virtue of subsection (3) is not, having regard to all the circumstances, just and reasonable, the amount of the securities income that is qualifying securities income is such amount as is just and reasonable.

(5)Qualifying securities income is wholly “qualifying foreign securities income” if the duties of the relevant employment are performed wholly outside the United Kingdom.

(6)If some, but not all, of the duties of the relevant employment are performed outside the United Kingdom—

(a)the qualifying securities income is to be apportioned (on a just and reasonable basis) between duties performed in the United Kingdom and duties performed outside the United Kingdom, and

(b)the income apportioned in respect of duties performed outside the United Kingdom is qualifying foreign securities income.

(7)But qualifying securities income from overseas Crown employment subject to United Kingdom tax is not qualifying foreign securities income.

41XMeaning of “overseas Crown employment subject to UK tax”U.K.

(1)This section explains what is meant by —

(a)qualifying general earnings “from overseas Crown employment subject to United Kingdom tax” for the purposes of section 41T(3)(b), and

(b)qualifying securities income “from overseas Crown employment subject to United Kingdom tax” for the purposes of section 41V(7).

(2)Qualifying general earnings and qualifying securities income are “from overseas Crown employment” if the earnings or income is from Crown employment (within the meaning of section 28(2)) in respect of duties performed outside the United Kingdom.

(3)Such earnings or income are to be taken as being “subject to United Kingdom tax” unless they fall within any exception contained in an order made under section 28(5) for the purposes of section 27(2).

(4)An order made under section 28(5) may also—

(a)provide for any exceptions mentioned in subsection (3) to not apply for the purposes of this section, and

(b)make exceptions for the purposes of this section.

(5)For the purposes of this section, if securities income is partly from overseas Crown employment subject to United Kingdom tax, a just and reasonable proportion of the securities income is to be taken to be from such employment.

41YLocation of employment dutiesU.K.

(1)Section 38 (period of absence from employment) applies for the purposes of this Chapter as if references to general earnings were to general earnings or third party income.

(2)Section 40(1) and (2) (place of performance of duties on board vessel or aircraft) applies for the purposes of this Chapter.

(3)Duties of an employment performed in the UK sector of the continental shelf in connection with exploration of exploitation activities are to be treated for the purposes of this Chapter as being performed in the United Kingdom.

(4)In subsection (3) “the UK sector of the continental shelf” and “exploration or exploitation activities” have the same meaning as in section 41 (treatment of general earnings from employment in the UK sector of the continental shelf).

Other rules for determining amounts of qualifying foreign employment incomeU.K.

41ZArtificial arrangements to be disregardedU.K.

(1)Any arrangements falling within subsection (2) are to be disregarded for the purposes of determining the extent to which—

(a)general earnings are qualifying general earnings;

(b)third party income is qualifying third party income;

(c)securities income is qualifying securities income;

(2)Arrangements fall within this subsection if the main purpose, or one of the main purposes of the arrangements is to enable an individual to obtain—

(a)relief under this Chapter to which they would not otherwise be entitled, or

(b)relief under this Chapter of a greater amount than that to which they would otherwise be entitled.

(3)In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

41Z1Limit on qualifying foreign employment income from associated employmentsU.K.

(1)This section applies if—

(a)the individual has associated employments from or in respect of which there is qualifying employment income, and

(b)the duties of the associated employments are not performed wholly outside the United Kingdom.

(2)There is a limit on how much of the qualifying employment income from or in respect of the associated employments is qualifying foreign employment income.

(3)The limit is the proportion of the qualifying employment income that is reasonable having regard to—

(a)the nature of, and time devoted to, the duties performed outside the United Kingdom, and those performed in the United Kingdom, and

(b)all other relevant circumstances.

(4)In this section “associated employments” means employments with the same employer or with associated employers; and section 24(5) and (6) applies for the purposes of this section.]

F133Chapter 6U.K.Disputes as to domicile or ordinary residence

Textual Amendments

F133Pt. 2 Ch. 6 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 23

F13342 Commissioners to determine dispute as to domicile or ordinary residenceU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13343Appeal against Commissioners' decision on domicile or ordinary residenceU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Modifications etc. (not altering text)

Chapter 7U.K.Application of provisions to agency workers

Agency workersU.K.

[F13444Treatment of workers supplied by agenciesU.K.

(1)This section applies if—

(a)an individual (“the worker”) personally provides services (which are not excluded services) to another person (“the client”),

(b)there is a contract between—

(i)the client or a person connected with the client, and

(ii)a person other than the worker, the client or a person connected with the client (“the agency”), and

(c)under or in consequence of that contract—

(i)the services are provided, or

(ii)the client or any person connected with the client pays, or otherwise provides consideration, for the services.

(2)But this section does not apply if—

(a)it is shown that the manner in which the worker provides the services is not subject to (or to the right of) supervision, direction or control by any person, or

(b)remuneration receivable by the worker in consequence of providing the services constitutes employment income of the worker apart from this Chapter.

(3)If this section applies—

(a)the worker is to be treated for income tax purposes as holding an employment with the agency, the duties of which consist of the services the worker provides to the client, and

(b)all remuneration receivable by the worker (from any person) in consequence of providing the services is to be treated for income tax purposes as earnings from that employment,

but this is subject to subsections (4) to (6).

(4)Subsection (5) applies if (whether before or after the worker begins to provide the services)—

(a)the client provides the agency with a fraudulent document which is intended to constitute evidence that, by virtue of subsection (2)(a), this section does not or will not apply, or

(b)a relevant person provides the agency with a fraudulent document which is intended to constitute evidence that, by virtue of subsection (2)(b), this section does not or will not apply.

(5)In relation to services the worker provides to the client after the fraudulent document is provided—

(a)subsection (3) does not apply,

(b)the worker is to be treated for income tax purposes as holding an employment with the client or (as the case may be) with the relevant person, the duties of which consist of the services, and

(c)all remuneration receivable by the worker (from any person) in consequence of providing the services is to be treated for income tax purposes as earnings from that employment.

(6)In subsections (4) and (5) “relevant person” means a person, other than the client, the worker or a person connected with the client or with the agency, who—

(a)is resident, or has a place of business, in the United Kingdom, and

(b)is party to a contract with the agency or a person connected with the agency, under or in consequence of which—

(i)the services are provided, or

(ii)the agency, or a person connected with the agency, makes payments in respect of the services.]

Textual Amendments

F134S. 44 substituted (6.4.2014) by virtue of Finance Act 2014 (c. 26), s. 16(2)(11)

45Arrangements with agenciesU.K.

If—

(a)an individual (“the worker”), with a view to personally providing services (which are not excluded services) to another person (“the client”), enters into arrangements with a third person F135..., and

(b)the arrangements are such that the services (if and when they are provided) will be treated for income tax purposes under section 44 as duties of an employment held by the worker F136...,

any remuneration receivable under or in consequence of the arrangements is to be treated for income tax purposes as earnings from that employment.

Textual Amendments

F135Words in s. 45(a) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), s. 16(3)(a)(11)

F136Words in s. 45(b) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), s. 16(3)(b)(11)

46Cases involving unincorporated bodies etc.U.K.

(1)Section 44 also applies—

(a)if the worker personally providesF137... the services in question as a partner in a firm or a member of an unincorporated body;

(b)if the agency in question is an unincorporated body of which the worker is a member.

(2)In a case within subsection (1)(a), remuneration receivable [F138in consequence of the worker providing the services] is to be treated for income tax purposes as income of the worker and not as income of the firm or body.

Textual Amendments

F137Words in s. 46(1)(a) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), s. 16(4)(a)(11)

F138Words in s. 46(2) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 16(4)(b)(11)

[F139Anti-avoidanceU.K.

Textual Amendments

F139S. 46A and cross-heading inserted (6.4.2014) by Finance Act 2014 (c. 26), s. 16(5)(11)

46AAnti-avoidanceU.K.

(1)This section applies if—

(a)an individual (“W”) personally provides services (which are not excluded services) to another person (“C”),

(b)a third person (“A”) enters into arrangements the main purpose, or one of the main purposes, of which is to secure that the services are not treated for income tax purposes under section 44 as duties of an employment held by W with A, and

(c)but for this section, section 44 would not apply in relation to the services.

(2)In subsection (1)(b) “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(3)Subject to subsection (2) of section 44, that section applies in relation to the services.

(4)For the purposes of subsection (3)—

(a)W is to be treated as being the worker,

(b)C is to be treated as being the client,

(c)A is to be treated as being the agency, and

(d)section 44 has effect as if subsections (4) to (6) of that section were omitted.]

SupplementaryU.K.

47Interpretation of this ChapterU.K.

F140(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)In this Chapter “excluded services” means—

(a)services as an actor, singer, musician or other entertainer or as a fashion, photographic or artist’s model, or

(b)services provided wholly—

(i)in the worker’s own home, or

(ii)at other premises which are neither controlled or managed by the client nor prescribed by the nature of the services.

(3)For the purposes of this Chapter “remuneration”—

(a)does not include anything that would not have constituted employment income of the worker if it had been receivable in connection with an employment apart from this Chapter, but

(b)subject to paragraph (a), includes every form of payment, gratuity, profit and benefit.

Textual Amendments

F140S. 47(1) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), s. 16(6)(11)

Chapter 8U.K.[F141Workers' services provided through intermediaries to small clients]

Textual Amendments

F141Pt. 2 Ch. 8 heading substituted (6.4.2021 for the tax year 2021-22 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 1 paras. 2, 24 (with Sch. 1 paras. 30-34)

Application of this ChapterU.K.

48Scope of this ChapterU.K.

(1)This Chapter has effect with respect to the provision of services through an intermediary [F142in a case where the services are provided to a person who is not a public authority and who either—

(a)qualifies as small for a tax year, or

(b)does not have a UK connection for a tax year.]

(2)Nothing in this Chapter—

(a)affects the operation of Chapter 7 of this Part,

[F143(aa)applies to services provided by a managed service company (within the meaning of Chapter 9 of this Part), or]

(b)applies to payments [F144or transfers to which section 966(3) or (4) of ITA 2007 applies (visiting performers: duty to deduct and account for sums representing income tax)] .

[F145(3)In this Chapter “public authority” has the same meaning as in Chapter 10 of this Part (see section 61L).]

[F146(4)For provisions determining when a person qualifies as small for a tax year, see sections 60A to 60G.

(5)For provision determining when a person has a UK connection for a tax year, see section 60I.]

Textual Amendments

F142Words in s. 48(1) substituted (6.4.2021 for the tax year 2021-22 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 1 paras. 3(2), 24 (with Sch. 1 paras. 30-34)

F143S. 48(2)(aa) substituted for word (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), s. 25(2), Sch. 3 para. 3

F144Words in s. 48(2) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 429 (with Sch. 2)

F145S. 48(3) inserted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 2(b)

F146S. 48(4)(5) inserted (6.4.2021 for the tax year 2021-22 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 1 paras. 3(3), 24 (with Sch. 1 paras. 30-34)

49Engagements to which this Chapter appliesU.K.

(1)This Chapter applies where—

(a)an individual (“the worker”) personally performs, or is under an obligation personally to perform, services [F147for another person] (“the client”),

[F148(aa)the client is not a public authority,]

(b)the services are provided not under a contract directly between the client and the worker but under arrangements involving a third party (“the intermediary”), and

[F149(c)the circumstances are such that—

(i)if the services were provided under a contract directly between the client and the worker, the worker would be regarded for income tax purposes as an employee of the client or the holder of an office under the client, or

(ii)the worker is an office-holder who holds that office under the client and the services relate to the office.]

F150(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The reference in subsection (1)(b) to a “third party” includes a partnership or unincorporated body of which the worker is a member.

(4)The circumstances referred to in subsection (1)(c) include the terms on which the services are provided, having regard to the terms of the contracts forming part of the arrangements under which the services are provided.

[F151(4A)Holding office as statutory auditor of the client does not count as holding office under the client for the purposes of subsection (1)(c), and here “statutory auditor” means a statutory auditor within the meaning of Part 42 of the Companies Act 2006 (see section 1210 of that Act).]

(5)In this Chapter “engagement to which this Chapter applies” means any such provision of services as is mentioned in subsection (1).

Textual Amendments

F147Words in s. 49(1)(a) substituted (with effect in accordance with s. 136(4) of the amending Act) by Finance Act 2003 (c. 14), s. 136(2)

F148S. 49(1)(aa) inserted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 3

F149S. 49(1)(c) substituted (with effect in accordance with s. 22(2) of the amending Act) by Finance Act 2013 (c. 29), s. 22(1)

F150S. 49(2) repealed (with effect in accordance with s. 136(4) of the amending Act) by Finance Act 2003 (c. 14), s. 136(3)(a), Sch. 43 Pt. 3(1)

F151S. 49(4A) inserted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 11

50Worker treated as receiving earnings from employmentU.K.

(1)If, in the case of an engagement to which this Chapter applies, in any tax year—

[F152(za)the client qualifies as small or does not have a UK connection,]

(a)the conditions specified in section 51, 52 or 53 are met in relation to the intermediary, and

(b)the worker, or an associate of the worker—

(i)receives from the intermediary, directly or indirectly, a payment or benefit that is not employment income, or

(ii)has rights which entitle, or which in any circumstances would entitle, the worker or associate to receive from the intermediary, directly or indirectly, any such payment or benefit,

the intermediary is treated as making to the worker, and the worker is treated as receiving, in that year a payment which is to be treated as earnings from an employment (“the deemed employment payment”).

(2)A single payment is treated as made in respect of all engagements in relation to which the intermediary is treated as making a payment to the worker in the tax year.

(3)The deemed employment payment is treated as made at the end of the tax year, unless section 57 applies (earlier date of deemed payment in certain cases).

(4)In this Chapter “the relevant engagements”, in relation to a deemed employment payment, means the engagements mentioned in subsection (2).

[F153(5)The condition in paragraph (za) of subsection (1) is to be ignored if—

(a)the client concerned is an individual, and

(b)the services concerned are performed otherwise than for the purposes of the client's business.

(6)For the purposes of paragraph (za) of subsection (1) the client is to be treated as not qualifying as small for the tax year concerned if the client is treated as medium or large for that tax year by reason of section 61TA(3)(a).]

Textual Amendments

F152S. 50(1)(za) inserted (6.4.2021 for the tax year 2021-22 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 1 paras. 4(2), 24 (with Sch. 1 paras. 30-34)

F153S. 50(5)(6) inserted (6.4.2021 for the tax year 2021-22 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 1 paras. 4(3), 24 (with Sch. 1 paras. 30-34)

51Conditions of liability where intermediary is a companyU.K.

(1)Where the intermediary is a company the conditions are that the intermediary is not an associated company of the client that falls within subsection (2) and either—

(a)the worker has a material interest in the intermediary, or

(b)the payment or benefit mentioned in section 50(1)(b)—

(i)is received or receivable by the worker directly from the intermediary, and

(ii)can reasonably be taken to represent remuneration for services provided by the worker to the client.

(2)An associated company of the client falls within this subsection if it is such a company by reason of the intermediary and the client being under the control—

(a)of the worker, or

(b)of the worker and other persons.

(3)A worker is treated as having a material interest in a company if—

(a)the worker, alone or with one or more associates of the worker, or

(b)an associate of the worker, with or without other such associates,

has a material interest in the company.

(4)For this purpose a material interest means—

(a)beneficial ownership of, or the ability to control, directly or through the medium of other companies or by any other indirect means, more than 5% of the ordinary share capital of the company; or

(b)possession of, or entitlement to acquire, rights entitling the holder to receive more than 5% of any distributions that may be made by the company; or

(c)where the company is a close company, possession of, or entitlement to acquire, rights that would in the event of the winding up of the company, or in any other circumstances, entitle the holder to receive more than 5% of the assets that would then be available for distribution among the participators.

(5)In subsection (4)(c) “participator” has the meaning given by [F154section 454 of CTA 2010].

Textual Amendments

F154Words in s. 51(5) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 380 (with Sch. 2)

52Conditions of liability where intermediary is a partnershipU.K.

(1)Where the intermediary is a partnership the conditions are as follows.

(2)In relation to any payment or benefit received or receivable by the worker as a member of the partnership the conditions are—

(a)that the worker, alone or with one or more relatives, is entitled to 60% or more of the profits of the partnership; or

(b)that most of the profits of the partnership concerned derive from the provision of services under engagements to which [F155one or other of this Chapter and Chapter 10] applies—

(i)to a single client, or

(ii)to a single client together with associates of that client; or

(c)that under the profit sharing arrangements the income of any of the partners is based on the amount of income generated by that partner by the provision of services under engagements to which [F156one or other of this Chapter and Chapter 10] applies.

In paragraph (a) “relative” means [F157spouse or civil partner] , parent or child or remoter relation in the direct line, or brother or sister.

(3)In relation to any payment or benefit received or receivable by the worker otherwise than as a member of the partnership, the conditions are that the payment or benefit—

(a)is received or receivable by the worker directly from the intermediary, and

(b)can reasonably be taken to represent remuneration for services provided by the worker to the client.

Textual Amendments

F155Words in s. 52(2)(b) substituted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 4

F156Words in s. 52(2)(c) substituted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 4

53Conditions of liability where intermediary is an individualU.K.

Where the intermediary is an individual the conditions are that the payment or benefit—

(a)is received or receivable by the worker directly from the intermediary, and

(b)can reasonably be taken to represent remuneration for services provided by the worker to the client.

The deemed employment paymentU.K.

54Calculation of deemed employment paymentU.K.

(1)The amount of the deemed employment payment for a tax year (“the year”) is the amount resulting from the following steps—

Step 1

Find (applying section 55) the total amount of all payments and benefits received by the intermediary in the year in respect of the relevant engagements, and reduce that amount by 5%.

Step 2

Add (applying that section) the amount of any payments and benefits received by the worker in the year in respect of the relevant engagements, otherwise than from the intermediary, that—

(a)are not chargeable to income tax as employment income, and

(b)would be so chargeable if the worker were employed by the client.

Step 3

Deduct (applying Chapters 1 to 5 of Part 5) the amount of any expenses met in the year by the intermediary that would have been deductible from the taxable earnings from the employment if—

(a)the worker had been employed by the client, and

(b)the expenses had been met by the worker out of those earnings.

If the result at this or any later point is nil or a negative amount, there is no deemed employment payment.

Step 4

Deduct the amount of any capital allowances in respect of expenditure incurred by the intermediary that could have been deducted from employment income under section 262 of CAA 2001 (employments and offices) if the worker had been employed by the client and had incurred the expenditure.

Step 5

Deduct any contributions made in the year for the benefit of the worker by the intermediary to a [F158registered pension scheme] that if made by an employer for the benefit of an employee would not be chargeable to income tax as income of the employee.

This does not apply to excess contributions made and later repaid.

Step 6

Deduct the amount of any employer’s national insurance contributions paid by the intermediary for the year in respect of the worker.

Step 7

Deduct the amount of any payments and benefits received in the year by the worker from the intermediary—

(a)in respect of which the worker is chargeable to income tax as employment income, and

(b)which do not represent items in respect of which a deduction was made under step 3.

Step 8

Assume that the result of step 7 represents an amount together with employer’s national insurance contributions on it, and deduct what (on that assumption) would be the amount of those contributions.

The result is the deemed employment payment.

[F159(1A)For the purposes of step 1 of subsection (1), any payment or benefit which is employment income of the worker by virtue of section 863G(4) of ITTOIA 2005 (salaried members of limited liability partnerships: anti-avoidance) is to be ignored.]

(2)If [F160section 61 of the Finance Act 2004] applies (sub-contractors in the construction industry: payments to be made under deduction), the intermediary is treated for the purposes of step 1 of subsection (1) as receiving the amount that would have been received had no deduction been made under that section.

(3)In step 3 of subsection (1), the reference to expenses met by the intermediary includes—

(a)expenses met by the worker and reimbursed by the intermediary, and

(b)where the intermediary is a partnership and the worker is a member of the partnership, expenses met by the worker for and on behalf of the partnership.

(4)In step 3 of subsection (1), the expenses deductible include the amount of any mileage allowance relief for the year which the worker would have been entitled to in respect of the use of a vehicle falling within subsection (5) if—

(a)the worker had been employed by the client, and

(b)the vehicle had not been a company vehicle (within the meaning of Chapter 2 of Part 4).

(5)A vehicle falls within this subsection if—

(a)it is provided by the intermediary for the worker, or

(b)where the intermediary is a partnership and the worker is a member of the partnership, it is provided by the worker for the purposes of the business of the partnership.

(6)Where, on the assumptions mentioned in paragraphs (a) and (b) of step 3 of subsection (1), the deductibility of the expenses is determined under sections 337 to 342 (travel expenses), the duties performed under the relevant engagements are treated as duties of a continuous employment with the intermediary.

(7)In step 7 of subsection (1), the amounts deductible include any payments received in the year from the intermediary that—

(a)are exempt from income tax by virtue of section 229 or 233 (mileage allowance payments and passenger payments), and

(b)do not represent items in respect of which a deduction was made under step 3.

(8)For the purposes of subsection (1) any necessary apportionment is to be made on a just and reasonable basis of amounts received by the intermediary that are referable—

(a)to the services of more than one worker, or

(b)partly to the services of the worker and partly to other matters.

Textual Amendments

F158Words in s. 54(1) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 56 (with Sch. 36)

F159S. 54(1A) inserted (retrospective to 6.4.2014) by Finance Act 2014 (c. 26), Sch. 17 paras. 5, 6

F160Words in s. 54(2) substituted (with effect in accordance with s. 77 of the amending Act) by Finance Act 2004 (c. 12), Sch. 12 para. 17(2)

Modifications etc. (not altering text)

C10S. 54(1) applied in part (with effect in accordance with reg. 1(2) of the amending S.I.) by The Pension Protection Fund (Tax) (2005-06) Regulations 2005 (S.I. 2005/1907), regs. 1(1), 13

55Application of rules relating to earnings from employmentU.K.

(1)The following provisions apply in relation to the calculation of the deemed employment payment.

(2)A “payment or benefit” means anything that, if received by an employee for performing the duties of an employment, would be earnings from the employment.

(3)The amount of a payment or benefit is taken to be—

(a)in the case of a payment or cash benefit, the amount received, and

(b)in the case of a non-cash benefit, the cash equivalent of the benefit.

(4)The cash equivalent of a non-cash benefit is taken to be—

(a)the amount that would be earnings if the benefit were earnings from an employment, or

(b)in the case of living accommodation, whichever is the greater of that amount and the cash equivalent determined in accordance with section 398(2).

(5)A payment or benefit is treated as received—

(a)in the case of a payment or cash benefit, when payment is made of or on account of the payment or benefit;

(b)in the case of a non-cash benefit that is calculated by reference to a period within the tax year, at the end of that period;

(c)in the case of a non-cash benefit that is not so calculated, when it would have been treated as received for the purposes of Chapter 4 or 5 of this Part (see section 19 or 32) if—

(i)the worker had been an employee, and

(ii)the benefit had been provided by reason of the employment.

56Application of Income Tax Acts in relation to deemed employmentU.K.

(1)The Income Tax Acts (in particular, the PAYE provisions) apply in relation to the deemed employment payment as follows.

(2)They apply as if—

(a)the worker were employed by the intermediary, and

(b)the relevant engagements were undertaken by the worker in the course of performing the duties of that employment.

(3)The deemed employment payment is treated in particular—

(a)as taxable earnings from the employment for the purpose of securing that any deductions under Chapters 2 to 6 of Part 5 do not exceed the deemed employment payment; and

(b)as taxable earnings from the employment for the purposes of section 232.

F161(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F161(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Where the intermediary is a partnership or unincorporated association, the deemed employment payment is treated as received by the worker in the worker’s personal capacity and not as income of the partnership or association.

(7)Where—

(a)the worker is resident in the United Kingdom, [F162 and]

(b)the services in question are provided in the United Kingdom, F163...

F163(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

the intermediary is treated as having a place of business in the United Kingdom, whether or not it in fact does so.

F164(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F161S. 56(4)(5) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 14

F162Words in s. 56(7)(a) inserted (with effect in accordance with s. 136(4) of the amending Act) by Finance Act 2003 (c. 14), s. 136(3)(b)(i)

F163S. 56(7)(c) and word repealed (with effect in accordance with s. 136(4) of the amending Act) by Finance Act 2003 (c. 14), s. 136(3)(b)(ii), Sch. 43 Pt. 3(1)

F164S. 56(8) repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 35 para. 57, Sch. 36)

Supplementary provisionsU.K.

57Earlier date of deemed employment payment in certain casesU.K.

(1)If in any tax year—

(a)a deemed employment payment is treated as made, and

(b)before the date on which the payment would be treated as made under section 50(2) any relevant event (as defined below) occurs in relation to the intermediary,

the deemed employment payment for that year is treated as having been made immediately before that event or, if there is more than one, immediately before the first of them.

(2)Where the intermediary is a company the following are relevant events—

(a)the company ceasing to trade;

(b)where the worker is a member of the company, the worker ceasing to be such a member;

(c)where the worker holds an office with the company, the worker ceasing to hold such an office;

(d)where the worker is employed by the company, the worker ceasing to be so employed.

(3)Where the intermediary is a partnership the following are relevant events—

(a)the dissolution of the partnership or the partnership ceasing to trade or a partner ceasing to act as such;

(b)where the worker is employed by the partnership, the worker ceasing to be so employed.

(4)Where the intermediary is an individual and the worker is employed by the intermediary, it is a relevant event if the worker ceases to be so employed.

(5)The fact that the deemed employment payment is treated as made before the end of the tax year does not affect what receipts and other matters are taken into account in calculating its amount.

58Relief in case of distributions by intermediaryU.K.

(1)A claim for relief may be made under this section where the intermediary—

(a)is a company,

(b)is treated as making a deemed employment payment in any tax year, and

(c)either in that tax year (whether before or after that payment is treated as made), or in a subsequent tax year, makes a distribution (a “relevant distribution”).

(2)A claim for relief under this section must be made—

(a)by the intermediary by notice to [F165an officer of Revenue and Customs] , and

(b)within 5 years after the 31st January following the tax year in which the distribution is made.

(3)If on a claim being made [F165an officer of Revenue and Customs] [F166is] satisfied that relief should be given in order to avoid a double charge to tax, [F167the officer] must direct the giving of such relief by way of amending any assessment, by discharge or repayment of tax, or otherwise, as appears to [F167the officer] appropriate.

(4)Relief under this section is given by setting the amount of the deemed employment payment against the relevant distribution so as to reduce the distribution.

(5)In the case of more than one relevant distribution, [F165an officer of Revenue and Customs] must exercise the power conferred by this section so as to secure that so far as practicable relief is given by setting the amount of a deemed employment payment—

(a)against relevant distributions of the same tax year before those of other years,

(b)against relevant distributions received by the worker before those received by another person, and

(c)against relevant distributions of earlier years before those of later years.

F168(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F168S. 58(6) omitted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 1 para. 61(2)

59Provisions applicable to multiple intermediariesU.K.

(1)The provisions of this section apply where in the case of an engagement to which this Chapter applies the arrangements involve more than one relevant intermediary.

(2)All relevant intermediaries in relation to the engagement are jointly and severally liable, subject to subsection (3), to account for any amount required under the PAYE provisions to be deducted from a deemed employment payment treated as made by any of them—

(a)in respect of that engagement, or

(b)in respect of that engagement together with other engagements.

(3)An intermediary is not so liable if it has not received any payment or benefit in respect of that engagement or any such other engagement as is mentioned in subsection (2)(b).

(4)Subsection (5) applies where a payment or benefit has been made or provided, directly or indirectly, from one relevant intermediary to another in respect of the engagement.

(5)In that case, the amount taken into account in relation to any intermediary in step 1 or step 2 of section 54(1) is reduced to such extent as is necessary to avoid double-counting having regard to the amount so taken into account in relation to any other intermediary.

(6)Except as provided by subsections (2) to (5), the provisions of this Chapter apply separately in relation to each relevant intermediary.

(7)In this section “relevant intermediary” means an intermediary in relation to which the conditions specified in section 51, 52 or 53 are met.

60Meaning of “associate”U.K.

(1)In this Chapter “associate”—

(a)in relation to an individual, has the meaning given by [F169section 448 of CTA 2010], subject to the following provisions of this section;

(b)in relation to a company, means a person connected with the company; and

(c)in relation to a partnership, means any associate of a member of the partnership.

(2)Where an individual has an interest in shares or obligations of the company as a beneficiary of an employee benefit trust, the trustees are not regarded as associates of the individual by reason only of that interest except in the following circumstances.

(3)The exception is where—

(a)the individual, either alone or with any one or more associates of the individual, or

(b)any associate of the individual, with or without other such associates,

has at any time on or after 14th March 1989 been the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control more than 5% of the ordinary share capital of the company.

(4)In subsection (3) “associate” does not include the trustees of an employee benefit trust as a result only of the individual’s having an interest in shares or obligations of the trust.

(5)Sections 549 to 554 (attribution of interests in companies to beneficiaries of employee benefit trusts) apply for the purposes of subsection (3) as they apply for the purposes of the provisions listed in section 549(2).

(6)In this section “employee benefit trust” has the meaning given by sections 550 and 551.

Textual Amendments

F169Words in s. 60(1)(a) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 381 (with Sch. 2)

[F170When a person qualifies as small for a tax yearU.K.

Textual Amendments

F170Ss. 60A-60I and cross-headings inserted (6.4.2021 for the tax year 2021-22 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 1 paras. 5, 24 (with Sch. 1 paras. 30-34)

60AWhen a company qualifies as small for a tax yearU.K.

(1)For the purposes of this Chapter, a company qualifies as small for a tax year if one of the following conditions is met (but this is subject to section 60C).

(2)The first condition is that the company's first financial year is not relevant to the tax year.

(3)The second condition is that the small companies regime applies to the company for its last financial year that is relevant to the tax year.

(4)For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company's accounts and reports for the financial year ends before the beginning of the tax year.

(5)Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.

60BWhen a company qualifies as small for a tax year: joint venturesU.K.

(1)This section applies when determining for the purposes of section 60A(3) whether the small companies regime applies to a company for a financial year in a case where—

(a)at the end of the financial year the company is jointly controlled by two or more other persons, and

(b)one or more of those other persons are undertakings (“the joint venturer undertakings”).

(2)If the company is a parent company, the joint venturer undertakings are to be treated as members of the group headed by the company.

(3)If the company is not a parent company, the company and the joint venturer undertakings are to be treated as constituting a group of which the company is the parent company.

(4)In this section the expression “jointly controlled” is to be read in accordance with those provisions of international accounting standards which relate to joint ventures.

(5)Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.

60CWhen a company qualifies as small for a tax year: subsidiariesU.K.

(1)A company does not qualify as small for a tax year by reason of the condition in section 60A(3) being met if—

(a)the company is a member of a group at the end of its last financial year that is relevant to the tax year,

(b)the company is not the parent undertaking of that group at the end of that financial year, and

(c)the undertaking that is the parent undertaking of that group at that time does not qualify as small in relation to its last financial year that is relevant to the tax year.

(2)Where the parent undertaking mentioned in subsection (1)(c) is not a company, sections 382 and 383 of the Companies Act 2006 have effect for determining whether the parent undertaking qualifies as small in relation to its last financial year that is relevant to the tax year as if references in those sections to a company and a parent company included references to an undertaking and a parent undertaking.

(3)For the purposes of subsections (1)(c) and (2) a financial year of an undertaking that is not a company is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year.

(4)For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company's accounts and reports for the financial year ends before the beginning of the tax year.

(5)Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.

60DWhen a relevant undertaking qualifies as small for a tax yearU.K.

(1)Sections 60A to 60C apply in relation to a relevant undertaking as they apply in relation to a company, subject to any necessary modifications.

(2)In this section “relevant undertaking” means an undertaking in respect of which regulations have effect under—

(a)section 15(a) of the Limited Liability Partnerships Act 2000,

(b)section 1043 of the Companies Act 2006 (unregistered companies), or

(c)section 1049 of the Companies Act 2006 (overseas companies).

(3)Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.

60EWhen other undertakings qualify as small for a tax yearU.K.

(1)An undertaking that is not a company or a relevant undertaking qualifies as small for a tax year if one of the following conditions is met.

(2)The first condition is that the undertaking's first financial year is not relevant to the tax year.

(3)The second condition is that the undertaking's turnover for its last financial year that is relevant to the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006.

(4)For the purposes of this section a financial year of an undertaking is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year.

(5)In this section—

  • “relevant undertaking” has the meaning given by section 60D, and

  • “turnover”, in relation to an undertaking, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived.

(6)Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.

60FWhen other persons qualify as small for a tax yearU.K.

(1)For the purposes of this Chapter, a person who is not a company, relevant undertaking or other undertaking qualifies as small for a tax year if the person's turnover for the last calendar year before the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006.

(2)In this section—

  • “company” and “undertaking” have the same meaning as in the Companies Act 2006,

  • “relevant undertaking” has the meaning given by section 60D, and

  • “turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived.

60GSections 60A to 60F: connected personsU.K.

(1)This section applies where—

(a)it is necessary for the purposes of determining whether a person qualifies as small for a tax year (“the tax year concerned”) to first determine the person's turnover for a financial year or calendar year (“the assessment year”), and

(b)at the end of the assessment year the person is connected with one or more other persons (“the connected persons”).

(2)For the purposes of determining whether the person qualifies as small for the tax year concerned the person's turnover for the assessment year is to be taken to be the sum of—

(a)the person's turnover for the assessment year, and

(b)the relevant turnover of each of the connected persons.

(3)In subsection (2)(b) “the relevant turnover” of a connected person means—

(a)in a case where the connected person is a company, relevant undertaking or other undertaking, its turnover for its last financial year that is relevant to the tax year concerned, and

(b)in a case where the connected person is not a company, relevant undertaking or other undertaking, the turnover of the connected person for the last calendar year ending before the tax year concerned.

(4)For the purposes of subsection (3)(a)—

(a)a financial year of a company or relevant undertaking is relevant to the tax year concerned if the period for filing accounts and reports for the financial year ends before the beginning of the tax year concerned, and

(b)a financial year of any other undertaking is relevant to the tax year concerned if it ends more than 9 months before the beginning of the tax year concerned.

(5)In a case where—

(a)the person mentioned in subsection (1)(a) is a company or relevant undertaking, and

(b)at the end of the assessment period the person is a member of a group,

the person is to be treated for the purposes of this section as not being connected with any person that is a member of that group.

(6)In this section—

  • “turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived, and

  • “relevant undertaking” has the meaning given by section 60D.

(7)For provision determining whether one person is connected with another, see section 718 (connected persons).

(8)Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.

60HDuty on client to state whether it qualifies as small for a tax yearU.K.

(1)This section applies if, in the case of an engagement that meets conditions (a) to (b) in section 49(1), the client receives from the client's agent or the worker a request to state whether in the client's opinion the client qualifies as small for a tax year specified in the request.

(2)The client must provide to the person who made the request a statement as to whether in the client's opinion the client qualifies as small for the tax year specified in the request.

(3)If the client fails to provide the statement by the time mentioned in subsection (4) the duty to do so is enforceable by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(4)The time is whichever is the later of—

(a)the end of the period of 45 days beginning with the date the client receives the request, and

(b)the beginning of the period of 45 days ending with the start of the tax year specified in the request.

(5)In this section “the client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in paragraph (b) of section 49(1).

When a person has a UK connectionU.K.

60IWhen a person has a UK connection for a tax yearU.K.

(1)For the purposes of this Chapter, a person has a UK connection for a tax year if (and only if) immediately before the beginning of that tax year the person—

(a)is resident in the United Kingdom, or

(b)has a permanent establishment in the United Kingdom.

(2)In this section “permanent establishment”—

(a)in relation to a company, is to be read (by virtue of section 1007A of ITA 2007) in accordance with Chapter 2 of Part 24 of CTA 2010, and

(b)in relation to any other person, is to be read in accordance with that Chapter but as if references in that Chapter to a company were references to that person.

Modifications etc. (not altering text)

C12S. 60I applied (with effect in accordance with Sch. 1 para. 27 of the amending Act) by 2004 c. 12, s. 60(3C) (as inserted by Finance Act 2020 (c. 14), Sch. 1 para. 20 (with Sch. 1 paras. 30-34))

Interpretation]U.K.

61InterpretationU.K.

(1)In this Chapter—

  • “associate” has the meaning given by section 60;

  • “associated company” has the meaning given by [F171section 449 of CTA 2010];

  • “business” means any trade, profession or vocation and includes a [F172UK property business] [F173within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009];

  • “company” [F174(except in sections 60A to 60G)] means a body corporate or unincorporated association, and does not include a partnership;

  • “employer’s national insurance contributions” means secondary Class 1 or Class 1A national insurance contributions;

  • [F175“engagement to which Chapter 10 applies” has the meaning given by section 61M(5);]

  • “engagement to which this Chapter applies” has the meaning given by section 49(5);

  • “national insurance contributions” means contributions under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992;

  • “PAYE provisions” means the provisions of Part 11 or PAYE regulations;

  • “the relevant engagements” has the meaning given by section 50(4).

(2)References in this Chapter to payments or benefits received or receivable from a partnership or unincorporated association include payments or benefits to which a person is or may be entitled in the person’s capacity as a member of the partnership or association.

(3)For the purposes of this Chapter—

(a)anything done by or in relation to an associate of an intermediary is treated as done by or in relation to the intermediary, and

(b)a payment or other benefit provided to a member of an individual’s family or household is treated as provided to the individual.

[F176(4)For the purposes of this Chapter, two people living together as if they were a married couple or civil partners are treated as if they were married to, or civil partners of, each other.]

Textual Amendments

F171Words in s. 61(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 382 (with Sch. 2)

F173Words in s. 61(1) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 549 (with Sch. 2 Pts. 1, 2)

F174Words in s. 61(1) inserted (6.4.2021 for the tax year 2021-22 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 1 paras. 6, 24 (with Sch. 1 paras. 30-34)

F175Words in s. 61(1) inserted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 5

Modifications etc. (not altering text)

C13S. 61(4)(5) applied by S.I. 2000/727, reg 16 (as inserted (6.4.2017) by The Social Security (Miscellaneous Amendments No. 2) Regulations 2017 (S.I. 2017/373), regs. 1, 2(13))

[F177Chapter 9U.K.Managed service companies

Textual Amendments

F177Pt. 2 Ch. 9 inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), s. 25(2), Sch. 3 para. 4

Application of this ChapterU.K.

61AScope of this ChapterU.K.

(1)This Chapter has effect with respect to the provision of services by a managed service company.

(2)Nothing in this Chapter—

(a)affects the operation of Chapter 7 of this Part (agency workers), or

(b)applies to payments or transfers to which section 966(3) or (4) of ITA 2007 applies (visiting performers: duty to deduct and account for sums representing income tax).

[F178(3)See also section 61D(4A) (disapplication of this Chapter if Chapter 10 applies).]

Textual Amendments

F178S. 61A(3) inserted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 6

61BMeaning of “managed service company”U.K.

(1)A company is a “managed service company” if—

(a)its business consists wholly or mainly of providing (directly or indirectly) the services of an individual to other persons,

(b)payments are made (directly or indirectly) to the individual (or associates of the individual) of an amount equal to the greater part or all of the consideration for the provision of the services,

(c)the way in which those payments are made would result in the individual (or associates) receiving payments of an amount (net of tax and national insurance) exceeding that which would be received (net of tax and national insurance) if every payment in respect of the services were employment income of the individual, and

(d)a person who carries on a business of promoting or facilitating the use of companies to provide the services of individuals (“an MSC provider”) is involved with the company.

(2)An MSC provider is “involved with the company” if the MSC provider or an associate of the MSC provider—

(a)benefits financially on an ongoing basis from the provision of the services of the individual,

(b)influences or controls the provision of those services,

(c)influences or controls the way in which payments to the individual (or associates of the individual) are made,

(d)influences or controls the company's finances or any of its activities, or

(e)gives or promotes an undertaking to make good any tax loss.

(3)A person does not fall within subsection (1)(d) merely by virtue of providing legal or accountancy services in a professional capacity.

(4)A person does not fall within subsection (1)(d) merely by virtue of carrying on a business consisting only of placing individuals with persons who wish to obtain their services (including by contracting with companies which provide their services).

(5)Subsection (4) does not apply if the person or an associate of the person—

(a)does anything within subsection (2)(c) or (e), or

(b)does anything within subsection (2)(d) other than influencing the company's finances or activities by doing anything within subsection (2)(b).

61CSection 61B: supplementaryU.K.

(1)The Treasury may by order provide that persons of a prescribed description do not fall within section 61B(1)(d).

(2)An order under subsection (1) may be made so as to have effect in relation to the whole of the tax year in which it is made.

(3)In section 61B and this section, “company” means a body corporate or partnership.

(4)References in section 61B to an associate of a person (“P”) include a person who, for the purpose of securing that the individual's services are provided by a company, acts in concert with P (or with P and other persons).

(5)In section 61B(2)(e), “undertaking to make good any tax loss” means an undertaking (in any terms) to make good (in whole or in part, and by any means) any cost to the individual or an associate of the individual resulting from a relevant provision, or a particular kind of relevant provision, applying in relation to payments made to the individual or associate.

(6)In subsection (5) “relevant provision” means—

(a)a provision of the Tax Acts,

(b)an enactment relating to national insurance, or

(c)a provision of subordinate legislation made under any such provision or enactment.

The deemed employment paymentU.K.

61DWorker treated as receiving earnings from employmentU.K.

(1)This section applies if—

(a)the services of an individual (“the worker”) are provided (directly or indirectly) by a managed service company (“the MSC”),

(b)the worker, or an associate of the worker, receives (from any person) a payment or benefit which can reasonably be taken to be in respect of the services, and

(c)the payment or benefit is not earnings (within Chapter 1 of Part 3) received by the worker directly from the MSC.

(2)The MSC is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment (“the deemed employment payment”).

(3)The deemed employment payment is treated as made at the time the payment or benefit mentioned in subsection (1)(b) is received.

(4)In this Chapter—

  • “the worker” has the meaning given by subsection (1),

  • “the relevant services” means the services mentioned in that subsection, and

  • “the client” means the person to whom the relevant services are provided.

[F179(4A)This section does not apply where the provision of the relevant services gives rise (directly or indirectly) to an engagement to which Chapter 10 applies and either—

(a)the client for the purposes of section 61M(1) is a public authority, or

(b)the client for the purposes of section 61M(1)—

(i)qualifies as medium or large for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received, and

(ii)has a UK connection for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received.

(4B)Sections 60I (when a person has a UK connection for a tax year), 61K(3) (when a person qualifies as medium or large for a tax year) and 61L (meaning of public authority) apply for the purposes of subsection (4A).

(4C)It does not matter for the purposes of subsection (4A) whether the client for the purposes of this Chapter is also “the client” for the purposes of section 61M(1).]

(5)Section 61F supplements this section.

Textual Amendments

F179S. 61D(4A)-(4C) substituted for s. 61D(4A) (with effect in accordance with Sch. 1 para. 26 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 18 (with Sch. 1 paras. 30-34)

61ECalculation of deemed employment paymentU.K.

(1)The amount of the deemed employment payment is the amount resulting from the following steps—

Step 1

Find (applying section 61F) the amount of the payment or benefit mentioned in section 61D(1)(b).

Step 2

Deduct (applying Chapters 1 to 5 of Part 5) the amount of any expenses met by the worker that would have been deductible from the taxable earnings from the employment if—

(a)the worker had been employed by the client to provide the relevant services, and

(b)the expenses had been met by the worker out of those earnings.

If the result at this point is nil or a negative amount, there is no deemed employment payment.

Step 3

Assume that the result of step 2 represents an amount together with employer's national insurance contributions on it, and deduct what (on that assumption) would be the amount of those contributions.

The result is the deemed employment payment.

(2)In step 2 of subsection (1), the reference to expenses met by the worker includes, where the MSC is a partnership and the worker is a member of the partnership, expenses met by the worker for and on behalf of the partnership.

(3)In step 2 of subsection (1), the expenses deductible include the amount of any mileage allowance relief which the worker would have been entitled to in respect of the use of a vehicle falling within subsection (4) if—

(a)the worker had been employed by the client to provide the relevant services, and

(b)the vehicle had not been a company vehicle (within the meaning of Chapter 2 of Part 4).

(4)A vehicle falls within this subsection if—

(a)it is provided by the MSC for the worker, or

(b)where the MSC is a partnership and the worker is a member of the partnership, it is provided by the worker for the purposes of the business of the partnership.

(5)For the purposes of subsection (1) any necessary apportionment of payments or benefits that are referable partly to the provision of the relevant services and partly to other matters is to be made on a just and reasonable basis.

61FSections 61D and 61E: application of rules relating to earnings from employmentU.K.

(1)The following provisions apply for the purposes of sections 61D and 61E.

(2)A “payment or benefit” means anything that, if received by an employee for performing the duties of an employment, would be general earnings from the employment.

(3)The amount of a payment or benefit is taken to be—

(a)in the case of a payment or cash benefit, the amount received, and

(b)in the case of a non-cash benefit, the cash equivalent of the benefit.

(4)The cash equivalent of a non-cash benefit is taken to be—

(a)the amount that would be general earnings if the benefit were general earnings from an employment, or

(b)in the case of living accommodation, whichever is the greater of that amount and the cash equivalent determined in accordance with section 398(2).

(5)A payment or benefit is treated as received—

(a)in the case of a payment or cash benefit, when payment is made of or on account of the payment or benefit;

(b)in the case of a non-cash benefit, when it would have been treated as received for the purposes of Chapter 4 or 5 of this Part (see section 19 or 32) if—

(i)the worker had been an employee, and

(ii)the benefit had been provided by reason of the employment.

61GApplication of Income Tax Acts in relation to deemed employmentU.K.

(1)The Income Tax Acts (in particular, the PAYE provisions) apply in relation to the deemed employment payment as follows.

(2)They apply as if—

(a)the worker were employed by the MSC to provide the relevant services, and

(b)the deemed employment payment were a payment by the MSC of earnings from that employment;

but this is subject to subsection (3).

(3)No deduction under Part 5 (deductions allowed from employment income) or section 232 (mileage allowance relief) may be made from the deemed employment payment.

F180(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F180(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Where the MSC is a partnership and the worker is a member of the partnership, the deemed employment payment is treated as received by the worker in the worker's personal capacity and not as income of the partnership.

(7)Where—

(a)the worker is resident in the United Kingdom, and

(b)the relevant services are provided in the United Kingdom,

the MSC is treated as having a place of business in the United Kingdom, whether or not it in fact does so.

Textual Amendments

F180S. 61G(4)(5) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 14

Supplementary provisionsU.K.

61HRelief in case of distributions by managed service companyU.K.

(1)A claim for relief may be made under this section where the MSC—

(a)is a body corporate,

(b)is treated as making a deemed employment payment in any tax year, and

(c)either in that tax year (whether before or after that payment is treated as made), or in a subsequent tax year, makes a distribution (a “relevant distribution”).

(2)A claim for relief under this section must be made—

(a)by the MSC by notice to an officer of Revenue and Customs, and

(b)within 5 years after 31st January following the tax year in which the distribution is made.

(3)If on a claim being made an officer of Revenue and Customs is satisfied that relief should be given in order to avoid a double charge to tax, the officer must direct the giving of such relief by way of amending any assessment, by discharge or repayment of tax, or otherwise, as appears to the officer appropriate.

(4)Relief under this section is given by setting the amount of the deemed employment payment against the relevant distribution so as to reduce the distribution.

(5)In the case of more than one relevant distribution, an officer of Revenue and Customs must exercise the power conferred by this section so as to secure that so far as practicable relief is given by setting the amount of a deemed employment payment—

(a)against relevant distributions of the same tax year before those of other years,

(b)against relevant distributions received by the worker before those received by another person, and

(c)against relevant distributions of earlier years before those of later years.

F181(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F181S. 61H(6) omitted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 1 para. 61(2)

61IMeaning of “associate”U.K.

(1)Subsections (2) to (4) apply for the purposes of this Chapter.

(2)“Associate”, in relation to an individual, means—

(a)a member of the individual's family or household,

(b)a relative of the individual,

(c)a partner of the individual, or

(d)the trustee of any settlement in relation to which the individual, or a relative of the individual or member of the individual's family (living or dead), is or was a settlor.

(3)“Associate”, in relation to a company, means a person connected with the company.

(4)“Associate”, in relation to a partnership, means any associate of a member of the partnership.

(5)If—

(a)a managed service company (“the MSC”) is a partnership, and

(b)a person is an associate of another person by virtue only of being a member of the partnership,

the person is to be treated, for the purposes of this Chapter as it applies in relation to the MSC, as if the person were not an associate of that other person.

(6)In subsection (2), “relative” means ancestor, lineal descendant, brother or sister.

[F182(7)For the purposes of subsection (2), two people living together as if they were a married couple or civil partners are treated as if they were married to, or civil partners of, each other.]

Textual Amendments

61JInterpretation of ChapterU.K.

(1)In this Chapter—

  • “associate” has the meaning given by section 61I,

  • “business” means any trade, profession or vocation,

  • “the client” has the meaning given by section 61D(4),

  • “employer's national insurance contributions” means secondary Class 1 or Class 1A national insurance contributions,

  • [F183“ engagement to which Chapter 10 applies” has the meaning given by section 61M(5),]

  • “managed service company” has the meaning given by section 61B,

  • “national insurance contributions” means contributions under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992,

  • “PAYE provisions” means the provisions of Part 11 or PAYE regulations,

  • “the relevant services” has the meaning given by section 61D(4), and

  • “the worker” has the meaning given by section 61D(4).

(2)Nothing in section 995 of ITA 2007 (meaning of control) applies for the purposes of this Chapter.]

Textual Amendments

F183Words in s. 61J(1) inserted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 8

[F184CHAPTER 10U.K.[F185Workers' services provided through intermediaries to public authorities or medium or large clients]

Textual Amendments

F184Pt. 2 Ch. 10 inserted (with effect in accordance with Sch. 1 para. 16 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 9

F185Pt. 2 Ch. 10 heading substituted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 8 (with Sch. 1 paras. 30-34)

61KScope of this ChapterU.K.

(1)This Chapter has effect with respect to the provision of services [F186through an intermediary in a case where the services are provided to a person who—

(a)is a public authority, or

(b)qualifies as medium or large and has a UK connection for a tax year]

(2)Nothing in this Chapter—

(a)affects the operation of Chapter 7 of this Part (agency workers), or

(b)applies to payments or transfers to which section 966(3) or (4) of ITA 2007 applies (visiting performers: duty to deduct and account for sums representing income tax).

[F187(3)For the purposes of this Chapter a person qualifies as medium or large for a tax year if the person does not qualify as small for the tax year for the purposes of Chapter 8 of this Part (see sections 60A to 60G).

(4)Section 60I (when a person has a UK connection for a tax year) applies for the purposes of this Chapter.]

Textual Amendments

F186Words in s. 61K(1) substituted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 9(2) (with Sch. 1 paras. 30-34)

F187S. 61K(3)(4) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 9(3) (with Sch. 1 paras. 30-34)

Modifications etc. (not altering text)

C14S. 61K(3) applied (with effect in accordance with Sch. 1 para. 27 of the amending Act) by 2004 c. 12, s. 60(3C) (as inserted by Finance Act 2020 (c. 14), Sch. 1 para. 20 (with Sch. 1 paras. 30-34))

61LMeaning of “public authority”U.K.

(1)In this Chapter “public authority” means—

(a)a public authority as defined by the Freedom of Information Act 2000,

[F188(aa)a body specified in section 23(3) of the Freedom of Information Act 2000,]

(b)a Scottish public authority as defined by the Freedom of Information (Scotland) Act 2002 (asp 13),

[F189(ba)the Advanced Research and Invention Agency,]

(c)the Corporate Officer of the House of Commons,

(d)the Corporate Officer of the House of Lords,

(e)the National Assembly for Wales Commission, F190...

(f)the Northern Ireland Assembly Commission [F191, or

(g)a company connected with any person mentioned in paragraphs (a) to (f).]

(2)An authority within paragraph (a) or (b) of subsection (1) is a public authority for the purposes of this Chapter in relation to all its activities even if provisions of the Act mentioned in that paragraph do not apply to all information held by the authority.

(3)Subsection (1) is subject to subsection (4).

(4)A primary-healthcare provider is a public authority for the purposes of this Chapter only if the primary-healthcare provider—

(a)has a registered patient list for the purposes of relevant medical-services regulations,

(b)is within paragraph 43A in Part 3 of Schedule 1 to the Freedom of Information Act 2000 (providers of primary healthcare services in England and Wales) by reason of being a person providing primary dental services,

(c)is within paragraph 51 in that Part of that Schedule (providers of healthcare services in Northern Ireland) by reason of being a person providing general dental services, or

(d)is within paragraph 33 in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002 (providers of healthcare services in Scotland) by reason of being a person providing general dental services.

(5)In this section—

  • “primary-healthcare provider” means an authority that is within subsection (1)(a) or (b) only because it is within a relevant paragraph,

  • “relevant paragraph” means—

    (a)

    any of paragraphs 43A to 45A and 51 in Part 3 of Schedule 1 to the Freedom of Information Act 2000, or

    (b)

    any of paragraphs 33 to 35 in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002, and

  • “relevant medical-services regulations” means any of the following—

    (a)

    the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) Regulations 2004 (S.I. 2004/906),

    (b)

    the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) (Wales) Regulations 2004 (S.I. 2004/1017),

    (c)

    the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) (Scotland) Regulations 2004 (S.S.I. 2004/162), and

    (d)

    the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) Regulations (Northern Ireland) 2004 (S.R. (N.I.) 2004 No. 477).

(6)The Commissioners for Her Majesty's Revenue and Customs may by regulations amend this section in consequence of—

(a)any amendment or revocation of any regulations for the time being referred to in this section,

(b)any amendment in Part 3 of Schedule 1 to the Freedom of Information Act 2000, or

(c)any amendment in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002.

Textual Amendments

F188S. 61L(1)(aa) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 10(a) (with Sch. 1 paras. 30-34)

F190Word in s. 61L(1)(e) omitted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by virtue of Finance Act 2020 (c. 14), Sch. 1 para. 10(b) (with Sch. 1 paras. 30-34)

F191S. 61L(1)(g) and word inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 10(c) (with Sch. 1 paras. 30-34)

Modifications etc. (not altering text)

C15S. 61L applied (with effect in accordance with Sch. 1 para. 27 of the amending Act) by 2004 c. 12, s. 60(3C) (as inserted by Finance Act 2020 (c. 14), Sch. 1 para. 20 (with Sch. 1 paras. 30-34))

61MEngagements to which Chapter appliesU.K.

(1)Sections 61N to 61R apply where—

(a)an individual (“the worker”) personally performs, or is under an obligation personally to perform, services for another person (“the client”),

F192(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)the services are provided not under a contract directly between the client and the worker but under arrangements involving a third party (“the intermediary”), F193...

[F194(ca)the client—

(i)is a public authority, or

(ii)is a person who qualifies as medium or large and has a UK connection for one or more tax years during which the arrangements mentioned in paragraph (c) have effect, and]

(d)the circumstances are such that—

(i)if the services were provided under a contract directly between the client and the worker, the worker would be regarded for income tax purposes as an employee of the client or the holder of an office under the client, or

(ii)the worker is an office-holder who holds that office under the client and the services relate to the office.

[F195(1A)But sections 61N to 61R do not apply if—

(a)the client is an individual, and

(b)the services are provided otherwise than for the purposes of the client's trade or business.]

(2)The reference in subsection (1)(c) to a “third party” includes a partnership or unincorporated association of which the worker is a member.

(3)The circumstances referred to in subsection (1)(d) include the terms on which the services are provided, having regard to the terms of the contracts forming part of the arrangements under which the services are provided.

(4)Holding office as statutory auditor of the client does not count as holding office under the client for the purposes of subsection (1)(d), and here “statutory auditor” means a statutory auditor within the meaning of Part 42 of the Companies Act 2006 (see section 1210 of that Act).

(5)In this Chapter “engagement to which this Chapter applies” means any such provision of services as is mentioned in subsection (1).

Textual Amendments

F192S. 61M(1)(b) omitted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by virtue of Finance Act 2020 (c. 14), Sch. 1 para. 11(2)(a) (with Sch. 1 paras. 30-34)

F193Word in s. 61M(1)(c) omitted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by virtue of Finance Act 2020 (c. 14), Sch. 1 para. 11(2)(b) (with Sch. 1 paras. 30-34)

F194S. 61M(1)(ca) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 11(2)(c) (with Sch. 1 paras. 30-34)

F195S. 61M(1A) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 11(3) (with Sch. 1 paras. 30-34)

61NWorker treated as receiving earnings from employmentU.K.

(1)If one of Conditions A to C is met, identify the chain of two or more persons where—

(a)the highest person in the chain is the client,

(b)the lowest person in the chain is the intermediary, and

(c)each person in the chain above the lowest makes a chain payment to the person immediately below them in the chain.

(See section 61U for cases where one of Conditions A to C is treated as being met.)

(2)In this section and sections 61O to 61S—

  • “chain payment” means a payment, or money's worth or any other benefit, that can reasonably be taken to be for the worker's services to the client,

  • “make”—

    (a)

    in relation to a chain payment that is money's worth, means transfer, and

    (b)

    in relation to a chain payment that is a benefit other than a payment or money's worth, means provide, and

  • “the fee-payer” means the person in the chain immediately above the lowest.

(3)The fee-payer is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment (“the deemed direct payment”), but this is subject to subsections (5) to (7) [F196and (8A)] and sections 61T [F197, 61TA] [F198, 61V and 61WA].

(4)The deemed direct payment is treated as made at the same time as the chain payment made by the fee-payer.

[F199(5)Unless and until the client gives a status determination statement to the worker (see section 61NA), subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to [F200sections 61V and 61WA].

(5A)Subsections (6) and (7) apply, subject to sections 61T, 61TA [F201, 61V and 61WA], if—

(a)the client has given a status determination statement to the worker,

(b)the client is not the fee-payer, and

(c)the fee-payer is not a qualifying person.]

(6)If there is no person in the chain below the highest and above the lowest who is a qualifying person, subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client.

(7)Otherwise, subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the person in the chain who—

(a)is above the lowest,

(b)is a qualifying person, and

(c)is lower in the chain than any other person in the chain who—

(i)is above the lowest, and

(ii)is a qualifying person.

(8)In subsections (5) to (7) a “qualifying person” is a person who—

[F202(za)has been given by the person immediately above them in the chain the status determination statement given by the client to the worker,]

(a)is resident in the United Kingdom or has a place of business in the United Kingdom,

(b)is not a person who is controlled by—

(i)the worker, alone or with one or more associates of the worker, or

(ii)an associate of the worker, with or without other associates of the worker, and

(c)if a company, is not one in which—

(i)the worker, alone or with one or more associates of the worker, or

(ii)an associate of the worker, with or without other associates of the worker,

has a material interest (within the meaning given by section 51(4) and (5)).

[F203(8A)If the client is not a public authority, a person is to be treated by subsection (3) as making a deemed direct payment to the worker only if the chain payment made by the person is made in a tax year for which the client qualifies as medium or large and has a UK connection.]

(9)Condition A is that—

(a)the intermediary is a company, and

(b)the conditions in section 61O are met in relation to the intermediary.

(10)Condition B is that—

(a)the intermediary is a partnership,

(b)the worker is a member of the partnership,

(c)the provision of the services is by the worker as a member of the partnership, and

(d)the condition in section 61P is met in relation to the intermediary.

(11)Condition C is that the intermediary is an individual.

(12)Where a payment, money's worth or any other benefit can reasonably be taken to be for both—

(a)the worker's services to the client, and

(b)anything else,

then, for the purposes of this Chapter, so much of it as can, on a just and reasonable apportionment, be taken to be for the worker's services is to be treated as (and the rest is to be treated as not being) a payment, or money's worth or another benefit, that can reasonably be taken to be for the worker's services.

Textual Amendments

F196Words in s. 61N(3) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 12(2)(a) (with Sch. 1 paras. 30-34)

F197Word in s. 61N(3) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 12(2)(b) (with Sch. 1 paras. 30-34)

F198Words in s. 61N(3) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(2)(a)

F199S. 61N(5)(5A) substituted for s. 61N(5) (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 12(3) (with Sch. 1 paras. 30-34)

F200Words in s. 61N(5) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(2)(b)

F201Words in s. 61N(5A) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(2)(c)

F202S. 61N(8)(za) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 12(4) (with Sch. 1 paras. 30-34)

F203S. 61N(8A) inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 12(5) (with Sch. 1 paras. 30-34)

[F20461NAMeaning of status determination statementU.K.

(1)For the purposes of section 61N “status determination statement” means a statement by the client that—

(a)states that the client has concluded that the condition in section 61M(1)(d) is met in the case of the engagement and explains the reasons for that conclusion, or

(b)states (albeit incorrectly) that the client has concluded that the condition in section 61M(1)(d) is not met in the case of the engagement and explains the reasons for that conclusion.

(2)But a statement is not a status determination statement if the client fails to take reasonable care in coming to the conclusion mentioned in it.

(3)For further provisions concerning status determination statements, see section 61T (client-led status disagreement process) and section 61TA (duty for client to withdraw status determination statement if it ceases to be medium or large).]

Textual Amendments

F204S. 61NA inserted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 13 (with Sch. 1 paras. 30-34)

61OConditions where intermediary is a companyU.K.

(1)The conditions mentioned in section 61N(9)(b) are that—

(a)the intermediary is not an associated company of the client that falls within subsection (2), and

[F205(b)subsection (1A) or (1B) is satisfied.]

[F206(1A)This subsection is satisfied where the worker has a material interest in the intermediary.

(1B)This subsection is satisfied where—

(a)the worker has a non-material interest in the intermediary,

(b)the worker—

(i)has received,

(ii)has rights which entitle, or which in any circumstances would entitle, the worker to receive, or

(iii)expects to receive,

a chain payment from the intermediary, and

(c)the chain payment does not, or will not, wholly constitute employment income of the worker (apart from as a result of this Chapter).]

(2)An associated company of the client falls within this subsection if it is such a company by reason of the intermediary and the client being under the control—

(a)of the worker, or

(b)of the worker and other persons.

(3)The worker is treated as having a material interest in the intermediary if—

(a)the worker, alone or with one or more associates of the worker, or

(b)an associate of the worker, with or without other associates of the worker,

has a material interest in the intermediary.

(4)For this purpose “material interest” has the meaning given by section 51(4) and (5).

[F207(4A)The worker is treated as having a non-material interest in the intermediary if—

(a)the worker, alone or with one or more associates of the worker, or

(b)an associate of the worker, with or without other associates of the worker,

has a non-material interest in the intermediary.

(4B)For this purpose a non-material interest means—

(a)beneficial ownership of, or the ability to control, directly or through the medium of other companies or by any other indirect means, 5% or less of the ordinary share capital of the company,

(b)possession of, or entitlement to acquire, rights entitling the holder to receive 5% or less of any distributions that may be made by the company, or

(c)where the company is a close company, possession of, or entitlement to acquire, rights that would in the event of the winding up of the company, or in any other circumstances, entitle the holder to receive 5% or less of the assets that would then be available for distribution among the participators.

(4C)In subsection (4B)(c) “participator” has the meaning given by section 454 of CTA 2010.]

(5)In this section “associated company” has the meaning given by section 449 of CTA 2010.

Textual Amendments

F205S. 61O(1)(b) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(3)(a)

F206S. 61O(1A)(1B) inserted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(3)(b)

F207S. 61O(4A)-(4C) inserted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(3)(c)

61PConditions where intermediary is a partnershipU.K.

(1)The condition mentioned in section 61N(10)(d) is—

(a)that the worker, alone or with one or more relatives, is entitled to 60% or more of the profits of the partnership, or

(b)that most of the profits of the partnership derive from the provision of services under engagements to which one or other of this Chapter and Chapter 8 applies—

(i)to a single client, or

(ii)to a single client together with associates of that client, or

(c)that under the profit sharing arrangements the income of any of the partners is based on the amount of income generated by that partner by the provision of services under engagements to which one or other of this Chapter and Chapter 8 applies.

(2)In subsection (1)(a) “relative” means spouse or civil partner, parent or child or remoter relation in the direct line, or brother or sister.

(3)Section 61(4) and (5) apply for the purposes of this section as they apply for the purposes of Chapter 8.

61QCalculation of deemed direct paymentU.K.

(1)The amount of the deemed direct payment is the amount resulting from the following steps—

  • Step 1 Identify the amount or value of the chain payment made by the person who is treated as making the deemed direct payment, and deduct from that amount so much of it (if any) as is in respect of value added tax.

  • Step 2 Deduct, from the amount resulting from Step 1, so much of that amount as represents the direct cost to the intermediary of materials used, or to be used, in the performance of the services.

  • Step 3 Deduct, at the option of the person treated as making the deemed direct payment, from the amount resulting from Step 2, so much of that amount as represents expenses met by the intermediary that would have been deductible from the taxable earnings from the employment if—

    (a)

    the worker had been employed by the client, and

    (b)

    the expenses had been met by the worker out of those earnings.

  • Step 4 If the amount resulting from the preceding Steps is nil or negative, there is no deemed direct payment. Otherwise, that amount is the amount of the deemed direct payment.

(2)For the purposes of Step 1 of subsection (1), any part of the amount or value of the chain payment which is employment income of the worker by virtue of section 863G(4) of ITTOIA 2005 (salaried members of limited liability partnerships: anti-avoidance) is to be ignored.

(3)In subsection (1), the reference to the amount or value of the chain payment means the amount or value of that payment before the deduction (if any) permitted under section 61S.

(4)If the actual amount or value of the chain payment mentioned in Step 1 of subsection (1) is such that its recipient bears the cost of amounts due under PAYE regulations or contributions regulations in respect of the deemed direct payment, that Step applies as if the amount or value of that chain payment were what it would be if the burden of that cost were not being passed on through the setting of the level of the payment.

(5)In Step 3 of subsection (1), the reference to expenses met by the intermediary includes—

(a)expenses met by the worker and reimbursed by the intermediary, and

(b)where the intermediary is a partnership and the worker is a member of the partnership, expenses met by the worker for and on behalf of the partnership.

(6)In subsection (4) “contributions regulations” means regulations under the Contributions and Benefits Act providing for primary Class 1 contributions to be paid in a similar manner to income tax in relation to which PAYE regulations have effect (see, in particular, paragraph 6(1) of Schedule 1 to the Act); and here “primary Class 1 contribution” means a primary Class 1 contribution within the meaning of Part 1 of the Contributions and Benefits Act.

61RApplication of Income Tax Acts in relation to deemed employmentU.K.

(1)The Income Tax Acts (in particular, Part 11 and PAYE regulations) apply in relation to the deemed direct payment as follows.

(2)They apply as if—

(a)the worker were employed by the person treated as making the deemed direct payment, and

(b)the services were performed, or to be performed, by the worker in the course of performing the duties of that employment.

(3)The deemed direct payment is treated in particular—

(a)as taxable earnings from the employment for the purpose of securing that any deductions under Chapters 2 to 6 of Part 5 do not exceed the deemed direct payment, and

(b)as taxable earnings from the employment for the purposes of section 232.

F208(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F208(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Where the intermediary is a partnership or unincorporated association, the deemed direct payment is treated as received by the worker in the worker's personal capacity and not as income of the partnership or association.

F209(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F208S. 61R(4)(5) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 14

F209S. 61R(7) omitted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by virtue of Finance Act 2020 (c. 14), Sch. 1 para. 15 (with Sch. 1 paras. 30-34)

61SDeductions from chain paymentsU.K.

(1)This section applies if, as a result of section 61R, a person who is treated as making a deemed direct payment is required under PAYE Regulations to pay an amount to the Commissioners for Her Majesty's Revenue and Customs (“the Commissioners”) in respect of the payment.

(But see subsection (4)).

(2)The person may deduct from the underlying chain payment an amount which is equal to the amount payable to the Commissioners, but where the amount or value of the underlying chain payment is treated by section 61Q(4) as increased by the cost of any amount due under PAYE Regulations, the amount that may be deducted is limited to the difference (if any) between the amount payable to the Commissioners and the amount of that increase.

(3)Where a person in the chain other than the intermediary receives a chain payment from which an amount has been deducted in reliance on subsection (2) or this subsection, that person may deduct the same amount from the chain payment made by them.

(4)This section does not apply in a case to which 61V(2) applies ([F210relevant person] treated as making deemed direct payment).

(5)In subsection (2) “the underlying chain payment” means the chain payment whose amount is used at Step 1 of section 61Q(1) as the starting point for calculating the amount of the deemed direct payment.

Textual Amendments

F210Words in s. 61S(4) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(4)

[F21161TClient-led status disagreement processU.K.

(1)This section applies if, before the final chain payment is made in the case of an engagement to which this Chapter applies, the worker or the deemed employer makes representations to the client that the conclusion contained in a status determination statement is incorrect.

(2)The client must either—

(a)give a statement to the worker or (as the case may be) the deemed employer that—

(i)states that the client has considered the representations and has decided that the conclusion contained in the status determination statement is correct, and

(ii)states the reasons for that decision, or

(b)give a new status determination statement to the worker and the deemed employer that—

(i)contains a different conclusion from the conclusion contained in the previous status determination statement,

(ii)states the date from which the client considers that the conclusion contained in the new status determination statement became correct, and

(iii)states that the previous status determination statement is withdrawn.

(3)If the client fails to comply with the duty in subsection (2) before the end of the period of 45 days beginning with the date the client receives the representations, section 61N(3) and (4) has effect from the end of that period until the duty is complied with as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to [F212sections 61V and 61WA].

(4)A new status determination statement given to the deemed employer under subsection (2)(b) is to be treated for the purposes of section 61N(8)(za) as having been given to the deemed employer by the person immediately above the deemed employer in the chain.

(5)In this section—

  • “the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment;

  • “status determination statement” has the meaning given by section 61NA.

Textual Amendments

F211Ss. 61T-61TA substituted for s. 61T (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 16 (with Sch. 1 paras. 30-34)

F212Words in s. 61T(3) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(5)

61TADuty for client to withdraw status determination statement if it ceases to be medium or largeU.K.

(1)This section applies if in the case of an engagement to which this Chapter applies—

(a)the client is not a public authority,

(b)the client gives a status determination statement to the worker, the client's agent or both, and

(c)the client does not (but for this section) qualify as medium or large for a tax year beginning after the status determination statement is given.

(2)Before the beginning of the tax year the client must give a statement to the relevant person, or (as the case may be) to both of the relevant persons, stating—

(a)that the client does not qualify as medium or large for the tax year, and

(b)that the status determination statement is withdrawn with effect from the beginning of the tax year.

(3)If the client fails to comply with that duty the following rules apply in relation to the engagement for the tax year—

(a)the client is to be treated as medium or large for the tax year, and

(b)section 61N(3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client.

(4)For the purposes of subsection (2)—

(a)the worker is a relevant person if the status determination statement was given to the worker, and

(b)the deemed employer is a relevant person if the status determination statement was given to the client's agent.

(5)In this section—

  • “client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in section 61M(1)(c);

  • “the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment;

  • “status determination statement” has the meaning given by section 61NA.]

Textual Amendments

F211Ss. 61T-61TA substituted for s. 61T (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 16 (with Sch. 1 paras. 30-34)

61UInformation to be provided by worker [F213or intermediary] and consequences of failureU.K.

(1)In the case of an engagement to which this Chapter applies, [F214the relevant person] must inform the potential deemed employer of which one of the following is applicable—

(a)that one of conditions A to C in section 61N is met in the case;

(b)that none of conditions A to C in section 61N is met in the case.

(2)If [F215the relevant person] has not complied with subsection (1) then, for the purposes of section 61N(1), one of conditions A to C in section 61N is to be treated as met.

(3)In this section [F216—

  • “relevant person” means the worker or, in a case where the worker has not complied with subsection (1), the intermediary;]

  • “the potential deemed employer” is the person who, if one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3).

Textual Amendments

F213Words in s. 61U heading inserted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(6)(a)

F214Words in s. 61U(1) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(6)(b)

F215Words in s. 61U(2) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(6)(c)

F216Words in s. 61U(3) inserted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(6)(d)

61VConsequences of providing fraudulent informationU.K.

(1)Subsection (2) applies if in any case—

(a)a person (“the deemed employer”) would, but for this section, be treated by section 61N(3) as making a payment to another person (“the services-provider”), and

(b)the fraudulent documentation condition is met.

(2)Section 61N(3) has effect in the case as if the reference to the fee-payer were a reference to the [F217relevant person (or if more than one, the first relevant person) in relation to whom the fraudulent documentation condition is met], but—

(a)section 61N(4) continues to have effect as if the reference to the fee-payer were a reference to the deemed employer, and

(b)Step 1 of section 61Q(1) continues to have effect as referring to the chain payment made by the deemed employer.

(3)Subsection (2) has effect even though that [F218may involve a services-provider] being treated as both employer and employee in relation to the deemed employment under section 61N(3).

(4)“The fraudulent documentation condition” is that a relevant person provided any person with a fraudulent document intended to constitute evidence—

(a)that the case is not an engagement to which this Chapter applies, or

(b)that none of conditions A to C in section 61N is met in the case.

(5)A “relevant person” is—

(a)the services-provider;

(b)a person connected with the services-provider;

(c)if the intermediary in the case is a company, an office-holder in that company;

[F219(d)a person in the chain who is resident in the United Kingdom or has a place of business in the United Kingdom.]

Textual Amendments

F217Words in s. 61V(2) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(7)(a)

F218Words in s. 61V(3) substituted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(7)(b)

F219S. 61V(5)(d) inserted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(7)(c)

61WPrevention of double charge to tax and allowance of certain deductionsU.K.

(1)Subsection (2) applies where—

(a)a person (“the payee”) receives a payment or benefit (“the end-of-line remuneration”) from another person (“the paying intermediary”),

(b)the end-of-line remuneration can reasonably be taken to represent remuneration for services of the payee to a [F220another person (“the client”)],

(c)a payment (“the deemed payment”) has been treated by section 61N(3) as made to the payee,

(d)the underlying chain payment can reasonably be taken to be for the same services of the payee to [F221the client], and

(e)the recipient of the underlying chain payment has (whether by deduction from that payment or otherwise) borne the cost of any amounts due, under PAYE regulations and contributions regulations in respect of the deemed payment, from the person treated by section 61N(3) as making the deemed payment.

(2)For income tax purposes, the paying intermediary and the payee may treat the amount of the end-of-line remuneration as reduced (but not below nil) by any one or more of the following—

(a)the amount (see section 61Q) of the deemed payment;

(b)the amount of any capital allowances in respect of expenditure incurred by the paying intermediary that could have been deducted from employment income under section 262 of CAA 2001 if the payee had been employed by the [F222client] and had incurred the expenditure;

(c)the amount of any contributions made, in the same tax year as the end-of-line remuneration, for the benefit of the payee by the paying intermediary to a registered pension scheme that if made by an employer for the benefit of an employee would not be chargeable to income tax as income of the employee.

(3)Subsection (2)(c)does not apply to—

(a)excess contributions paid and later repaid,

(b)contributions set under subsection (2) against another payment by the paying intermediary, or

(c)contributions deductible at Step 5 of section 54(1) in calculating the amount of the payment (if any) treated by section 50 as made in the tax year concerned by the paying intermediary to the payee.

(4)For the purposes of subsection (3)(c), the contributions to which Step 5 of section 54(1) applies in the case of the particular calculation are “deductible” at that Step so far as their amount does not exceed the result after Step 4 in that calculation.

(5)In subsection (1)(d) “the underlying chain payment” means the chain payment whose amount is used at Step 1 of section 61Q(1) as the starting point for calculating the amount of the deemed payment.

(6)Subsection (2) applies whether the end-of-line remuneration—

(a)is earnings of the payee,

(b)is a distribution of the paying intermediary, or

(c)takes some other form.

Textual Amendments

F220Words in s. 61W(1)(b) substituted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 17(2)(a) (with Sch. 1 paras. 30-34)

F221Words in s. 61W(1)(d) substituted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 17(2)(b) (with Sch. 1 paras. 30-34)

F222Word in s. 61W(2)(b) substituted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 17(3) (with Sch. 1 paras. 30-34)

[F22361WAAnti-avoidanceU.K.

(1)This section applies if in any case at least one relevant person in a chain participates in a relevant avoidance arrangement.

(2)An arrangement is a “relevant avoidance arrangement” if its main purpose, or one of its main purposes, is to secure a tax advantage by securing that at least one of the conditions mentioned in section 61O or 61P is not met in relation to an intermediary.

(3)Section 61N(3) has effect as if the reference to the fee-payer were a reference to the participating person, but—

(a)section 61N(4) continues to have effect as if the reference to the fee-payer were a reference to the deemed employer, and

(b)Step 1 of section 61Q(1) continues to have effect as referring to the chain payment made by the deemed employer.

(4)The participating person is—

(a)in a case where only one relevant person participates in the arrangement, that person;

(b)in any other case the highest relevant person in the chain who participated in the arrangement and from whom HMRC considers there is a realistic prospect of recovering, within a reasonable period, the amount of tax that would have been paid (or not repaid) in the absence of the arrangement.

(5)Subsection (3) has effect even though that may involve a participating person being treated as both employer and employee in relation to the deemed employment under section 61N(3).

(6)In this section—

  • “arrangement” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

  • “deemed employer” means a person who would, but for this section, be treated by section 61N(3) as making a payment to the worker;

  • “relevant person” means—

    (a)

    the worker;

    (b)

    a person who is resident in the United Kingdom or who has a place of business in the United Kingdom;

  • “tax” means income tax (and “tax advantage” is to be construed accordingly”);

  • “tax advantage” includes—

    (a)

    avoidance or reduction of a charge to tax or an assessment to tax,

    (b)

    repayment or increased repayment of tax,

    (c)

    avoidance of a possible assessment to tax, and

    (d)

    deferral of a payment of tax or advancement of a repayment of tax.]

Textual Amendments

F223S. 61WA inserted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(8)

61XInterpretationU.K.

In this Chapter—

  • “associate” has the meaning given by section 60;

  • “company” means a body corporate or unincorporated association, and does not include a partnership;

  • “engagement to which Chapter 8 applies” has the meaning given by section 49(5).]

Part 3U.K.Employment income: earnings and benefits etc. treated as earnings

Chapter 1U.K.Earnings

62EarningsU.K.

(1)This section explains what is meant by “earnings” in the employment income Parts.

(2)In those Parts “earnings”, in relation to an employment, means—

(a)any salary, wages or fee,

(b)any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth, or

(c)anything else that constitutes an emolument of the employment.

(3)For the purposes of subsection (2) “money’s worth” means something that is—

(a)of direct monetary value to the employee, or

(b)capable of being converted into money or something of direct monetary value to the employee.

(4)Subsection (1) does not affect the operation of statutory provisions that provide for amounts to be treated as earnings (and see section 721(7)).

Chapter 2U.K.Taxable benefits: the benefits code

The benefits codeU.K.

63The benefits codeU.K.

(1)In the employment income Parts “the benefits code” means—

  • this Chapter,

  • Chapter 3 (expenses payments),

  • Chapter 4 (vouchers and credit-tokens),

  • Chapter 5 (living accommodation),

  • Chapter 6 (cars, vans and related benefits),

  • Chapter 7 (loans), [F224and]

  • F225...

  • F225...

  • Chapter 10 (residual liability to charge)

  • F226...

F227(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F227(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F227(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F228(5)The benefits code has effect subject to section 554Z2(2).]

Textual Amendments

F224Word in s. 63(1) inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 5(2)(a)

F225S. 63(1) entries repealed (with effect in accordance with Sch. 22 para. 20(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 20(1), Sch. 43 Pt. 3(4)

F226Words in s. 63(1) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 5(2)(b)

F227S. 63(2)-(4) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 5(3)

F228S. 63(5) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 8

64Relationship between earnings and benefits codeU.K.

(1)This section applies if, apart from this section, the same benefit would give rise to two amounts (“A” and “B”)—

(a)A being an amount of earnings as defined in Chapter 1 of this Part, and

(b)B being an amount to be treated as earnings under the benefits code.

(2)In such a case—

(a)A constitutes earnings as defined in Chapter 1 of this Part, and

(b)the amount (if any) by which B exceeds A is to be treated as earnings under the benefits code.

(3)This section does not apply in connection with living accommodation to which Chapter 5 of this Part applies.

(4)In that case section 109 applies to determine the relationship between that Chapter and Chapter 1 of this Part.

F229(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F229(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F229S. 64(5)(6) repealed (with effect in accordance with Sch. 22 para. 21(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 21(1), Sch. 43 Pt. 3(4)

F23065Dispensations relating to benefits within provisions not applicable to lower-paid employmentU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F230S. 65 omitted (with effect in accordance with s. 12(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 12(2) (with s. 12(6)(7))

General definitions for benefits codeU.K.

66Meaning of “employment” and related expressionsU.K.

(1)In the benefits code—

(a)“employment” means a taxable employment under Part 2, and

(b)“employed”, “employee” and “employer” have corresponding meanings.

(2)Where a Chapter of the benefits code applies in relation to an employee—

(a)references in that Chapter to “the employment” are to the employment of that employee, and

(b)references in that Chapter to “the employer” are to the employer in respect of that employment.

(3)For the purposes of the benefits code an employment is a “taxable employment under Part 2” in a tax year if the earnings from the employment for that year are (or would be if there were any) general earnings to which the charging provisions of Chapter 4 or 5 of Part 2 apply.

(4)In subsection (3)—

(a)the reference to an employment includes employment as a director of a company, and

(b)“earnings” means earnings as defined in Chapter 1 of this Part.

[F231(5)In the benefits code “lower-paid employment as a minister of religion” has the same meaning as in Part 4 (see section 290D).]

Textual Amendments

F231S. 66(5) inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 6

67Meaning of “director” and “full-time working director”U.K.

(1)In the benefits code “director” means—

(a)in relation to a company whose affairs are managed by a board of directors or similar body, a member of that body,

(b)in relation to a company whose affairs are managed by a single director or similar person, that director or person, and

(c)in relation to a company whose affairs are managed by the members themselves, a member of the company,

and includes any person in accordance with whose directions or instructions the directors of the company (as defined above) are accustomed to act.

(2)For the purposes of subsection (1) a person is not to be regarded as a person in accordance with whose directions or instructions the directors of the company are accustomed to act merely because the directors act on advice given by that person in a professional capacity.

(3)In the benefits code “full-time working director” means a director who is required to devote substantially the whole of his time to the service of the company in a managerial or technical capacity.

68Meaning of “material interest” in a companyU.K.

(1)For the purposes of the benefits code a person has a material interest in a company if condition A or B is met.

(2)Condition A is that the person (with or without one or more associates) or any associate of that person (with or without one or more [F232other such associates]) is—

(a)the beneficial owner of, or

(b)able to control, directly or through the medium of other companies or by any other indirect means,

more than 5% of the ordinary share capital of the company.

(3)Condition B is that, in the case of a close company, the person (with or without one or more associates) or any associate of that person (with or without one or more [F233other such associates]), possesses or is entitled to acquire, such rights as would—

(a)in the event of the winding-up of the company, or

(b)in any other circumstances,

give an entitlement to receive more than 5% of the assets which would then be available for distribution among the participators.

(4)In this section—

  • “associate” has the meaning given by [F234section 448 of CTA 2010] except that, for this purpose, “relative” in [F235section 448(1)] has the meaning given by subsection (5) below, and

  • “participator” has the meaning given by [F236section 454 of CTA 2010].

(5)For the purposes of this section a person (“A”) is a relative of another (“B”) if A is—

(a)B’s spouse [F237or civil partner],

(b)a parent, child or remoter relation in the direct line either of B or of B’s spouse [F237or civil partner],

(c)a brother or sister of B or of B’s spouse [F237or civil partner], or

(d)the spouse [F237or civil partner] of a person falling within paragraph (b) or (c).

Textual Amendments

F232Words in s. 68(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(2) (with Sch. 2)

F233Words in s. 68(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(3) (with Sch. 2)

F234Words in s. 68(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(4)(a)(i) (with Sch. 2)

F235Words in s. 68(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(4)(a)(ii) (with Sch. 2)

F236Words in s. 68(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 383(4)(b) (with Sch. 2)

69Extended meaning of “control”U.K.

(1)The definition of “control” in [F238section 995 of ITA 2007] (which is applied for the purposes of this Act by section 719) is extended as follows.

(2)For the purposes of the benefits code that definition applies (with the necessary modifications) in relation to an unincorporated association as it applies in relation to a body corporate.

Textual Amendments

F238Words in s. 69(1) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 430 (with Sch. 2)

[F23969AOptional remuneration arrangementsU.K.

(1)Subsections (2) to (7) have effect for the purposes of the benefits code.

(2)A benefit provided for an employee is provided under “optional remuneration arrangements” so far as it is provided under arrangements of type A or B (regardless of whether those arrangements are made before or after the beginning of the person's employment).

(3)“Type A arrangements” are arrangements under which, in return for the benefit, the employee gives up the right (or a future right) to receive an amount of earnings within Chapter 1 of Part 3.

(4)“Type B arrangements” are arrangements (other than type A arrangements) under which the employee agrees to be provided with the benefit rather than an amount of earnings within Chapter 1 of Part 3.

(5)A benefit provided for an employee is to be regarded as provided under optional remuneration arrangements (whether of type A or type B) so far as it is just and reasonable to attribute the provision of the benefit to the arrangements in question.

(6)Where a benefit is provided for an employee under any arrangements, the mere fact that under the arrangements the employee makes good, or is required to make good, any part of the cost of provision is not to be taken to show that the benefit is (to any extent) provided otherwise than under optional remuneration arrangements.

(7)Where a benefit is provided for an employee partly under optional remuneration arrangements and partly otherwise than under such arrangements, the benefits code is to apply with any modifications (including provision for just and reasonable apportionments) that may be required for ensuring that the benefit is treated—

(a)in accordance with the relevant provision in the column 2 of the table so far as it is provided under optional remuneration arrangements, and

(b)in accordance with the relevant provision in column 1 of the table so far as it is provided otherwise than under such arrangements.

Column 1Column 2
SectionSection
81(1)81(1A)(b)
87(1)87A(1)(a)
94(1)94A(1)(a)
102(1A)102(1B)(b)
120(1)120A(1)(a)
149(1)149A(2)(a)
154(1)154A(1)(a)
160(1)160A(2)(a)
175(1)175(1A)(b)
203(1)203A(1)(a)

Textual Amendments

F239Ss. 69A, 69B inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 1

69BOptional remuneration arrangements: supplementaryU.K.

(1)For the purposes of the benefits code “the amount foregone”—

(a)in relation to a benefit provided for an employee under type A arrangements means the amount of earnings mentioned in section 69A(3);

(b)in relation to a benefit provided for an employee under type B arrangements means the amount of earnings mentioned in section 69A(4);

(c)in relation to a benefit provided for an employee partly under type A arrangements and partly under type B arrangements, means the sum of the amounts foregone under the arrangements of each type.

(2)Subsection (3) applies where, in order to determine the amount foregone with respect to a particular benefit mentioned in section 69A(3) or (4), it is necessary to apportion an amount of earnings to the benefit.

(3)The apportionment is to be made on a just and reasonable basis.

(4)In this section and section 69A references to a benefit provided for an employee include a benefit provided for a member of an employee's family or household.

(5)In this section and section 69A—

  • “benefit” includes any benefit or facility, regardless of its form and the manner of providing it;

  • “earnings” means earnings within Chapter 1 of Part 3 (and includes a reference to amounts which would have been such earnings if the employee had received them).]

Textual Amendments

F239Ss. 69A, 69B inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 1

Chapter 3U.K.Taxable benefits: expenses payments

70Sums in respect of expensesU.K.

(1)This Chapter applies to a sum paid to an employee in a tax year if the sum—

(a)is paid to the employee in respect of expenses, and

(b)is so paid by reason of the employment.

(2)This Chapter applies to a sum paid away by an employee in a tax year if the sum—

(a)was put at the employee’s disposal in respect of expenses,

(b)was so put by reason of the employment, and

(c)is paid away by the employee in respect of expenses.

(3)For the purposes of this Chapter it does not matter whether the employment is held at the time when the sum is paid or paid away so long as it is held at some point in the tax year in which the sum is paid or paid away.

(4)References in this Chapter to an employee accordingly include a prospective or former employee.

(5)This Chapter does not apply to the extent that the sum constitutes earnings from the employment by virtue of any other provision.

71Meaning of paid or put at disposal by reason of the employmentU.K.

(1)If an employer pays a sum in respect of expenses to an employee it is to be treated as paid by reason of the employment unless—

(a)the employer is an individual, and

(b)the payment is made in the normal course of the employer’s domestic, family or personal relationships.

(2)If an employer puts a sum at an employee’s disposal in respect of expenses it is to be treated as put at the employee’s disposal by reason of the employment unless—

(a)the employer is an individual, and

(b)the sum is put at the employee’s disposal in the normal course of the employer’s domestic, family or personal relationships.

72Sums in respect of expenses treated as earningsU.K.

(1)If this Chapter applies to a sum, the sum is to be treated as earnings from the employment for the tax year in which it is paid or paid away.

(2)Subsection (1) does not prevent the making of a deduction allowed under any of the provisions listed in subsection (3).

(3)The provisions are—

  • section 336 (deductions for expenses: the general rule);

  • section 337 (travel in performance of duties);

  • section 338 (travel for necessary attendance);

  • section 340 (travel between group employments);

  • [F240section 340A (travel between linked employments);]

  • section 341 (travel at start or finish of overseas employment);

  • section 342 (travel between employments where duties performed abroad);

  • section 343 (deduction for professional membership fees);

  • section 344 (deduction for annual subscriptions);

  • section 346 (deduction for employee liabilities);

  • section 351 (expenses of ministers of religion);

  • section 353 (deductions from earnings charged on remittance).

Textual Amendments

F240Words in s. 72(3) inserted (with effect in accordance with art. 4 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2014 (S.I. 2014/211), arts. 1, 3

Chapter 4U.K.Taxable benefits: vouchers and credit-tokens

Cash vouchers: introductionU.K.

73Cash vouchers to which this Chapter appliesU.K.

(1)This Chapter applies to a cash voucher provided for an employee by reason of the employment which is received by the employee.

(2)A cash voucher provided for an employee by the employer is to be regarded as provided by reason of the employment unless—

(a)the employer is an individual, and

(b)the provision is made in the normal course of the employer’s domestic, family or personal relationships.

(3)A cash voucher provided for an employee and appropriated to the employee—

(a)by attaching it to a card held for the employee, or

(b)in any other way,

is to be treated for the purposes of this Chapter as having been received by the employee at the time when it is appropriated.

74Provision for, or receipt by, member of employee’s familyU.K.

For the purposes of this Chapter any reference to a cash voucher being provided for or received by an employee includes a reference to it being provided for or received by a member of the employee’s family.

Meaning of “cash voucher”U.K.

75Meaning of “cash voucher”U.K.

(1)In this Chapter “cash voucher” means a voucher, stamp or similar document capable of being exchanged for a sum of money which is—

(a)greater than,

(b)equal to, or

(c)not substantially less than,

the expense incurred by the person at whose cost the voucher, stamp or similar document is provided.

(2)For the purposes of subsection (1) it does not matter whether the document—

(a)is also capable of being exchanged for goods or services;

(b)is capable of being exchanged singly or together with other vouchers, stamps, or documents;

(c)is capable of being exchanged immediately or only after a time.

(3)Subsection (1) is subject to section 76 (sickness benefits-related voucher).

76Sickness benefits-related voucherU.K.

(1)This section applies where—

(a)the expense incurred by the person at whose cost a voucher, stamp or similar document is provided (“the provision expense”) includes costs to that person of providing sickness benefits (“sickness benefits costs”),

(b)the voucher, stamp or document would be a cash voucher (apart from this section) but for the fact that the sum of money for which it is capable of being exchanged (“the exchange sum”) is substantially less than the provision expense, and

(c)the whole or part of the difference between the exchange sum and the provision expense represents the sickness benefits costs.

(2)The voucher, stamp or document is a cash voucher within the meaning of this Chapter if—

or

where—

E is the exchange sum,

PE is the provision expense, and

D is the amount of the difference between E and PE which represents the sickness benefits costs.

(3)In this section “sickness benefits” mean benefits in connection with sickness, personal injury or death.

77Apportionment of cost of provision of voucherU.K.

If a person incurs expense in or in connection with the provision of vouchers, stamps or similar documents for two or more employees as members of a group or class, the expense incurred in respect of one of them is to be such part of that expense as is just and reasonable.

Cash vouchers: exceptionsU.K.

78Voucher made available to public generallyU.K.

This Chapter does not apply to a cash voucher if—

(a)it is of a kind made available to the public generally, and

(b)it is provided to the employee or a member of the employee’s family on no more favourable terms than to the public generally.

79Voucher issued under approved schemeU.K.

(1)This Chapter does not apply to a cash voucher received by an employee if—

(a)it is issued under a scheme, and

(b)at the time when it is received the scheme is a scheme approved by [F165an officer of Revenue and Customs] for the purposes of this section.

(2)[F165An officer of Revenue and Customs] must not approve a scheme for the purposes of this section unless [F241the officer] [F242is] satisfied that it is practicable for income tax in respect of all payments made in exchange for vouchers issued under the scheme to be deducted in accordance with PAYE regulations.

Textual Amendments

80Vouchers where payment of sums exempt from taxU.K.

This Chapter does not apply to a cash voucher if it is—

(a)a document intended to enable a person to obtain payment of a sum which would not have constituted employment income if paid to the person directly, or

(b)a savings certificate where the accumulated interest payable in respect of it is exempt from tax (or would be so exempt if certain conditions were met).

Benefit of cash voucher treated as earningsU.K.

81Benefit of cash voucher treated as earningsU.K.

(1)The cash equivalent of the benefit of a cash voucher to which this Chapter applies is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee.

[F243(1A)Where a cash voucher to which this Chapter applies is provided pursuant to optional remuneration arrangements—

(a)subsection (1) does not apply, and

(b)the relevant amount is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee.

(1B)In this section “the relevant amount” means—

(a)the cash equivalent, or

(b)if greater, the amount foregone with respect to the benefit of the voucher (see section 69B).]

(2)The cash equivalent is the sum of money for which the voucher is capable of being exchanged.

[F244(3)For the purposes of subsection (1B), assume that the cash equivalent is zero if the condition in subsection (4) is met.

(4)The condition is that the benefit of the voucher would be exempt from income tax but for section 228A (exclusion of certain exemptions).]

Textual Amendments

F243S. 81(1A)(1B) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 3(2)

F244S. 81(3)(4) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 3(3)

Non-cash vouchers: introductionU.K.

82Non-cash vouchers to which this Chapter appliesU.K.

(1)This Chapter applies to a non-cash voucher provided for an employee by reason of the employment which is received by the employee.

(2)A non-cash voucher provided for an employee by the employer is to be regarded as provided by reason of the employment unless—

(a)the employer is an individual, and

(b)the provision is made in the normal course of the employer’s domestic, family or personal relationships.

(3)A non-cash voucher provided for an employee and appropriated to the employee—

(a)by attaching it to a card held for the employee, or

(b)in any other way,

is to be treated for the purposes of this Chapter as having been received by the employee at the time when it is appropriated.

83Provision for, or receipt by, member of employee’s familyU.K.

For the purposes of this Chapter any reference to a non-cash voucher being provided for or received by an employee includes a reference to it being provided for or received by a member of the employee’s family.

Meaning of “non-cash voucher”U.K.

84Meaning of “non-cash voucher”U.K.

(1)In this Chapter “non-cash voucher” means—

(a)a voucher, stamp or similar document or token which is capable of being exchanged for money, goods or services,

[F245(ab)a childcare voucher,]

(b)a transport voucher, or

(c)a cheque voucher,

but does not include a cash voucher.

(2)For the purposes of subsection (1)(a) it does not matter whether the document or token is capable of being exchanged—

(a)singly or together with other vouchers, stamps, documents or tokens;

(b)immediately or only after a time.

[F246(2A)In this Chapter “childcare voucher” means a voucher, stamp or similar document or token intended to enable a person to obtain the provision of care for a child (whether or not in exchange for it).]

(3)In this Chapter “transport voucher” means a ticket, pass or other document or token intended to enable a person to obtain passenger transport services (whether or not in exchange for it).

(4)In this Chapter “cheque voucher” means a cheque—

(a)provided for an employee, and

(b)intended for use by the employee wholly or mainly for payment for—

(i)particular goods or services, or

(ii)goods or services of one or more particular classes;

and, in relation to a cheque voucher, references to a voucher being exchanged for goods or services are to be read accordingly.

Textual Amendments

F245S. 84(1)(ab) inserted (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 2(2)(a)

F246S. 84(2A) inserted (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 2(2)(b)

Non-cash voucher: exceptionsU.K.

85Non-cash voucher made available to public generallyU.K.

This Chapter does not apply to a non-cash voucher if—

(a)it is of a kind made available to the public generally, and

(b)it is provided to the employee or a member of the employee’s family on no more favourable terms than to the public generally.

86Transport vouchers under pre-26th March 1982 arrangementsU.K.

(1)This Chapter does not apply to a transport voucher provided for an employee of a passenger transport undertaking under arrangements in operation on 25th March 1982 which meet the condition in subsection (2).

(2)The condition is that the arrangements are intended to enable the employee or a member of the employee’s family to obtain passenger transport services provided by—

(a)the employer,

(b)a subsidiary of the employer,

(c)a body corporate of which the employer is a subsidiary, or

(d)another passenger transport undertaking.

(3)In this section—

  • “passenger transport undertaking” means an undertaking whose business consists wholly or mainly in the carriage of passengers or a subsidiary of such an undertaking, and

  • “subsidiary” means a wholly-owned subsidiary within the meaning of section [F2471159 of and Schedule 6 to] the Companies Act [F2482006].

Textual Amendments

Benefit of non-cash voucher treated as earningsU.K.

87Benefit of non-cash voucher treated as earningsU.K.

(1)The cash equivalent of the benefit of a non-cash voucher to which this Chapter applies is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee.

(2)The cash equivalent is the difference between—

(a)the cost of provision, and

(b)any part of that cost made good by the employee [F249, to the person incurring it, on or before 6 July following the relevant tax year].

[F250(2A)If the voucher is a non-cash voucher other than a cheque voucher, the relevant tax year is—

(a)the tax year in which the cost of provision is incurred, or

(b)if later, the tax year in which the employee receives the voucher.

(2B)If the voucher is a cheque voucher, the relevant tax year is the tax year in which the voucher is handed over in exchange for money, goods or services.]

(3)In this Chapter the “cost of provision” means, in relation to a non-cash voucher, the expense incurred in or in connection with the provision of—

(a)the voucher, and

(b)the money, goods or services for which it is capable of being exchanged,

by the person at whose cost they are provided.

[F251(3A)In the case of a childcare voucher, the reference in subsection (3)(b) to the services for which the voucher is capable of being exchanged is to the provision of care for a child which may be obtained by using it.]

(4)In the case of a transport voucher, the reference in subsection (3)(b) to the services for which the voucher is capable of being exchanged is to the passenger transport services which may be obtained by using it.

(5)If a person incurs expense in or in connection with the provision of non-cash vouchers for two or more employees as members of a group or class, the expense incurred in respect of one of them is to be such part of that expense as is just and reasonable.

F252(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F249Words in s. 87(2)(b) substituted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(2)(a)

F250S. 87(2A)(2B) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(2)(b)

F251S. 87(3A) inserted (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 2(3)

F252S. 87(6) omitted (with effect in accordance with Sch. 39 para. 50(3) of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 39 para. 50(2)

[F25387ABenefit of non-cash voucher treated as earnings: optional remuneration arrangementsU.K.

(1)Where a non-cash voucher to which this Chapter applies is provided pursuant to optional remuneration arrangements—

(a)the relevant amount is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee, and

(b)section 87(1) does not apply.

(2)To find the relevant amount, first determine which (if any) is the greater of—

(a)the cost of provision (see section 87(3)), and

(b)the amount foregone with respect to the benefit of the voucher (see section 69B).

(3)If the cost of provision is greater than or equal to the amount foregone, the “relevant amount” is the cash equivalent of the benefit of the non-cash voucher (see section 87(2)).

(4)Otherwise, the “relevant amount” is the difference between—

(a)the amount foregone, and

(b)any part of the cost of provision that is made good by the employee, to the person incurring it, on or before 6 July following the relevant tax year.

(5)If the voucher is a non-cash voucher other than a cheque voucher, the relevant tax year is—

(a)the tax year in which the cost of provision is incurred, or

(b)if later, the tax year in which the employee receives the voucher.

(6)If the voucher is a cheque voucher, the relevant tax year is the tax year in which the voucher is handed over in exchange for money, goods or services.

(7)For the purposes of subsections (2) and (3), assume that the cost of provision is zero if the condition in subsection (8) is met.

(8)The condition is that the non-cash voucher would be exempt from income tax but for section 228A (exclusion of certain exemptions).]

Textual Amendments

F253S. 87A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 4

88Year in which earnings treated as receivedU.K.

(1)In the case of a non-cash voucher other than a cheque voucher, the amount treated as earnings under section 87 [F254or 87A] is to be treated as received—

(a)in the tax year in which the cost of provision is incurred, or

(b)if later, in the tax year in which the voucher is received by the employee.

(2)In the case of a cheque voucher, the amount treated as earnings under section 87 [F255or 87A] is to be treated as received in the tax year in which the voucher is handed over in exchange for money, goods or services.

(3)[F256For the purposes of subsection (2) and sections 87(2B) and 87A(6),] Where a cheque voucher is posted it is to be treated as handed over at the time of posting.

Textual Amendments

F254Words in s. 88(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 5(a)

F255Words in s. 88(2) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 5(b)

F256Words in s. 88(3) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(3)

F25789Reduction for meal vouchersU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F257S. 89 repealed (with effect in accordance with Sch. 39 para. 50(3) of the amending Act) by Finance Act 2012 (c. 14), Sch. 39 para. 50(1)

Credit-tokens: introductionU.K.

90Credit-tokens to which this Chapter appliesU.K.

(1)This Chapter applies to a credit-token provided for an employee by reason of the employment which is used by the employee to obtain money, goods or services.

(2)A credit-token provided for an employee by the employer is to be regarded as provided by reason of the employment unless—

(a)the employer is an individual, and

(b)the provision is made in the normal course of the employer’s domestic, family or personal relationships.

91Provision for, or use by, member of employee’s familyU.K.

For the purposes of this Chapter—

(a)any reference to a credit-token being provided for an employee includes a reference to it being provided for a member of the employee’s family, and

(b)use of a credit-token by a member of an employee’s family is to be treated as use of the token by the employee.

Meaning of “credit-token”U.K.

92Meaning of “credit-token”U.K.

(1)In this Chapter “credit-token” means a credit card, debit card or other card, a token, a document or other object given to a person by another person (“X”) who undertakes—

(a)on the production of it, to supply money, goods or services on credit, or

(b)if a third party (“Y”) supplies money, goods or services on its production, to pay Y for what is supplied.

(2)A card, token, document or other object can be a credit-token even if—

(a)some other action is required in addition to its production in order for the money, goods or services to be supplied;

(b)X in paying Y may take a discount or commission.

(3)For the purposes of this section—

(a)the use of an object given by X to operate a machine provided by X is to be treated as its production to X, and

(b)the use of an object given by X to operate a machine provided by Y is to be treated as its production to Y.

(4)A “credit-token” does not include a cash voucher or a non-cash voucher.

Credit-tokens: exceptionU.K.

93Credit-token made available to public generallyU.K.

This Chapter does not apply to a credit-token if—

(a)it is of a kind made available to the public generally, and

(b)it is provided to the employee or a member of the employee’s family on no more favourable terms than to the public generally.

Benefit of credit-token treated as earningsU.K.

94Benefit of credit-token treated as earningsU.K.

(1)On each occasion on which a credit-token to which this Chapter applies is used by the employee in a tax year to obtain money, goods or services, the cash equivalent of the benefit of the token is to be treated as earnings from the employment for that year.

(2)The cash equivalent is the difference between—

(a)the cost of provision, and

(b)any part of that cost made good by the [F258employee—

(i)to the person incurring it, and

(ii)on or before 6 July following the tax year which contains the occasion in question.]

(3)In this section the “cost of provision” means the expense incurred—

(a)in or in connection with the provision of the money, goods or services obtained on the occasion in question, and

(b)by the person at whose cost they are provided.

(4)If a person incurs expense in or in connection with the provision of credit-tokens for two or more employees as members of a group or class, the expense incurred in respect of one of them is to be such part of that expense as is just and reasonable.

Textual Amendments

F258Words in s. 94(2)(b) substituted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(4)

[F25994ABenefit of credit-token treated as earnings: optional remuneration arrangementsU.K.

(1)If the conditions in subsections (2) and (3) are met in relation to any occasions on which a credit-token to which this Chapter applies is used by the employee in a tax year to obtain money, goods or services—

(a)the relevant amount is to be treated as earnings from the employment for that year, and

(b)section 94(1) does not apply in relation to the use of the credit-token on those occasions.

(2)The condition in this subsection is that the credit-token is used pursuant to optional remuneration arrangements.

(3)The condition in this subsection is that AF is greater than the relevant cost of provision for the tax year.

In this section “AF” means so much of the amount foregone (see section 69B) as is attributable on a just and reasonable basis to the use of the credit-token by the employee in the tax year pursuant to the optional remuneration arrangements to obtain money, goods or services.

(4)The “relevant amount” is the difference between—

(a)AF, and

(b)any part of the relevant cost of provision for the tax year that is made good by the employee, to the person incurring it, on or before 6 July following the tax year which contains the occasion of use of the credit-token to which the making good relates.

(5)But the relevant amount is taken to be zero if the amount given by paragraph (b) of subsection (4) exceeds AF.

(6)For the purposes of this section the “relevant cost of provision for the tax year” is determined as follows—

  • Step 1 Find the cost of provision with respect to each occasion of use of the credit-token by the employee in the tax year pursuant to the optional remuneration arrangements to obtain money, goods or services.

  • Step 2 The total of those amounts is the relevant cost of provision for the tax year.

(7)But the relevant cost of provision for the tax year is to be taken to be zero if the condition in subsection (8) is met.

(8)The condition is that use of the credit token by the employee in the tax year pursuant to the optional remuneration arrangements to obtain money, goods or services would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(9)In this section “cost of provision” has the same meaning as in section 94.]

Textual Amendments

F259S. 94A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 6

General supplementary provisionsU.K.

95Disregard for money, goods or services obtainedU.K.

(1)This section applies if the cash equivalent of the benefit of a cash voucher, a non-cash voucher or a credit-token [F260or the relevant amount in respect of a cash voucher, a non-cash voucher or a credit-token] —

(a)is to be treated as earnings from an employee’s employment under this Chapter, F261...

F261(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Money, goods or services obtained—

(a)by the employee or another person in exchange for the cash voucher or non-cash voucher, or

(b)by the employee or a member of the employee’s family by use of the credit-token,

are to be disregarded for the purposes of the Income Tax Acts.

(3)But the goods or services are not to be disregarded for the purposes of applying sections 362 and 363 (deductions where non-cash voucher or credit-token provided).

[F262(3A)In the case of a childcare voucher, the reference in subsection (2)(a) to the services obtained in exchange for the voucher is to the provision of care for a child obtained by using it.]

(4)In the case of a transport voucher, the reference in subsection (2)(a) to the services obtained in exchange for the voucher is to the passenger transport services obtained by using it.

Textual Amendments

F260Words in s. 95(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 51

F261S. 95(1)(b) and word omitted (with effect in accordance with s. 12(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 12(4)(a)

F262S. 95(3A) inserted (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 2(4)

F26396Dispensations relating to vouchers or credit-tokensU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F263S. 96 omitted (with effect in accordance with s. 12(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 12(3) (with s. 12(6)(7))

[F26496APower to exempt use of non-cash vouchers or credit-tokens to obtain exempt benefitsU.K.

(1)The Treasury may by regulations provide for exemption from any liability that would otherwise arise by virtue of this Chapter in respect of—

(a)non-cash vouchers which are or can be used to obtain specified exempt benefits, or which evidence an employee's entitlement to specified exempt benefits;

(b)credit-tokens which are used to obtain specified exempt benefits.

(2)In this section—

  • “exempt benefit” means a benefit the direct provision of which is exempted from liability to income tax by a provision of Part 4 (employment income: exemptions), and

  • “specified” means specified in the regulations.

(3)Regulations under this section may operate by amending section 266 (exemption of non-cash vouchers for exempt benefits) or section 267 (exemption of credit-tokens used for exempt benefits).]

Textual Amendments

F264S. 96A inserted (19.7.2006) by Finance Act 2006 (c. 25), s. 63

Chapter 5U.K.Taxable benefits: living accommodation

Living accommodationU.K.

97Living accommodation to which this Chapter appliesU.K.

(1)This Chapter applies to living accommodation provided for—

(a)an employee, or

(b)a member of an employee’s family or household,

by reason of the employment.

[F265(1A)Where this Chapter applies to any living accommodation—

(a)the living accommodation is a benefit for the purposes of this Chapter (and accordingly it is immaterial whether the terms on which it is provided to any of those persons constitute a fair bargain), and

(b)sections 102 to 108 provide for [F266an amount in respect of] the benefit of the living accommodation to be treated as earnings.]

(2)Living accommodation provided for any of those persons by the employer is to be regarded as provided by reason of the employment unless—

(a)the employer is an individual, and

(b)the provision is made in the normal course of the employer’s domestic, family or personal relationships.

Textual Amendments

F265S. 97(1A) inserted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(2)

F266Words in s. 97(1A)(b) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 7

ExceptionsU.K.

98Accommodation provided by local authorityU.K.

[F267In section 102 (benefit of accommodation treated as earnings) subsection (1A) (accommodation provided otherwise than pursuant to optional remuneration arrangements)] does not apply to living accommodation provided for an employee if—

(a)the employer is a local authority,

(b)it is provided for the employee by the authority, and

(c)the terms on which it is provided are no more favourable than those on which similar accommodation is provided by the authority for persons who are not their employees but whose circumstances are otherwise similar to those of the employee.

Textual Amendments

F267Words in s. 98 substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 8

99Accommodation provided for performance of dutiesU.K.

(1)[F268In section 102 (benefit of accommodation treated as earnings) subsection (1A) (accommodation provided otherwise than pursuant to optional remuneration arrangements)] does not apply to living accommodation provided for an employee if it is necessary for the proper performance of the employee’s duties that the employee should reside in it.

(2)[F269In section 102 (benefit of accommodation treated as earnings) subsection (1A)] does not apply to living accommodation provided for an employee if—

(a)it is provided for the better performance of the duties of the employment, and

(b)the employment is one of the kinds of employment in the case of which it is customary for employers to provide living accommodation for employees.

(3)But if the accommodation is provided by a company and the employee (“E”) is a director of the company or of an associated company, the exception in subsection (1) or (2) only applies if, in the case of each company of which E is a director—

(a)E has no material interest in the company, and

(b)either—

(i)E’s employment is as a full-time working director, or

(ii)the company is non-profit-making or is [F270a charitable company].

(4)“Non-profit-making” means that the company does not carry on a trade and its functions do not consist wholly or mainly in the holding of investments or other property.

(5)A company is “associated” with another if—

(a)one has control of the other, or

(b)both are under the control of the same person.

Textual Amendments

F268Words in s. 99(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 9(2)

F269Words in s. 99(2) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 9(3)

F270Words in s. 99(3)(b)(ii) substituted (coming into force for the tax year 2012-13 and subsequent tax years) by Finance Act 2010 (c. 13), Sch. 6 paras. 17(2), 34(2); S.I. 2012/736, art. 13

100Accommodation provided as result of security threatU.K.

[F271In section 102 (benefit of accommodation treated as earnings) subsection (1A) (accommodation provided otherwise than pursuant to optional remuneration arrangements)] does not apply to living accommodation provided for an employee if—

(a)there is a special threat to the security of the employee,

(b)special security arrangements are in force, and

(c)the employee resides in the accommodation as part of those arrangements.

Textual Amendments

F271Words in s. 100 substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 10

[F272100AHomes outside UK owned through company etcU.K.

(1)[F273In section 102 (benefit of accommodation treated as earnings) subsection (1A) (accommodation provided otherwise than pursuant to optional remuneration arrangements)] does not apply to living accommodation outside the United Kingdom provided by a company for a director or other officer of the company (“D”) or a member of D's family or household if—

(a)the company is wholly owned by D or D and other individuals (and no interest in the company is partnership property), and

(b)the company has been the holding company of the property at all times after the relevant time.

(2)The company is “the holding company of the property” when—

(a)it owns a relevant interest in the property,

(b)its main or only asset is that interest, and

(c)the only activities undertaken by it are ones that are incidental to its ownership of that interest.

(3)The company is also “the holding company of the property” when—

(a)a company (“the subsidiary”) which is wholly owned by the company meets the conditions in paragraphs (a) to (c) of subsection (2),

(b)the company's main or only asset is its interest in the subsidiary, and

(c)the only activities undertaken by the company are ones that are incidental to its ownership of that interest.

(4)“Relevant interest in the property” means an interest under the law of any territory that confers (or would but for any inferior interest confer) a right to exclusive possession of the property at all times or at certain times.

(5)“The relevant time” is the time the company first owned a relevant interest in the property; but this is subject to subsection (6).

(6)If—

(a)none of D's interest in the company was acquired directly or indirectly from a person connected with D, and

(b)the company owned a relevant interest in the property at the time D first acquired an interest in the company,

“the relevant time” is the time D first acquired such an interest.

Textual Amendments

F272Ss. 100A,100B inserted (retrospectively) by Finance Act 2008 (c. 9), s. 45

F273Words in s. 100A(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 11

100BSection 100A(1): exceptionsU.K.

(1)Section 100A(1) does not apply if subsection (2), (3) or (4) applies.

(2)This subsection applies if—

(a)the company's interest in the property was acquired directly or indirectly from a connected company at an undervalue, or

(b)the company's interest in the property derives from an interest that was so acquired.

(3)This subsection applies if, at any time after the relevant time—

(a)expenditure in respect of the property has been incurred directly or indirectly by a connected company, or

(b)any borrowing of the company directly or indirectly from a connected company has been outstanding (but see subsection (7)).

(4)This subsection applies if the living accommodation is provided in pursuance of an arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax or national insurance contributions.

(5)In subsection (2) references to the acquisition of an interest include the grant of an interest.

(6)For the purposes of that subsection, an interest is acquired at an undervalue if the total consideration for it is less than that which might reasonably have been expected to be obtained on a disposal of the interest on the open market; and “consideration” here means consideration provided at any time (and, for example, includes payments by way of rent).

(7)For the purposes of subsection (3)(b), no account is to be taken of—

(a)any borrowing at a commercial rate, or

(b)any borrowing which results in D being treated under Chapter 7 (taxable benefits: loans) as receiving earnings.

(8)In subsection (4) “arrangement” includes any scheme, agreement or understanding, whether or not enforceable.

(9)In this section “connected company” means—

(a)a company connected with D, with a member of D's family or with an employer of D, or

(b)a company connected with such a company.]

Textual Amendments

F272Ss. 100A,100B inserted (retrospectively) by Finance Act 2008 (c. 9), s. 45

101Chevening HouseU.K.

[F274In section 102 (benefit of accommodation treated as earnings) subsection (1A) (accommodation provided otherwise than pursuant to optional remuneration arrangements)] does not apply to living accommodation provided for an employee if the accommodation is—

(a)Chevening House, or

(b)any other premises held on the trusts of the trust instrument set out in the Schedule to the Chevening Estate Act 1959 (c. 49),

and the employee is a person nominated in accordance with those trusts.

Textual Amendments

F274Words in s. 101 substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 12

Benefit of living accommodation treated as earningsU.K.

102Benefit of living accommodation treated as earningsU.K.

(1)[F275This section applies if living accommodation to which this Chapter applies is provided in any period (“the taxable period”) — ]

(a)which consists of the whole or part of a tax year, and

(b)throughout which the employee holds the employment,

[F276(1A) the cash equivalent of the benefit of the accommodation is to be treated as earnings from the employment for that year.]

[F277(1B)If the benefit of the accommodation is provided pursuant to optional remuneration arrangements—

(a)subsection (1A) does not apply, and

(b)the relevant amount is to be treated as earnings from the employment for that tax year.]

F278(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Section 103 indicates how the cash equivalent is calculated.

[F279(4)Section 103A indicates how the relevant amount is determined.]

Textual Amendments

F275Words in s. 102(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 13(2)

F276Words in s. 102(1) renumbered as s. 102(1A) (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 13(3)

F277S. 102(1B) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 13(4)

F278S. 102(2) omitted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by virtue of Finance Act 2017 (c. 10), Sch. 2 para. 13(5)

F279S. 102(4) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 13(6)

Calculation of cash equivalentU.K.

103Method of calculating cash equivalentU.K.

(1)The cash equivalent is calculated—

(a)under section 105 if the cost of providing the living accommodation does not exceed £75,000; and

(b)under section 106 if the cost of providing the living accommodation exceeds £75,000.

(2)Section 104 (general rule) sets out how to calculate the cost of providing living accommodation for the purpose of determining whether or not it exceeds £75,000.

(3)In this Chapter—

  • “annual value”,

  • “person involved in providing accommodation”, and

  • “the property”,

  • have the meaning given by sections 110 to 113, and “the taxable period” has the meaning given by section [F280102(1)] .

Textual Amendments

F280Word in s. 103(3) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 14

[F281103AAccommodation provided pursuant to optional remuneration arrangements: relevant amountU.K.

(1)To find the relevant amount, first determine which (if any) is the greater of—

(a)the modified cash equivalent of the benefit of the accommodation (see sections 105(2A) and 106(2A)), and

(b)the amount foregone with respect to the benefit of the accommodation (see section 69B).

(2)If the amount mentioned in subsection (1)(a) is greater than or equal to the amount mentioned in subsection (1)(b), the “relevant amount” is the cash equivalent of the benefit of the accommodation (see section 103).

(3)Otherwise, the “relevant amount” is the difference between—

(a)the amount foregone with respect to the benefit of the accommodation, and

(b)the deductible amount (see subsections (7) and (8)).

(4)If the amount foregone with respect to the benefit of the accommodation does not exceed the deductible amount, the relevant amount is taken to be zero.

(5)For the purposes of subsections (1) and (2), assume that the modified cash equivalent of the benefit of the accommodation is zero if the condition in subsection (6) is met.

(6)The condition is that the benefit of the accommodation would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(7)If the cost of providing the living accommodation does not exceed £75,000, the “deductible amount” means any sum made good, on or before 6 July following the tax year which contains the taxable period, by the employee to the person at whose cost the accommodation is provided that is properly attributable to its provision.

(8)If the cost of providing the living accommodation exceeds £75,000, the “deductible amount” means the total of amounts A and B where—

  • A is equal to so much of MG as does not exceed RV;

  • B is the amount of any excess rent paid by the employee in respect of the taxable period;

  • MG is the total of any sums made good, on or before 6 July following the tax year which contains the taxable period, by the employee to the person at whose cost the accommodation is provided that are properly attributable to its provision (in the taxable period);

  • RV is the rental value of the accommodation for the taxable period as set out in section 105(3) or (4A)(b) (as applicable).

(9)In subsection (8) “excess rent” means so much of the rent in respect of the taxable period paid—

(a)by the employee,

(b)in respect of the accommodation,

(c)to the person providing it, and

(d)on or before 6 July following the tax year which contains the taxable period,

as exceeds the rental value of the accommodation.

(10)Where it is necessary for the purposes of subsection (1)(b) and (3)(a) to apportion an amount of earnings to the benefit of the accommodation in the taxable period, the apportionment is to be made on a just and reasonable basis.

In this subsection “earnings” is to be interpreted in accordance with section 69B(5).]

Textual Amendments

F281S. 103A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 15

104General rule for calculating cost of providing accommodationU.K.

For any tax year the cost of providing living accommodation is given by the formula—

where—

A is any expenditure incurred in acquiring the estate or interest in the property held by a person involved in providing the accommodation,

I is any expenditure incurred on improvements to the property which has been incurred before the tax year in question by a person involved in providing the accommodation, and

P is so much of any payment or payments made by the employee to a person involved in providing the accommodation as represents—

  • (a) reimbursement of A or I, or

  • (b) consideration for the grant to the employee of a tenancy or sub-tenancy of the property.

Accommodation costing £75,000 or lessU.K.

105Cash equivalent: cost of accommodation not over £75,000U.K.

(1)The cash equivalent [F282or modified cash equivalent] is to be calculated under this section if the cost of providing the living accommodation does not exceed £75,000.

(2)The cash equivalent is the difference between—

(a)the rental value of the accommodation for the taxable period, and

(b)any sum made good [F283, on or before 6 July following the tax year which contains the taxable period,] by the employee to the person at whose cost the accommodation is provided that is properly attributable to its provision.

[F284(2A)The modified cash equivalent is equal to the rental value of the accommodation for the taxable period.]

(3)The “rental value of the accommodation” for the taxable period is [F285(subject to subsections (4) and (4A))] the rent which would have been payable for that period if the property had been let to the employee at an annual rent equal to the annual value.

[F286(4)Subsection (4A) applies where—

(a)a rental amount is payable by the person (“P”) at whose cost the accommodation is provided in respect of the whole or part of the taxable period (“the relevant period”), and

(b)the amount so payable is payable at an annual rate greater than the annual value.

(4A)Where this subsection applies—

(a)subsection (3) does not apply to the relevant period, and

(b)instead the “rental value of the accommodation” for the relevant period is the rental amount payable by P in respect of the relevant period.

(4B)A reference in subsection (4) or (4A) to a rental amount payable by P in respect of the relevant period is to the sum of—

(a)any rent for the period payable by P, and

(b)any amount attributed to the period in respect of a lease premium (see sections 105A and 105B).]

(5)If the rental value of the accommodation for the taxable period does not exceed any sum made good by the employee as mentioned in subsection (2)(b), the cash equivalent is nil.

Textual Amendments

F282Words in s. 105(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 16(2)

F283Words in s. 105(2)(b) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(5)

F284S. 105(2A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 16(3)

F285Words in s. 105(3) inserted (with effect in accordance with s. 71(4)-(6) of the amending Act) by Finance Act 2009 (c. 10), s. 71(2)(a)

F286S. 105(4)-(4B) substituted for s. 105(4) (with effect in accordance with s. 71(4)-(6) of the amending Act) by Finance Act 2009 (c. 10), s. 71(2)(b)

[F287105ALease premiumsU.K.

(1)For the purposes of section 105(4B)(b) an amount is attributed to the relevant period “in respect of a lease premium” if—

(a)the property consists of premises, or a part of premises, that are subject to a lease,

(b)the premises are not mainly used by P for a purpose other than the provision of living accommodation to which this Chapter applies,

(c)the lease is for a term of 10 years or less, and

(d)the net amount payable by P in relation to the lease by way of lease premium is greater than zero.

(2)The amount so attributed is—

where—

A is the relevant period (in days),

B is the term of the lease (in days), and

C is the net amount payable by P in relation to the lease by way of lease premium.

(3)For provision about the application of this section in relation to certain leases with break clauses, see section 105B.

(4)For the purposes of this section the net amount payable by P in relation to a lease by way of lease premium is—

(a)the total amount (if any) that has been paid, or is or will become payable, by P in relation to the lease by way of lease premium, less

(b)any amount within paragraph (a) that has been repaid or is or will become repayable.

(5)In this section and section 105B “lease premium” means any premium payable—

(a)under a lease, or

(b)otherwise under the terms on which a lease is granted.

(6)In the application of this section to Scotland “premium” includes a grassum.

Textual Amendments

F287Ss. 105A, 105B inserted (with effect in accordance with s. 71(4)-(6) of the amending Act) by Finance Act 2009 (c. 10), s. 71(3)

105BLease premiums in the case of leases with break clausesU.K.

(1)This section applies to a lease (“the original lease”) that contains one or more relevant break clauses.

(2)For the purposes of this section—

(a)“break clause” means a provision of a lease that gives a person a right to terminate it so that its term is shorter than it otherwise would be, and

(b)a break clause contained in the original lease is “relevant” if the right to terminate the lease that it confers is capable of being exercised in such a way that the term of the original lease is 10 years or less.

(3)For the purposes of section 105A—

(a)the term of the original lease, and

(b)the net amount payable by P in relation to the lease by way of lease premium,

are to be determined on the assumption that any relevant break clause is exercised in such a way that the term of the lease is as short as possible.

(4)If a relevant break clause is not in fact exercised in such a way that the term of the original lease is as short as possible, the parties to the lease are treated for the purposes of section 105A as if they were parties to another lease (a “notional lease”) the term of which—

(a)begins immediately after the time at which the term of the original lease would have ended, if that break clause had been so exercised, and

(b)ends at the time mentioned in subsection (5).

(5)The term of a notional lease ends—

(a)at the time the term of the original lease would end, on the assumption that any relevant break clause that is exercisable only after the beginning of the term of the notional lease is exercised in such a way that the term of the original lease is as short as possible, or

(b)if earlier, the tenth anniversary of the beginning of the term of the original lease.

(6)For the purposes of section 105A the net amount payable by P in relation to a notional lease by way of lease premium is, in the case of a notional lease the term of which ends under paragraph (a) of subsection (5)—

(a)the net amount that would be payable by P in relation to the original lease by way of lease premium on the assumption mentioned in that paragraph, less

(b)any part of that amount that has already been attributed to a period in respect of a lease premium under section 105(4B)(b).

(7)For the purposes of section 105A the net amount payable by P in relation to a notional lease by way of lease premium is, in the case of a notional lease the term of which ends under paragraph (b) of subsection (5), the relevant proportion of—

(a)the net amount that would be payable by P in relation to the original lease by way of lease premium, on the assumption that no break clause is exercised, less

(b)any part of that amount that has already been attributed to a period in respect of a lease premium under section 105(4B)(b).

(8)In subsection (7) “the relevant proportion” means—

where—

D is the term of the notional lease (in days), and

E is the sum of—

  • (a) the term of the notional lease (in days), and

  • (b) the number of days by which the term of the original lease would exceed 10 years, on the assumption that no break clause is exercised.]

Textual Amendments

F287Ss. 105A, 105B inserted (with effect in accordance with s. 71(4)-(6) of the amending Act) by Finance Act 2009 (c. 10), s. 71(3)

Accommodation costing more than £75,000U.K.

106Cash equivalent: cost of accommodation over £75,000U.K.

(1)The cash equivalent [F288or modified cash equivalent] is calculated under this section if the cost of providing the living accommodation exceeds £75,000.

(2)To calculate the cash equivalent—

Step 1

Calculate the amount that would be the cash equivalent if section 105 applied (cash equivalent: cost of accommodation not over £75,000).

Step 2

Calculate the following amount (“the additional yearly rent”)—

where—

ORI is the official rate of interest in force for the purposes of Chapter 7 of this Part (taxable benefits: loans) on 6th April in the tax year, and

C is the cost of providing the accommodation calculated—

  • (a) in accordance with section 104 (general rule for calculating cost of accommodation), or

  • (b) in a case where section 107 applies (special rule for calculating cost of providing accommodation), in accordance with that section instead.

Step 3

Calculate the rent which would have been payable for the taxable period if the property had been let to the employee at the additional yearly rent calculated under step 2.

Step 4

Calculate the cash equivalent by—

(a)adding together the amounts calculated under steps 1 and 3, and

(b)(if allowed by subsection (3)) subtracting from that total the excess rent paid by the employee.

[F289(2A)To calculate the modified cash equivalent—

(a)apply steps 1 to 3 in subsection (2), as if the words “cash equivalent” in step 1 were “modified cash equivalent (for the purposes of section 105)”;

(b)calculate the modified cash equivalent by adding together the amounts calculated under steps 1 and 3 as applied by paragraph (a).]

(3)In step 4—

(a)paragraph (b) only applies if, in respect of the taxable period, the rent [F290paid—

(i)by the employee,

(ii)in respect of the accommodation,

(iii)to the person providing it, and

(iv)on or before 6 July following the tax year which contains the taxable period,

exceeds] the rental value of the accommodation for that period as set out in section 105(3) or (4)(b), as applicable, and

(b)“the excess rent” means the total amount of that excess.

Textual Amendments

F288Words in s. 106(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 17(2)

F289S. 106(2A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 17(3)

F290Words in s. 106(3)(a) substituted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(6)

107Special rule for calculating cost of providing accommodationU.K.

(1)This section contains a special rule for calculating the cost of providing living accommodation which—

(a)operates for the purposes of step 2 of section 106(2) (calculating the additional yearly rent), and

(b)accordingly only operates where the cost of provision for the purposes of section 106(1) (as calculated under section 104) exceeds £75,000.

(2)This section applies if, throughout the period of 6 years ending with the date when the employee first occupied the accommodation (“the initial date”), an estate or interest in the property was held by a person involved in providing the accommodation.

It does not matter whether it was the same estate, interest or person throughout.

(3)For any tax year the cost of providing the living accommodation for the purposes mentioned in subsection (1)(a) is given by the formula—

where—

MV is the price which the property might reasonably be expected to have fetched on a sale in the open market with vacant possession as at the initial date,

I is any expenditure incurred on improvements to the property which has been incurred during the period—

  • (a) beginning with the initial date, and

  • (b) ending with the day before the beginning of the tax year,

by a person involved in providing the accommodation, and

P is so much of any payment or payments made by the employee to a person involved in providing the accommodation as represents—

  • (a) reimbursement (up to an amount not exceeding MV) of any expenditure incurred in acquiring the estate or interest in the property held on the initial date,

  • (b) reimbursement of I, or

  • (c) consideration for the grant to the employee of a tenancy or sub-tenancy of the property.

(4)In estimating MV no reduction is to be made for an option in respect of the property held by—

(a)the employee,

(b)a person connected with the employee, or

(c)a person involved in providing the accommodation.

Apportionment of cash equivalentU.K.

108Cash equivalent: accommodation provided for more than one employeeU.K.

(1)If, for the whole or part of a tax year, the same living accommodation is provided for more than one employee at the same time, the total of the cash equivalents for all of the employees is to be limited to the amount that would be the cash equivalent if the accommodation was provided for one employee.

(2)The cash equivalent for each of the employees is to be such part of that amount as is just and reasonable.

Other tax implicationsU.K.

109Priority of this Chapter over Chapter 1 of this PartU.K.

(1)This section applies if—

(a)under this Chapter [F291an amount] is to be treated as earnings from an employee’s employment for a tax year, and

(b)under Chapter 1 of this Part an amount would, apart from this section, constitute earnings from the employment for the year in respect of the provision of the accommodation.

(2)The full amount [F292mentioned in subsection (1)(a)] is to be treated as earnings from the employment for that year under this Chapter.

(3)The amount mentioned in subsection (1)(b) is to constitute earnings from the employment for the year under Chapter 1 of this Part only to the extent that it exceeds the amount mentioned in subsection (2).

[F293(4)In a case where the [F294amount mentioned in subsection (1)(a)] is nil—

(a)subsections (2) and (3) do not apply, and

(b)the full amount mentioned in subsection (1)(b) constitutes earnings from the employment for the year under Chapter 1.]

Textual Amendments

F291Words in s. 109(1)(a) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 18(2)

F292Words in s. 109(2) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 18(3)

F293S. 109(4) inserted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(3)

F294Words in s. 109(4) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 18(4)

SupplementaryU.K.

110Meaning of “annual value”U.K.

(1)For the purposes of this Chapter the “annual value” of living accommodation is the rent which might reasonably be expected to be obtained on a letting from year to year if—

(a)the tenant undertook to pay all taxes, rates and charges usually paid by a tenant, and

(b)the landlord undertook to bear the costs of the repairs and insurance and the other expenses (if any) necessary for maintaining the property in a state to command that rent.

(2)For the purposes of subsection (1) that rent—

(a)is to be taken to be the amount that might reasonably be expected to be so obtained in respect of the letting of the accommodation, and

(b)is to be calculated on the basis that the only amounts that may be deducted in respect of services provided by the landlord are amounts in respect of the cost to the landlord of providing any relevant services.

(3)If living accommodation is of a kind that might reasonably be expected to be let on terms under which—

(a)the landlord is to provide any services which are either—

(i)relevant services, or

(ii)the repair, insurance or maintenance of any premises which do not form part of the accommodation but belong to or are occupied by the landlord, and

(b)amounts are payable in respect of the services in addition to the rent,

the rent to be established under subsection (1) in respect of the accommodation is to be increased under subsection (4).

(4)That rent is to include—

(a)where the services are relevant services, so much of the additional amounts as exceeds the cost to the landlord of providing the services;

(b)where the services are within subsection (3)(a)(ii), the whole of the additional amounts.

(5)In this section “relevant service” means a service other than the repair, insurance or maintenance of the accommodation or of any other premises.

111Disputes as to annual valueU.K.

(1)This section applies if there is a dispute as to the amount of the annual value of living accommodation for the purposes of this Chapter.

F295(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F296(3)An application for the tribunal to determine the question is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act), and each of the persons concerned is entitled to be a party to the proceedings on the application.]

Textual Amendments

112Meaning of “person involved in providing the accommodation”U.K.

For the purposes of this Chapter “person involved in providing the accommodation” means any of the following—

(a)the person providing the accommodation;

(b)the employee’s employer (if not within paragraph (a));

(c)any person, other than the employee, who is connected with a person within paragraph (a) or (b).

113Meaning of “the property”U.K.

For the purposes of this Chapter “the property”, in relation to living accommodation, means the property consisting of that accommodation.

Chapter 6U.K.Taxable benefits: cars, vans and related benefits

Modifications etc. (not altering text)

C16Pt. 3 Ch. 6 modified (6.4.2020 for the tax year 2020-21) by Finance Act 2020 (c. 14), s. 9

C17Pt. 3 Ch. 6 modified (6.4.2021 for the tax year 2021-22) by Finance Act 2020 (c. 14), s. 10

GeneralU.K.

114Cars, vans and related benefitsU.K.

(1)This Chapter applies to a car or a van in relation to a particular tax year if in that year the car or van—

(a)is made available (without any transfer of the property in it) to an employee or a member of the employee’s family or household,

(b)is so made available by reason of the employment (see section 117), and

(c)is available for the employee’s or member’s private use (see section 118).

[F297(1A)Where this Chapter applies to a car or van, the car or van is a benefit for the purposes of this Chapter (and accordingly it is immaterial whether the terms on which it is made available to the employee or member constitute a fair bargain).]

(2)Where this Chapter applies to a car or van—

(a)sections 120 to 148 provide for [F298an amount in respect of] the benefit of the car to be treated as earnings,

(b)sections 149 to 153 provide for [F299an amount in respect of] the benefit of any fuel provided for the car to be treated as earnings, F300...

(c)sections 154 to [F301159] provide for [F302an amount in respect of] the benefit of the van to be treated as earnings[F303; and

(d)sections 160 to 164 provide for [F304an amount in respect of] the benefit of any fuel provided for the van to be treated as earnings in certain circumstances.]

F305(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F306(3A)This Chapter does not apply to a van in relation to a tax year if the private use of the van during the tax year by the employee or member of the employee’s family or household is insignificant.]

(4)The following provisions of this Chapter provide for further exceptions—

  • section 167 (pooled cars);

  • section 168 (pooled vans);

  • section 169 (car available to more than one member of family or household employed by same employer).

  • [F307section 169A (van available to more than one member of family or household employed by same employer).]

Textual Amendments

F297S. 114(1A) inserted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(4)

F298Words in s. 114(2)(a) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 19(a)

F299Words in s. 114(2)(b) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 19(b)

F300Word in s. 114(2)(b) repealed (22.7.2004) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(9)

F301Word in s. 114(2)(c) substituted (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 2(2)

F302Words in s. 114(2)(c) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 19(c)

F303S. 114(2)(d) and preceding word inserted (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 2(2)

F304Words in s. 114(2)(d) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 19(d)

F305S. 114(3) omitted (with effect in accordance with s. 23(2) of the amending Act) by virtue of Finance Act 2014 (c. 26), s. 23(1)

F306S. 114(3A) inserted (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 2(3)

F307Words in s. 114(4) inserted (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 2(4)

115Meaning of “car” and “van”U.K.

(1)In this Chapter—

  • “car” means a mechanically propelled road vehicle which is not—

    (a)

    a goods vehicle,

    (b)

    a motor cycle,

    (c)

    an invalid carriage, or

    (d)

    a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used;

  • “van” means a mechanically propelled road vehicle which—

    (a)

    is a goods vehicle, and

    (b)

    has a design weight not exceeding 3,500 kilograms,

    and which is not a motor cycle.

(2)For the purposes of subsection (1)—

  • “design weight” means the weight which a vehicle is designed or adapted not to exceed when in normal use and travelling on a road laden;

  • “goods vehicle” means a vehicle of a construction primarily suited for the conveyance of goods or burden of any description;

  • “invalid carriage” has the meaning given by section 185(1) of the Road Traffic Act 1988 (c. 52);

  • “motor cycle” has the meaning given by section 185(1) of the Road Traffic Act 1988.

116Meaning of when car or van is available to employeeU.K.

(1)For the purposes of this Chapter a car or van is available to an employee at a particular time if it is then made available, by reason of the employment and without any transfer of the property in it, to the employee or a member of the employee’s family or household.

(2)References in this Chapter to—

(a)the time when a car [F308or van] is first made available to an employee are to the earliest time when the car [F308or van] is made available as mentioned in subsection (1), and

(b)the last day in a year on which a car [F308or van] is available to an employee are to the last day in the year on which the car [F308or van] is made available as mentioned in subsection (1).

(3)This section does not apply to section [F309124A or] 138 (automatic car [F308or van] for a disabled employee).

Textual Amendments

F308Words in s. 116(2) inserted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 14 para. 3

F309Words in s. 116(3) inserted (with effect in accordance with s. 54(6) of the amending Act) by Finance Act 2009 (c. 10), s. 54(2)

[F310117Meaning of car or van made available by reason of employmentU.K.

(1)For the purposes of this Chapter a car or van made available by an employer to an employee or member of an employee's family or household is to be regarded as made available by reason of the employment unless subsection (2) or (3) excludes the application of this subsection.

(2)Subsection (1) does not apply where—

(a)the employer is an individual, and

(b)the car or van in question is made available in the normal course of the employer's domestic, family or personal relationships.

(3)Subsection (1) does not apply where—

(a)the employer carries on a vehicle hire business under which cars or vans of the same kind are made available to members of the public for hire,

(b)the car or van in question is hired to the employee or member in the normal course of that business, and

(c)in hiring that car or van the employee or member is acting as an ordinary member of the public.]

Textual Amendments

F310S. 117 substituted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(5)

118Availability for private useU.K.

(1)For the purposes of this Chapter a car or van made available in a tax year to an employee or a member of the employee’s family or household is to be treated as available for the employee’s or member’s private use unless in that year—

(a)the terms on which it is made available prohibit such use, and

(b)it is not so used.

(2)In this Chapter “private use”, in relation to a car or van made available to an employee or a member of the employee’s family or household, means any use other than for the employee’s business travel (see section 171(1)).

119Where alternative to benefit of [F311low emission] car [F312or van] offeredU.K.

[F313(1)This section applies where in a tax year—

(a)a car is made available as mentioned in section 114(1),

(b)the car's CO2 emissions figure (see sections 133 to 138) does not exceed 75 grams per kilometre, and

(c)an alternative to the benefit of the car is offered.]

(2)The mere fact that the alternative is offered does not result in an amount in respect of the benefit constituting earnings by virtue of Chapter 1 of this Part (earnings).

Textual Amendments

F311Words in s. 119 heading inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 20(3)

F312Words in s. 119 inserted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 14 para. 4

F313S. 119(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 20(2)

Cars: benefit treated as earningsU.K.

120Benefit of car treated as earningsU.K.

(1)If this Chapter applies to a car in relation to a particular tax year, the cash equivalent of the benefit of the car is to be treated as earnings from the employment for that year.

(2)In such a case [F314(including a case where the cash equivalent of the benefit of the car is nil)] the employee is referred to in this Chapter as being chargeable to tax in respect of the car in that year.

[F315(3)Any reference in this Act to a case where the cash equivalent of the benefit of a car is treated as the employee's earnings for a year by virtue of this section includes a case where the cash equivalent is nil.]

[F316(4)This section is subject to section 120A.]

Textual Amendments

F314Words in s. 120(2) inserted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(6)(a)

F315S. 120(3) inserted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(6)(b)

F316S. 120(4) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 21

[F317120ABenefit of car treated as earnings: optional remuneration arrangementsU.K.

(1)Where this Chapter applies to a car in relation to a particular tax year and the conditions in subsection (3) are met—

(a)the relevant amount (see section 121A) is to be treated as earnings from the employment for that tax year, and

(b)section 120(1) does not apply.

(2)In such a case (including a case where the relevant amount is nil) the employee is referred to in this Chapter as being chargeable to tax in respect of the car in the tax year.

(3)The conditions are that—

(a)the car is made available to the employee or member of the employee's household pursuant to optional remuneration arrangements,

(b)[F318the total foregone amount in connection with the car for the tax year is] is greater than the modified cash equivalent of the benefit of the car for the tax year (see section 121B), and

(c)the car's CO2 emissions figure (see sections 133 to 138) exceeds 75 grams per kilometre.

[F319(4)In this section, and in section 121A, the total foregone amount in connection with the car for a tax year is the total of—

(a)the amount foregone (see section 69B) with respect to the benefit of the car for that year, and

(b)the amount foregone (see section 69B) with respect to each other benefit that—

(i)is connected with the car,

(ii)is provided in that year for the employee, or a member of the employee's household, pursuant to optional remuneration arrangements, and

(iii)is neither the provision of a driver nor the provision of fuel.]]

Textual Amendments

F317S. 120A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 22

F318Words in s. 120A(3)(b) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(2)(a)

F319S. 120A(4) inserted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(2)(b)

121Method of calculating the cash equivalent of the benefit of a carU.K.

(1)The cash equivalent of the benefit of a car for a tax year is calculated as follows—

Step 1

Find the price of the car in accordance with sections 122 to [F320124A].

Step 2

Add the price of any accessories which fall to be taken into account in accordance with sections 125 to 131.

Step 3

Make any deduction under section 132 for capital contributions made by the employee to the cost of the car or accessories. [F321The resulting amount is the interim sum.]

Step 4

F322...

Step 5

Find the appropriate percentage for the car for the year in accordance with sections 133 to 142.

Step 6

Multiply the interim sum by the appropriate percentage for the car for the year.

Step 7

Make any deduction under section 143 for any periods when the car was unavailable.

The resulting amount is the provisional sum.

Step 8

Make any deduction from the provisional sum under section 144 in respect of payments by the employee for the private use of the car.

The result is the cash equivalent of the benefit of the car for the year.

(2)The method of calculation set out in subsection (1) is modified in the special cases dealt with in—

  • section 146 (cars that run on road fuel gas), and

  • section 147 (classic cars: 15 years of age or more).

[F323(3)Where the car is shared the cash equivalent is calculated under this section in accordance with section 148.]

Textual Amendments

F320Word in s. 121(1) substituted (with effect in accordance with s. 54(6) of the amending Act) by Finance Act 2009 (c. 10), s. 54(3)

F321Words in s. 121(1) inserted (with effect in accordance with Sch. 28 para. 10(2) of the amending Act) by Finance Act 2009 (c. 10), Sch. 28 para. 2(2)

F322Words in s. 121(1) omitted (with effect in accordance with Sch. 28 para. 10(2) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 28 para. 2(3)

[F324121AOptional remuneration arrangements: method of calculating relevant amountU.K.

(1)To find the relevant amount for the purposes of section 120A, take the following steps—

  • [F325Step 1 Take the total foregone amount in connection with the car for the tax year (see section 120A(4)).] .

  • Step 2 Make any deduction under section 132A in respect of capital contributions made by the employee to the cost of the car or accessories.

    The resulting amount is the provisional sum.

  • Step 3 Make any deduction from the provisional sum under section 144 in respect of payments by the employee for the private use of the car.

    The result is the “relevant amount” for the purposes of section 120A.

(2)Where it is necessary, for the purpose of determining the [F326“total foregone amount” for the purposes of] step 1 of subsection (1), to apportion an amount of earnings to [F327a benefit mentioned in section 120A(4)(a) or (b)] for the tax year, the apportionment is to be made on a just and reasonable basis.

In this subsection “earnings” is to be interpreted in accordance with section 69B(5).

Textual Amendments

F324Ss. 121A, 121B inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 23

F325Words in s. 121A(1) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(3)(a)

F326Words in s. 121A(2) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(3)(b)(i)

F327Words in s. 121A(2) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(3)(b)(ii)

121BMeaning of “modified cash equivalent”U.K.

(1)The “modified cash equivalent” of the benefit of a car for a tax year is calculated in accordance with the following steps (which must be read with subsections (2) to (4))—

  • Step 1 Find the price of the car in accordance with sections 122 to 124A.

  • Step 2 Add the price of any accessories which fall to be taken into account in accordance with sections 125 to 131.

    The resulting amount is the interim sum.

  • Step 3 Find the appropriate percentage for the car for the year in accordance with sections 133 to 142.

  • Step 4 Multiply the interim sum by the appropriate percentage for the car for the year.

  • Step 5 Make any deduction under section 143 for any periods when the car was unavailable.

    The resulting amount is the modified cash equivalent of the benefit of the car for the year.

(2)Where the car is shared the modified cash equivalent is calculated under this section in accordance with section 148.

(3)The modified cash equivalent of the benefit of a car for a tax year is to be taken to be zero if the condition in subsection (4) is met.

(4)The condition is that the benefit of the car for the tax year would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(5)The method of calculation set out in subsection (1) is modified in the special cases dealt with in—

(a)section 146 (cars that run on road fuel gas), and

(b)section 147A (classic cars: optional remuneration arrangements).]

Textual Amendments

F324Ss. 121A, 121B inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 23

Cars: the price of a carU.K.

122The price of the carU.K.

[F328(1)For the purposes of this Chapter the price of a car means—

This is subject to section 124A (automatic car for a disabled employee).

(a)its list price, if it has one, or

(b)its notional price, if it has no list price.]

[F329(2)This is subject to section 124A (automatic car for a disabled employee).]

Textual Amendments

F328S. 122 renumbered as s. 122(1) (with effect in accordance with s. 54(6) of the amending Act) by Finance Act 2009 (c. 10), s. 54(4)

F329S. 122(2) inserted (with effect in accordance with s. 54(6) of the amending Act) by Finance Act 2009 (c. 10), s. 54(4)

123The list price of a carU.K.

(1)In this Chapter a car’s “list price” means the price published by the car’s manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for a car of that kind if sold—

(a)in the United Kingdom,

(b)singly,

(c)in a retail sale,

(d)in the open market, and

(e)on the day immediately before the date of the car’s first registration.

(2)The “inclusive price” means the price inclusive of—

(a)any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business, and

(b)any relevant taxes (see section 171(1)).

Modifications etc. (not altering text)

C18S. 123 applied (with modifications) by 1994 c. 22, s. 1GF(3)(4) (as inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 46(2)(c))

124The notional price of a car with no list priceU.K.

(1)In this Chapter a car’s “notional price” means the price which might reasonably have been expected to be its list price if its manufacturer, importer or distributor (as the case may be) had published a price as the inclusive price appropriate for a sale of a car of the same kind sold—

(a)in the United Kingdom,

(b)singly,

(c)in a retail sale,

(d)in the open market,

(e)on the day immediately before the date of the car’s first registration, and

(f)with accessories equivalent to the qualifying accessories (see section 125) available with the car at the time when it was first made available to the employee.

(2)In this section “inclusive price” has the same meaning as in section 123.

Modifications etc. (not altering text)

C19S. 124 applied (with modifications) by 1994 c. 22, s. 1GF(3)(4) (as inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 46(2)(c))

[F330124AAutomatic car for a disabled employeeU.K.

(1)This section applies where—

(a)a car has automatic transmission (“the automatic car”),

(b)at any time in the year when the automatic car is available to the employee (“E”), E holds a disabled person's badge, and

(c)by reason of E's disability, E must, in the event of wanting to drive a car, drive a car which has automatic transmission.

(2)If, under section 122 to 124, the price of the automatic car is more than it would have been if the automatic car had been an equivalent manual car, the price of the automatic car is to be the price of an equivalent manual car.

(3)In subsection (2) “an equivalent manual car” means a car which—

(a)is first registered at or about the same time as the automatic car, and

(b)does not have automatic transmission, but otherwise is the closest variant available of the make and model of the automatic car.

(4)For the purposes of this section a car has automatic transmission if—

(a)the driver of the car is not provided with any means by which the driver may vary the gear ratio between the engine and the road wheels independently of the accelerator and the brakes, or

(b)the driver is provided with such means, but they do not include—

(i)a clutch pedal, or

(ii)a lever which the driver may operate manually.

(5)For the purposes of this section a car is available to an employee at a particular time if it is then made available, by reason of the employment and without any transfer of the property in it, to the employee.]

Textual Amendments

F330S. 124A inserted (with effect in accordance with s. 54(6) of the amending Act) by Finance Act 2009 (c. 10), s. 54(5)

Cars: treatment of accessoriesU.K.

125Meaning of “accessory” and related termsU.K.

(1)In this Chapter “qualifying accessory” means an accessory which—

(a)is made available for use with the car without any transfer of the property in the accessory,

(b)is made available by reason of the employment, and

(c)is attached to the car (whether permanently or not).

(2)For the purposes of this Chapter “accessory” includes any kind of equipment but does not include—

(a)equipment necessarily provided for use in the performance of the duties of the employment;

(b)equipment by means of which a car is capable of running on road fuel gas;

(c)equipment to enable a disabled person to use a car (see section 172);

(d)a mobile telephone (within the meaning given in section 319(2)).

(3)But subsection (2)(b) does not apply in relation to a car to which section 137 (different CO2 emissions figure for bi-fuel cars) applies.

[F331(3A)Subsection (2) needs to be read with section 125A (security features not to be regarded as accessories).]

(4)In this Chapter—

  • “standard accessory” means an accessory equivalent to an accessory assumed to be available with cars of the same kind as the car in question in arriving at the list price, and

  • “non-standard accessory” means any other accessory.

Textual Amendments

F331S. 125(3A) inserted (with effect in accordance with s. 14(5) of the amending Act) by Finance Act 2012 (c. 14), s. 14(2)

Modifications etc. (not altering text)

C20S. 125 applied (with modifications) by 1994 c. 22, s. 1GF(3)(4) (as inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 46(2)(c))

[F332125ASecurity features not to be regarded as accessoriesU.K.

(1)This section applies where a car made available to an employee has a relevant security feature.

(2)The relevant security feature is not an accessory for the purposes of this Chapter if it is provided in order to meet a threat to the employee's personal physical security which arises wholly or mainly because of the nature of the employee's employment.

(3)In this section “relevant security feature” means—

(a)armour designed to protect the car's occupants from explosions or gunfire,

(b)bullet-resistant glass,

(c)any modification to the car's fuel tank designed to protect the tank's contents from explosions or gunfire (including by making the tank self-sealing), and

(d)any modification made to the car in consequence of anything which is a relevant security feature by virtue of paragraph (a), (b) or (c).

(4)The Treasury may by regulations amend the definition of “relevant security feature” in subsection (3).]

Textual Amendments

F332S. 125A inserted (with effect in accordance with s. 14(5) of the amending Act) by Finance Act 2012 (c. 14), s. 14(3)

126Amounts taken into account in respect of accessoriesU.K.

(1)The price of the following accessories is to be taken into account under step 2 of section 121(1) [F333and step 2 of section 121B(1)] —

(a)in the case of a car with a list price, the price of any initial extra accessory, and

(b)in the case of any car, the price of any later accessory.

(2)In this Chapter an “initial extra accessory” means a qualifying accessory which—

(a)is a non-standard accessory,

(b)is available with the car at the time when it is first made available to the employee, and

(c)if it is an accessory in relation to which there is no published price of the manufacturer, importer or distributor of the car (see section 128), is available with the car in the tax year in question.

(3)In this Chapter a “later accessory” means a qualifying accessory which—

(a)is available with the car in the tax year in question,

(b)was not available with the car at the time when it was first made available to the employee,

(c)was not made available with the car before 1st August 1993, and

(d)has a price of at least £100.

(4)In this section references to the price of an accessory are to—

(a)its list price, if it has one, or

(b)its notional price, if it has no list price.

(5)This section is subject to section 131 (replacement accessories).

Textual Amendments

F333Words in s. 126(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 24

127The list price of an accessoryU.K.

(1)For the purposes of this Chapter the list price of an initial extra accessory is—

(a)the published price of the manufacturer, importer or distributor of the car (see section 128), or

(b)if there is no such price, the published price of the manufacturer, importer or distributor of the accessory (see section 129).

(2)For the purposes of this Chapter the list price of a later accessory is the published price of the manufacturer, importer or distributor of the accessory (see section 129).

Modifications etc. (not altering text)

C21Ss. 127-130 applied (with modifications) by 1994 c. 22, s. 1GF(3)(4) (as inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 46(2)(c))

128Accessory: published price of the car manufacturer etc.U.K.

(1)In this Chapter the “published price of the manufacturer, importer or distributor of the car” in relation to an accessory means the price published by the car’s manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for an equivalent accessory if sold with a car of the same kind—

(a)in the United Kingdom,

(b)singly,

(c)in a retail sale,

(d)in the open market, and

(e)on the day immediately before the date of the car’s first registration.

(2)The “inclusive price” means the price inclusive of—

(a)any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business,

(b)any relevant taxes other than car tax (see section 171(1)), and

(c)any charge for fitting the accessory.

Modifications etc. (not altering text)

C21Ss. 127-130 applied (with modifications) by 1994 c. 22, s. 1GF(3)(4) (as inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 46(2)(c))

129Accessory: published price of the accessory manufacturer etc.U.K.

(1)In this Chapter the “published price of the manufacturer, importer or distributor of the accessory” in relation to an accessory means the price published by or on behalf of the manufacturer, importer or distributor of the accessory (as the case may be) as the inclusive price appropriate for such an accessory if sold—

(a)in the United Kingdom,

(b)singly,

(c)in a retail sale,

(d)in the open market, and

(e)at the time immediately before the accessory concerned is first made available for use with the car.

(2)The “inclusive price” means the price inclusive of—

(a)any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business,

(b)any relevant taxes other than car tax (see section 171(1)), and

(c)in the case of an accessory permanently attached to the car, the price which the seller would charge for attaching it.

(3)In the case of an initial extra accessory, the time referred to in subsection (1)(e) may be a time before the car is first made available to the employee.

Modifications etc. (not altering text)

C21Ss. 127-130 applied (with modifications) by 1994 c. 22, s. 1GF(3)(4) (as inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 46(2)(c))

130The notional price of an accessoryU.K.

(1)In this Chapter the “notional price” of an accessory means the inclusive price which it might reasonably have been expected to fetch if sold—

(a)in the United Kingdom,

(b)singly,

(c)in a retail sale,

(d)in the open market, and

(e)at the time immediately before the accessory concerned is first made available for use with the car.

(2)The “inclusive price” means the price inclusive of—

(a)any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business,

(b)any relevant taxes other than car tax (see section 171(1)), and

(c)in the case of an accessory permanently attached to the car, the price which the seller would charge for attaching it.

(3)In the case of an initial extra accessory, the time referred to in subsection (1)(e) may be a time before the car is first made available to the employee.

Modifications etc. (not altering text)

C21Ss. 127-130 applied (with modifications) by 1994 c. 22, s. 1GF(3)(4) (as inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 46(2)(c))

131Replacement accessoriesU.K.

(1)This section applies [F334for the purposes of sections 121(1) and 121B(1)] where—

(a)a later accessory is available with the car in the tax year in question,

(b)that accessory (“the new accessory”) replaced another qualifying accessory (“the old accessory”) in that year or an earlier tax year, and

(c)the new accessory is of the same kind as the old accessory.

[F335(1A)In the application of this section for the purposes of section 121B(1)—

(a)references to the cash equivalent of the benefit of the car for the tax year are to be read as references to the modified cash equivalent of the benefit of the car for the tax year, and

(b)references to step 2 of section 121(1) are to be read as references to step 2 of section 121B(1).]

(2)If the new accessory is not superior to the old accessory, the cash equivalent of the benefit of the car for the tax year is to be calculated under step 2 of section 121(1) as if—

(a)the replacement has not been made, and

(b)the new accessory is a continuation of the old accessory.

(3)If the new accessory is superior to the old accessory and the conditions in subsection (4) are met, the cash equivalent of the benefit of the car for the tax year is to be calculated under step 2 of section 121(1)—

(a)as if the old accessory was not available with the car in that tax year, or

(b)where the price of the old accessory would (apart from this section) be added to the price of the car under step 2 of section 121(1) as an initial extra accessory, as if it was not available with the car at the time when the car was first made available to the employee.

(4)The conditions mentioned in subsection (3) are that—

(a)the old accessory was a non-standard accessory, and

(b)both the old and the new accessory would (apart from this section) be taken into account under step 2 of section 121(1) in calculating the cash equivalent of the benefit of the car for the year.

(5)For the purposes of this section a new accessory is superior to an old accessory if the price of the new accessory exceeds whichever is the greater of—

(a)the price of the old accessory, and

(b)the price of an accessory equivalent to the old accessory at the time immediately before the new accessory is first made available for use with the car.

(6)In this section references to the price of an accessory are to—

(a)its list price, if it has one, or

(b)its notional price, if it has no list price.

Textual Amendments

F334Words in s. 131(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 25(2)

F335S. 131(1A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 25(3)

Cars: capital contributions by employeeU.K.

132Capital contributions by employeeU.K.

(1)This section applies [F336for the purposes of section 121(1)] if the employee contributes a capital sum to expenditure on the provision of—

(a)the car, or

(b)any qualifying accessory which is taken into account in calculating the cash equivalent of the benefit of the car.

(2)A deduction is to be made from the amount carried forward from step 2 of section 121(1)—

(a)for the tax year in which the contribution is made, and

(b)for all subsequent years in which the employee is chargeable to tax in respect of the car by virtue of section 120.

(3)The amount of the deduction allowed in any tax year is the lesser of—

(a)the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—

(i)the car, or

(ii)any qualifying accessory which is taken into account in calculating the cash equivalent of the benefit of the car for the tax year in question, and

(b)£5,000.

Textual Amendments

F336Words in s. 132(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 26

[F337132ACapital contributions by employee: optional remuneration arrangementsU.K.

(1)This section applies for the purposes of section 121A(1) if the employee contributes a capital sum to expenditure on the provision of—

(a)the car, or

(b)any qualifying accessory which is taken into account in calculating under section 121B the modified cash equivalent of the benefit of the car.

(2)A deduction is to be made from the amount carried forward from step 1 of section 121A(1)—

(a)for the tax year in which the contribution is made, and

(b)for all subsequent tax years in which the employee is chargeable to tax in respect of the car by virtue of section 120A.

[F338(3)The amount of the deduction allowed in any tax year is found by—

(a)first multiplying the capped amount by the appropriate percentage, and

(b)then multiplying the result by the availability factor.]

(4)In subsection (3) the reference to “the appropriate percentage” is to the appropriate percentage for the car for the tax year (determined in accordance with sections 133 to 142).

[F339(4A)For the purposes of subsection (3), “the availability factor” is given by the formula—

where—

Y is the number of days in the tax year, and

U is the number of days in the tax year on which the car is unavailable.

(4B)For the purposes of subsection (4A), the car is unavailable on any day if the day—

(a)falls before the first day on which the car is available to the employee,

(b)falls after the last day on which the car is available to the employee, or

(c)falls within a period of 30 days or more throughout which the car is not available to the employee.]

(5)In this section “the capped amount” means the lesser of—

(a)the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—

(i)the car, or

(ii)any qualifying accessory which is taken into account in calculating under section 121B the modified cash equivalent of the benefit of the car for the tax year in question, and

(b)£5,000.

(6)This section is modified by section 147A (classic cars: optional remuneration arrangements).]

Textual Amendments

F337S. 132A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 27

F338S. 132A(3) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(4)(a)

F339S. 132A(4A)(4B) inserted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(4)(b)

Cars: the appropriate percentageU.K.

133How to determine the “appropriate percentage”U.K.

(1)The “appropriate percentage” for a car for a year depends upon when the car was first registered.

(2)If the car was first registered on or after 1st January 1998, the “appropriate percentage” depends upon whether the car—

(a)is a car with a CO2 emissions figure (see section 134(1)),

(b)is a car without a CO2 emissions figure (see section 134(2)), or

(c)is a diesel car to which section 141 applies,

and is determined under sections 139 to 141.

(3)If the car was first registered before 1st January 1998, the “appropriate percentage” is determined under section 142.

Modifications etc. (not altering text)

134Meaning of car with or without a CO2 emissions figureU.K.

(1)In this Chapter a “car with a CO2 emissions figure” means—

(a)a car first registered on or after 1st January 1998 but before 1st October 1999 to which section 135 applies,

(b)a car first registered on or after 1st October 1999 [F340but before IP completion day] to which section 136 [F341(registration from 1st October 1999 to IP completion day)] applies, F342...

[F343(ba)a car first registered on or after IP completion day to which section 136A (registration on or after IP completion day) applies,]

(c)a car first registered on or after 1st January 2000 [F344but before IP completion day] which is a car to which section 137 (bi-fuel cars [F345: registration from 1st January 2000 to IP completion day]) applies [F346, or

(d)a car first registered on or after IP completion day to which section 137A (bi-fuel cars: registration on or after IP completion day) applies.]

(2)In this Chapter a “car without a CO2 emissions figure” means any other car first registered on or after 1st January 1998.

Textual Amendments

F342Word in s. 134(1)(b) omitted (24.2.2022) by virtue of Finance Act 2022 (c. 3), Sch. 18 para. 3(b)

Modifications etc. (not altering text)

Cars: appropriate percentage: first registered on or after 1st January 1998U.K.

135Car with a CO2 emissions figure: pre-October 1999 registrationU.K.

(1)This section applies to a car first registered on or after 1st January 1998 but before 1st October 1999 if when it was so registered—

(a)it conformed to a vehicle type with an EC type-approval certificate (see section 171(1)), or

(b)it had a UK approval certificate (see section 171(1)),

which specifies a CO2 emissions figure in terms of grams per kilometre driven.

(2)The car’s CO2 emissions figure is that specified figure.

(3)This is subject to section 138 (automatic car for a disabled employee).

Modifications etc. (not altering text)

136Car with a CO2 emissions figure: [F347registration from 1st October 1999 to IP completion day] U.K.

(1)This section applies to a car first registered on or after 1st October 1999 [F348but before IP completion day] if it is so registered on the basis of—

(a)an EC certificate of conformity (see section 171(1)), or

(b)a UK approval certificate (see section 171(1)),

which specifies a CO2 emissions figure in terms of grams per kilometre driven.

(2)The car’s CO2 emissions figure is that specified figure unless more than one figure is specified, in which case the car’s CO2 emissions figure is the figure specified as the CO2 emissions (combined) figure.

[F349(2A)For the purpose of determining the car's CO2 emissions figure [F350in a case where the car is first registered before 6 April 2020], ignore any WLTP (worldwide harmonised [F351light] vehicles test procedures) values specified in [F352the EC certificate of conformity or UK approval certificate].]

[F353(2B)For the purpose of determining the car's CO2 emissions figure in a case where the car is first registered on or after 6 April 2020, ignore any values specified in the EC certificate of conformity or UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values.]

(3)[F354Subsection (2)] is subject to—

(a)section 137 (bi-fuel cars [F355: registration from 1st January 2000 to IP completion day]), and

(b)section 138 (automatic car for a disabled employee).

Textual Amendments

F347Words in s. 136 heading substituted (24.2.2022) by Finance Act 2022 (c. 3), Sch. 18 para. 4(1)(a)

F349S. 136(2A) inserted (with effect in accordance with s. 48(12) of the amending Act) by Finance Act 2018 (c. 3), s. 48(9)(a)

F350Words in s. 136(2A) inserted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(2)(a)(i)(5)

F351Word in s. 136(2A) substituted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(2)(a)(ii)(5)

F352Words in s. 136(2A) substituted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(2)(a)(iii)(5)

F353S. 136(2B) inserted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(2)(b)(5)

F354Words in s. 136(3) substituted (with effect in accordance with s. 48(12) of the amending Act) by Finance Act 2018 (c. 3), s. 48(9)(b)

Modifications etc. (not altering text)

[F356136ACar with a CO2 emissions figure: registration on or after IP completion dayU.K.

(1)This section applies to a car first registered on or after IP completion day if it is so registered on the basis of a qualifying emissions certificate.

(2)The car’s CO2 emissions figure is the figure specified in the qualifying emissions certificate unless more than one figure is specified, in which case the car’s CO2 emissions figure is the figure specified as the CO2 emissions (combined) figure.

(3)For the purpose of determining the car’s CO2 emissions figure ignore any values specified in the qualifying emissions certificate that are not WLTP (worldwide harmonised light vehicles test procedures) values.

(4)Subsection (2) is subject to—

(a)section 137A (bi-fuel cars registered after IP completion day), and

(b)section 138 (automatic car for a disabled employee).]

Textual Amendments

137Car with a CO2 emissions figure: bi-fuel cars [F357: registration from 1st January 2000 to IP completion day] U.K.

(1)This section applies to a car first registered on or after 1st January 2000 [F358but before IP completion day] if it is so registered on the basis of—

(a)an EC certificate of conformity (see section 171(1)), or

(b)a UK approval certificate (see section 171(1)),

which specifies separate CO2 emissions figures in terms of grams per kilometre driven for different fuels.

(2)The car’s CO2 emissions figure is—

(a)the lowest figure specified, or

(b)if there is more than one figure specified in relation to each fuel, the lowest CO2 emissions (combined) figure specified.

[F359(2A)For the purpose of determining the car's CO2 emissions figure [F360in a case where the car is first registered before 6 April 2020], ignore any WLTP (worldwide harmonised [F361light] vehicles test procedures) values specified in [F362the EC certificate of conformity or UK approval certificate].]

[F363(2B)For the purpose of determining the car's CO2 emissions figure in a case where the car is first registered on or after 6 April 2020, ignore any values specified in the EC certificate of conformity or UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values.]

(3)[F364Subsection (2)] is subject to section 138 (automatic car for a disabled employee).

Textual Amendments

F357Words in s. 137 heading inserted (24.2.2022) by Finance Act 2022 (c. 3), Sch. 18 para. 5(1)(a)

F359S. 137(2A) inserted (with effect in accordance with s. 48(12) of the amending Act) by Finance Act 2018 (c. 3), s. 48(10)(a)

F360Words in s. 137(2A) inserted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(3)(a)(i)(5)

F361Word in s. 137(2A) substituted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(3)(a)(ii)(5)

F362Words in s. 137(2A) substituted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(3)(a)(iii)(5)

F363S. 137(2B) inserted (6.4.2020 with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(3)(b)(5)

F364Words in s. 137(3) substituted (with effect in accordance with s. 48(12) of the amending Act) by Finance Act 2018 (c. 3), s. 48(10)(b)

Modifications etc. (not altering text)

[F365137ACar with a CO2 emissions figure: bi-fuel cars registered on or after IP completion dayU.K.

(1)This section applies to a car first registered on or after IP completion day if it is so registered on the basis of a qualifying emissions certificate which specifies separate CO2 emissions figures in terms of grams per kilometre driven for different fuels.

(2)The car’s CO2 emissions figure is—

(a)the lowest figure specified, or

(b)if there is more than one figure specified in relation to each fuel, the lowest CO2 emissions (combined) figure specified.

(3)For the purpose of determining the car’s CO2 emissions figure ignore any values specified in the qualifying emissions certificate that are not WLTP (worldwide harmonised light vehicles test procedures) values.

(4)Subsection (2) is subject to section 138 (automatic car for a disabled employee).]

Textual Amendments

138Car with a CO2 emissions figure: automatic car for a disabled employeeU.K.

(1)This section applies where—

(a)a car with a CO2 emissions figure has automatic transmission (“the automatic car”),

(b)at any time in the year when the automatic car is available to the employee (“E”), E holds a disabled person’s badge, and

(c)by reason of E’s disability, E must, in the event of wanting to drive a car, drive a car which has automatic transmission.

(2)If, under sections 135 to 137, the automatic car’s CO2 emissions figure is more than it would have been if the automatic car had been an equivalent manual car, the CO2 emissions figure for the automatic car is to be the CO2 emissions figure for an equivalent manual car.

(3)In subsection (2) “an equivalent manual car” means a car which—

(a)is first registered at or about the same time as the automatic car, and

(b)does not have automatic transmission, but otherwise is the closest variant available of the make and model of the automatic car.

(4)For the purposes of this section a car has automatic transmission if—

(a)the driver of the car is not provided with any means by which the driver may vary the gear ratio between the engine and the road wheels independently of the accelerator and the brakes, or

(b)the driver is provided with such means, but they do not include—

(i)a clutch pedal, or

(ii)a lever which the driver may operate manually.

(5)For the purposes of this section a car is available to an employee at a particular time if it is then made available, by reason of the employment and without any transfer of the property in it, to the employee.

Modifications etc. (not altering text)

[F366139Cars with a CO2 emissions figure: the appropriate percentageU.K.

(1)[F367The appropriate percentage for a year for a car with a CO2 emissions figure of less than 75 is determined in accordance with the following table.

[F368CarAppropriate percentage
Car with CO2 emissions figure of 03%
Car with CO2 emissions figure of 1–50As follows
Car with electric range figure of 130 or more3%
Car with electric range figure of 70–1296%
Car with electric range figure of 40–699%
Car with electric range figure of 30–3913%
Car with electric range figure of less than 3015%
Car with CO2 emissions figure of 51–5416%
Car with CO2 emissions figure of 55–5917%
Car with CO2 emissions figure of 60–6418%
Car with CO2 emissions figure of 65–6919%
Car with CO2 emissions figure of 70–7420%]

[F369(2)For the purposes of subsection (1) and the table—

(a)if a CO2 emissions figure is not a whole number, round it down to the nearest whole number, and

(b)if an electric range figure is not a whole number, round it up to the nearest whole number.]

(3)The appropriate percentage for a year for a car with a CO2 emissions figure of 75 or more is whichever is the lesser of—

(a)[F37021%] plus one percentage point for each 5 grams per kilometre driven by which the CO2 emissions figure exceeds 75, and

(b)37%.

(4)For the purposes of subsection (3), if a CO2 emissions figure is not a multiple of 5, round it down to the nearest multiple of 5.

(5)In this section, an “electric range figure” is the number of miles which is the equivalent of the number of kilometres specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate on the basis of which a car is registered, as being the maximum distance for which the car can be driven in electric mode without recharging the battery.]

[F371(5A)For the purpose of determining the electric range figure for a car first registered before 6 April 2020, ignore any WLTP (worldwide harmonised light vehicle test procedures) values specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate.

(5B)For the purpose of determining the electric range figure for a car first registered on or after 6 April 2020, ignore any values specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values.]

(7)This section is subject to—

(a)section 141 (diesel cars), and

(b)any regulations made by the Treasury under section 170(4) (power to reduce the appropriate percentage).]

Textual Amendments

F366S. 139 substituted (for tax year 2012-13 and subsequent tax years) by Finance Act 2010 (c. 13), s. 59(2)(5)

F367S. 139(1)-(5) substituted for s. 139(1)-(6) (for tax year 2020-21 and subsequent tax years) by Finance (No. 2) Act 2017 (c. 32), s. 2(2)(6)

F368S. 139(1) Table substituted (for the tax year 2025-26) by Finance Act 2023 (c. 1), s. 11(1)(2)

F369S. 139(2) substituted for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(4)(a)(5)

F370Word in s. 139(3)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2023 (c. 1), s. 11(3)(4)

F371S. 139(5A)(5B) inserted (for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 8(4)(b)(5)

Modifications etc. (not altering text)

140Car without a CO2 emissions figure: the appropriate percentageU.K.

(1)The appropriate percentage for a year for a car without a CO2 emissions figure is determined under this section.

(2)If the car has an internal combustion engine with one or more reciprocating pistons, the appropriate percentage for the year is—

Table
Cylinder capacity of car in cubic centimetresAppropriate percentage
1,400 or less [F37218%] [F37320%] [F37424%]
More than 1,400 but not more than 2,000 [F37529%] [F37631%] [F37735%]
More than 2,000[F37837%]

For this purpose a car’s cylinder capacity is the capacity of its engine as calculated for the purposes of VERA 1994.

(3)If subsection (2) does not apply, the appropriate percentage for the year is—

[F379[F380(a)[F3819%] [F38213%] [F38316%] [F3842%] if the car cannot in any circumstances emit CO2 by being driven, and]

(b)[F38537%] in any other case.]

F386(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F387(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)This section is subject to—

(a)section 141 (diesel cars), and

(b)any regulations made by the Treasury under section 170(4) (power to reduce the appropriate percentage).

Textual Amendments

F372Word in s. 140(2) substituted (for tax year 2017-18) by Finance Act 2015 (c. 11), s. 7(5)(a)(7)

F373Word in s. 140(2) substituted (for tax year 2018-19 and subsequent tax year) by Finance Act 2015 (c. 11), s. 8(5)(a)(7)

F374Word in s. 140(2) Table substituted (for tax year 2020-21 and subsequent tax years) by Finance (No. 2) Act 2017 (c. 32), s. 2(3)(a)(i)(6)

F375Word in s. 140(2) substituted (for tax year 2017-18) by Finance Act 2015 (c. 11), s. 7(5)(b)(7)

F376Word in s. 140(2) substituted (for tax year 2018-19 and subsequent tax year) by Finance Act 2015 (c. 11), s. 8(5)(b)(7)

F377Word in s. 140(2) Table substituted (for tax year 2020-21 and subsequent tax years) by Finance (No. 2) Act 2017 (c. 32), s. 2(3)(a)(ii)(6)

F378Word in s. 140(2) Table substituted (for tax year 2015-16 and subsequent tax years) by Finance Act 2013 (c. 29), s. 23(8)(12)

F379S. 140(3)(a)(b) substituted for words (with effect for the tax year 2010-11 and subsequent tax years in accordance with s. 58(18) of the amending Act) by Finance Act 2010 (c. 13), s. 58(8)

F380S. 140(3)(a) substituted (for tax year 2015-16 and subsequent tax years) by Finance Act 2013 (c. 29), s. 23(9)(12)

F381Word in s. 140(3)(a) substituted (for tax year 2017-18) by Finance Act 2016 (c. 24), s. 9(1)(2)

F382Word in s. 140(3)(a) substituted (for the tax year 2018-19) by Finance Act 2016 (c. 24), s. 9(3)(4)

F383Word in s. 140(3)(a) substituted (for tax year 2019-20 and subsequent tax years) by Finance Act 2016 (c. 24), s. 8(7)(9)

F384Word in s. 140(3)(a) substituted (for tax year 2020-21 and subsequent tax years) by Finance (No. 2) Act 2017 (c. 32), s. 2(3)(b)(6)

F385Word in s. 140(3)(b) substituted (for tax year 2015-16 and subsequent tax years) by Finance Act 2013 (c. 29), s. 23(10)(12)

F386S. 140(3A) omitted (for the tax year 2015-16 and subsequent tax years) by virtue of Finance Act 2013 (c. 29), s. 23(10)(12)

F387S. 140(4) omitted (with effect for the tax year 2010-11 and subsequent tax years in accordance with s. 58(18) of the amending Act) by virtue of Finance Act 2010 (c. 13), s. 58(10)

Modifications etc. (not altering text)

141Diesel cars: the appropriate percentageU.K.

[F388(1)This section applies to a diesel car first registered on or after 1 January 1998 but before 1 September 2017.

(1A)This section applies to a diesel car first registered on or after 1 September 2017 if it does not meet the Euro 6d emissions standard.]

(2)To determine the appropriate percentage for [F389the] car for a year—

Step 1

Determine whether the car is a car with a CO2 emissions figure or a car without a CO2 emissions figure (see section 134).

Step 2

Take what would be the appropriate percentage for the car for the year under section 139 or 140 as appropriate.

Step 3

The appropriate percentage for the car for the year is whichever is the smaller of—

(a)the figure resulting from the addition of [F3904 percentage points] to the figure found under step 2, and

(b)35%.

[F391(2A) A vehicle meets the Euro 6d emissions standard only if it is first registered on the basis of an EC certificate of conformity which indicates that the exhaust emission level is Euro 6d (and it does not meet that standard if it is first registered on the basis of an EC certificate of conformity which indicates that that level is Euro 6d-TEMP).]

(3)In this section “diesel car” means a car which is propelled solely by diesel.

(4)This section is subject to any regulations made by the Treasury under section 170(4) (power to reduce the appropriate percentage).

Textual Amendments

F388S. 141(1)(1A) substituted for s. 141(1) (for tax year 2018-19 and subsequent tax years) by Finance Act 2018 (c. 3), s. 9(2)(6)

F389Word in s. 141(2) substituted (for tax year 2018-19 and subsequent tax years) by Finance Act 2018 (c. 3), s. 9(3)(a)(6)

F390Words in s. 141(2)(a) substituted (for tax year 2018-19 and subsequent tax years) by Finance Act 2018 (c. 3), s. 9(3)(b)(6)

F391S. 141(2A) inserted (for tax year 2018-19 and subsequent tax years) by Finance Act 2018 (c. 3), s. 9(4)(6)

Modifications etc. (not altering text)

Cars: appropriate percentage: first registered before 1st January 1998U.K.

142Car first registered before 1st January 1998: the appropriate percentageU.K.

(1)The appropriate percentage for a car first registered before 1st January 1998 is determined under this section.

(2)If the car has an internal combustion engine with one or more reciprocating pistons, the appropriate percentage for the year is—

Table
Cylinder capacity of car in cubic centimetresAppropriate percentage
1,400 or less [F39224%]
More than 1,400 but not more than 2,000 [F39335%]
More than 2,000 [F39437%]

For this purpose a car’s cylinder capacity is the capacity of its engine as calculated for the purposes of VERA 1994.

(3)If subsection (2) does not apply, the appropriate percentage for the year is [F39537%].

F396(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F392Word in s. 142(2) Table substituted (with effect in accordance with s. 2(6) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 2(4)(a)

F393Word in s. 142(2) Table substituted (with effect in accordance with s. 2(6) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 2(4)(b)

F394Word in s. 142(2) Table substituted (with effect in accordance with s. 24(17) of the amending Act) by Finance Act 2014 (c. 26), s. 24(13)(c)

F395Word in s. 142(3) substituted (with effect in accordance with s. 24(17) of the amending Act) by Finance Act 2014 (c. 26), s. 24(14)

F396S. 142(4) omitted (with effect in accordance with Sch. 28 para. 10(2) of the amending Act and with Finance Act 2010 (c. 13), s. 58(20)) by virtue of Finance Act 2009 (c. 10), Sch. 28 para. 8(b)

Modifications etc. (not altering text)

Cars: unavailability or payments for private useU.K.

143Deduction for periods when car unavailableU.K.

[F397(A1)This section has effect for the purposes of—

(a)section 121(1) (method of calculating the cash equivalent of the benefit of a car), and

(b)section 121B(1) (optional remuneration arrangements: meaning of “modified cash equivalent”).]

(1)A deduction is to be made from the amount carried forward from step 6 of section 121(1) [F398or (as the case may be) step 4 of section 121B(1)] if the car has been unavailable on any day during the tax year in question.

(2)For the purposes of this section a car is unavailable on any day if the day—

(a)falls before the first day on which the car is available to the employee,

(b)falls after the last day on which the car is available to the employee, or

(c)falls within a period of 30 days or more throughout which the car is not available to the employee.

(3)The amount of the deduction is given by the formula—

where—

U is the number of days in the year on which the car is unavailable,

Y is the number of days in that year, and

A is the amount carried forward from step 6 [F399of section 121(1) or (as the case may be) step 4 of section 121B(1)] .

(4)This section is subject to section 145 (modification where car temporarily replaced).

Textual Amendments

F397S. 143(A1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 28(2)

F398Words in s. 143(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 28(3)

F399Words in s. 143(3) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 28(4)

144Deduction for payments for private useU.K.

(1)A deduction is to be made from the provisional sum [F400(see subsection (1A))] if, as a condition of the car being available for the employee’s private use, the employee—

(a)is required in the tax year in question to pay (whether by way of deduction from earnings or otherwise) an amount of money for that use, and

[F401(b)pays that amount [F402on or before 6 July following] that year.]

[F403(1A)In this section “the provisional sum” means the provisional sum calculated under—

(a)step 7 of section 121(1) (method of calculating the cash equivalent of the benefit of a car), or

(b)step 2 of section 121A(1) (optional remuneration arrangements: method of calculating relevant amount).]

(2)If the amount paid [F404as mentioned in subsection (1)(b)] by the employee in respect of that year is equal to or exceeds the provisional sum, the provisional sum is reduced [F405so that—

(a)in a case within subsection (1A)(a), the cash equivalent of the benefit of the car for the year is nil, or

(b)in a case within subsection (1A)(b), the relevant amount for the purposes of section 120A is nil.]

(3)[F406Where subsection (2) does not apply,] the amount paid [F407as mentioned in subsection (1)(b) ] by the employee in respect of the year is deducted from the provisional sum in order to [F408give—

(a)in a case within subsection (1A)(a), the cash equivalent of the benefit of the car for the year, or

(b)in a case within subsection (1A)(b), the relevant amount for the purposes of section 120A.]

(4)In this section the reference to the car being available for the employee’s private use includes a reference to the car being available for the private use of a member of the employee’s family or household.

(5)This section is subject to section 145 (modification where car temporarily replaced).

Textual Amendments

F400Words in s. 144(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 29(2)

F401S. 144(1)(b) substituted (with effect in accordance with s. 25(3) of the amending Act) by Finance Act 2014 (c. 26), s. 25(1)

F402Words in s. 144(1)(b) substituted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(7)(a)

F403S. 144(1A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 29(3)

F404Words in s. 144(2) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(7)(b)

F405Words in s. 144(2) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 29(4)

F406Words in s. 144(3) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 29(5)(a)

F407Words in s. 144(3) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(7)(c)

F408Words in s. 144(3) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 29(5)(b)

145Modification of provisions where car temporarily replacedU.K.

(1)This section applies if—

(a)the car normally available to an employee (“the normal car”) is not available to the employee for a period of less than 30 days,

(b)another car (“the replacement car”) is made available to the employee in order to replace the normal car for the whole or part of that period,

[F409(c)the employee is chargeable to tax—

(i)in respect of both the normal car and the replacement car by virtue of section 120, or

(ii)in respect of both the normal car and the replacement car by virtue of section 120A, and”.]

(d)the replacement car meets condition A or B.

(2)Condition A is met if the replacement car is not materially better than the normal car.

(3)Condition B is met if the replacement car is not made available to the employee under an arrangement of which the main purpose, or one of the main purposes, is to provide the employee with the benefit of a car which is materially better than the normal car.

(4)If this section applies—

(a)section 143 (deduction for periods when car unavailable) applies so that the replacement car is to be treated as unavailable on the days of the period during which it replaces the normal car, and

(b)section 144 (deduction for payments for private use) applies as if the replacement had not been made and the replacement car were a continuation of the normal car.

(5)A replacement car is regarded as materially better than the normal car if—

(a)it is materially better in quality, or

(b)when calculating the cash equivalent of the benefit of the replacement car, the interim sum calculated under [F410step 3] of section 121(1) is materially higher than the interim sum calculated in relation to the normal car.

[F411(6)Where this section applies by virtue of subsection (1)(c)(ii), the condition in subsection (5)(b) is to be taken to be met if it would be met on the assumption that the cash equivalent of the benefit of the cars in question is to be calculated under section 121(1).]

Textual Amendments

F409S. 145(1)(c) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 30(2)

F410Words in s. 145(5) substituted (with effect in accordance with Sch. 28 para. 10(2) of the amending Act) by Finance Act 2009 (c. 10), Sch. 28 para. 3

F411S. 145(6) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 30(3)

Cars: special casesU.K.

146Cars that run on road fuel gasU.K.

(1)This section applies [F412for the purposes of sections 121 and 121B] if the car—

(a)has been manufactured so as to be capable of running on road fuel gas, and

(b)is not a car to which section 137 (different CO2 emissions figure for bi-fuel cars) applies.

(2)The price of the car found under step 1 of section 121(1) [F413or (as the case may be) step 1 of section 121B(1)] is to be reduced by so much of that price as it is reasonable to attribute to the car being manufactured in such a way as to be capable of running on road fuel gas rather than in such a way as to be capable of running only on petrol.

Textual Amendments

F412Words in s. 146(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 31(2)

F413Words in s. 146(2) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 31(3)

147Classic cars: 15 years of age or moreU.K.

(1)This section applies in calculating the cash equivalent of the benefit of a car for a tax year if—

(a)the age of the car at the end of the year is 15 years or more,

(b)the market value of the car for the year is £15,000 or more, and

(c)that market value exceeds the [F414interim sum calculated under] step 3 of section 121(1).

(2)For the [F415interim sum calculated under] step 3 substitute the market value of the car for the tax year in question less any deductions under subsection (6).

(3)The market value of a car for a tax year is the price which the car might reasonably have been expected to fetch on a sale in the open market on—

(a)the last day of that year, or

(b)the last day in that year on which the car is available to the employee if that is earlier.

(4)It is assumed that any qualifying accessories available with the car on that day are included in the sale.

(5)Subsection (6) applies if the employee contributes a capital sum to expenditure on the provision of—

(a)the car, or

(b)any qualifying accessory which is taken into account in determining the market value of the car.

(6)A deduction is to be made from the market value of the car—

(a)for the tax year in which the contribution is made, and

(b)for all subsequent years in which the employee is chargeable to tax in respect of the car by virtue of section 120.

(7)The amount of the deduction allowed in any tax year is the lesser of—

(a)the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—

(i)the car, or

(ii)any qualifying accessory which is taken into account in determining the market value of the car for the tax year in question, and

(b)£5,000.

Textual Amendments

F414Words in s. 147(1) substituted (with effect in accordance with Sch. 28 para. 10(2) of the amending Act) by Finance Act 2009 (c. 10), Sch. 28 para. 4

F415Words in s. 147(2) substituted (with effect in accordance with Sch. 28 para. 10(2) of the amending Act) by Finance Act 2009 (c. 10), Sch. 28 para. 4

[F416147AClassic cars: optional remuneration arrangementsU.K.

(1)This section applies in calculating the relevant amount in respect of a car for a tax year for the purposes of section 120A (benefit of car treated as earnings: optional remuneration arrangements) if—

(a)the age of the car at the end of the year is 15 years or more,

(b)the market value of the car for the year is £15,000 or more, and

(c)that market value exceeds the specified amount (see subsection (4)).

(2)In calculating the modified cash equivalent of the benefit of the car, for the interim sum calculated under step 2 of section 121B(1) substitute the market value of the car for the tax year in question.

(3)Section 132A (capital contributions by employee: optional remuneration arrangements) has effect as if—

(a)in subsection (1)(b) the reference to calculating under section 121B the modified cash equivalent of the benefit of the car were to determining the market value of the car, and

(b)in subsection (5)(a)(ii) the reference to calculating under section 121B the modified cash equivalent of the benefit of the car for the tax year in question were to determining the market value of the car for the tax year in question.

(4)The “specified amount” is found as follows.

  • Step 1 Find what would be the interim sum under step 2 of section 121B(1) (if subsection (2) of this section did not have effect).

  • Step 2 (Assuming for this purpose that the reference in section 132(2) to step 2 of section 121(1) includes a reference to step 1 of this subsection) make any deduction under section 132 for capital contributions made by the employee to the cost of the car or accessories.

    The resulting amount is the specified amount.

(5)The market value of a car for a tax year is to be determined in accordance with section 147(3) and (4).]

Textual Amendments

F416S. 147A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 32

Cars: reduction where shared carU.K.

148Reduction of cash equivalent where car is sharedU.K.

(1)This section applies [F417for the purposes of sections 121 and 121B] if in a tax year a car—

(a)is available to more than one employee concurrently,

(b)is so made available by the same employer, and

(c)is available concurrently for each employee’s private use,

and two or more of those employees are chargeable to tax in respect of the car in that year by virtue of [F418sections 120 and 120A] .

[F419(2)The amount to be treated as earnings in respect of the benefit of the car is to be calculated separately for each of those employees for that tax year (whether under section 120 or section 120A).]

[F420(2A)[F421In the case of an employee chargeable to tax in respect of the car by virtue of section 120] The provisional sum calculated under step 7 in section 121(1) is to be reduced on a just and reasonable basis before making any deduction under step 8.]

[F422(2B)In the case of an employee chargeable to tax in respect of the car by virtue of section 120A, the modified cash equivalent (as determined under section 121B(1)) is to be reduced on a just and reasonable basis.]

F423(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)In this section the reference to the car being available for each employee’s private use includes a reference to the car being available for the private use of a member of the employee’s family or household.

Textual Amendments

F417Words in s. 148(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 33(2)(a)

F418Words in s. 148(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 33(2)(b)

F419S. 148(2) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 33(3)

F421Words in s. 148(2A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 33(4)

F422S. 148(2B) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 33(5)

F423S. 148(3) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 7

Car fuel: benefit treated as earningsU.K.

149Benefit of car fuel treated as earningsU.K.

(1)If in a tax year—

(a)fuel is provided for a car by reason of an employee’s employment, and

(b)that person is chargeable to tax in respect of the car by virtue of section 120 [F424or 120A],

the cash equivalent of the benefit of the fuel is to be treated as earnings from the employment for that year.

(2)The cash equivalent of the benefit of the fuel is calculated in accordance with sections 150 to 153.

(3)Fuel is to be treated as provided for a car, in addition to any other way in which it may be provided, if—

(a)any liability in respect of the provision of fuel for the car is discharged,

(b)a non-cash voucher or a credit-token is used to obtain fuel for the car,

(c)a non-cash voucher or a credit-token is used to obtain money which is spent on fuel for the car, or

(d)any sum is paid in respect of expenses incurred in providing fuel for the car.

(4)References in this section to fuel do not include any facility or means for supplying electrical energy [F425or any energy for a car which cannot in any circumstances emit CO2 by being driven].

Textual Amendments

F424Words in s. 149(1)(b) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 34

F425Words in s. 149(4) substituted (with effect for the tax year 2010-11 and subsequent tax years in accordance with s. 58(18) of the amending Act) by Finance Act 2010 (c. 13), s. 58(11)

[F426149ABenefit of car fuel treated as earnings: optional remuneration arrangementsU.K.

(1)This section applies if—

(a)fuel is provided for a car in a tax year by reason of an employee's employment,

(b)the employee is chargeable to tax in respect of the car in the tax year by virtue of section 120 or 120A, and

(c)the fuel is provided pursuant to optional remuneration arrangements.

(2)If the condition in subsection (3) is met—

(a)the amount foregone with respect to the benefit of the fuel (see section 69B) is to be treated as earnings from the employment for the tax year, and

(b)section 149(1) does not apply.

(3)The condition mentioned in subsection (2) is that the amount foregone with respect to the benefit of the fuel is greater than the cash equivalent of the benefit of the fuel.

(4)For the purposes of subsection (3), assume that the cash equivalent of the benefit of the fuel is zero if the condition in subsection (5) is met.

(5)The condition mentioned in subsection (4) is that the benefit of the fuel would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(6)References in this section to fuel do not include any facility or means for supplying electrical energy or any energy for a car which cannot in any circumstances emit CO2 by being driven.

(7)Where it is necessary for the purposes of subsections (2)(a) and (3) to apportion an amount of earnings to the benefit of the fuel in the tax year, the apportionment is to be made on a just and reasonable basis.

In this subsection “earnings” is to be interpreted in accordance with section 69B(5).]

Textual Amendments

F426S. 149A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 35

150Car fuel: calculating the cash equivalentU.K.

(1)The cash equivalent of the benefit of the fuel is the appropriate percentage of [F427£28,200].

(2)The “appropriate percentage” means the appropriate percentage determined in accordance with sections 133 to 142 for the purpose of calculating the cash equivalent of the benefit of the car for which the fuel is provided.

(3)But the cash equivalent may be—

(a)nil where either of the conditions in section 151 is met;

(b)proportionately reduced under section 152;

(c)reduced under section 153.

Textual Amendments

F427Sum in s. 150(1) substituted (with application to tax year 2025-26 and subsequent tax years) by The Van Benefit and Car and Van Fuel Benefit Order 2024 (S.I. 2024/1349), arts. 1(2), 2(2)

151Car fuel: nil cash equivalentU.K.

(1)The cash equivalent of the benefit of the fuel is nil if condition A or B is met.

(2)Condition A is met if F428...—

(a)[F429in the tax year in question,] the employee is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use, and

(b)the employee does make good that expense [F430on or before 6 July following that tax year] .

(3)Condition B is met if in the tax year in question the fuel is made available only for business travel (see section 171(1)).

Textual Amendments

F428Words in s. 151(2) omitted (with effect in accordance with s. 1(14) of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 1(8)(a)

F429Words in s. 151(2)(a) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(8)(b)

F430Words in s. 151(2)(b) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(8)(c)

152Car fuel: proportionate reduction of cash equivalentU.K.

(1)The cash equivalent of the benefit of the fuel is to be proportionately reduced if for any part of the tax year in question the car for which the fuel is provided is unavailable (within the meaning of section 143 (deduction for periods when car unavailable)).

(2)The cash equivalent of the benefit of the fuel is also to be proportionately reduced if F431...—

(a)[F432for any part of the tax year in question,] the facility for the provision of fuel as mentioned in section 149(1) is not available,

(b)[F433for any part of the tax year in question,] the fuel is made available only for business travel (see section 171(1)), or

(c)the employee[F434—

(i)for any part of the tax year in question,] is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use [F435, and

(ii)the employee does make good that expense on or before 6 July following that tax year]

(3)The fact that any of the conditions specified in subsection (2) is met for part of a tax year is to be disregarded if there is a time later in that year when none of those conditions is met.

(4)Where the cash equivalent is to be proportionately reduced under subsection (1) or (2) (or under both those subsections), the reduced amount is given by the formula—

where—

CE is the amount of the cash equivalent before any reduction,

Y is the number of days in the tax year in question, and

D is the total number of days in that year on which either the car is unavailable or one or more of the conditions in subsection (2) is met.

Textual Amendments

F431Words in s. 152(2) omitted (with effect in accordance with s. 1(14) of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 1(9)(a)

F432Words in s. 152(2)(a) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(9)(b)

F433Words in s. 152(2)(b) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(9)(c)

F434S. 152(2)(c)(i) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(9)(d)(i)

F435Words in s. 152(2)(c) substituted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(9)(d)(ii)

153Car fuel: reduction of cash equivalentU.K.

If a reduction of the cash equivalent of the benefit of the car for which the fuel is provided is made under section 148 (reduction of cash equivalent where car is shared), a corresponding reduction is to be made in relation to the cash equivalent of the benefit of the fuel.

Vans: benefit treated as earningsU.K.

154Benefit of van treated as earningsU.K.

(1)[F436If this Chapter applies to a van in relation to a particular tax year, the cash equivalent of the benefit of the van is to be treated as earnings from the employment for that year.]

[F437(2)In such a case (including a case where the cash equivalent of the benefit of the van is nil) the employee is referred to in this Chapter as being chargeable to tax in respect of the van for that year.

(3)Any reference in this Act to a case where the cash equivalent of the benefit of a van is treated as the employee's earnings for a year by virtue of this section includes a case where the cash equivalent is nil.]

[F438(4)This section is subject to section 154A.]

Textual Amendments

F436 s. 154 renumbered as s. 154(1) (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(7)(a)

F437S. 154(2)(3) inserted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(7)(b)

F438S. 154(4) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 36

[F439154ABenefit of van treated as earnings: optional remuneration arrangementsU.K.

(1)Where this Chapter applies to a van in relation to a particular tax year and the conditions in subsection (2) are met—

(a)the relevant amount is to be treated as earnings from the employment for that tax year, and

(b)section 154(1) does not apply.

In such a case (including a case where the relevant amount is nil) the employee is referred to in this Chapter as being chargeable to tax in respect of the van in the tax year.

(2)The conditions are that—

(a)the van is made available to the employee or member of the employee's household pursuant to optional remuneration arrangements, and

(b)[F440the total foregone amount in connection with the van] is greater than the modified cash equivalent of the benefit of the van.

(3)To find the relevant amount for the purposes of this section take the following steps—

  • [F441Step 1 Take the total foregone amount in connection with the van for the tax year.]

  • Step 2 Make any deduction under section 158A in respect of payments by the employee for the private use of the van.

    The result is the “relevant amount”.

(4)In subsection (2) the reference to the “modified cash equivalent” is to the amount which would be the cash equivalent of the benefit of the van (after any reductions under section 156 or 157) if this Chapter had effect the following modifications—

(a)omit paragraph (c) of section 155(8);

(b)omit section 158;

(c)in section 159(2)(b), for “155, 157 and 158” substitute “ 155 and 157 ”.

(5)For the purposes of subsection (2) assume that the modified cash equivalent of the benefit of the van is zero if the condition in subsection (6) is met.

(6)The condition is that the benefit of the van would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(7)Where it is necessary for the purposes of subsection (2)(b) and step 1 of subsection (3) to apportion an amount of earnings to [F442a benefit mentioned in subsection (8)(a) or (b)] in the tax year, the apportionment is to be made on a just and reasonable basis.

In this subsection “earnings” is to be interpreted in accordance with section 69B(5).

[F443(8)In this section the total foregone amount in connection with the van for a tax year is the total of—

(a)the amount foregone (see section 69B) with respect to the benefit of the van for that year, and

(b)the amount foregone (see section 69B) with respect to each other benefit that—

(i)is connected with the van,

(ii)is provided in that year for the employee, or a member of the employee's household, pursuant to optional remuneration arrangements, and

(iii)is neither the provision of a driver nor the provision of fuel.]]

Textual Amendments

F439S. 154A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 37

F440Words in s. 154A(2)(b) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(5)(a)

F441Words in s. 154A(3) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(5)(b)

F442Words in s. 154A(7) substituted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(5)(c)

F443S. 154A(8) inserted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(5)(d)

[F444155Cash equivalent of the benefit of a vanU.K.

[F445(1)The cash equivalent of the benefit of a van for a tax year is calculated as follows.

(1A)If the restricted private use condition is met in relation to the van for the tax year, the cash equivalent is nil.

(1B)If that condition is not met in relation to the van for the tax year—

(a)if the van cannot in any circumstances emit CO2 by being driven and the tax year is any of the tax years 2015-16 to [F4462020-21], the cash equivalent is the appropriate percentage of [F447£3,500] F448...

[F449(aa)if the van cannot in any circumstances emit CO2 by being driven and the tax year is 2021-22 or a subsequent tax year, the cash equivalent is nil, and]

(b)in any other case, the cash equivalent is [F450£4,020].

(1C)The appropriate percentage for the purposes of subsection (1B)(a) is—

(a)20% for the tax year 2015-16,

[F451(b)20% for the tax year 2016-17;

(c)60% for the tax year 2017-18,

(d)80% for the tax year 2018-19, and

(e)90% for the tax year 2019-20.

(f)80% for the tax year 2020-21;

F452(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]]

(4)The restricted private use condition is met in relation to a van for a tax year if—

(a)the commuter use requirement is satisfied throughout the year (or the part of the year on which it is available to the employee) or the extent to which it is not satisfied during that period is insignificant, and

(b)the business travel requirement is satisfied throughout the year (or the part of the year on which it is available to the employee).

(5)The commuter use requirement is satisfied at any time if—

(a)the terms on which the van is available to the employee at the time prohibit its private use otherwise than for the purposes of ordinary commuting or travel between two places that is for practical purposes substantially ordinary commuting, and

(b)neither the employee nor a member of the employee’s family or household makes private use of the van at the time otherwise than for those purposes.

(6)In subsection (5) “ordinary commuting” has the same meaning as in section 338 (travel for necessary attendance) (see subsection (3) of that section).

(7)The business travel requirement is satisfied at a time if the van is available to the employee at the time mainly for use for the purposes of the employee’s business travel (see section 171(1)).

(8)The cash equivalent of the van may be reduced—

(a)under section 156 for any periods when the van is unavailable,

(b)under section 157 where the van is shared, and

(c)under section 158 in respect of payments by the employee for the private use of the van.]

Textual Amendments

F444Ss. 155-164 substituted for ss. 155-166 (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 5

F445S. 155(1)-(1C) substituted for s. 155(1)(2) (with effect in accordance with s. 10(8) of the amending Act) by Finance Act 2015 (c. 11), s. 10(2)

F446Word in s. 155(1B)(a) substituted (10.6.2021) by Finance Act 2021 (c. 26), s. 23(2)(a)

F447Sum in s. 155(1B)(a) substituted (with application in accordance with art. 1(2) of the amending S.I.) by The Van Benefit and Car and Van Fuel Benefit Order 2021 (S.I. 2021/248), arts. 1(2), 3

F448Word in s. 155(1B)(a) omitted (10.6.2021) by virtue of Finance Act 2021 (c. 26), s. 23(2)(b)

F449S. 155(1B)(aa) inserted (10.6.2021) by Finance Act 2021 (c. 26), s. 23(2)(c)

F450Sum in s. 155(1B)(b) substituted (with application to tax year 2025-26 and subsequent tax years) by The Van Benefit and Car and Van Fuel Benefit Order 2024 (S.I. 2024/1349), arts. 1(2), 2(3)

F451S. 155(1C)(b)-(g) substituted for s. 155(1C)(b)-(e) (with effect in accordance with s. 11(4) of the amending Act) by Finance Act 2016 (c. 24), s. 11(3)

F452S. 155(1C)(g) omitted (10.6.2021) by virtue of Finance Act 2021 (c. 26), s. 23(3)

[F444Vans: reductions of cash equivalentU.K.

156Meaning of “shared van”U.K.

(1)The cash equivalent of the benefit of a van for a tax year under section [F453155] is to be reduced if the van has been unavailable on any day during the year.

(2)For the purposes of this section a van is unavailable on any day if the day—

(a)falls before the first day on which the van is available to the employee,

(b)falls after the last day on which the van is available to the employee, or

(c)falls within a period of 30 days or more throughout which the van is not available to the employee.

(3)The amount of the reduction is given by the formula—

where—

U is the number of days in the year on which the van is unavailable,

Y is the number of days in the year, and

CE is the amount of the cash equivalent before any reduction.]

Textual Amendments

F453Word in s. 156(1) substituted (with effect in accordance with s. 10(8) of the amending Act) by Finance Act 2015 (c. 11), s. 10(3)

[F444Reduction of cash equivalent where van is sharedU.K.

157Reduction of cash equivalent where van is sharedU.K.

(1)This section applies if in a tax year a van—

(a)is available to more than one employee concurrently,

(b)is so made available by the same employer, and

(c)is available concurrently for each employee’s private use.

(2)The cash equivalent of the benefit of the van to each of those employees for that year—

(a)is to be calculated separately under sections 155 and 156, and

(b)is then to be reduced on a just and reasonable basis.

F454(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)In this section the reference to the van being available for each employee’s private use includes a reference to the van being available for the private use of a member of the employee’s family or household.]

Textual Amendments

F454S. 157(3) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 8

[F444Reduction for payments for private useU.K.

158Reduction for payments for private useU.K.

(1)The cash equivalent of the benefit of a van for a tax year under section [F455155] (after any reduction under sections 156 and 157) is to be reduced if, as a condition of the van being available for the employee’s private use, the employee—

(a)is required in that year to pay (whether by way of deduction from earnings or otherwise) an amount of money for that use, and

[F456(b)pays that amount [F457on or before 6 July following] that year.]

(2)If the amount paid [F458as mentioned in subsection (1)(b)] by the employee in respect of that year is equal to or exceeds that cash equivalent, it is reduced to nil.

(3)In any other case that cash equivalent is reduced by the amount paid [F459as mentioned in subsection (1)(b)] by the employee.

(4)In this section the reference to the van being available for the employee’s private use includes a reference to the van being available for the private use of a member of the employee’s family or household.

Textual Amendments

F455Word in s. 158(1) substituted (with effect in accordance with s. 10(8) of the amending Act) by Finance Act 2015 (c. 11), s. 10(4)

F456S. 158(1)(b) substituted (with effect in accordance with s. 25(3) of the amending Act) by Finance Act 2014 (c. 26), s. 25(2)

F457Words in s. 158(1)(b) substituted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(10)(a)

F458Words in s. 158(2) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(10)(b)

F459Words in s. 158(3) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(10)(c)

[F460158AVan provided pursuant to optional remuneration arrangements: private useU.K.

(1)In calculating the relevant amount under section 154A in relation to a van and a tax year, a deduction is to be made under step 2 of subsection (3) of that section if, as a condition of the van being available for the employee's private use, the employee—

(a)is required in that year to pay (whether by way of deduction from earnings or otherwise) an amount of money for that use, and

(b)pays that amount on or before 6 July following that year.

(2)The amount of the deduction is—

(a)the amount paid as mentioned in subsection (1)(b) by the employee in respect of the year, or

(b)if less, the amount that would reduce the relevant amount to nil.

(3)In this section the reference to the van being available for the employee's private use includes a reference to the van being available for the private use of a member of the employee's family or household.]]

Textual Amendments

F460S. 158A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 38

[F444Modification of provisions where van temporarily replacedU.K.

159Modification of provisions where van temporarily replacedU.K.

(1)This section applies if—

(a)the van normally available to an employee (“the normal van”) is not available to the employee for a period of less than 30 days,

(b)another van (“the replacement van”) is made available to the employee in order to replace the normal van for the whole or part of that period, and

(c)the employee is chargeable to tax in respect of both the normal van and the replacement van by virtue of section 154.

(2)If this section applies—

(a)section 156 applies so that the replacement van is to be treated as unavailable on the days during the period on which it replaces the normal van, and

(b)sections 155, 157 and 158 apply as if the replacement van were the normal van.]

[F444Van fuel: benefit treated as earningsU.K.

160Benefit of van fuel treated as earningsU.K.

(1)If in a tax year—

(a)fuel is provided for a van by reason of an employee’s employment,

(b)that person is chargeable to tax in respect of the van by virtue of section 154 [F461or 154A] , and

(c)the cash equivalent of the van for that year is that under [F462section 155(1B)(b)],

the cash equivalent of the benefit of the fuel is to be treated as earnings from the employment for that year.

(2)The cash equivalent of the benefit of the fuel is calculated in accordance with sections 161 to 164.

(3)Fuel is to be treated as provided for a van, in addition to any other way in which it may be provided, if—

(a)any liability in respect of the provision of fuel for the van is discharged,

(b)a non-cash voucher or a credit-token is used to obtain fuel for the van,

(c)a non-cash voucher or a credit-token is used to obtain money which is spent on fuel for the van, or

(d)any sum is paid in respect of expenses incurred in providing fuel for the van.

F463(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F464(5)This section is subject to section 160A.]]

Textual Amendments

F461Words in s. 160(1)(b) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 39(2)

F462Words in s. 160(1)(c) substituted (with effect in accordance with s. 10(8) of the amending Act) by Finance Act 2015 (c. 11), s. 10(5)

F463S. 160(4) omitted (with effect for the tax year 2010-11 and subsequent tax years in accordance with s. 58(18) of the amending Act) by virtue of Finance Act 2010 (c. 13), s. 58(14)(b)

F464S. 160(5) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 39(3)

[F465160ABenefit of van fuel treated as earnings: optional remuneration arrangementsU.K.

(1)This section applies if—

(a)fuel is provided for a van in a tax year by reason of an employee's employment,

(b)the benefit of the fuel is provided pursuant to optional remuneration arrangements, and

(c)the employee is chargeable to tax in respect of the van in the tax year by virtue of section 154 or 154A.

(2)If the condition in subsection (3) is met—

(a)the amount foregone with respect to the benefit of the fuel (see section 69B) is to be treated as earnings from the employment for that year, and

(b)section 160(1) does not apply.

(3)The condition mentioned in subsection (2) is that the amount foregone with respect to the benefit of the fuel is greater than the cash equivalent of the benefit of the fuel.

(4)For the purposes of subsection (3), assume that the cash equivalent of the benefit of the fuel is zero if the condition mentioned in subsection (5) is met.

(5)The condition mentioned in subsection (4) is that the benefit of the fuel would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(6)Where it is necessary for the purposes of subsections (2)(a) and (3) to apportion an amount of earnings to the benefit of the fuel in the tax year, the apportionment is to be made on a just and reasonable basis.

In this subsection “earnings” is to be interpreted in accordance with section 69B(5).]

Textual Amendments

F465S. 160A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 40

[F444161Van fuel: the cash equivalentU.K.

The cash equivalent of the benefit of the fuel is—

(a)where the tax year is the tax year 2005-06 or 2006-07, nil, and

(b)where the tax year is a later tax year, [F466£769].]

Textual Amendments

F466Sum in s. 161(b) substituted (6.4.2025 with application to tax year 2025-26 and subsequent tax years) by The Van Benefit and Car and Van Fuel Benefit Order 2024 (S.I. 2024/1349), arts. 1(2), 2(4)

[F444162Van fuel: nil cash equivalentU.K.

(1)The cash equivalent of the benefit of the fuel is nil if condition A or B is met.

(2)Condition A is met if F467...—

(a)[F468in the tax year in question,] the employee is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use, and

(b)the employee does make good that expense [F469on or before 6 July following that tax year] .

(3)Condition B is met if in the tax year in question the fuel is made available only for business travel (see section 171(1)).]

Textual Amendments

F467Words in s. 162(2) omitted (with effect in accordance with s. 1(14) of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 1(11)(a)

F468Words in s. 162(2)(a) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(11)(b)

F469Words in s. 162(2)(b) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(11)(c)

[F444163Van fuel: proportionate reduction of cash equivalentU.K.

(1)The cash equivalent of the benefit of the fuel is to be proportionately reduced if for any part of the tax year in question the van for which the fuel is provided is unavailable (within the meaning of section 156 (reduction for periods when van unavailable)).

(2)But if section 159 (van temporarily replaced) applies—

(a)section 160 applies as if the replacement van were the normal van, and

(b)for the purposes of subsection (1) the replacement van is to be treated as unavailable on the days during the period on which it replaces the normal van.

(3)The cash equivalent of the benefit of the fuel is also to be proportionately reduced if F470...—

(a)[F471for any part of the tax year in question,] the facility for the provision of fuel as mentioned in section 160 (1) is not available,

(b)[F472for any part of the tax year in question,] the fuel is made available only for business travel (see section 171(1)), or

(c)the employee[F473—

(i)for any part of the tax year in question,is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use] [F474, and

(ii)the employee does make good that expense on or before 6 July following that tax year]

(4)The fact that any of the conditions specified in subsection (3) is met for part of a tax year is to be disregarded if there is a time later in that year when none of those conditions is met.

(5)Where the cash equivalent is to be proportionately reduced under subsection (1) or (3) (or under both those subsections), the reduced amount is given by the formula—

where—

CE is the amount of the cash equivalent before any reduction,

Y is the number of days in the tax year in question, and

D is the total number of days in the tax year on which either the van is unavailable or one or more of the conditions in subsection (3) is met.]

Textual Amendments

F470Words in s. 163(3) omitted (with effect in accordance with s. 1(14) of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 1(12)(a)

F471Words in s. 163(3)(a) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(12)(b)

F472Words in s. 163(3)(b) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(12)(c)

F473S. 163(3)(c)(i) inserted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(12)(d)(i)

F474S. 163(3)(c)(ii) substituted for words (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(12)(d)(ii)

[F444164Van fuel: reduction of cash equivalentU.K.

If a reduction of the cash equivalent of the benefit of the van for which the fuel is provided is made under section 157 (reduction of cash equivalent where van is shared), a corresponding reduction is to be made in relation to the cash equivalent of the benefit of the fuel.]

Cars and vans: exceptionsU.K.

167Pooled carsU.K.

(1)This section applies to a car in relation to a particular tax year if for that year the car has been included in a car pool for the use of the employees of one or more employers.

(2)For that tax year the car—

(a)is to be treated under section 114(1) (cars to which this Chapter applies) as not having been available for the private use of any of the employees concerned, and

(b)is not to be treated in relation to the employees concerned as an employment-related benefit within the meaning of Chapter 10 of this Part (taxable benefits: residual liability to charge) (see section 201).

(3)In relation to a particular tax year, a car is included in a car pool for the use of the employees of one or more employers if in that year—

(a)the car was made available to, and actually used by, more than one of those employees,

(b)the car was made available, in the case of each of those employees, by reason of the employee’s employment,

(c)the car was not ordinarily used by one of those employees to the exclusion of the others,

(d)in the case of each of those employees, any private use of the car made by the employee was merely incidental to the employee’s other use of the car in that year, and

(e)the car was not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making the car available to them.

168Pooled vansU.K.

(1)This section applies to a van in relation to a particular tax year if for that year the van has been included in a van pool for the use of the employees of one or more employers.

(2)For that tax year the van—

(a)is to be treated under section 114(1) (vans to which this Chapter applies) as not having been available for the private use of any of the employees concerned, and

(b)is not to be treated in relation to the employees concerned as an employment-related benefit within the meaning of Chapter 10 of this Part (taxable benefits: residual liability to charge) (see section 201).

(3)In relation to a particular tax year, a van is included in a van pool for the use of the employees of one or more employers if in that year—

(a)the van was made available to, and actually used by, more than one of those employees,

(b)the van was made available, in the case of each of those employees, by reason of the employee’s employment,

(c)the van was not ordinarily used by one of those employees to the exclusion of the others,

(d)in the case of each of those employees, any private use of the van made by the employee was merely incidental to the employee’s other use of the van in that year, and

(e)the van was not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making the van available to them.

169Car available to more than one member of family or household employed by same employerU.K.

(1)This section applies where—

(a)an employee (“E”) and a member of the employee’s family or household (“M”) are employed by the same employer, and

(b)as a result of a car being made available to M in a tax year, E would (apart from this section) be chargeable to tax in respect of the car in that year by virtue of section 120.

(2)The cash equivalent of the benefit of the car and of any fuel provided for the car by reason of E’s employment is not to be treated as E’s earnings for that year if—

(a)M is chargeable to tax in respect of the car in that year by virtue of section 120, or

[F475(b)M's employment is lower-paid employment as a minister of religion.]

F476(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F476(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F475S. 169(2)(b) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 9(2)

F476S. 169(3)(4) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 9(3)

[F477169AVan available to more than one member of family or household employed by same employerU.K.

(1)This section applies where—

(a)an employee (“E”) and a member of the employee’s family or household (“M”) are employed by the same employer, and

(b)as a result of a van being made available to M in a tax year, E would (apart from this section) be chargeable to tax in respect of the van in that year by virtue of section 154.

(2)The cash equivalent of the benefit of the van and of any fuel provided for the van by reason of E’s employment is not to be treated as E’s earnings for that year if—

(a)M is chargeable to tax in respect of the van in that year by virtue of section 154, or

[F478(b)M's employment is lower-paid employment as a minister of religion.]

F479(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F479(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F477S. 169A inserted (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 6

F478S. 169A(2)(b) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 10(2)

F479S. 169A(3)(4) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 10(3)

OrdersU.K.

170Orders etc. relating to this ChapterU.K.

(1)The Treasury may by order substitute a greater amount for that for the time being specified in—

F480(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)section 126(3)(d) (car: minimum price of later accessory),

(c)section 132(3)(b) (car: maximum contributions deduction),

[F481(ca)section 132A(5)(b) (corresponding provision with respect to optional remuneration arrangements),]

(d)section 147(1)(b) (classic car: minimum value), F482...

(e)section 147(7)(b) (classic car: maximum contributions deduction) [F483, or

(f)section 147A(1)(b) (classic car: minimum value: optional remuneration arrangements).]

[F484(1A)The Treasury may by order substitute a different amount for the amount for the time being specified in—

(a)section 155(1A) (cash equivalent where van subject only to restricted private use by employee),

(b)section 155(1B)(a) (cash equivalent for zero-emission van [F485in tax years 2015-16 to 2020-21]), F486...

[F487(ba)section 155(1B)(aa) (cash equivalent for zero-emissions vans in tax year 2021-22 and subsequent tax years), and]

(c)section 155(1B)(b) (cash equivalent in other cases).]

(2)An order under subsection (1) [F488or (1A)] must specify the tax years to which it applies.

F489(2A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F490(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)The Treasury may by regulations provide for the value of the appropriate percentage as determined under sections 139 to 141 to be reduced—

(a)by such amount,

(b)in such circumstances, and

(c)subject to such conditions,

as may be prescribed in the regulations.

(5)The Treasury may by order substitute a different amount for that specified in section 150(1) (car fuel: cash equivalent) [F491or section 161(b) (van fuel: cash equivalent)].

(6)An order under subsection (5) must specify the tax years to which it applies, being tax years beginning after that in which it is made.

Textual Amendments

F480S. 170(1)(a) omitted (with effect for the tax year 2011-12 and subsequent tax years in accordance with Sch. 28 para. 10(2) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 28 para. 5

F481S. 170(1)(ca) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 41(a)

F482Word in s. 170(1)(d) omitted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by virtue of Finance Act 2017 (c. 10), Sch. 2 para. 41(b)

F483S. 170(1)(f) and word inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 41(c)

F484S. 170(1A) substituted (for tax year 2015-16 and subsequent tax years) by Finance Act 2015 (c. 11), s. 10(6)(8)

F485Words in s. 170(1A)(b) inserted (10.6.2021) by Finance Act 2021 (c. 26), s. 23(4)(a)

F486Word in s. 170(1A)(b) omitted (10.6.2021) by virtue of Finance Act 2021 (c. 26), s. 23(4)(b)

F488Words in s. 170(2) inserted (with effect for the year 2005-06 and subsequent years of assessment in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 7(3)

F489S. 170(2A) omitted (with effect for the tax year 2012-13 and subsequent tax years in accordance with s. 59(5) of the amending Act) by virtue of Finance Act 2010 (c. 13), s. 59(3)(a)

F490S. 170(3) omitted (for tax year 2020-21 and subsequent tax years) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 2(5)(6)

F491Words in s. 170(5) inserted (with effect for the year 2005-06 and subsequent years of assessment in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 7(4)

SupplementaryU.K.

171Minor definitions: generalU.K.

(1)In this Chapter—

  • “business travel”, in relation to any employee, means travelling the expenses of which, if incurred and paid by the employee, would (if Chapter 2 of Part 4 did not apply) be deductible under sections 337 to 342, section 353 or under Chapter 5 of Part 5 (other than section 377);

  • “diesel” means any diesel fuel within the definition in Article 2 of Directive 98/70/EC of the European Parliament and of the Council;

  • [F492“EC certificate of conformity” means a certificate of conformity within the meaning of—

    (a)

    Council Directive 70/156/EEC,

    (b)

    Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007, or

    (c)

    Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles;]

  • [F493“EC type-approval certificate” means—

    (a)

    a type-approval certificate issued under any provision of the law of a Member State implementing Council Directive 70/156/EEC,

    (b)

    an EC type-approval certificate within the meaning of Council Directive 2007/46/EC, or

    (c)

    an EU type-approval certificate within the meaning of Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles;]

  • [F494“qualifying emissions certificate” has the same meaning as in CAA 2001 (see section 268C(1) of that Act);]

  • “relevant taxes” means any car tax, any value added tax, any customs or excise duty and any tax chargeable as if it were a customs duty;

  • “road fuel gas” means any substance which is gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars, and which is for use as fuel in road vehicles;

  • [F495“UK approval certificate” means—

    (a)

    a certificate issued under—

    (i)

    section 58(1) or (4) of the Road Traffic Act 1988, or

    (ii)

    Article 31A(4) or (5) of the Road Traffic (Northern Ireland) Order 1981 (S.I. 1981/154 (N.I. 1)), or

    (b)

    any other certificate or document issued in the United Kingdom on the basis of which a vehicle is first registered, other than an EC certificate of conformity or an EC type-approval certificate.]

(2)In this Chapter references to the date of first registration in relation to a car F496... are to the date on which the vehicle was first registered under VERA 1994 or under corresponding legislation of any country or territory.

(3)In this Chapter references to the age of a car F497... at any time are to the interval between the date of first registration of the vehicle and that time.

(4)In this Chapter “disabled person’s badge” means a badge—

(a)which is issued to a disabled person under section 21 of the Chronically Sick and Disabled Persons Act 1970 (c. 44) or section 14 of the Chronically Sick and Disabled Persons (Northern Ireland) Act 1978 (c. 53), or has effect as if it had been issued under one of those provisions, and

(b)which is not required to be returned to the issuing authority under or by virtue of the provision referred to in paragraph (a).

Textual Amendments

F494Words in s. 171(1) inserted (24.2.2022) by Finance Act 2022 (c. 3), Sch. 18 para. 6(2)

F495Words in s. 171(1) substituted (with effect in accordance with Sch. 18 para. 6(4) of the amending Act) by Finance Act 2022 (c. 3), Sch. 18 para. 6(3)

F496Words in s. 171(2) repealed (with effect in accordance with Sch. 42 Pt. 2(9) of the repealing Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(9)

F497Words in s. 171(3) repealed (with effect in accordance with Sch. 42 Pt. 2(9) of the repealing Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(9)

172Minor definitions: equipment to enable a disabled person to use a carU.K.

(1)In section 125(2)(c) “equipment to enable a disabled person to use a car” means equipment—

(a)which is designed solely for use by a chronically sick or disabled person, or

(b)which is made available for use with the car because it enables a disabled employee to use the car in spite of the disability.

(2)In this section—

  • “disabled employee” means an employee who, at the time when the car is first made available to the employee, holds a disabled person’s badge, and

  • “the disability” means the disability entitling the disabled employee to hold the disabled person’s badge.

Chapter 7U.K.Taxable benefits: loans

Modifications etc. (not altering text)

C23Pt. 3 Ch. 7 extended (with modifications) (with effect in accordance with s. 97(3) of the amending Act) by Finance Act 2006 (c. 25), s. 97(1)(2)

IntroductionU.K.

173Loans to which this Chapter appliesU.K.

(1)This Chapter applies to a loan if it is an employment-related loan.

[F498(1A)Where this Chapter applies to a loan—

(a)the loan is a benefit for the purposes of this Chapter (and accordingly it is immaterial whether the terms of the loan constitute a fair bargain), and

(b)sections 175 to 183 [F499make provision about amounts which, in the case of a taxable cheap loan, are to be treated as earnings in certain circumstances] .]

(2)In this Chapter—

(a)“loan” includes any form of credit, and

(b)references to making a loan (and related expressions) include arranging, guaranteeing or in any way facilitating a loan.

(3)Sections 288 and 289 make provision for exemption and relief for certain bridging loans connected with employment moves.

Textual Amendments

F498S. 173(1A) inserted (with effect in accordance with s. 7(9) of the amending Act) by Finance Act 2016 (c. 24), s. 7(8)

F499Words in s. 173(1A)(b) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 42

[F500173AAlternative finance arrangementsU.K.

(1)For the purposes of this Chapter a reference to a loan includes a reference to arrangements—

(a)to which section 564C of ITA 2007 or section 503 of CTA 2009 (purchase and resale arrangements) applies (or would apply assuming one of the parties were a financial institution), or

(b)to which section 564D of ITA 2007 or section 504 of CTA 2009 (diminishing shared ownership arrangements) applies (or would apply on that assumption).

(2)In the application of this Chapter as a result of this section, a reference to interest is to be treated as including alternative finance return (or anything that would be such return on that assumption).

(3)In the application of this Chapter as a result of this section, a reference to the amount outstanding is to be taken—

(a)in the case of arrangements within subsection (1)(a), as a reference to the purchase price minus such part of the aggregate payments made as does not represent alternative finance return (or anything that would be such return on that assumption),

(b)in the case of arrangements to which section 564D of ITA 2007 or section 504 of CTA 2009 applies, as a reference to the amount of the [F501first owner’s] original beneficial interest minus such part of the aggregate payments made as does not represent alternative finance return, and

(c)in the case of arrangements to which section 564D of ITA 2007 or section 504 of CTA 2009 would apply assuming one of the parties were a [F502first owner], as a reference to the amount of that party's original beneficial interest minus such part of the aggregate payments made as does not represent anything that would be alternative finance return on that assumption.

(4)In this section—

  • “alternative finance return” has the meaning given in sections 564I to 564L of ITA 2007 or sections 511 to 513 of CTA 2009, F503...

  • “financial institution” has the meaning given in section 564B of ITA 2007 or section 502 of CTA 2009[F504, and

  • “first owner” is to be construed in accordance with section 564D of ITA 2007 or section 504 of CTA 2009.]

(5)This section does not apply to arrangements entered into before 22 March 2006.]

Textual Amendments

F500S. 173A inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 2 para. 49 (with Sch. 9 paras. 1-9, 22)

174Employment-related loansU.K.

(1)For the purposes of this Chapter an employment-related loan is a loan—

(a)made to an employee or a relative of an employee, and

(b)of a class described in subsection (2).

(2)For the purposes of this Chapter the classes of employment-related loan are—

A

A loan made by the employee’s employer.

B

A loan made by a company or partnership over which the employee’s employer had control.

C

A loan made by a company or partnership by which the employer (being a company or partnership) was controlled.

D

A loan made by a company or partnership which was controlled by a person by whom the employer (being a company or partnership) was controlled.

E

A loan made by a person having a material interest in—

(a)a close company which was the employer, had control over the employer or was controlled by the employer, or

(b)a company or partnership controlling that close company.

(3)In this section—

  • “employee” includes a prospective employee, and

  • “employer” includes a prospective employer.

(4)References in this section to a loan being made by a person extend to a person who—

(a)assumes the rights and liabilities of the person who originally made the loan, or

(b)arranges, guarantees or in any way facilitates the continuation of a loan already in existence.

(5)A loan is not an employment-related loan if—

(a)it is made by an individual in the normal course of the individual’s domestic, family or personal relationships, or

(b)it is made to a relative of the employee and the employee derives no benefit from it.

(6)For the purposes of this section a person (“X”) is a relative of another (“Y”) if X is—

(a)Y’s spouse [F505or civil partner] ,

(b)a parent, child or remoter relation in the direct line either of Y or of Y’s spouse [F505or civil partner] ,

(c)a brother or sister of Y or of Y’s spouse [F505or civil partner] , or

(d)the spouse [F505or civil partner] of a person falling within paragraph (b) or (c).

Textual Amendments

Benefit of taxable cheap loan treated as earningsU.K.

175Benefit of taxable cheap loan treated as earningsU.K.

[F506(A1)This section applies where an employment-related loan is a taxable cheap loan in relation to a tax year.

(1)The cash equivalent of the benefit of the loan is to be treated as earnings from the employee's employment for the tax year.

(1A)If the benefit of the loan is provided pursuant to optional remuneration arrangements and the condition in subsection (1B) is met—

(a)subsection (1) does not apply, and

(b)the relevant amount (see section 175A) is to be treated as earnings from the employee's employment for the tax year.

(1B)The condition is that the amount foregone with respect to the benefit of the loan for the tax year (see section 69B) is greater than the modified cash equivalent of the benefit of the loan for the tax year (see section 175A).]

(2)For the purposes of this Chapter an employment-related loan is a “taxable cheap loan” in relation to a particular tax year if—

(a)there is a period consisting of the whole or part of that year during which the loan is outstanding and the employee holds the employment,

(b)no interest is paid on it for that year, or the amount of interest paid on it for that year is less than the interest that would have been payable at the official rate, and

(c)none of the exceptions in sections 176 to 179 apply.

(3)The cash equivalent of the benefit of an employment-related loan for a tax year is the difference between—

(a)the amount of interest that would have been payable on the loan for that year at the official rate, and

(b)the amount of interest (if any) actually paid on the loan for that year.

(4)If there are two or more employment-related loans, this section applies to each separately.

(5)This section is subject to—

  • section 180 (threshold for benefit of loan to be treated as earnings);

  • section 186 (replacement loans).

Textual Amendments

F506S. 175(A1)-(1B) substituted for s. 175(1) (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 43

[F507175AOptional remuneration arrangements: “relevant amount” and “modified cash equivalent”U.K.

(1)In section 175(1A) “the relevant amount”, in relation to a loan the benefit of which is provided pursuant to optional remuneration arrangements, means the difference between—

(a)the amount foregone (see section 69B) with respect to the benefit of the loan, and

(b)the amount of interest (if any) actually paid on the loan for the tax year.

(2)For the purposes of section 175 the “modified cash equivalent” of the benefit of an employment-related loan for a tax year is the amount which would be the cash equivalent if section 175(3) had effect with the following modifications—

(a)in the opening words, omit “the difference between”;

(b)omit paragraph (b) and the “and” before it.

(3)But the modified cash equivalent of the benefit of the loan is to be taken to be zero if the condition in subsection (4) is met.

(4)The condition is that the benefit of the loan for the tax year would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(5)For the purpose of calculating the modified cash equivalent of the benefit of an employment-related loan, assume that section 186(2) (replacement loans: aggregation) and section 187(3) (aggregation of loans by close company to a director) do not have effect.

(6)Where it is necessary for the purposes of section 175(1B) and subsection (1) of this section to apportion an amount of earnings to the benefit of the loan for the tax year, the apportionment is to be made on a just and reasonable basis.

In this subsection “earnings” is to be interpreted in accordance with section 69B(5).]

Textual Amendments

F507S. 175A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 44(1)

176Exception for loans on ordinary commercial termsU.K.

(1)A loan on ordinary commercial terms is not a taxable cheap loan.

(2)In this section a “loan on ordinary commercial terms” means a loan—

(a)made by a person (“the lender”) in the ordinary course of a business carried on by the lender which includes—

(i)the lending of money, or

(ii)the supplying of goods or services on credit, and

(b)in relation to which condition A, B or C is met.

(3)Condition A is met if—

(a)at the time the loan was made comparable loans were available to all those who might be expected to avail themselves of the services provided by the lender in the course of the lender’s business,

(b)a substantial proportion of the loans (consisting of the loan in question and the comparable loans) made by the lender at or about the time the loan in question was made were made to members of the public,

(c)the loan in question is held on the same terms as comparable loans generally made by the lender to members of the public at or about the time the loan in question was made, and

(d)where those terms differ from the terms applicable immediately after the loan in question was first made, they were imposed in the ordinary course of the lender’s business.

(4)For the purposes of condition A a loan is comparable to another loan if it is made for the same or similar purposes and on the same terms and conditions.

(5)Condition B is met if—

(a)the loan has been varied before 6th April 2000,

(b)a substantial proportion of the relevant loans were made to members of the public,

(c)the loan in question is held on the same terms as relevant loans generally made by the lender to members of the public at or about the relevant time, and

(d)where those terms differ from the terms applicable immediately after the relevant time, they were imposed in the ordinary course of the lender’s business.

(6)Condition C is met if—

(a)the loan has been varied on or after 6th April 2000,

(b)a substantial proportion of the relevant loans were made to members of the public,

(c)at the relevant time members of the public who had loans from the lender for similar purposes had a right to vary their loans on the same terms and conditions as applied in relation to the variation of the loan in question,

(d)the loan in question as varied is held on the same terms as any existing loans so varied, and

(e)where those terms differ from the terms applicable immediately after the relevant time, they were imposed in the ordinary course of the lender’s business.

(7)For the purposes of condition B and C—

(a)the “relevant time” is the time of the variation of the loan in question, and

(b)the “relevant loans” are—

(i)the loan in question,

(ii)any existing loans which were varied at or about the relevant time so as to be held on the same terms as the loan in question after it was varied, and

(iii)any new loans which were made by the lender at or about that time and are held on those terms.

(8)No account is to be taken of amounts which are incurred on fees, commission or other incidental expenses by the person to whom a loan is made for the purpose of obtaining the loan—

(a)in determining for the purposes of condition A whether loans made by a lender before 1st June 1994 are made or held on the same terms or conditions, or

(b)in determining for the purposes of condition B or C whether rights to vary loans are exercisable on the same terms and conditions or loans are held on the same terms.

(9)No account is to be taken of amounts which are incurred on penalties, interest or similar amounts by the person to whom a loan is made as a result of varying the loan in determining for the purposes of condition B or C whether rights to vary loans are exercisable on the same terms and conditions or loans are held on the same terms.

(10)For the purposes of this section a “member of the public” means a member of the public at large with whom the lender deals at arm’s length.

177Exceptions for loans at fixed rate of interestU.K.

(1)A fixed rate loan made on or after 6th April 1978 is not a taxable cheap loan by reason only of an increase in the official rate of interest since the year in which the loan was made if the condition in subsection (2) is met.

(2)The condition in this subsection is met if the amount of interest paid on the loan for the tax year in which it was made was equal to or greater than the interest that would have been payable at the official rate for that year.

(3)A fixed rate loan made before 6th April 1978 is not a taxable cheap loan if the condition in subsection (4) is met.

(4)The condition in this subsection is met if the rate of interest for the loan is equal to or greater than the rate which could have been expected to apply to a loan made—

(a)at the same time as the loan in question,

(b)on the same terms (other than as to the rate of interest), and

(c)between persons not connected with each other dealing at arm’s length.

(5)In this section a “fixed rate loan” means a loan—

(a)made for a fixed period which cannot be changed, and

(b)made at a fixed rate of interest which cannot be changed during that period.

178Exception for loans where interest qualifies for tax reliefU.K.

A loan is not a taxable cheap loan in relation to a particular tax year if, assuming interest is paid on the loan for that year (whether or not it is in fact paid), the whole of that interest—

(a)is eligible for relief under section 353 of ICTA [F508or section 383 of ITA 2007 (relief for interest payments)],

(b)would be eligible for relief under [F509section 353 of ICTA] but for the fact that it is a payment of relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax),

(c)is deductible in computing the amount of the profits to be charged [F510to tax] in respect of a trade, profession or vocation carried on [F511wholly or partly in the United Kingdom] by the person to whom the loan is made, or

(d)is deductible in computing the amount of the profits to be charged [F512to tax in respect of a UK property business [F513(within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)]] carried on by that person.

Textual Amendments

F508Words in s. 178(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 431(a) (with Sch. 2)

F509Words in s. 178(b) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 431(b) (with Sch. 2)

F513Words in s. 178(d) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 550 (with Sch. 2 Pts. 1, 2)

179Exception for certain advances for necessary expensesU.K.

(1)An advance by an employer to an employee for the purpose of paying for—

(a)necessary expenses, or

(b)incidental overnight expenses,

is not a taxable cheap loan in relation to a particular tax year if the following conditions are met.

(2)The conditions are—

(a)that at all times in the tax year in question the amount outstanding on such advances made by the employer to the employee does not exceed £1,000,

(b)that the advance is spent within 6 months after the date on which it is made, and

(c)that the employee accounts to the employer at regular intervals for the expenditure of the amount advanced.

(3)If, on an application made by the employer, [F514an officer of Revenue and Customs is] satisfied that there is good reason to do so in the case of a particular advance, [F515the officer] may authorise that either or both of the following limits are increased in relation to that advance—

(a)the sum of money specified in subsection (2)(a);

(b)the time limit specified in subsection (2)(b).

(4)An application under subsection (3)—

(a)must be in writing, and

(b)must contain such particulars and be supported by such evidence as [F165an officer of Revenue and Customs] may require.

(5)In this section “necessary expenses” are expenses (including travel expenses) which—

(a)the employee is obliged to incur and pay as holder of the employment, and

(b)are necessarily incurred in the performance of the duties of the employment.

(6)In this section “incidental overnight expenses” are expenses which—

(a)are incidental to the employee’s absence from the place where the employee normally lives,

(b)relate to a continuous period of such absence in relation to which the overnight stay conditions are met, and

(c)would not be deductible under Part 5 if the employee incurred and paid them and Chapter 2 of Part 4 (mileage allowances and passenger payments) did not apply.

(7)In subsection (6)(b) “the overnight stay conditions” has the same meaning as in section 240 (exemption for incidental overnight expenses) (see section 240(4)).

Textual Amendments

180Threshold for benefit of loan to be treated as earningsU.K.

(1)[F516Section 175 does not have effect in relation to an employee and a tax year—]

(a)if the normal [F517£10,000] threshold is not exceeded, or

(b)where the loan is a non-qualifying loan and that threshold is exceeded, if the [F517£10,000] threshold for non-qualifying loans is not exceeded.

(2)The normal [F518£10,000] threshold is not exceeded if at all times in the year the amount outstanding on the loan (or, if two or more employment-related loans which are taxable cheap loans are outstanding in the year, the aggregate of the amount outstanding on them) does not exceed [F518£10,000].

(3)The [F518£10,000] threshold for non-qualifying loans is not exceeded if at all times in the year the amount outstanding on the loan (or if two or more employment-related loans which are non-qualifying loans are outstanding in the year, the aggregate of the amounts outstanding on them) does not exceed [F518£10,000].

(4)In this section a “non-qualifying loan” means a taxable cheap loan which is not a qualifying loan.

(5)For the purposes of this section a loan is a “qualifying loan” in relation to a particular tax year if, assuming interest is paid on the loan for that year (whether or not it is in fact paid), the whole or part of that interest—

(a)is eligible for relief under section 353 of ICTA [F519or section 383 of ITA 2007 (relief for interest payments)],

(b)would be eligible for relief under [F520section 353 of ICTA] but for the fact that it is a payment of relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax),

(c)is deductible in computing the amount of the profits to be charged [F521to tax] in respect of a trade, profession or vocation carried on [F522wholly or partly in the United Kingdom] by the person to whom the loan is made, or

(d)is deductible in computing the amount of the profits to be charged [F523to tax in respect of a UK property business [F524(within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)]] carried on by that person.

Textual Amendments

F516Words in s. 180(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 45

F517Word in s. 180(1)(a)(b) substituted (with effect in accordance with s. 22(2) of the amending Act) by Finance Act 2014 (c. 26), s. 22(1)

F518Word in s. 180(2)(3) substituted (with effect in accordance with s. 22(2) of the amending Act) by Finance Act 2014 (c. 26), s. 22(1)

F519Words in s. 180(5)(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 432(a) (with Sch. 2)

F520Words in s. 180(5)(b) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 432(b) (with Sch. 2)

F524Words in s. 180(5)(d) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 551 (with Sch. 2 Pts. 1, 2)

Calculation of amount of interest at official rateU.K.

181The official rate of interestU.K.

(1)“The official rate of interest” for the purposes of this Chapter means the rate applicable under section 178 of FA 1989 (general power of Treasury to specify rates of interest).

(2)Regulations under that section may make different provision in relation to a loan if—

(a)it was made in the currency of a country or territory outside the United Kingdom, and

(b)the employee normally lives in that country or territory, and has actually lived there at some time in the period of 6 years ending with the tax year in question.

(3)Subsection (2) does not affect the general power under section 178(3) of FA 1989 to make different provision for different purposes.

182Normal method of calculation: averagingU.K.

The normal method of calculating for the purposes of this Chapter the amount of interest that would be payable on a loan for a tax year at the official rate is as follows. Step 1

Calculate the average amount of the loan outstanding during the tax year—

1. Find the maximum amount of the loan outstanding on 5th April preceding the tax year or, if the loan was made in the tax year, on the date it was made.

2. Find the maximum amount outstanding on 5th April of the tax year or, if the loan was discharged in the tax year, on the date of discharge.

3. Add these amounts together and divide the result by 2.

Step 2

If the official rate of interest changed during the period in the tax year when the loan was outstanding, calculate the average official rate of interest for that period as follows—

1. Multiply each official rate of interest in force during the period by the number of days when it is in force.

2. Add these products together.

3. Divide the result by the number of days in the period.

Step 3

Calculate the amount of interest that would be payable on the loan for the tax year at the official rate as follows—

where—

A is the average amount of the loan outstanding during the tax year obtained from step 1,

I is the official rate of interest in force during the period in the tax year when the loan was outstanding or, if the official rate changed, the average official rate of interest obtained from step 2, and

M is the number of whole months during which the loan was outstanding in the year.

For this purpose a month begins on the sixth day of the calendar month.

183Alternative method of calculationU.K.

(1)The alternative method of calculating for the purposes of this Chapter the amount of interest that would be payable on a loan for a tax year at the official rate applies for a tax year—

(a)if [F165an officer of Revenue and Customs] so [F525requires] , by notice to the employee, or

(b)if the employee so elects, by notice to [F165an officer of Revenue and Customs] .

(2)Notice may be given on or before the first anniversary of the normal self-assessment filing date for the tax year in relation to which the question arises whether the loan is a taxable cheap loan.

(3)The alternative method is as follows—

Step 1

Find for each day in the tax year in question the maximum amount of the loan outstanding on that day and multiply it by the official rate of interest in force on that day.

Step 2

Add together each of the amounts obtained under step 1.

Step 3

Divide the result by the number of days in the tax year.

(4)Where in any tax year the cash equivalent of the benefit of the same taxable cheap loan is to be treated as earnings of two or more employees then, for the purposes of determining the cash equivalent of the benefit of the loan, the alternative method applies if—

(a)the notice under subsection (1)(a) is given to all those employees, or

(b)the notice under subsection (1)(b) is given by all those employees.

Textual Amendments

Supplementary provisions relating to taxable cheap loansU.K.

184Interest treated as paidU.K.

(1)This section applies where [F526—

(a)the cash equivalent of the benefit of a taxable cheap loan is treated as earnings from an employee's employment for a tax year under section 175(1), or

(b)the relevant amount in respect of the benefit of a taxable cheap loan is treated as earnings from an employee's employment for a tax year under section 175(1A).]

(2)The employee is to be treated for the purposes of the Tax Acts as having paid interest on the loan in that year equal to the cash equivalent.

(3)But the employee is not to be treated as having paid that interest for the purposes of this Chapter or of any of [F527the following Chapters of this Part—

  • Chapter 3 (taxable benefits: expenses payments);

  • Chapter 6 (taxable benefits: cars, vans and related benefits);

  • Chapter 10 (taxable benefits: residual liability to charge).]

(4)The interest is to be treated—

(a)as accruing during the period in the tax year during which the employee holds the employment and the loan is outstanding, and

(b)as paid by the employee at the end of the period.

(5)The interest is not to be treated—

(a)as income of the person making the loan, or

(b)as relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax).

Textual Amendments

F526Words in s. 184(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 46

F527Words in s. 184(3) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 11

185Apportionment of cash equivalent in case of joint loan etc.U.K.

Where in any tax year the cash equivalent of the benefit of the same taxable cheap loan is to be treated as earnings of two or more employees—

(a)the cash equivalent of the benefit of the loan (determined in accordance with the provisions of this Chapter) is to be apportioned between them in a just and reasonable manner, and

(b)the portion allocated to each employee is to be treated as the cash equivalent of the benefit of the loan so far as that employee is concerned.

186Replacement loansU.K.

(1)This section applies where an employment-related loan (“the original loan”) is replaced, directly or indirectly, by—

(a)a further employment-related loan, or

(b)a loan which is not an employment-related loan but which in turn is, in the same tax year or within 40 days after the end of the tax year, replaced, directly or indirectly, by a further employment-related loan.

(2)In such a case, for the purposes of calculating the cash equivalent of the benefit of the original loan under section 175(3), section 182 (normal method of calculating interest at the official rate) applies as if the replacement loan, or each of the replacement loans, were the same loan as the original loan.

(3)Where section 182 is applied as modified by subsection (2) then for the purposes of section 175(3)(b) the amount of interest actually paid on the loan for the tax year in question is the total of—

(a)the amount of interest actually paid on the original loan for that year, and

(b)the amount of interest actually paid on the replacement loan or on each of the replacement loans for that year.

(4)In this section a “further employment-related loan” means a loan which is an employment-related loan made in relation to—

(a)the same or other employment with the person who is the employer in relation to the original loan, or

(b)employment with a person who is connected with that employer.

187Aggregation of loans by close company to directorU.K.

(1)This section applies where, in relation to any tax year, there are employment-related loans between the same lender and borrower which are aggregable with each other.

(2)The lender may elect for aggregation to apply for that tax year in the case of the borrower.

(3)The effect of the election is that all the aggregable loans are to be treated as a single loan for the purposes of—

  • section 175 (benefit of taxable cheap loan treated as earnings),

  • the provisions of this Chapter relating to the calculation of the cash equivalent of the benefit of a taxable cheap loan, and

  • section 184 (interest treated as paid).

(4)For this purpose loans are aggregable for any tax year if they are made in the same currency and all the following conditions are met in relation to each of them—

(a)there is a time in the tax year when—

(i)the loan is outstanding,

(ii)the lender is a close company, and

(iii)the borrower is a director of that company;

(b)at all times in the tax year the rate of interest on the loan is less than the official rate applying at that time;

(c)the loan is not a qualifying loan within the meaning of section 180 (see section 180(5)).

(5)An election under this section must be made by the lender in a notice given—

(a)to [F165an officer of Revenue and Customs] , and

(b)before 7th July after the end of the tax year to which the election relates.

Textual Amendments

Loan released or written offU.K.

188Loan released or written off: amount treated as earningsU.K.

(1)If—

(a)the whole or part of an employment-related loan is released or written off in a tax year, and

(b)at the time when it is released or written off the employee holds the employment in relation to which the loan is an employment-related loan (“employment E”),

the amount released or written off is to be treated as earnings from the employment for that year.

(2)But if the employment has terminated or become [F528lower-paid employment as a minister of religion] and there was a time when—

(a)the whole or part of the loan was outstanding,

(b)the employee held the employment, and

(c)it was not [F528lower-paid employment as a minister of religion],

subsection (1) applies as if the employment had not terminated or become [F528lower-paid employment as a minister of religion] .

(3)Where subsection (2) applies, any loan which replaces directly or indirectly the employment-related loan is to be treated as an employment-related loan in relation to employment E if—

(a)it would, if employment E had not terminated or become [F529lower-paid employment as a minister of religion], have been an employment-related loan in relation to employment E, and

(b)it is not an employment-related loan in relation to other employment.

(4)This section is subject to section 189 (exception where double charge).

Textual Amendments

F528Words in s. 188(2) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 12(2)

F529Words in s. 188(3)(a) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 12(3)

189Exception where double chargeU.K.

(1)Section 188 (loan released or written off: amount treated as earnings) does not apply if, by virtue of any other provision of the Income Tax Acts, the amount released or written off—

(a)is employment income of the employee, or

(b)is or is treated as income of the employee (or of the employee as a borrower) which is not employment income and upon which that person is liable to pay income tax.

This is subject to subsections (2) and (3).

(2)If, as a result of subsection (1), Chapter 3 of Part 6 (payments and benefits on termination of employment etc.) would be the only provision by virtue of which the amount released or written off would be income of the employee—

(a)section 188 does apply, and

(b)accordingly Chapter 3 of Part 6 does not apply.

(3)If—

(a)an amount is treated as the employee’s income under [F530section 633 of ITTOIA 2005 (capital sums paid to settlor by trustees of settlement)] in respect of a capital sum paid in relation to the release or writing-off of the loan, and

(b)the amount released or written off exceeds the amount so treated as income,

section 188 does apply but only the amount of the excess is to be treated as earnings from the employment for the tax year in question under that section.

Textual Amendments

F530Words in s. 189(3)(a) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 589 (with Sch. 2)

General supplementary provisionsU.K.

190Exclusion of charge after death of employeeU.K.

(1)On the employee’s death a taxable cheap loan is to be treated—

(a)for the purposes of this Chapter as ceasing to be outstanding, and

(b)for the purposes of section 182 (normal method of calculating interest at the official rate) as being discharged on the date of death.

(2)Section 188 (loan released or written off: amount treated as earnings) does not apply in relation to a release or writing off which takes effect on or after the death of the employee.

191Claim for relief to take account of event after assessmentU.K.

(1)A claim may be made for relief in the following cases.

(2)The first case is where—

(a)the tax payable by an employee for a tax year in respect of a loan has been decided on the basis that, for the purposes of section 175 (benefit of taxable cheap loan treated as earnings), the whole or part of the interest payable on the loan for that year was not paid, and

(b)it is subsequently paid.

(3)The second case is where—

(a)the tax payable by an employee for a tax year in respect of a loan has been decided on that basis that, for the purposes of section 188 (loan released or written off: amount treated as earnings), the loan has been released or written off in that year, and

(b)the whole or part of the loan is subsequently repaid.

(4)The third case is where—

(a)the tax payable by an employee for a tax year in respect of a loan has been decided on the basis that—

(i)section 288 (limited exemption of certain bridging loans connected with employment moves), and

(ii)section 289 (relief for certain bridging loans not qualifying for exemption under section 288),

will not apply because the condition in section 288(1)(b) (which requires that the limit on the exemption under section 287(1) has not been reached) will not be met, and

(b)that condition is met.

(5)Where a claim is made under this section the tax payable is to be adjusted accordingly.

F531Chapter 8U.K.Taxable benefits: notional loans in respect of acquisitions of shares

Textual Amendments

F531Pt. 3 Ch. 8 repealed (with effect in accordance with Sch. 22 para. 22(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 22(1), Sch. 43 Pt. 3(4)

IntroductionU.K.

192Application of this ChapterU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Acquisition of shares for less than market valueU.K.

193Notional loan where acquisition for less than market valueU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

194The amount of the notional loanU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195Discharge of notional loan: amount treated as earningsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary provisionsU.K.

196Effects on other income tax chargesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197Minor definitionsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F532Chapter 9U.K.Taxable benefits: disposals of shares for more than market value

Textual Amendments

F532Pt. 3 Ch. 9 repealed (with effect in accordance with Sch. 22 para. 23(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 23(1), Sch. 43 Pt. 3(4)

198Shares to which this Chapter appliesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

199Disposal for more than market value: amount treated as earningsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200Minor definitionsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 10U.K.Taxable benefits: residual liability to charge

Modifications etc. (not altering text)

C24Pt. 3 Ch. 10 excluded (with effect in accordance with reg. 1(2) of the amending S.I.) by The Income Tax (Exemption of Minor Benefits) (Coronavirus) Regulations 2020 (S.I. 2020/1293), regs. 1(2), 2 (with reg. 1(2))

IntroductionU.K.

201Employment-related benefitsU.K.

(1)This Chapter applies to employment-related benefits.

(2)In this Chapter—

  • “benefit” means a benefit or facility of any kind;

  • “employment-related benefit” means a benefit, other than an excluded benefit, which is provided in a tax year—

    (a)

    for an employee, or

    (b)

    for a member of an employee’s family or household,

    by reason of the employment. For the definition of “excluded benefit” see section 202.

(3)A benefit provided by an employer is to be regarded as provided by reason of the employment unless—

(a)the employer is an individual, and

(b)the provision is made in the normal course of the employer’s domestic, family or personal relationships.

(4)For the purposes of this Chapter it does not matter whether the employment is held at the time when the benefit is provided so long as it is held at some point in the tax year in which the benefit is provided.

(5)References in this Chapter to an employee accordingly include a prospective or former employee.

202Excluded benefitsU.K.

(1)A benefit is an “excluded benefit” for the purposes of this Chapter if—

(a)any of Chapters 3 to 9 of the benefits code applies to the benefit,

(b)any of those Chapters would apply to the benefit but for an exception, or

(c)the benefit consists in the right to receive, or the prospect of receiving, sums treated as earnings under section 221 (payments where employee absent because of sickness or disability).

[F533(1A)But a benefit provided to an employee or member of an employee's family or household is to be taken not to be an excluded benefit by virtue of subsection (1)(c) so far as it is provided under optional remuneration arrangements.]

(2)In this section “exception”, in relation to the application of a Chapter of the benefits code to a benefit, means any enactment in the Chapter which provides that the Chapter does not apply to the benefit.

But for this purpose section 86 (transport vouchers under pre-26th March 1982 arrangements) is not an exception.

Textual Amendments

F533S. 202(1A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 47

Cash equivalent of benefit treated as earningsU.K.

203Cash equivalent of benefit treated as earningsU.K.

(1)The cash equivalent of an employment-related benefit is to be treated as earnings from the employment for the tax year in which it is provided.

(2)The cash equivalent of an employment-related benefit is the cost of the benefit less any part of that cost made good by the employee [F534, to the persons providing the benefit, on or before 6 July following the tax year in which it is provided].

(3)The cost of an employment-related benefit is determined in accordance with section 204 unless—

(a)section 205 provides that the cost is to be determined in accordance with that section, or

(b)section 206 provides that the cost is to be determined in accordance with that section.

Textual Amendments

F534Words in s. 203(2) substituted (with effect in accordance with s. 1(14) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 1(13)

[F535203AEmployment-related benefit provided under optional remuneration arrangementsU.K.

(1)Where an employment-related benefit is provided pursuant to optional remuneration arrangements—

(a)the relevant amount is to be treated as earnings from the employment for the tax year in which the benefit is provided, and

(b)section 203(1) does not apply.

(2)To find the relevant amount, first determine which (if any) is the greater of—

(a)the cost of the employment-related benefit, and

(b)the amount foregone with respect to the benefit (see section 69B).

(3)If the cost of the employment-related benefit is greater than or equal to the amount foregone, the “relevant amount” is the cash equivalent (see section 203(2)).

(4)Otherwise, the “relevant amount” is—

(a)the amount foregone with respect to the employment-related benefit, less

(b)any part of the cost of the benefit made good by the employee, to the persons providing the benefit, on or before 6 July following the tax year in which it is provided.

(5)For the purposes of subsections (2) and (3), assume that the cost of the employment-related benefit is zero if the condition in subsection (6) is met.

(6)The condition is that the employment-related benefit would be exempt from income tax but for section 228A (exclusion of certain exemptions).

(7)Where it is necessary for the purposes of subsections (2)(b) and (4) to apportion an amount of earnings to the benefit provided in the tax year, the apportionment is to be made on a just and reasonable basis.

In this subsection “earnings” is to be interpreted in accordance with section 69B(5).]

Textual Amendments

F535S. 203A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 48

Determination of the cost of the benefitU.K.

204Cost of the benefit: basic ruleU.K.

The cost of an employment-related benefit is the expense incurred in or in connection with provision of the benefit (including a proper proportion of any expense relating partly to provision of the benefit and partly to other matters).

205Cost of the benefit: asset made available without transferU.K.

(1)The cost of an employment-related benefit (“the taxable benefit”) is determined in accordance with this section if—

[F536(a)the benefit consists in an asset being made available for private use, and]

(b)there is no transfer of the property in the asset.

[F537(1A)In this section and section 205A, “private use” means private use by the employee or a member of the employee's family or household.

(1B)For the purposes of subsection (1) and sections 205A and 205B, an asset made available in a tax year for use by the employee or a member of the employee's family or household is to be treated as made available throughout the year for private use unless—

(a)at all times in the year when it is available for use by the employee or a member of the employee's family or household, the terms under which it is made available prohibit private use, and

(b)no private use is made of it in the year.

(1C)The cost of the taxable benefit is—

(a)the annual cost of the benefit determined in accordance with subsection (2), less

(b)any amount required to be deducted by section 205A (deduction for periods when asset unavailable for private use).

(1D)In certain cases, the cost of the taxable benefit is calculated under this section in accordance with section 205B (reduction of cost of taxable benefit where asset is shared).]

(2)The [F538annual cost of the] benefit is the higher of—

(a)the annual value of the use of the asset, and

(b)the annual amount of the sums, if any, paid by those providing the benefit by way of rent or hire charge for the asset,

together with the amount of any additional expense.

(3)For the purposes of subsection (2), the annual value of the use of an asset is—

(a)in the case of land, its annual rental value;

(b)in any other case, 20% of the market value of the asset at the time when those providing the taxable benefit first applied the asset in the provision of an employment-related benefit (whether or not the person provided with that benefit is also the person provided with the taxable benefit).

If those providing the taxable benefit first applied the asset in the provision of an employment-related benefit before 6th April 1980, paragraph (b) is to be read as if the reference to 20% were a reference to 10%.

(4)In this section “additional expense” means the expense incurred in or in connection with provision of the taxable benefit (including a proper proportion of any expense relating partly to provision of the benefit and partly to other matters), other than—

(a)the expense of acquiring or producing the asset incurred by the person to whom the asset belongs, and

(b)any rent or hire charge payable for the asset by those providing the asset.

[F539(5)Where the asset is an emergency vehicle, the expense of providing fuel for it in a tax year is not an additional expense by virtue of subsection (4) so long as—

(a)the person incurring that expense incurs no expense in that tax year in the provision of fuel for the vehicle which is used for the employee's private travel (“private fuel expense”), or

(b)all private fuel expense that the person does incur in that tax year is made good by the employee on or before 6 July following the tax year.

(6)For the purposes of this section—

  • “emergency vehicle” has the same meaning as in section 248A;

  • “fuel” includes electrical energy;

  • “private travel” means travelling the expenses of which, if incurred and paid by the employee, would not be deductible under Chapter 2 or 5 of Part 5.]

Textual Amendments

F536S. 205(1)(a) substituted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(2)(a)

F537S. 205(1A)-(1D) inserted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(2)(b)

F538Words in s. 205(2) substituted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(2)(c)

F539S. 205(5)(6) inserted (with effect in accordance with s. 9(5) of the amending Act) by Finance Act 2019 (c. 1), s. 9(4)

Modifications etc. (not altering text)

C25S. 205 modified (12.2.2019) by Finance Act 2019 (c. 1), s. 9(6)-(8)

[F540205ADeduction for periods when asset unavailable for private useU.K.

(1)A deduction is to be made under section 205(1C)(b) if the asset mentioned in section 205(1) has been unavailable for private use on any day during the tax year concerned.

(2)For the purposes of this section an asset is “unavailable” for private use on any day if—

(a)that day falls before the day on which the asset is first available to the employee,

(b)that day falls after the day on which the asset is last available to the employee,

(c)for more than 12 hours during that day the asset—

(i)is not in a condition fit for use,

(ii)is undergoing repair or maintenance,

(iii)could not lawfully be used,

(iv)is in the possession of a person who has a lien over it and who is not the employer, not a person connected with the employer, not the employee, not a member of the employee's family and not a member of the employee's household, or

(v)is used in a way that is neither use by, nor use at the direction of, the employee or a member of the employee's family or household, or

(d)on that day the employee—

(i)uses the asset in the performance of the duties of the employment, and

(ii)does not use the asset otherwise than in the performance of the duties of the employment.

(3)The amount of the deduction is given by—

where—

U is the number of days, in the tax year concerned, on which the asset is unavailable for private use,

Y is the number of days in that year, and

A is the annual cost of the benefit of the asset determined under section 205(2).

(4)The reference in subsection (2)(a) to the time when the asset is first available to the employee is to the earliest time when the asset is made available, by reason of the employment and without any transfer of the property in it, for private use.

(5)The reference in subsection (2)(b) to the time when the asset is last available to the employee is to the last time when the asset is made available, by reason of the employment and without any transfer of the property in it, for private use.

Textual Amendments

F540Ss. 205A, 205B inserted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(3)

Modifications etc. (not altering text)

C26S. 205A modified (12.2.2019) by Finance Act 2019 (c. 1), s. 9(6)-(8)

205BReduction of cost of taxable benefit where asset is sharedU.K.

(1)This section applies where the cost of an employment-related benefit (“the taxable benefit”) is to be determined under section 205.

(2)If, for the whole or part of the tax year concerned, the same asset is available for more than one employee's private use at the same time, the total of the amounts which are the cost of the taxable benefit for each of those employees is to be limited to the annual cost of the benefit of the asset determined in accordance with section 205(2).

(3)The cost of the taxable benefit for each employee is determined by taking the amount given by section 205(1C) and then reducing that amount on a just and reasonable basis.

(4)For the purposes of this section, an asset is available for an employee's private use if it is available for private use by the employee or a member of the employee's family or household.]

Textual Amendments

F540Ss. 205A, 205B inserted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(3)

206Cost of the benefit: transfer of used or depreciated assetU.K.

(1)The cost of an employment-related benefit is determined in accordance with this section if—

(a)the benefit consists in the transfer of an asset, and

(b)the asset has been used, or has depreciated, since the person transferring the asset (“the transferor”) acquired or produced it.

(2)The cost of the benefit is the market value of the asset at the time of the transfer.

(3)But the cost of the benefit (“the current benefit”) is the higher of the market value of the asset at the time of the transfer and the amount calculated in accordance with subsection (5) if—

(a)the asset is not [F541an excluded asset (see subsection (6))] ,

(b)the asset has previously been applied in the provision of a relevant employment-related benefit (whether or not the person provided with that benefit is also the transferee), and

(c)the transferor first applied the asset in the provision of an employment-related benefit after 5th April 1980.

(4)In this section “relevant employment-related benefit” means an employment-related benefit the cost of which was to be determined in accordance with section 205.

(5)The amount referred to in subsection (3) is calculated in accordance with the following steps—

Step 1

Determine the tax years in which the asset was applied in the provision of a relevant employment-related benefit (including, if appropriate, the current tax year).

Step 2

Determine the cost of the benefit for each of those tax years in accordance with section 205.

Step 3

Calculate the total of the amounts determined under step 2.

Step 4

Calculate the market value of the asset at the time when the transferor first applied it in the provision of an employment-related benefit.

Step 5

Deduct the total calculated under step 3 from the market value calculated under step 4.

The result is the amount referred to in subsection (3).

[F542(6)An excluded asset is—

(a)a car (within the meaning of Chapter 6),

(b)computer equipment that has previously been applied as mentioned in subsection (3)(b) in circumstances in which the conditions set out in section 320 were met, or

(c)a cycle or cyclist's safety equipment that has previously been so applied in circumstances in which the conditions set out in section 244 were met.]

Textual Amendments

F541Words in s. 206(3)(a) substituted (with effect in accordance with s. 17(4) of the amending Act) by Finance Act 2005 (c. 7), s. 17(2)

F542S. 206(6) inserted (with effect in accordance with s. 17(4) of the amending Act) by Finance Act 2005 (c. 7), s. 17(3)

Supplementary provisionsU.K.

207Meaning of “annual rental value”U.K.

(1)For the purposes of this Chapter the “annual rental value” of land is the rent which might reasonably be expected to be obtained on a letting from year to year if—

(a)the tenant undertook to pay all taxes, rates and charges usually paid by a tenant, and

(b)the landlord undertook to bear the costs of the repairs and insurance and other expenses (if any) necessary for maintaining the land in a state to command the rent.

(2)For the purposes of subsection (1) that rent—

(a)is to be taken to be the amount that might reasonably be expected to be so obtained in respect of the letting, and

(b)is to be calculated on the basis that the only amounts that may be deducted in respect of services provided by the landlord are amounts in respect of the cost to the landlord of providing any relevant services.

(3)If the land is of a kind that might reasonably be expected to be let on terms under which—

(a)the landlord is to provide any services which are either—

(i)relevant services, or

(ii)the repair, insurance or maintenance of any premises which do not form part of the land but belong to or are occupied by the landlord, and

(b)amounts are payable in respect of the services in addition to the rent,

the rent to be established under subsection (1) in respect of the land is to be increased under subsection (4).

(4)That rent is to include—

(a)where the services are relevant services, so much of the additional amounts as exceeds the cost to the landlord of providing the services;

(b)where the services are within subsection (3)(a)(ii), the whole of the additional amounts.

(5)In this section “relevant service” means a service other than the repair, insurance or maintenance of the land or of any other land.

208Meaning of “market value”U.K.

For the purposes of this Chapter the market value of an asset at any time is the price which the asset might reasonably be expected to fetch on a sale in the open market at that time.

209Meaning of “persons providing benefit”U.K.

For the purposes of this Chapter the persons providing a benefit are the person or persons at whose cost the benefit is provided.

210Power to exempt minor benefitsU.K.

(1)The Treasury may make provision by regulations for exempting from the application of this Chapter such minor benefits as may be specified in the regulations.

(2)An exemption conferred by such regulations is conditional on the benefit being made available to the employer’s employees generally on similar terms.

Special rules for scholarshipsU.K.

211Special rules for scholarships: introductionU.K.

(1)Sections 212 to 214 supplement the preceding provisions of this Chapter in the following ways—

  • section 212 provides for certain scholarships provided under arrangements entered into by an employer or a connected person to be regarded as provided by reason of an employment;

  • section 213 provides that this Chapter does not apply to certain scholarships provided under a trust fund or a scheme;

  • section 214 provides a different method of determining the cost of an employment-related benefit if it consists in the provision of a scholarship from a trust fund.

(2)Section 215 limits the extent to which [F543section 776(1) of ITTOIA 2005] (exemption for scholarship income) applies to a scholarship whose provision constitutes an employment-related benefit.

(3)In this section and sections 212 to 215 “scholarship” includes a bursary, exhibition or other similar educational endowment.

Textual Amendments

F543Words in s. 211(2) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 298 (with Sch. 9 paras. 1-9, 22)

212Scholarships provided under arrangements entered into by employer or connected personU.K.

(1)A scholarship which is provided for a member of an employee’s family or household is to be regarded for the purposes of this Chapter as provided by reason of the employment if it is provided under arrangements entered into by—

(a)the employer, or

(b)a person connected with the employer.

(2)Subsection (1) applies whether or not the arrangements require the employer or the connected person to contribute directly or indirectly to the cost of providing the scholarship.

(3)A scholarship is not to be regarded as provided by reason of an employment by virtue of subsection (1) if—

(a)the employer is an individual, and

(b)the arrangements are made in the normal course of the employer’s domestic, family or personal relationships.

(4)This section is without prejudice to section 201(3).

213Exception for certain scholarships under trusts or schemesU.K.

(1)This Chapter does not apply to an employment-related benefit consisting in the provision of a scholarship if conditions A, B, C and D are met.

(2)Condition A is that the scholarship would not be regarded as provided by reason of the employment if section 201(3) and section 212 were disregarded.

(3)Condition B is that the holder of the scholarship is a full-time student.

(4)Condition C is that the scholarship is provided from a trust fund or under a scheme.

(5)Condition D is that, in the tax year in which the scholarship is provided, not more than 25% of the total amount of relevant payments is attributable to scholarships provided by reason of a person’s employment.

(6)For the purposes of conditions B and D “full-time student” means a person who is in full-time education at a university, college, school or other educational establishment.

(7)For the purposes of condition D—

  • “employment” includes any employment within the meaning of the employment income Parts (see section 4), whether or not it is a taxable employment under Part 2;

  • “relevant payments” means the payments made from the fund or scheme mentioned in condition C in respect of scholarships held by full-time students.

214Scholarships: cost of the benefitU.K.

If an employment-related benefit consists in the provision of a scholarship from a trust fund—

(a)section 204 does not apply, and

(b)the cost of the benefit is the total of the payments made from the fund to the person holding the scholarship.

215Limitation of exemption for scholarship income in [F544section 776(1) of ITTOIA 2005] U.K.

If an employment-related benefit consists in the provision of a scholarship, [F545section 776(1) of ITTOIA 2005] (exemption for scholarship income) applies only in relation to the holder of the scholarship.

Textual Amendments

F544Words in s. 215 heading substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 299 (with Sch. 9 paras. 1-9, 22)

F546Chapter 11U.K.Taxable benefits: exclusion of lower-paid employments from parts of benefits code

Textual Amendments

F546Pt. 3 Ch. 11 omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 13(1)

IntroductionU.K.

216Provisions not applicable to lower-paid employmentsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

What is lower-paid employmentU.K.

217Meaning of “lower-paid employment”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

218Calculation of earnings rate for a tax yearU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

219Extra amounts to be added in connection with a carU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Treatment of related employmentsU.K.

220Related employmentsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 12U.K. [F547Other amounts] treated as earnings

Textual Amendments

F547Words in Pt. 3 Ch. 12 heading substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 4(a), 38; S.I. 2013/1755, art. 2

[F548Payments] U.K.

Textual Amendments

F548S. 221 cross-heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 4(b), 38; S.I. 2013/1755, art. 2

221Payments where employee absent because of sickness or disabilityU.K.

(1)This section applies if—

(a)an employee is absent from work because of sickness or disability, and

(b)a qualifying sickness payment is made in respect of the employee’s absence from work.

(2)But this section does not apply if the qualifying sickness payment constitutes earnings from the employment by virtue of any other provision.

(3)The qualifying sickness payment is to be treated as earnings from the employment in respect of the period of absence.

(4)If the qualifying sickness payment is made from funds to which the employer and the employer’s employees have made contributions, only the amount of the payment which it is just and reasonable to attribute to the employer’s contributions is treated as earnings under this section.

(5)In this section “qualifying sickness payment” means a payment which meets conditions A and B.

(6)Condition A is that the payment is made—

(a)to the employee or to a member of the employee’s family,

(b)to the order of such a person, or

(c)to the benefit of such a person.

(7)Condition B is that the payment is made—

(a)by reason of the employment, and

(b)as a result of arrangements entered into by the employer.

222Payments by employer on account of tax where deduction not possibleU.K.

(1)This section applies if—

(a)an employer is treated by virtue of sections 687, [F549687A,] 689 [F550, 689A] and 693 to 700 as having made a payment of income of an employee (“the notional payment”),

(b)the employer is required by virtue of section 710(4) to account to [F165an officer of Revenue and Customs] for an amount of income tax (“the due amount”) in respect of the notional payment, and

(c)the employee does not, before the end of the period of [F55190 days] [F552after the end of the tax year in which the relevant date falls], make good the due amount to the employer.

(2)The due amount is to be treated as earnings from the employment for the tax year in which the [F553relevant date] falls.

(3)In this section “employer”, in relation to any provision of sections 687, [F554687A,] 689, 693 to 700 or 710, means the person taken to be the employer for the purposes of that provision.

It also includes a person who is treated as making a payment of PAYE income by virtue of section 689(2) (payments by person for whom employee works but who is not the employer) [F555or section 689A(3) (deemed payments of PAYE income of continental shelf workers by person other than employer)] .

[F556(4)In this section “the relevant date” means—

(a)if the employer is treated by virtue of any Act as making the notional payment before the date on which the Act is passed, that date, and

(b)in any other case, the date on which the employer is treated as making the notional payment.]

Textual Amendments

F549Word in s. 222(1)(a) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 10

F550Word in s. 222(1)(a) inserted (6.4.2014) by Finance Act 2014 (c. 26), s. 21(2)(a)(10)

F551Words in s. 222(1)(c) substituted (with effect in accordance with s. 144(2) of the amending Act) by Finance Act 2003 (c. 14), s. 144(1)

F552Words in s. 222(1)(c) substituted (with effect in accordance with s. 19(2) of the amending Act) by Finance Act 2014 (c. 26), s. 19(1)

F553Words in s. 222(2) substituted (with effect in accordance with s. 94(5) of the amending Act) by Finance Act 2006 (c. 25), s. 94(2)(b); S.I. 2007/1081, art. 2

F554Word in s. 222(3) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 10

F555Words in s. 222(3) inserted (6.4.2014) by Finance Act 2014 (c. 26), s. 21(2)(b)(10)

F556S. 222(4) inserted (with effect in accordance with s. 94(5) of the amending Act) by Finance Act 2006 (c. 25), s. 94(2)(c); S.I. 2007/1081, art. 2

Modifications etc. (not altering text)

223Payments on account of director’s tax other than by the directorU.K.

(1)This section applies if in a tax year—

(a)a person (“P”) makes a payment to another person who is employed as the director of a company,

(b)the payment is of, or on account of, earnings from the director’s employment,

(c)PAYE regulations require P to deduct an amount of income tax (“the deductible tax”),

(d)P deducts none, or only some, of the deductible tax, and

(e)either or both of the following occur—

(i)P accounts to [F111the Commissioners for Her Majesty’s Revenue and Customs] for some or all of the deductible tax (whether or not P has actually deducted the amount accounted for);

(ii)one or more persons other than P (apart from the director) account to [F111the Commissioners for Her Majesty’s Revenue and Customs] for some or all of the deductible tax.

(2)For the purposes of this section it does not matter whether the director’s employment is held at the time when P makes the payment mentioned in subsection (1)(a) so long as it is held at some point in the tax year in which the payment is made.

(3)References in this section to employment as a director accordingly include prospective or past employment as a director.

(4)The deductible tax accounted for to [F111the Commissioners for Her Majesty’s Revenue and Customs] is to be treated as earnings of the director from the director’s employment for the tax year in which it is accounted for.

(5)But if—

(a)the deductible tax is accounted for after the director’s employment has ceased, and

(b)the employment ceased in a tax year before the one in which the deductible tax is accounted for,

the deductible tax is treated as earnings for the tax year in which the director’s employment ceased.

(6)The following rules apply to the calculation of the amount to be treated as earnings under this section—

(a)any amount accounted for after the death of the director is to be disregarded;

(b)if P deducts some of the deductible tax, the amount treated as earnings is reduced by the amount deducted;

(c)if the director makes good to P or to another person some or all of the deductible tax which P or the other person accounts for, the amount treated as earnings is reduced by the amount made good.

(7)This section does not apply if the director has no material interest in the company and either—

(a)the director is employed as a full-time working director of the company, or

(b)the company is—

(i)non-profit-making, or

(ii)[F557a charitable company] .

(8)In this section—

  • “director” has the same meaning as in the benefits code (see section 67);

  • “director’s employment”, in relation to a person who is employed as a director, means that employment;

  • “full-time working director” has the same meaning as in the benefits code (see section 67);

  • “material interest” has the same meaning as in the benefits code (see section 68);

  • “non-profit-making”, in relation to a company, means that—

    (a)

    the company does not carry on a trade, and

    (b)

    its functions do not consist wholly or mainly in the holding of investments or other property.

Textual Amendments

F557Words in s. 223(7)(b)(ii) substituted (coming into force for the tax year 2012-13 and subsequent tax years) by Finance Act 2010 (c. 13), Sch. 6 paras. 17(4), 34(2); S.I. 2012/736, art. 13

F558224Payments to non-approved personal pension arrangementsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F558S. 224 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

225Payments for restrictive undertakingsU.K.

(1)This section applies where—

(a)an individual gives a restrictive undertaking in connection with the individual’s current, future or past employment, and

(b)a payment is made in respect of—

(i)the giving of the undertaking, or

(ii)the total or partial fulfilment of the undertaking.

(2)It does not matter to whom the payment is made.

(3)The payment is to be treated as earnings from the employment for the tax year in which it is made.

(4)Subsection (3) does not apply if the payment constitutes earnings from the employment by virtue of any other provision.

(5)A payment made after the death of the individual who gave the undertaking is treated for the purposes of this section as having been made immediately before the death.

[F559(6)This section only applies where—

(a)if there are general earnings from the employment that are earned in, or otherwise in respect of, the tax year mentioned in subsection (3), subsection (7) applies to any of those general earnings, or

(b)it is reasonable to assume that, if there were such general earnings, subsection (7) would apply to any of those general earnings.

(7)This subsection applies to general earnings if either—

(a)section 15 applies to the general earnings and the general earnings are not—

(i)qualifying foreign general earnings within the meaning of section 41T (qualifying foreign general earnings), or

(ii)general earnings to which section 22 or section 26 would apply if the individual made a claim under section 809B of ITA 2007 (claim for the remittance basis) for the tax year mentioned in section 22(1) or 26(1) (being a tax year before tax year 2025-26), or

(b)section 27 applies to the general earnings.]

(8)In this section “restrictive undertaking” means an undertaking which restricts the individual’s conduct or activities.

For this purpose it does not matter whether or not the undertaking is legally enforceable or is qualified.

Textual Amendments

F559S. 225(6)(7) substituted for s. 225(6) (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(3) (with Sch. 8 Pt. 3)

226Valuable consideration given for restrictive undertakingsU.K.

(1)In a case where—

(a)an individual gives a restrictive undertaking in connection with the individual’s current, future or past employment, and

(b)valuable consideration that is not in the form of money is provided in respect of—

(i)the giving of the undertaking, or

(ii)the total or partial fulfilment of the undertaking,

section 225 applies as it would if a payment of an amount equal to the value of the consideration had been made instead.

(2)For this purpose—

(a)merely assuming an obligation to make over or provide valuable property, rights or advantages is not valuable consideration, but

(b)wholly or partially discharging such an obligation is.

[F560Shares of employee shareholdersU.K.

Textual Amendments

F560Ss. 226A-226D and cross-heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 3, 38; S.I. 2013/1755, art. 2

226AAmount treated as earningsU.K.

(1)This section applies if shares having a market value of no less than £2000 are acquired by an employee in consideration of an employee shareholder agreement.

(2)An amount [F561equal to the market value of the shares] is to be treated as earnings from the employment, in respect of the acquisition of the shares, for the tax year in which they are acquired.

But this is subject to subsection (4).

F562(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)If the shares are acquired pursuant to an employment-related securities option, subsection (2) does not apply.

(5)If subsection (2) applies, nothing else constitutes earnings under this Part from the employment in respect of the acquisition of the shares.

(6)For the purposes of this section F563...—

  • shares are “acquired” by an employee if the employee becomes beneficially entitled to them (and they are acquired at the time when the employee becomes so entitled);

  • “employee shareholder agreement” means an agreement by virtue of which an employee is an employee shareholder (see section 205A(1)(a) to (d) of the Employment Rights Act 1996);

  • “employee shareholder share” means a share acquired by an employee in consideration of an employee shareholder agreement;

  • “employee” and “employer company”, in relation to an employee shareholder agreement, mean the individual and the company which enter into the agreement;

  • “employment-related securities option” has the same meaning as in Chapter 5 of Part 7 (see section 471(5));

  • “market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act; and the market value of shares is their market value on the day on which they are acquired (but see also subsection (7)).

(7)For the purposes of subsection (1) [F564(but not subsection (2))] , the market value of the shares is to be determined ignoring—

(a)any election under section 431 (election for market value of restricted shares to be calculated as if not restricted), and

(b)section 437 (market value of convertible securities to be determined as if not convertible).]

Textual Amendments

F561Words in s. 226A(2) substituted (with effect in accordance with s. 12(5)-(7) of the amending Act) by Finance Act 2017 (c. 10), s. 12(1)(a)

F562S. 226A(3) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(1)(b)

F563Words in s. 226A(6) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(1)(c)

F564Words in s. 226A(7) inserted (with effect in accordance with s. 12(5)-(7) of the amending Act) by Finance Act 2017 (c. 10), s. 12(1)(d)

F565226BDeemed payment for employee shareholder sharesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F565Ss. 226B-226D omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(2)

F565226COnly one payment deemed to be made under associated agreementsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F565Ss. 226B-226D omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(2)

F565226DShareholder or connected person having material interest in companyU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F565Ss. 226B-226D omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(2)

[F566Sporting testimonial paymentsU.K.

Textual Amendments

F566S. 226E and cross-heading inserted (with effect in accordance with Sch. 2 para. 4(1) of the amending Act) by Finance Act 2016 (c. 24), Sch. 2 para. 1

226ESporting testimonial paymentsU.K.

(1)This section applies in relation to an individual who is or has been employed as a professional sportsperson (“S”).

(2)In this section “sporting testimonial” means—

(a)a series of relevant events or activities which each have the same controller, or

(b)a single relevant event or activity not forming part of such a series.

(3)An event or activity is (subject to subsection (4)(b)) a relevant event or activity if—

(a)its purpose (or one of its purposes) is to raise money for or for the benefit of S, and

(b)the only or main reason for doing that is to recognise S's service as a professional sportsperson who is or has been employed as such.

(4)An activity that meets the conditions in subsection (3)(a) and (b) and consists solely of inviting and collecting donations for or for the benefit of S—

(a)is a relevant activity if it is one of a series of relevant events or activities for the purposes of subsection (2)(a), but

(b)is not a relevant activity for the purposes of subsection (2)(b) so long as both conditions in subsection (5) are met while the activity takes place.

(5)The conditions are—

(a)that any person who is responsible (alone or with others) for collecting the donations or who is the controller (or a member of a committee which is the controller) of the activity is not—

(i)S,

(ii)a person who is (or has been) the controller of any other relevant event or activity for or for the benefit of S,

(iii)a person connected with S or a person mentioned in sub-paragraph (ii),

(iv)a person acting for or on behalf of a person mentioned in sub-paragraphs (i) to (iii), and

(b)that the donations collected do not include any sums paid (directly or indirectly) out of money raised by any other relevant event or activity.

(6)A “sporting testimonial payment” is a payment made by (or on behalf of) the controller of a sporting testimonial out of money raised for or for the benefit of S which—

(a)is made to S, to a member of S's family or household, to a prescribed person, to S's order or otherwise for S's benefit, and

(b)does not (apart from this section) constitute earnings from an employment.

(7)A sporting testimonial payment is to be treated as earnings of S from the employment or former employment to which the sporting testimonial is most closely linked.

(8)For the purposes of this section if at any material time S is dead—

(a)anything done for or for the benefit of S's estate is to be regarded as done for or for the benefit of S; and

(b)a payment made to S's personal representatives or to their order is to be treated as a payment to S or to S's order.

(9)In this section—

  • “controller”, in relation to an event or activity which meets the conditions in subsection (3)(a) and (b), means the person who controls the disbursement of any money raised for or for the benefit of S from that event or activity,

  • “money” includes money's worth and “payment” includes the transfer of money's worth or the provision of any benefit,

  • “prescribed person” means a person prescribed in regulations made by the Treasury.

(10)Section 993 of ITA 2007 (meaning of “connected” persons) has effect for the purposes of this section.]

Part 4U.K.Employment income: exemptions

Modifications etc. (not altering text)

C28Pt. 4 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 26(3)

Chapter 1U.K.Exemptions: general

227Scope of Part 4U.K.

(1)This Part contains—

(a)earnings-only exemptions, and

(b)employment income exemptions.

(2)In this Act “earnings-only exemption” means an exemption from income tax which—

(a)prevents liability to tax arising in respect of earnings, either by virtue of one or more particular provisions (such as a Chapter of the benefits code) or at all, and

(b)does not prevent liability to tax arising in respect of other employment income.

(3)In this Act “employment income exemption” means an exemption from income tax which prevents liability to tax arising in respect of employment income of any kind at all.

(4)The following provisions in Part 7 also confer exemption from liability to income tax in respect of earnings—

[F567(za)section 418(1A) (acquisition of, and chargeable events occurring in relation to, employment-related securities options);]

[F568(a)section 425 (restricted securities: no charge in respect of acquisition in certain circumstances),

(b)section 475 (no charge in respect of acquisition of securities option),]

(c)sections 489 to 493 and sections 496 to 499 (F569... share incentive plans),

F570(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)section 519 (F571... SAYE option schemes: no charge in respect of exercise of option),

F572(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(g)section 524 (F573... CSOP schemes: no charge in respect of exercise of option),

F574(h). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(i)section 542 (priority share allocations: exemption where offer made to public and employees), and

(j)section 544 (priority share allocations: exemption where different offers made to public and employees).

[F575(5)In relation to the interaction between this Part and Part 7A, see section 554P(1).]

Textual Amendments

F567S. 227(4)(za) inserted (6.4.2016) by Finance Act 2016 (c. 24), s. 17(3)(4)

F568S. 227(4)(a)(b) substituted (with effect in accordance with Sch. 22 para. 25(4) of the amending Act, and otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 25(2); S.I. 2003/1997, art. 2

F569Word in s. 227(4)(c) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 45, 89 (with Sch. 8 paras. 90-96)

F570S. 227(4)(d) repealed (with effect in accordance with Sch. 22 para. 25(4) of the amending Act, and otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 25(3), Sch. 43 Pt. 3(4); S.I. 2003/1997, art. 2

F571Word in s. 227(4)(e) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 130, 146 (with Sch. 8 paras. 147-157)

F572S. 227(4)(f) repealed (with effect in accordance with Sch. 22 para. 25(4) of the amending Act, and otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 25(3), Sch. 43 Pt. 3(4); S.I. 2003/1997, art. 2

F573Word in s. 227(4)(g) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 191, 204 (with Sch. 8 paras. 205-215)

F574S. 227(4)(h) repealed (with effect in accordance with Sch. 22 para. 25(4) of the amending Act, and otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 25(3), Sch. 43 Pt. 3(4); S.I. 2003/1997, art. 2

F575S. 227(5) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 11

228Effect of exemptions on liability under provisions outside Part 2U.K.

(1)The exemptions conferred by the provisions specified in subsection (2) prevent liability to income tax arising under any enactment, but the other exemptions in this Part only affect liability to income tax under Part 2 of this Act.

(2)The provisions referred to in subsection (1) are—

(a)section 245 (travelling and subsistence during public transport strikes),

(b)section 248 (transport home: late night working and failure of car-sharing arrangements),

(c)section 264 (annual parties and functions),

(d)Chapter 8 of this Part (exemptions for special kinds of employees) except for sections [F576290, 290C to] 291 [F577and 306A] ,

[F578(da)section 308B (independent advice in respect of conversions and transfers of pension scheme benefits),]

[F579(db)section 308C (provision of pensions advice),]

(e)section 323 (long service awards),

(f)section 324 (small gifts from third parties), and

(g)section 326 (expenses incidental to transfer of a kind not normally met by transferor).

Textual Amendments

F576Words in s. 228(2)(d) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 13

F577Words in s. 228(2)(d) inserted (with effect in accordance with s. 14(4) of the amending Act) by Finance Act 2015 (c. 11), s. 14(3)

F578S. 228(2)(da) inserted (with effect in accordance with s. 54(3) of the amending Act) by Pension Schemes Act 2015 (c. 8), ss. 54(2), 89(3)(b) (with s. 87)

F579S. 228(2)(db) inserted (with effect in accordance with s. 3(5) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 3(2)

[F580228AGeneral exclusion from exemptions: optional remuneration arrangementsU.K.

(1)A relevant exemption does not apply (whether to prevent liability to income tax from arising or to reduce liability to income tax) in respect of a benefit or facility so far as the benefit or facility is provided pursuant to optional remuneration arrangements.

(2)For the purposes of subsection (1) it does not matter whether the relevant exemption would (apart from that subsection) have effect as an employment income exemption or an earnings-only exemption.

(3)For the purposes of this section an exemption conferred by this Part is a “relevant exemption” unless it is—

(a)a special case exemption (see subsection (4)), or

(b)an excluded exemption (see subsection (5)).

(4)“Special case exemption” means an exemption conferred by any of the following provisions—

(a)section 289A (exemption for paid or reimbursed expenses);

(b)section 289D (exemption for other benefits);

(c)section 308B (independent advice in respect of conversions and transfers of pension scheme benefits);

(d)section 312A (limited exemption for qualifying bonus payments);

(e)section 317 (subsidised meals);

(f)section 320C (recommended medical treatment);

(g)section 323A (trivial benefits provided by employers).

(5)“Excluded exemption” means an exemption conferred by any of the following provisions—

(a)section 239 (payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles);

(b)section 244 (cycles and cyclist's safety equipment);

(c)section 266(2)(c) (non-cash voucher regarding entitlement to exemption within section 244);

(d)section 270A (limited exemption for qualifying childcare vouchers);

(e)section 307 (death or retirement provision), so far as relating to provision made for retirement benefits;

(f)section 308 (exemption of contribution to registered pension scheme);

(g)section 308A (exemption of contributions to overseas pension scheme);

(h)section 308C (provision of pensions advice);

(i)section 309 (limited exemptions for statutory redundancy payments);

(j)section 310 (counselling and other outplacement services);

(k)section 311 (retraining courses);

(l)section 318 (childcare: exemption for employer-provided care);

(m)section 318A (childcare: limited exemption for other care).

(6)In subsection (5) “retirement benefit” has the meaning that would be given by subsection (2) of section 307 if “or death” were omitted in both places where it occurs in that subsection.

(7)In this section “benefit or facility” includes anything which constitutes employment income or in respect of which employment income is treated as arising to the employee (regardless of its form and the manner of providing it).

(8)In this section “optional remuneration arrangements” has the same meaning as in the benefits code (see section 69A).

(9)The Treasury may by order amend subsections (4) and (5) by adding or removing an exemption conferred by Part 4.]

Textual Amendments

F580S. 228A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 49

Chapter 2U.K.Exemptions: mileage allowances and passenger payments

Mileage allowancesU.K.

229Mileage allowance paymentsU.K.

(1)No liability to income tax arises in respect of approved mileage allowance payments for a vehicle to which this Chapter applies (see section 235).

(2)Mileage allowance payments are amounts, other than passenger payments (see section 233), paid to an employee for expenses related to the employee’s use of such a vehicle for business travel (see [F581sections 235A and 236(1))].

(3)Mileage allowance payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee for the kind of vehicle in question does not exceed the approved amount for such payments applicable to that kind of vehicle (see section 230).

(4)Subsection (1) does not apply if—

(a)the employee is a passenger in the vehicle, or

(b)the vehicle is a company vehicle (see section 236(2)).

Textual Amendments

F581Words in s. 229(2) substituted (with effect in accordance with s. 29(7) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 29(2)

230The approved amount for mileage allowance paymentsU.K.

(1)The approved amount for mileage allowance payments that is applicable to a kind of vehicle is—

where—

M is the number of miles of business travel by the employee (other than as a passenger) using that kind of vehicle in the tax year in question;

R is the rate applicable to that kind of vehicle.

(2)The rates applicable are as follows—

Table
Kind of vehicleRate per mile
Car or van [F58245p] for the first 10,000 miles
 25p after that
Motor cycle24p
Cycle20p

(3)The reference in subsection (2) to “the first 10,000 miles” is to the total number of miles of business travel in relation to the employment, or any associated employment, by car or van in the tax year in question.

(4)One employment is associated with another if—

(a)the employer is the same;

(b)the employers are partnerships or bodies and an individual or another partnership or body has control over both of them; or

(c)the employers are associated companies within the meaning [F583given by section 449 of CTA 2010].

(5)In subsection (4)(b)—

(a)“control”, in relation to a body corporate or partnership, has the meaning given by [F584section 995 of ITA 2007] (in accordance with section 719 of this Act), and

(b)the definition of “control” in that section of that Act applies (with the necessary modifications) in relation to an unincorporated association as it applies in relation to a body corporate.

(6)The Treasury may by regulations amend subsection (2) so as to alter the rates or rate bands.

Textual Amendments

F582Sum in s. 230(2) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Approved Mileage Allowance Payments (Rates) Regulations 2011 (S.I. 2011/896), regs. 1(2), 2

F583Words in s. 230(4)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 384 (with Sch. 2)

F584Words in s. 230(5)(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 433 (with Sch. 2)

231Mileage allowance reliefU.K.

(1)An employee is entitled to mileage allowance relief for a tax year—

(a)if the employee uses a vehicle to which this Chapter applies for business travel, and

(b)the total amount of all mileage allowance payments, if any, made to the employee for the kind of vehicle in question for the tax year is less than the approved amount for such payments applicable to that kind of vehicle.

(2)The amount of mileage allowance relief to which an employee is entitled for a tax year is the difference between—

(a)the total amount of all mileage allowance payments, if any, made to the employee for the kind of vehicle in question, and

(b)the approved amount for such payments applicable to that kind of vehicle.

(3)Subsection (1) does not apply if—

(a)the employee is a passenger in the vehicle, or

(b)the vehicle is a company vehicle.

232Giving effect to mileage allowance reliefU.K.

(1)A deduction is allowed for mileage allowance relief to which an employee is entitled for a tax year.

(2)If any of the employee’s earnings—

(a)are taxable earnings in the tax year in which the employee receives them, and

(b)are not also taxable earnings in that year that fall within subsection (3),

the relief is allowed as a deduction from those earnings in calculating net taxable earnings in the year.

(3)If any of the employee’s earnings are taxable earnings in the tax year in which the employee remits them to the United Kingdom, there may be deducted from those earnings the amount of any mileage allowance relief—

(a)for that tax year, and

(b)for any earlier tax year in which the employee was resident in the United Kingdom,

which, on the assumptions mentioned in subsection (4), would have been deductible under subsection (2).

(4)The assumptions are—

(a)that subsection (2)(b) does not apply, and

(b)where applicable, that the earnings constitute taxable earnings in the tax year in which the employee receives them.

(5)Subsection (3) applies only to the extent that the mileage allowance relief cannot be deducted under subsection (2).

(6)A deduction shall not be made twice, whether under subsection (2) or (3), in respect of the same mileage allowance relief.

[F585(6A)If the earnings from which a deduction allowed under this section is deductible include earnings that are “excluded” within the meaning of section 15(1A)—

(a)the amount of the deduction allowed is a proportion of the amount that would be allowed under this section if the tax year were not a split year, and

(b)that proportion is equal to the proportion that the part of the earnings that is not “excluded” bears to the total earnings.]

(7)In this section “taxable earnings” or “net taxable earnings” means taxable earnings or net taxable earnings from the employment for the purposes of Part 2.

Textual Amendments

F585S. 232(6A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 63

Passenger paymentsU.K.

233Passenger paymentsU.K.

(1)No liability to income tax arises in respect of approved passenger payments made to an employee for the use of a car or van (whether or not it is a company vehicle) if—

(a)the employee receives mileage allowance payments for the use of the car or van, and

(b)the cash equivalent of the benefit of the car or van is treated as earnings from the employment by virtue of section 120 or 154 (cars and vans as benefits).

This is subject to subsection (2).

(2)The condition in subsection (1)(b) needs to be met only if the car or van is made available to the employee by reason of the employment.

(3)Passenger payments are amounts paid to an employee because, while using a car or van for business travel, the employee carries in it one or more passengers who are also employees for whom the travel is business travel.

(4)Passenger payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee does not exceed the approved amount for such payments (see section 234).

(5)Section 117 (when cars and vans are made available by reason of employment) applies for the purposes of subsection (2).

234The approved amount for passenger paymentsU.K.

(1)The approved amount for passenger payments is—

where—

M is the number of miles of business travel by the employee by car or van—

  • (a) for which the employee carries in the tax year in question one or more passengers who are also employees for whom the travel is business travel, and

  • (b) in respect of which passenger payments are made;

R is a rate of 5p per mile.

(2)If the employee carries for all or part of the tax year two or more passengers who are also employees for whom the travel is business travel, the approved amount for passenger payments is the total of the amounts calculated separately under subsection (1) in respect of each of those passengers.

(3)The Treasury may by regulations amend subsection (1) so as to alter the rate.

SupplementaryU.K.

235Vehicles to which this Chapter appliesU.K.

(1)This Chapter applies to cars, vans, motor cycles and cycles.

(2)“Car” means a mechanically propelled road vehicle which is not—

(a)a goods vehicle,

(b)a motor cycle, or

(c)a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.

(3)“Van” means a mechanically propelled road vehicle which—

(a)is a goods vehicle, and

(b)has a design weight not exceeding 3,500 kilograms,

and which is not a motor cycle.

(4)“Motor cycle” has the meaning given by section 185(1) of the Road Traffic Act 1988 (c. 52).

(5)“Cycle” has the meaning given by section 192(1) of that Act.

(6)In this section—

  • “design weight” means the weight which a vehicle is designed or adapted not to exceed when in normal use and travelling on a road laden;

  • “goods vehicle” means a vehicle of a construction primarily suited for the conveyance of goods or burden of any description.

[F586235AJourneys made by members of local authorities etcU.K.

(1)Subject to subsections (2) and (3), a qualifying journey made by a member of a relevant authority is to be treated as business travel for the purposes of this Chapter if a qualifying payment is made by the authority—

(a)to the member for expenses related to the member's use for the journey of a vehicle to which this Chapter applies, or

(b)to another member of the authority for carrying the member as a passenger on the journey in a car or van.

(2)A qualifying journey is not to be treated as business travel—

(a)for the purposes of section 231, or

(b)when calculating for the purposes of that section the mileage allowance payments paid to the member in respect of the journey and the approved amount for such payments.

(3)If a journey made by a member of a relevant authority is a qualifying journey and a qualifying payment is made to the member for carrying a passenger on the journey, the member's journey is not to be treated as business travel in respect of that passenger for the purposes of sections 233 and 234 unless the passenger is also a member of the authority.

(4)A journey made by a member of a relevant authority is a “qualifying journey” for the purposes of this section if—

(a)it is a journey between the member's home and permanent workplace, and

(b)the member's home is situated in the area of the authority, or no more than 20 miles outside the boundary of the area.

(5)In this section “permanent workplace” has the same meaning as in Part 5 (see section 339).

(6)The Treasury may by regulations—

(a)provide for bodies specified in the regulations (which must be local authorities or bodies that have similar or related functions or purposes) to be relevant authorities for the purposes of this section,

(b)provide for references in this section to a member of a relevant authority to be read as references to a member of a description prescribed in the regulations, and

(c)define what is meant by “qualifying payment” for the purposes of this section.

(7)The regulations may contain transitional provision and savings.]

Textual Amendments

F586S. 235A inserted (with effect in accordance with s. 29(7) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 29(3)

236Interpretation of this ChapterU.K.

(1)In this Chapter—

  • “business travel” means travelling the expenses of which, if incurred and paid by the employee in question, would (if this Chapter did not apply) be deductible under sections 337 to 342;

  • “mileage allowance payments” has the meaning given by section 229(2);

  • “passenger payments” has the meaning given by section 233(3).

[F587(1A)For journeys that are treated as business travel for the purposes of certain provisions of this Chapter, see section 235A (journeys made by members of local authorities etc).]

(2)For the purposes of this Chapter a vehicle is a “company vehicle” in a tax year if in that year—

(a)the vehicle is made available to the employee by reason of the employment and is not available for the employee’s private use, or

(b)[F588an amount in respect of] the benefit of the vehicle is to be treated as the employee’s earnings for the tax year by virtue of—

(i)section 120 [F589or 120A] (benefit of car treated as earnings),

(ii)section 154 [F590or 154A] (benefit of van treated as earnings), or

(iii)section 203 [F591or 203A] (residual liability to charge: benefit treated as earnings), or

(c)in the case of a car or van, [F592an amount in respect of] the benefit of the car or van would be required to be so treated if sections 167 and 168 (exceptions for pooled cars and vans) [F593and section 248A (emergency vehicles)] did not apply, or

(d)in the case of a cycle, the cash equivalent of the benefit of the cycle would be required to be treated as the employee’s earnings for the tax year under Chapter 10 of Part 3 (taxable benefits: residual liability to charge) if section 244(1) (exception for cycles made available) did not apply.

(3)Sections 117 and 118 (when cars and vans are made available by reason of employment and are made available for private use) apply for the purposes of subsection (2).

Textual Amendments

F587S. 236(1A) inserted (with effect in accordance with s. 29(7) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 29(4)

F588Words in s. 236(2)(b) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 52(1)(a)

F589Words in s. 236(2)(b)(i) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 52(1)(b)

F590Words in s. 236(2)(b)(ii) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 52(1)(c)

F591Words in s. 236(2)(b)(iii) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 52(1)(d)

F592Words in s. 236(2)(c) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 52(2)

F593Words in s. 236(2)(c) inserted (with effect in accordance with s. 81(3) of the amending Act) by Finance Act 2004 (c. 12), s. 81(2)

Chapter 3U.K.Exemptions: other transport, travel and subsistence

237Parking provision and expensesU.K.

(1)[F594No liability to income tax arises] in respect of the provision of workplace parking for an employee.

(2)No liability to income tax arises by virtue of the payment or reimbursement of expenses incurred in connection with the provision for or the use by an employee of workplace parking.

(3)In this section “workplace parking” means—

(a)a [F595parking space for a car or van],

(b)a motor cycle parking space, or

(c)facilities for parking a cycle other than a motor cycle,

at or near the employee’s workplace.

Textual Amendments

F594Words in s. 237(1) substituted (with effect in accordance with s. 16(7) of the amending Act) by Finance Act 2005 (c. 7), s. 16(2)

F595Words in s. 237(3)(a) substituted (with effect in accordance with s. 80(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 14 para. 8

[F596237AVehicle-battery chargingU.K.

(1)No liability to income tax arises in respect of the provision, at or near an employee's workplace, of facilities for charging a battery of a vehicle used by the employee (including a vehicle used by the employee as a passenger).

(2)Subsection (1) applies only if the facilities are made available generally to the employer's employees at that workplace.

(3)In this section—

  • “facilities”—

    (a)

    includes electricity, but

    (b)

    does not include workplace parking,

  • “taxable”, in relation to a car or van, has the meaning given by section 239(6),

  • “vehicle” means a vehicle—

    (a)

    to which Chapter 2 applies (see section 235), and

    (b)

    which is neither a taxable car nor a taxable van, and

  • “workplace parking” has the meaning given by section 237(3).]

Textual Amendments

F596S. 237A inserted (with effect in accordance with s. 8(2) of the amending Act) by Finance Act 2019 (c. 1), s. 8(1)

238Modest private use of heavy goods vehiclesU.K.

(1)No liability to income tax arises where a heavy goods vehicle is made available to an employee for the employee’s private use if conditions A and B are met.

(2)Condition A is that there is no transfer of the property in the vehicle to the employee.

(3)Condition B is that the employee’s use of the vehicle in the tax year is not wholly or mainly private use.

(4)In this section—

  • “heavy goods vehicle” means a mechanically propelled road vehicle which—

    (a)

    is of a construction primarily suited for the conveyance of goods or burden of any kind, and

    (b)

    is designed or adapted to have a maximum weight exceeding 3,500 kilograms when in normal use and travelling on a road laden, and

  • “private use” means use other than for travel which the employee is necessarily obliged to do in the performance of the duties of the employment.

239Payments and benefits connected with taxable cars and vans and exempt heavy goods vehiclesU.K.

(1)No liability to income tax arises in respect of the discharge of any liability of an employee in connection with a taxable car or van or an exempt heavy goods vehicle.

(2)No liability to income tax arises in respect of a payment to an employee in respect of expenses incurred by the employee in connection with a taxable car or van or an exempt heavy goods vehicle.

(3)Subsections (1) and (2) do not apply to liability arising by virtue of [F597section 120A (optional remuneration arrangements: benefit of a car),] section 149 [F598or 149A] (benefit of car fuel treated as earnings) [F599, section 154A (optional remuneration arrangements: benefit of a van)] [F600or section 160 [F601or 160A] (benefit of van fuel treated as earnings).]

(4)No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of a benefit connected with a taxable car or van or an exempt heavy goods vehicle.

(5)Subsection (4) does not apply to the provision of a driver.

(6)For the purposes of this section a car or van is “taxable” if under Chapter 6 of Part 3 [F602an amount (whether the cash equivalent or the relevant amount) in respect of] the benefit of it is to be treated as the employee’s earnings for the tax year.

(7)For the purposes of this section—

(a)“heavy goods vehicle” has the same meaning as in section 238(4) (modest private use of heavy goods vehicles), and

(b)a heavy goods vehicle is “exempt” if it is made available in the tax year to the employee in such circumstances that section 238 applies.

(8)For the purposes of subsections (1) and (2), a heavy goods vehicle is also “exempt” if it is so made available in such circumstances that section 238 would apply if the employee were not in [F603lower-paid employment as a minister of religion (see section 290D)].

F604(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F597Words in s. 239(3) inserted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(6)(a)

F598Words in s. 239(3) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 53(2)(a)

F599Words in s. 239(3) inserted (with effect in accordance with s. 7(7) of the amending Act) by Finance Act 2019 (c. 1), s. 7(6)(b)

F600Words in s. 239(3) inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 48(1)

F601Words in s. 239(3) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 53(2)(b)

F602Words in s. 239(6) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 53(3)

F603Words in s. 239(8) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 14(2)

F604S. 239(9) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 14(3)

240Incidental overnight expenses and benefitsU.K.

(1)No liability to income tax arises in respect of a sum if or to the extent that it is paid wholly and exclusively for the purpose of paying or reimbursing expenses which—

(a)are incidental to the employee’s absence from the place where the employee normally lives,

(b)relate to a continuous period of such absence in relation to which the overnight stay conditions are met (a “qualifying period”), and

(c)would not be deductible under Part 5 if the employee incurred and paid them and Chapter 2 of this Part (mileage allowances and passenger payments) did not apply.

(2)No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of a benefit provided for an employee if—

(a)its provision is incidental to such an absence during a qualifying period, and

(b)no amount would be deductible in respect of it under Part 5.

(3)Subsections (1) and (2) are subject to section 241 (incidental overnight expenses and benefits: overall exemption limit).

(4)The overnight stay conditions are that—

(a)the employee is obliged to stay away from the place where the employee normally lives throughout the period,

(b)the period includes at least one overnight stay away from that place, and

(c)each such overnight stay during the period is at a place the expenses of travelling to which meet condition A or B.

(5)Condition A is that the expenses are deductible under Part 5 (otherwise than under any of the excepted foreign travel provisions) or would be if the employee incurred and paid them and Chapter 2 of this Part did not apply.

(6)Condition B is that the expenses are within section 250 or 255 (exemption of work-related and individual learning account training provision) or would be if the employer paid or reimbursed them.

(7)In this section “excepted foreign travel provisions” means—

(a)section 371 (travel costs and expenses where duties performed abroad: visiting spouse’s [F605civil partner's] or child’s travel),

(b)section 374 (non-domiciled employee’s spouse’s [F606civil partner's] or child’s travel costs and expenses where duties performed in UK), and

(c)section 376 (foreign accommodation and subsistence costs and expenses (overseas employments)).

Textual Amendments

241Incidental overnight expenses and benefits: overall exemption limitU.K.

(1)Section 240(1) and (2) do not apply if the exemption provisions total in respect of the qualifying period in question exceeds the permitted amount.

(2)In this section “the exemption provisions total”, in respect of a period, means the aggregate of—

(a)the amounts that would be exempted under section 240(1) and (2) in respect of the period, apart from this section, and

(b)the amounts that would be exempted under section 268 (exemption of vouchers and tokens for incidental overnight expenses) in respect of the period, apart from the condition in section 268(5).

(3)In this section “the permitted amount”, in respect of a period, means the aggregate of the following amounts—

(a)£5 for each night during the period spent wholly in the United Kingdom, and

(b)£10 for each night during the period spent wholly or partly outside the United Kingdom.

[F607241ATravel by unpaid directors of not-for-profit companiesU.K.

(1)No liability to income tax arises in respect of a sum if or to the extent that it is paid wholly and exclusively for the purpose of paying or reimbursing travel expenses in respect of which conditions A to C are met.

(2)Condition A is that—

(a)the employee is obliged to incur the expenses as holder of the employment, and

(b)the expenses are attributable to the employee’s necessary attendance at any place in the performance of the duties of the employment.

(3)Condition B is that the employment is employment as a director of a not-for-profit company.

(4)Condition C is that the employment is one from which the employee receives no employment income other than sums to which Chapter 3 of Part 3 applies (expenses payments).

(5)In this section—

(a)“director” has the same meaning as in the benefits code (see section 67), and

(b)“not-for-profit company” means a company that does not carry on activities for the purpose of making profits for distribution to its members or others.

Textual Amendments

F607Ss. 241A, 241B inserted (with effect in accordance with art. 4 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2014 (S.I. 2014/211), arts. 1, 2(1)

241BTravel where directorship held as part of trade or professionU.K.

(1)No liability to income tax arises in respect of a sum if or to the extent that it is paid wholly and exclusively for the purpose of paying or reimbursing travel expenses in respect of which conditions A to D are met.

(2)Condition A is that the employee is obliged to incur the expenses as holder of the employment.

(3)Condition B is that the employment is employment as a director of a company.

(4)Condition C is that the employee carries on a trade, profession or vocation (alone or in partnership).

(5)Condition D is that, in calculating the profits of that trade, profession or vocation for income tax purposes, a deduction is allowed under ITTOIA 2005 for the expenses, but no such deduction is to be made.

(6)In this section “director” has the same meaning as in the benefits code (see section 67).]

Textual Amendments

F607Ss. 241A, 241B inserted (with effect in accordance with art. 4 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2014 (S.I. 2014/211), arts. 1, 2(1)

242Works transport servicesU.K.

(1)No liability to income tax arises in respect of the provision for employees of a works transport service if—

(a)the service is available generally to employees of the employer (or each employer) concerned,

(b)the main use of the service is for qualifying journeys by those employees, and

(c)the service—

(i)is used only by the employees for whom it is provided or their children, or

(ii)is substantially used only by those employees or children.

(2)In this section—

  • “children” includes stepchildren and illegitimate children but does not include children aged 18 or over, and

  • “works transport service” means a service which is provided by means of a bus or a minibus for conveying employees of one or more employers on qualifying journeys.

(3)For the purposes of this section—

(a)“bus” means a road passenger vehicle which has a seating capacity of 12 or more, and

(b)“minibus” means a vehicle constructed or adapted for the carriage of passengers which has a seating capacity of 9, 10 or 11.

(4)But a vehicle which falls within the definition in subsection (3)(b) is not a minibus for the purposes of this section if—

(a)it has one or more disqualified seats, and

(b)excluding the disqualified seats, it has a seating capacity of 8 or less.

(5)For the purposes of subsections (3) and (4) the seating capacity of a vehicle is determined in the same way as for the purposes of Part 3 of Schedule 1 to VERA 1994 (vehicle excise duty on buses).

This applies whether or not the vehicle is a bus within the meaning of that Part of that Schedule.

(6)For the purposes of subsection (4) a seat is disqualified if relevant construction and use requirements are not met in relation to it.

In this subsection “construction and use requirements” has the same meaning as in Part 2 of the Road Traffic Act 1988 (c. 52) or, in Northern Ireland, Part III of the Road Traffic (Northern Ireland) Order 1995 (S.I. 1995/2994 (N.I. 18)).

243Support for public bus servicesU.K.

(1)No liability to income tax arises in respect of the provision of financial or other support for a public transport road service if—

(a)in the case of a local bus service, conditions A and B are met, or

(b)in any other case, conditions A to C are met.

(2)Condition A is that the service is used by employees of one or more employers for qualifying journeys.

(3)Condition B is that the service is available generally to employees of the employer (or each employer) concerned.

(4)Condition C is that the terms on which the service is available to the employees of the employer (or each employer) concerned are not more favourable than those available to other passengers.

(5)In this section—

  • “local bus service” means a local service (as defined in section 2 of the Transport Act 1985 (c. 67)), and

  • “public transport road service” means a public passenger transport service provided by means of a road vehicle.

244Cycles and cyclist’s safety equipmentU.K.

(1)[F608No liability to income tax arises] in respect of the provision for an employee of a cycle or cyclist’s safety equipment if conditions A to C are met.

(2)Condition A is that there is no transfer of the property in the cycle or equipment in question.

(3)Condition B is that the employee uses the cycle or equipment in question mainly for qualifying journeys.

(4)Condition C is that cycles are available generally to employees of the employer concerned or, as the case may be, cyclist’s safety equipment is so available to them.

(5)In this section “cycle” has the meaning given by section 192(1) of the Road Traffic Act 1988 (c. 52), and “cyclist” has a corresponding meaning.

Textual Amendments

F608Words in s. 244(1) substituted (with effect in accordance with s. 16(7) of the amending Act) by Finance Act 2005 (c. 7), s. 16(3)

245Travelling and subsistence during public transport strikesU.K.

(1)No liability to income tax arises in respect of the following benefits and payments where a strike or other industrial action disrupts a public transport service normally used by an employee.

(2)They are—

(a)the provision for the employee of overnight accommodation at or near the employee’s permanent workplace,

(b)a payment to the employee in respect of expenses incurred by the employee in connection with such accommodation,

(c)the provision for the employee of transport for the purpose of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting, and

(d)a payment to the employee in respect of expenses incurred on such transport.

246Transport between work and home for disabled employees: generalU.K.

(1)No liability to income tax arises in respect of—

(a)the provision of transport for a disabled employee, or

(b)the payment or reimbursement of expenses incurred on such transport,

if the condition in subsection (2) is met.

(2)The condition is that the transport is provided or the expenses are incurred for the purpose of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting.

(3)Subsection (1) does not apply in a case where a car is made available to a disabled employee (but see section 247).

(4)In this section “disabled employee” means an employee who has a physical or mental impairment with a substantial and long-term adverse effect on the employee’s ability to carry out normal day to day activities.

247Provision of cars for disabled employeesU.K.

(1)This section applies where a car is made available to a disabled employee without any transfer of the property in it.

(2)No liability to income tax arises by virtue of Chapter 6 or 10 of Part 3 (taxable benefits: cars, vans etc. and residual liability to charge) in respect of the benefit if conditions A to C are met.

(3)No liability to income tax arises in respect of—

(a)the provision of fuel for the car, or

(b)the payment or reimbursement of expenses incurred in connection with it,

if conditions A to C are met.

(4)Condition A is that the car has been adapted for the employee’s special needs or, in the case of an employee who because of disability can only drive a car that has automatic transmission, it is such a car.

(5)Condition B is that the car is made available on terms prohibiting its use otherwise than for—

(a)the employee’s business travel, or

(b)transport for the employee for the purpose of—

(i)ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting, or

(ii)travel to a place the expenses of travelling to which would be within one of the training exemption provisions if the employer paid them.

(6)Condition C is that in the tax year the car is only used in accordance with those terms.

(7)In this section—

  • “business travel” has the same meaning as in Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits) (see section 171(1)),

  • “disabled employee” has the same meaning as in section 246 (see subsection (4)), and

  • “the training exemption provisions” means—

  • section 250 (exemption of work-related training provision),

  • section 255 (exemption for contributions to individual learning account training), and

  • section 311 (retraining courses).

(8)Section 138(4) (when a car has automatic transmission) applies for the purposes of this section as it applies for the purposes of section 138.

248Transport home: late night working and failure of car-sharing arrangementsU.K.

(1)No liability to income tax arises in respect of the provision of transport or the payment or reimbursement of expenses incurred on transport if—

(a)the transport is for a journey from the employee’s workplace to the employee’s home,

(b)the late working conditions or the car-sharing failure conditions are met, and

(c)the number of previous occasions in the tax year on which the provision of transport within this section or the payment or reimbursement of expenses within this section has occurred is lower than 60.

(2)The late working conditions are that—

(a)the journey is made on an occasion when the employee is required to work later than usual and until at least 9 p.m.,

(b)such occasions occur irregularly,

(c)by the time when the employee ceases work—

(i)public transport has ceased to be available for the journey, or

(ii)it would not be reasonable to expect the employee to use it, and

(d)the transport is by taxi or similar private road transport.

(3)The car-sharing failure conditions are that—

(a)the employee regularly travels to work in a car with one or more other employees of the employee’s employer under arrangements for the sharing of the car with them, and

(b)the journey is made on an occasion when the employee is unable to use the car because of unforeseen and exceptional circumstances.

[F609248AEmergency vehiclesU.K.

(1)This section applies where—

(a)an emergency vehicle is made available to a person employed in an emergency service [F610mainly for use for the person's business travel] ,

(b)the terms on which it is made available prohibit its private use otherwise than when the person is on call or F611... commuting, and

(c)the person does not make private use of it otherwise than in such circumstances.

(2)No liability to income tax arises by virtue of Chapter 6 or 10 of Part 3 (taxable benefits: cars, vans etc. and residual liability to charge) in respect of the benefit.

(3)“Emergency vehicle” means a vehicle which is used to respond to emergencies and which either—

(a)has fixed to it a lamp designed to emit a flashing light for use in emergencies, or

(b)would have such a lamp fixed to it but for the fact that (if it did) a special threat to the personal physical security of those using it would arise by reason of it being apparent that they were employed in an emergency service.

(4)The following are “employed in an emergency service”—

(a)constables and other persons employed for police purposes,

(b)persons employed for the purposes of a fire, or fire and rescue, service, and

(c)persons employed in the provision of ambulance or paramedic services.

(5)The Treasury may by order amend subsection (4).

(6)“Private use”, in relation to a person, means any use other than for the person’s business travel; and “business travel” has the same meaning as in Chapter 6 of Part 3 (see section 171(1)).

(7)A person to whom an emergency vehicle is made available is on call when liable, as part of normal duties, to be called on to use the emergency vehicle to respond to emergencies.

(8)A person to whom an emergency vehicle is made available is F612... commuting when the person—

(a)is using [F613the vehicle] for ordinary commuting or for travel between two places that is for practical purposes substantially ordinary commuting, and

F614(b)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F609S. 248A inserted (with effect in accordance with s. 81(3) of the amending Act) by Finance Act 2004 (c. 12), s. 81(1)

F610Words in s. 248A(1)(a) substituted (with effect in accordance with s. 9(5) of the amending Act) by Finance Act 2019 (c. 1), s. 9(2)(a)

F611Words in s. 248A(1)(b) omitted (with effect in accordance with s. 9(5) of the amending Act) by virtue of Finance Act 2019 (c. 1), s. 9(2)(b)

F612Words in s. 248A(8) substituted (with effect in accordance with s. 9(5) of the amending Act) by Finance Act 2019 (c. 1), s. 9(3)(a)

F613Words in s. 248A(8)(a) substituted (with effect in accordance with s. 9(5) of the amending Act) by Finance Act 2019 (c. 1), s. 9(3)(b)

F614S. 248A(8)(b) and word omitted (with effect in accordance with s. 9(5) of the amending Act) by virtue of Finance Act 2019 (c. 1), s. 9(3)(c)

249Interpretation of this ChapterU.K.

In this Chapter—

  • “car” and “van” have the same meaning as in Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits) (see section 115), except that for the purposes of sections 246 and 247 (transport for the disabled) any adaptation of a car for the employee’s special needs is to be disregarded,

  • “ordinary commuting” has the same meaning as in section 338 (travel for necessary attendance) (see subsection (3)),

  • “qualifying journey”, in relation to an employee, means the whole or part of a journey—

    (a)

    between the employee’s home and workplace,

    (b)

    between one workplace and another,

    in connection with the performance of the duties of the employment, and

  • “workplace” and “permanent workplace” have the meaning given by section 339.

Chapter 4U.K.Exemptions: education and training

Work-related trainingU.K.

250Exemption of work-related training provisionU.K.

(1)No liability to income tax arises by virtue of—

(a)the provision for an employee of work-related training or any benefit incidental to such training, or

(b)the payment or reimbursement to or in respect of an employee of—

(i)the cost of work-related training or of any benefit incidental to such training, or

(ii)any costs of a kind specified in subsection (2) in respect of such training.

(2)The costs are—

(a)costs which are incidental to the employee undertaking the training,

(b)expenses incurred in connection with an examination or other assessment of what the employee has gained from the training, and

(c)the cost of obtaining any qualification, registration or award to which the employee becomes or may become entitled as a result of the training or such an examination or other assessment.

251Meaning of “work-related training”U.K.

(1)In this Chapter “work-related training”, in relation to an employee, means a training course or other activity designed to impart, instil, improve or reinforce any knowledge, skills or personal qualities which—

(a)are likely to prove useful to the employee when performing the duties of the employment or a related employment, or

(b)will qualify or better qualify the employee—

(i)to perform those duties, or

(ii)to participate in any charitable or voluntary activities that are available to be performed in association with the employment or a related employment.

(2)For this purpose “related employment”, in relation to an employee, means another employment with the same employer, or with a person connected with the employer, which the employee—

(a)is to hold,

(b)has a serious opportunity of holding, or

(c)can realistically expect to have a serious opportunity of holding in due course.

252Exception for non-deductible travel expensesU.K.

(1)Where travel or subsistence is provided or the costs of travel or subsistence are paid or reimbursed, section 250 does not apply except to the extent that the travel meets condition A or B or the subsistence meets condition B.

(2)Condition A is that, on the assumptions in subsection (4), mileage allowance relief under Chapter 2 of this Part would be available for the travel if no mileage allowance payments had been made.

(3)Condition B is that, on those assumptions, the expenses of the travel or subsistence would be deductible under Part 5.

(4)The assumptions are—

(a)that the employee undertook the training as one of the duties of the employment, and

(b)that the employee incurred and paid the expenses.

(5)In this section—

  • “mileage allowance payments” has the meaning given by section 229(2), and

  • “subsistence” includes food, drink and temporary living accommodation.

253Exception where provision for excluded purposesU.K.

(1)Section 250 does not apply if or to the extent that the facilities or other benefits that are provided or the costs of which are paid or reimbursed are provided to the employee for one or more of the following purposes.

(2)They are—

(a)enabling the employee to enjoy the facilities or benefits for entertainment or recreational purposes which are unconnected,

(b)providing the employee with an unconnected inducement to remain in or accept an employment with the employer or a person connected with the employer, and

(c)rewarding the employee for performing duties of the employment or performing them in a particular way.

(3)In subsection (2)(a) the reference to enjoying facilities or benefits for entertainment or recreational purposes includes a reference to enjoying them in the course of a leisure activity.

(4)In subsection (2)(a) and (b) “unconnected” means unconnected with imparting, instilling, improving or reinforcing knowledge, skills or personal qualities within section 251(1).

254Exception where unrelated assets are providedU.K.

(1)Section 250 does not apply if the benefit that is provided or the cost of which is paid or reimbursed is, or is the use of, an asset that is not a training-related asset.

(2)“Training-related asset”, in relation to work-related training provided to an employee, means—

(a)an asset provided for use only—

(i)in the course of the training, or

(ii)in the course of the training and in the performance of the duties of the employee’s employment,

(b)training materials provided in the course of the training, or

(c)something made by the employee in the course of the training or incorporated into something so made.

(3)For this purpose, “training materials” includes stationery, books or other written material, audio or video tapes, compact disks or floppy disks.

[F615Persons leaving local authority careU.K.

Textual Amendments

F615S. 254A and cross-heading inserted (6.4.2020 with effect in relation to the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 11

254AApprenticeship bursaries paid to persons leaving local authority careU.K.

(1)No liability to income tax arises in respect of a care leaver's apprenticeship bursary payment.

(2)A care leaver's apprenticeship bursary payment is a payment—

(a)payable out of the public revenue,

(b)to a care leaver (see subsection (3)),

(c)made in connection with the person's employment as an apprentice (see subsection (4)), and

(d)in respect of which any conditions specified in regulations made by the Treasury are met.

(3)A person is a care leaver if they are a person—

(a)who is, or was, a child looked after—

(i)by a local authority in England within the meaning of section 22 of the Children Act 1989 (general duty of local authority in relation to children looked after by them);

(ii)by a local authority in Wales within the meaning of the Social Services and Well-being (Wales) Act 2014 (anaw 4) (see section 74 of that Act (child or young person looked after by a local authority));

(iii)by a local authority in Scotland within the meaning of Chapter 1 of Part 2 of the Children (Scotland) Act 1995 (see section 17(6) of that Act (duty of local authority to child looked after by them));

(iv)by an authority in Northern Ireland within the meaning of the Children (Northern Ireland) Order 1995 (S.I. 1995/755 (N.I. 2)) (see Article 25 of that Order (children looked after by an authority: interpretation)), and

(b)in respect of whom any other conditions specified in regulations made by the Treasury are met.

(4)“Apprentice” has the meaning specified in regulations made by the Treasury.

(5)Regulations under this section—

(a)may make provision framed by reference to a scheme (however described or named), or document, as it has effect from time to time,

(b)may make different provision for different purposes,

(c)may make different provision for different areas, and

(d)may make retrospective provision.]

Individual learning account trainingU.K.

255Exemption for contributions to individual learning account trainingU.K.

(1)No liability to income tax in respect of income from a current or former employment arises by virtue of—

(a)the provision to a person within subsection (2) (“the employee”) of individual learning account training that is given by a person who is not the employee’s employer or former employer,

(b)any payment to the person giving the training in respect of the cost of that provision,

(c)the provision to the employee of any benefit incidental to such training, or

(d)the payment or reimbursement of any costs in respect of such training of a kind specified in subsection (3).

(2)A person is within this subsection if the person either—

(a)holds an account that qualifies under section 104 of the Learning and Skills Act 2000 (c. 21), or

(b)is a party to arrangements that qualify under section 105 or 106 of that Act or section 2 of the Education and Training (Scotland) Act 2000 (asp. 8).

(3)The costs are—

(a)costs which are incidental to the employee undertaking the training,

(b)expenses incurred in connection with an examination or other assessment of what the employee has gained from the training, and

(c)the cost of obtaining any qualification, registration or award to which the employee becomes or may become entitled as a result of the training or such an examination or other assessment.

256Meaning of “individual learning account training”U.K.

In this Chapter “individual learning account training” means training or education of a kind that qualifies for grants authorised by—

(a)regulations under section 108 or 109 of the Learning and Skills Act 2000 (c. 21), or

(b)regulations under section 1 of the Education and Training (Scotland) Act 2000.

257Exception for non-deductible travel expensesU.K.

(1)Where travel or subsistence is provided or the costs of travel or subsistence are paid or reimbursed, section 255 does not apply except to the extent that the travel meets condition A or B or the subsistence meets condition B.

(2)Condition A is that, on the assumptions in subsection (4), mileage allowance relief under Chapter 2 of this Part would be available for the travel if no mileage allowance payments had been made.

(3)Condition B is that, on those assumptions, the expenses of the travel or subsistence would be deductible under Part 5.

(4)The assumptions are—

(a)that the employee undertook the training as one of the duties of the employment, and

(b)that the employee incurred and paid the expenses.

(5)In this section—

  • “mileage allowance payments” has the meaning given by section 229(2), and

  • “subsistence” includes food, drink and temporary living accommodation.

258Exception where provision for excluded purposesU.K.

(1)Section 255 does not apply if or to the extent that the facilities or other benefits that are provided or made available, or the costs of which are paid or reimbursed, are provided or made available for either or both of the following purposes.

(2)They are—

(a)enabling the employee or former employee to enjoy the facilities or benefits for entertainment or recreational purposes, and

(b)rewarding the employee or former employee for performing duties of the employment or former employment or performing them in a particular way.

(3)In subsection (2)(a) the reference to enjoying facilities or benefits for entertainment or recreational purposes includes a reference to enjoying them in the course of a leisure activity.

259Exception where unrelated assets are providedU.K.

(1)Section 255 does not apply if the benefit that is provided, or the use of which is provided, or the cost of which is paid or reimbursed is an asset that is not a training-related asset.

(2)“Training-related asset”, in relation to individual learning account training provided to an employee or former employee, means—

(a)an asset provided—

(i)for use only in the course of the training, or

(ii)for use in the course of the training and in the performance of the duties of the employee’s employment, but not to any significant extent for any other use, or

(b)training materials provided in the course of the training, or

(c)something made by the employee or former employee in the course of the training or incorporated into something so made.

(3)For this purpose “training materials” includes stationery, books or other written material, audio or video tapes, compact disks or floppy disks.

260Exception where training not generally available to staffU.K.

(1)Section 255(1) only applies if any expenditure involved in making the provision, the payment or the reimbursement is incurred in giving effect to existing arrangements providing—

(a)for the person incurring it to contribute to costs arising from the undertaking of individual learning account training by the employer’s employees or former employees, and

(b)for such contributions to be generally available, on similar terms, to the employer’s employees at that time.

(2)In subsection (1) “existing arrangements” means arrangements in place when the agreement to incur the expenditure was made.

(3)The Treasury may by regulations make provision specifying the persons or other entities under whom Crown servants are to be treated for the purposes of this section as holding employment.

(4)Such regulations may—

(a)treat a description of Crown servants (or two or more such descriptions taken together) as an entity for the purposes of the regulations, and

(b)make different provision for different descriptions of Crown servants.

(5)In this section “Crown servant” means a person holding an employment under the Crown.

Chapter 5U.K.Exemptions: recreational benefits

Recreational facilitiesU.K.

261Exemption of recreational benefitsU.K.

(1)No liability to income tax arises in respect of the provision to an employee or a member of an employee’s family or household of benefits within subsection (2).

(2)The benefits are—

(a)sporting or other recreational facilities which meet conditions A to C, and

(b)a right or opportunity to make use of such facilities.

This is subject to section 262.

(3)Condition A is that the facilities are available generally to the employees of the employer in question.

(4)Condition B is that they are not available to members of the public generally.

(5)Condition C is that they are used wholly or mainly by persons whose right or opportunity to use them is employment-related (whether or not by reference to the same employer).

(6)A person’s right or opportunity to use facilities is “employment-related” if and only if—

(a)it derives from the person being—

(i)an employee or former employee, or

(ii)a member or former member of the family or household of an employee or former employee,

of a particular employer, and

(b)the facilities are provided so as to be available generally to that employer’s employees.

262Benefits not exempted by section 261U.K.

(1)Section 261 (exemption of recreational benefits) does not apply to the following benefits—

(a)an interest in or the use of any of the following—

(i)a mechanically propelled vehicle,

(ii)holiday or other overnight accommodation, or

(iii)facilities which include, or are provided in association with, a right or opportunity to make use of holiday or overnight accommodation,

(b)facilities provided on domestic premises, or

(c)a right or opportunity to make use of facilities within paragraph (a) or (b).

(2)In this section—

  • “domestic premises” means—

    (a)

    premises used wholly or mainly as a private dwelling, or

    (b)

    land or other premises belonging to, or enjoyed with, premises so used, and

  • “vehicle” includes a ship, boat or other vessel, an aircraft and a hovercraft.

263Power to alter benefits to which section 261 appliesU.K.

The Treasury may by regulations provide that section 261—

(a)does not apply to a benefit specified in the regulations,

(b)applies to a benefit so specified only where such conditions as the regulations specify are met in relation to the terms on which, and the persons to whom, it is provided, or

(c)applies in such cases as are so specified to—

(i)facilities that do not meet the conditions in section 261(3) to (5), or

(ii)a benefit within section 262.

Annual parties and functionsU.K.

264Annual parties and functionsU.K.

(1)This section applies to an annual party or similar annual function provided for an employer’s employees and available to them generally or available generally to those at a particular location.

(2)Where in the tax year only one annual party or similar annual function to which this section applies is provided for the employer’s employees, or the employees in question, no liability to income tax arises in respect of its provision if the cost per head of the party or function does not exceed [F616£150].

(3)Where in the tax year two or more such parties or functions are so provided, no liability to income tax arises in respect of the provision of one or more of them (“the exempt party or parties”) if the cost per head of the exempt party or parties does not exceed [F617£150] or [F617£150] in aggregate.

(4)For the purposes of this section, the cost per head of a party or function is the total cost of providing—

(a)the party or function, and

(b)any transport or accommodation incidentally provided for persons attending it (whether or not they are the employer’s employees),

divided by the number of those persons.

(5)That total cost includes any value added tax on the expenses incurred in providing the party, function, transport or accommodation.

Textual Amendments

EntertainmentU.K.

265Third party entertainmentU.K.

(1)No liability to income tax arises in respect of the provision of entertainment for an employee or a member of the employee’s family or household if conditions A to C are met.

(2)Condition A is that the person providing the entertainment is not the employer or a person connected with the employer.

(3)Condition B is that neither the employer nor a person connected with the employer has directly or indirectly procured its provision.

(4)Condition C is that it is not provided—

(a)in recognition of particular services performed by the employee in the course of the employment, or

(b)in anticipation of particular services to be so performed.

(5)In this section “entertainment” includes hospitality of any kind.

Chapter 6U.K.Exemptions: non-cash vouchers and credit-tokens

General exemptions: use for exempt benefitsU.K.

266Exemption of non-cash vouchers for exempt benefitsU.K.

(1)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher if or to the extent that the voucher is used to obtain anything the direct provision of which would fall within—

(a)section 237(1) (parking provision),

(b)section 246 (transport between home and work for disabled employees: general),

(c)section 247 (provision of cars for disabled employees),

(d)section 248 (transport home: late night working and failure of car-sharing arrangements), F618...

(e)section 265 (third party entertainment)[F619, or

(f)section 320C (recommended medical treatment);]

(2)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher if the voucher evidences the employee’s entitlement to use anything the direct provision of which would fall within—

(a)section 242 (works transport services),

(b)section 243 (support for public bus services), F620...

(c)section 244 (cycles and cyclist’s safety equipment), [F621or

(d)section 319 (mobile telephones).]

(3)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher if the voucher can only be used to obtain anything the direct provision of which would fall within—

(a)section 245 (travelling and subsistence during public transport strikes),

(b)section 261 (exemption of recreational benefits),

(c)section 264 (annual parties and functions),

(d)section 296 (armed forces' leave travel facilities), F622...

(e)section 317 (subsidised meals) [F623, F624...

(f)section 320A (eye tests and special corrective appliances)] [F625or

(g)section 320B (health screening and medical check-ups).]

(4)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher if the voucher evidences the employee’s entitlement to a benefit in respect of which no charge arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) because of regulations under section 210 (power to exempt minor benefits).

(5)For the purposes of this section direct provision is taken to fall within a section if it would do so if the employee were not in [F626lower-paid employment as a minister of religion].

Textual Amendments

F618Word in s. 266(1)(d) omitted (1.1.2015) by virtue of Finance Act 2014 (c. 26), s. 12(3)(4); S.I. 2014/3226, art. 2

F619S. 266(1)(f) and word inserted (1.1.2015) by Finance Act 2014 (c. 26), s. 12(3)(4); S.I. 2014/3226, art. 2

F620Word in s. 266(2)(b) repealed (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 60(4)(5) of the amending Act) by Finance Act 2006 (c. 25), Sch. 26 Pt. 3(6)

F621S. 266(2)(d) and word inserted (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 60(4) of the amending Act) by Finance Act 2006 (c. 25), s. 60(1)

F622Word in s. 266(3)(d) repealed (with effect for the year 2006-07 and subsequent years of assessment in accordance with Sch. 26 Pt. 3(8) Note of the amending Act) by Finance Act 2006 (c. 25), Sch. 26 Pt. 3(8)

F623S. 266(3)(f) and word inserted (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 62(5) of the amending Act) by Finance Act 2006 (c. 25), s. 62(3)

F624Word in s. 266(3)(e) omitted (with effect in accordance with s. 55(5) of the amending Act) by virtue of Finance Act 2009 (c. 10), s. 55(2)

F625S. 266(3)(g) and word inserted (with effect in accordance with s. 55(5) of the amending Act) by Finance Act 2009 (c. 10), s. 55(2)

F626Words in s. 266(5) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 15

267Exemption of credit-tokens used for exempt benefitsU.K.

(1)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a credit-token if or to the extent that the token is used to obtain anything the direct provision of which—

(a)would fall within one of the provisions specified in subsection (2), or

(b)would do so if the employee were not in [F627lower-paid employment as a minister of religion].

(2)Those provisions are—

(a)section 237(1) (parking provision),

(b)section 245 (travelling and subsistence during public transport strikes),

(c)section 246 (transport between home and work for disabled employees: general),

(d)section 247 (provision of cars for disabled employees),

(e)section 248 (transport home: late night working and failure of car-sharing arrangements), F628...

(f)section 265 (third party entertainment).

[F629(g)section 319 (mobile telephones).] , F630...

[F631(h)section 320A (eye tests and special corrective appliances)] [F632and

(i)section 320B (health screening and medical check-ups).]

Textual Amendments

F627Words in s. 267(1)(b) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 16

F628Word in s. 267(2)(e) repealed (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 60(4)(5) of the amending Act) by Finance Act 2006 (c. 25), Sch. 26 Pt. 3(6)

F629S. 267(2)(g) inserted (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 60(4) of the amending Act) by Finance Act 2006 (c. 25), s. 60(2)

F630Word in s. 267(2)(g) omitted (with effect in accordance with s. 55(5) of the amending Act) by virtue of Finance Act 2009 (c. 10), s. 55(3)

F631S. 267(2)(h) and word inserted (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 62(5) of the amending Act) by Finance Act 2006 (c. 25), s. 62(4)

F632S. 267(2)(i) and word inserted (with effect in accordance with s. 55(5) of the amending Act) by Finance Act 2009 (c. 10), s. 55(3)

Exemptions for particular non-cash vouchers and credit-tokensU.K.

268Exemption of vouchers and tokens for incidental overnight expensesU.K.

(1)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if or to the extent that the voucher or token is used by an employee to obtain goods, services or money if conditions A to C are met.

(2)In the case of goods or services, condition A is that—

(a)obtaining them is incidental to the employee’s absence from the place where the employee normally lives, and

(b)that absence is for a continuous period in relation to which the overnight stay conditions are met (“the qualifying period”).

(3)In the case of money, condition A is that—

(a)it is obtained for the purpose of obtaining goods or services, and

(b)obtaining them is incidental to such an absence during such a period.

(4)Condition B is that an amount would not be deductible under section 362 or 363 (deductions where non-cash voucher or credit-token provided) in respect of the cost of obtaining the goods or services.

(5)Condition C is that the exemption provisions total in respect of the qualifying period does not exceed the permitted amount.

(6)In this section—

  • “the overnight stay conditions” has the same meaning as in section 240 (exemption of incidental overnight expenses and benefits) (see section 240(4)), and

  • “the exemption provisions total” and “the permitted amount” have the same meaning as in section 241 (incidental overnight expenses and benefits: overall exemption limit) (see section 241(2) and (3)).

269Exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicleU.K.

(1)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if or to the extent that the voucher or token is used by the employee or a member of the employee’s family for obtaining—

(a)goods or services in connection with a taxable car or van or an exempt heavy goods vehicle, or

(b)money which is spent on such goods or services.

(2)Subsection (1) applies where the goods in question are fuel for a car, [F633or van, but see section 149(3) or section 160(3)] (by virtue of which such use of a voucher or token is treated as the provision of the fuel for the purposes of section 149 (benefit of car fuel treated as earnings) [F634or section 160 (benefit of van fuel treated as earnings)]).

(3)For the purposes of this section—

(a)“car” and “van” have the meaning given by section 115, and

(b)a car or van is “taxable” if the cash equivalent of the benefit of it is treated as the employee’s earnings for the tax year in which the voucher or token is used under Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits).

(4)For the purposes of this section—

(a)“heavy goods vehicle” has the same meaning as in section 238 (modest private use of heavy goods vehicles), and

(b)a heavy goods vehicle is “exempt” if it is made available in the tax year to the employee in such circumstances that section 238 applies or would apply if the employee were not in [F635lower-paid employment as a minister of religion].

Textual Amendments

F633Words in s. 269(2) substituted (21.7.2008) by Finance Act 2008 (c. 9), s. 48(2)(a)

F634Words in s. 269(2) inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 48(2)(b)

F635Words in s. 269(4)(b) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 17

270Exemption for small gifts of vouchers and tokens from third partiesU.K.

(1)No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if conditions A to C are met.

(2)Condition A is that the voucher or token is provided as a gift.

(3)Condition B is that it is only capable of being used to obtain goods.

(4)Condition C is that it meets conditions A to C and E in section 324 (general exemption of small gifts from third parties).

[F636270ALimited exemption for qualifying childcare vouchersU.K.

(1)If qualifying childcare vouchers are provided for an [F637eligible] [F638employee—

(a)no liability to income tax arises by virtue of section 62 (general definition of earnings), and

(b)liability to income tax by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit tokens) arises only in respect of so much of the cash equivalent of the benefit as exceeds the exempt amount.]

[F639For the meaning of “eligible employee”, see section 270AA.]

(2)A “qualifying childcare voucher” means a non-cash voucher in relation to which Conditions A to [F640D] are met.

(3)Condition A is that the voucher is provided to enable an employee to obtain care for a child who—

(a)is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense, or

(b)is resident with the employee and is a person in respect of whom the employee has parental responsibility.

(4)Condition B is that the voucher can only be used to obtain qualifying child care.

(5)Condition C is that the vouchers are provided under a scheme that is open—

(a)to the employer’s [F641eligible] employees generally, or

(b)generally to those at a particular location.

[F642(5A)Where the scheme under which the vouchers are provided involves—

(a)relevant salary sacrifice arrangements, or

(b)relevant flexible remuneration arrangements,

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

(5B)In subsection (5A)—

  • “relevant salary sacrifice arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the vouchers;

  • “relevant flexible remuneration arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided agree with the employer that they are to be provided with the vouchers rather than receive some other description of employment income;

  • “relevant low-paid employees” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.]

[F643(5C)Condition D is that the employer has, at the required time, made an estimate of the employee's relevant earnings amount for the tax year in respect of which the voucher is provided (see section 270B).]

(6)For the purposes of this section the “exempt amount”, in any tax year, is [F644the sum of—

(a)[F645the appropriate amount] for each qualifying week in that year, and

(b)the voucher administration costs for that year.]

[F646(6ZA)In subsection (6)(a) “the appropriate amount”, in the case of an employee, means—

(a)if the relevant earnings amount in the case of the employee for the tax year, as estimated in accordance with subsection (5C), exceeds the higher rate limit for the tax year, [F647£25] ,

(b)if the relevant earnings amount in the case of the employee for the tax year, as so estimated, exceeds the basic rate limit for the tax year but does not exceed the higher rate limit for the tax year, £28, and

(c)otherwise, £55.]

[F648(6A)The “voucher administration costs” for any tax year in respect of which qualifying childcare vouchers are provided for an employee means the difference between the cost of provision of the vouchers and their face value.

The face value of a voucher is the amount stated on or recorded in the voucher as the value of the provision of care for a child that may be obtained by using it.]

(7)A “qualifying week” means a tax week in respect of which a qualifying childcare voucher is received.

A “tax week” means one of the successive periods in a tax year beginning with the first day of that year and every seventh day after that (so that the last day of a tax year or, in the case of a tax year ending in a leap year, the last two days is treated as a separate week).

(8)An employee is only entitled to one exempt amount even if care is provided for more than one child.

But it does not matter that another person may also be entitled to an exempt amount in respect of the same child.

(9)An employee is not entitled to an exempt amount under this section and under section 318A (limited exemption for employer-contracted childcare) in respect of the same tax week.

(10)In this section “care”, “child”, “parental responsibility” and “qualifying child care” have the same meaning as in section 318A (see sections 318B and 318C).

[F649(10A)In this section “ cost of provision”, in relation to a childcare voucher, has the meaning given in section 87(3) and (3A).]

(11)The powers conferred by section 318D (childcare: power to vary [F650amounts] and qualifying conditions) are exercisable—

(a)in relation to the [F650amounts] specified in subsection [F651(6ZA) above] as in relation to the [F650amounts] specified in section [F652318A(6A)] , and

(b)in relation to the qualifying conditions for the exemption conferred by this section as in relation to the qualifying conditions for the exemption conferred by section 318A.]

Textual Amendments

F636S. 270A inserted (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 3

F637Word in s. 270A(1) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 63(2)(a), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F638Words in s. 270A(1) substituted (with effect in accordance with s. 16(7) of the amending Act) by Finance Act 2005 (c. 7), s. 16(4)

F639Words in s. 270A(1) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 63(2)(b), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F640Word in s. 270A(2) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 2(2)

F641Word in s. 270A(5)(a) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 63(3), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F642S. 270A(5A)(5B) inserted (with effect in accordance with s. 36(3) of the amending Act) by Finance Act 2011 (c. 11), s. 36(1)

F643S. 270A(5C) inserted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 2(3)

F644Words in s. 270A(6) substituted (with effect in accordance with s. 15(5) of the amending Act) by Finance Act 2005 (c. 7), s. 15(2)

F645Words in s. 270A(6)(a) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 2(4)

F646S. 270A(6ZA) inserted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 2(5)

F647Word in s. 270A(6ZA)(a) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax (Exempt Amount for Childcare Vouchers and for Employer Contracted Childcare) Order 2013 (S.I. 2013/513), arts. 1(2), 2(2)

F648S. 270A(6A) inserted (with effect in accordance with s. 15(5) of the amending Act) by Finance Act 2005 (c. 7), s. 15(3)

F649S. 270A(10A) inserted (with effect in accordance with s. 15(5) of the amending Act) by Finance Act 2005 (c. 7), s. 15(4)

F650Word in s. 270A(11) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 2(6)(a)

F651Words in s. 270A(11) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 2(6)(b)

F652Word in s. 270A(11) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 2(6)(c)

[F653270AAMeaning of “eligible employee”U.K.

(1)An employee is an eligible employee for the purposes of section 270A if conditions A to C are met in relation to the employee.

(2)Condition A is that the employee—

(a)was employed by the employer immediately before the relevant day, and

(b)has not ceased to be employed by the employer on or after that day.

(3)“The relevant day” means the day specified by the Treasury in regulations for the purposes of this section.

(4)Condition B is that there has not been a period of 52 tax weeks ending on or after the relevant day which has not included at least one qualifying week.

(5)In subsection (4)—

  • “qualifying week” means a tax week in respect of which a qualifying childcare voucher has been provided for the employee under the scheme by the employer in respect of a child, and

  • “tax week” has the meaning given by section 270A(7).

(6)Condition C is that the employee has not given the employer a childcare account notice.

(7)A “childcare account notice” is a written notice informing the employer that the employee wishes to leave the scheme in order to be able to open a childcare account under section 17 of the Childcare Payments Act 2014 or enable the employee's partner to do so.

(8)In subsection (7) “partner” is to be read in accordance with regulations made under section 3(5) of that Act.]

Textual Amendments

[F654270BMeaning of “relevant earnings amount” and “required time”U.K.

(1)For the purposes of section 270A, the “relevant earnings amount”, in the case of an employee provided with vouchers by an employer for any qualifying week in a tax year, means—

(a)the aggregate of—

(i)the amount of any relevant earnings for the tax year from employment by the employer, and

(ii)any amounts treated under Chapters 2 to 12 of Part 3 as earnings from such employment, less

(b)the aggregate of any excluded amounts.

(2)But if the employee becomes employed by the employer during the tax year, what would otherwise be the amount of the aggregate mentioned in subsection (1)(a) is the relevant multiple of that amount; and the relevant multiple is—

where RD is the number of days in the period beginning with the day on which the employee becomes employed by the employer and ending with the tax year.

(3)In subsection (1)(a) “relevant earnings” means—

(a)salary, wages or fees, and

(b)any other earnings specified in regulations made by the Treasury under this paragraph.

(4)In subsection (1)(b) “excluded amounts” means amounts specified in regulations made by the Treasury under this subsection.

(5)In section 270A “the required time”, in the case of an employee, means—

(a)if the employee joins the scheme under which the vouchers are provided at a time during the tax year, that time, and

(b)otherwise, the beginning of the tax year.

(6)For the purposes of subsection (5)(a) the employee is taken to join the scheme as soon as—

(a)the employer has agreed that vouchers will be provided under the scheme for the employee, and

(b)there is a child falling within section 270A(3)(a) or (b) in relation to the employee.

(7)The Treasury may by order amend this section.]

Textual Amendments

F654S. 270B inserted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 3

Chapter 7U.K.Exemptions: removal benefits and expenses

Exemption of removal benefits and expenses: generalU.K.

271Limited exemption of removal benefits and expenses: generalU.K.

(1)No liability to income tax in respect of earnings [F655or by virtue of Part 7A] arises by virtue of—

(a)the provision of removal benefits to which this section applies, or

(b)the payment or reimbursement of removal expenses to which this section applies.

(2)[F656In relation to earnings, subsection] (1) does not apply if (disregarding this section) the earnings are general earnings to which either of the following sections applies—

(a)section 22 (chargeable overseas earnings for year when [F657remittance basis [F658applied] and employee [F659outside section 26]] ), or

(b)section 26 (foreign earnings for year when [F660remittance basis [F661applied] and employee [F662[F663met] section 26A requirement]] ).

[F664(2A)In relation to Part 7A, subsection (1) does not apply to any amount so far as the amount (disregarding this section and section 554P) would count as employment income to which section 554Z9 or 554Z10 would apply.]

(3)Subsection (1) is subject to section 287 (limit on exemption).

Textual Amendments

F655Words in s. 271(1) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 12(2)

F656Words in s. 271(2) substituted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 12(3)

F657Words in s. 271(2)(a) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 25(a)

F658Word in s. 271(2)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(10)(a)

F659Words in s. 271(2)(a) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 12(a) (with Sch. 46 para. 26)

F660Words in s. 271(2)(b) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 25(b)

F661Word in s. 271(2)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(10)(a)

F662Words in s. 271(2)(b) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 12(b) (with Sch. 46 para. 26)

F663Word in s. 271(2)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(10)(b)

F664S. 271(2A) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 12(4)

272Removal benefits and expenses to which section 271 appliesU.K.

(1)Benefits are removal benefits to which section 271 applies if—

(a)they are reasonably provided in connection with a change of the employee’s residence which meets the conditions in section 273,

(b)they are provided on or before the limitation day (see section 274), and

(c)they are within subsection (2) or one of the following provisions—

(i)section 277 (acquisition benefits and expenses),

(ii)section 278 (abortive acquisition benefits and expenses),

(iii)section 279 (disposal benefits and expenses),

(iv)section 280 (transporting belongings),

(v)section 281 (travelling and subsistence),

(vi)section 285 (replacement of domestic goods).

(2)A benefit is within this subsection if it is a non-cash voucher, cash voucher or credit-token used—

(a)to obtain goods or services the direct provision of which would be a benefit within one of the provisions specified in subsection (1)(c)(i) to (vi), or

(b)to obtain money for the purpose of obtaining such goods or services or meeting expenses within one of those provisions or section 284 (bridging loan expenses).

(3)Expenses are removal expenses to which section 271 applies if—

(a)they are reasonably incurred by the employee in connection with a change of the employee’s residence which meets the conditions in section 273,

(b)they are incurred on or before the limitation day, and

(c)they are within one of the provisions referred to in subsection (1)(c)(i) to (vi) or within section 284 (bridging loan expenses).

273Conditions applicable to change of residenceU.K.

(1)The conditions referred to in section 272(1)(a) and (3)(a) which apply to the change of the employee’s residence are conditions A to C.

(2)Condition A is that the change of residence results from one of the following changes—

(a)the employee becoming employed,

(b)an alteration of the duties of the employment, or

(c)an alteration of the place where the employee is normally to perform those duties.

(3)Condition B is that the change of residence is made wholly or mainly to allow the employee to reside within a reasonable daily travelling distance of the place where the employee normally performs or is normally to perform the duties of the employment after the employment change (see section 275).

(4)Condition C is that the employee’s former residence is not within a reasonable daily travelling distance of that place.

274Meaning of “the limitation day”U.K.

(1)In this Chapter “the limitation day”, in relation to an employee’s change of residence, means the last day of the tax year after that in which the employee begins to perform the duties of the employment after the employment change, but this is subject to any direction under subsection (2).

(2)[F165An officer of Revenue and Customs] may direct that the last day of a later tax year is the limitation day in relation to any particular change of residence if it appears to them reasonable to do so having regard to all the circumstances of that change.

Textual Amendments

275Meaning of “the employment change”U.K.

In this Chapter “the employment change”, in relation to an employee’s change of residence, means whichever of the changes specified in section 273(2) results in the change of residence.

276Meaning of “residence”, “former residence” and “new residence” etc.U.K.

(1)If an employee has more than one residence, references in this Chapter to the employee’s residence are references to the employee’s main residence.

(2)In this Chapter, in relation to a change of the employee’s residence—

(a)references to the former residence are references to the employee’s residence before the change, and

(b)references to the new residence are references to the employee’s residence after the change.

(3)In this Chapter references to an interest in a residence are, in the case of a building, references to an estate or interest in the land concerned.

Benefits and expenses within this ChapterU.K.

277Acquisition benefits and expensesU.K.

(1)This section applies if an interest in the employee’s new residence is acquired by—

(a)the employee,

(b)one or more members of the employee’s family or household, or

(c)the employee and one or more members of the employee’s family or household.

(2)The following benefits are within this section—

(a)legal services connected with the acquisition of the interest, including legal services connected with any loan raised by the employee to acquire it,

(b)the waiving of any procurement fees connected with any such loan,

(c)the waiving of any amount payable in respect of insurance effected to cover risks incurred by the maker of any such loan because the loan equals the whole, or a substantial part, of the value of the interest,

(d)any survey or inspection of the residence undertaken in connection with the acquisition, and

(e)the connection of any utility serving the new residence for use by the employee or by the employee and one or more members of the employee’s family or household.

(3)The following expenses are within this section—

(a)sums paid for any services within subsection (2)(a), (d) or (e),

(b)any procurement fees connected with any loan raised by the employee to acquire the interest,

(c)the costs of any insurance within subsection (2)(c),

(d)fees payable to an appropriate registry or appropriate register in connection with the acquisition, and

(e)stamp duty [F665or stamp duty land tax] charged on the acquisition.

(4)In this section references to a loan raised by the employee include a loan raised by—

(a)one or more members of the employee’s family or household, or

(b)the employee and one or more members of the employee’s family or household.

(5)In this section—

  • “appropriate registry” means—

    (a)

    Her Majesty’s Land Registry,

    (b)

    the Land Registry in Northern Ireland, or

    (c)

    the Registry of Deeds for Northern Ireland, and

  • “appropriate register” means any register under the management and control of the Keeper of the Registers of Scotland.

Textual Amendments

F665Words in s. 277(3)(e) inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 18 para. 6

278Abortive acquisition benefits and expensesU.K.

Benefits or expenses are within this section if—

(a)they are benefits provided or expenses incurred with a view to the acquisition of an interest in a residence,

(b)the interest is not acquired—

(i)because of circumstances outside the control of the person seeking to acquire it, or

(ii)because that person reasonably declines to proceed, and

(c)the benefits or expenses would have fallen within section 277 if the interest had been acquired.

279Disposal benefits and expensesU.K.

(1)This section applies if the employee has an interest in the former residence and because of the change of residence it is disposed of or is intended to be disposed of.

(2)The following benefits are within this section—

(a)legal services connected with the disposal or intended disposal, including legal services connected with the redemption of a related loan,

(b)the waiving of any penalty for redeeming a related loan for the purpose of the disposal or intended disposal,

(c)the services of an estate agent or auctioneer engaged in the disposal or intended disposal,

(d)services connected with the advertisement of the disposal or intended disposal,

(e)the disconnection, for the purpose of the disposal or intended disposal, of any utility serving the former residence, and

(f)services connected with maintaining, insuring, or preserving the security of, the former residence at any time when it is unoccupied pending the disposal or intended disposal.

(3)The following expenses are within this section—

(a)sums paid for any services within subsection (2)(a), (c), (d) or (e),

(b)any penalty for redeeming a related loan for the purpose of the disposal or intended disposal,

(c)rent paid in respect of the former residence at any time when it is unoccupied pending the disposal or intended disposal, and

(d)expenses of maintaining, insuring, or preserving the security of the former residence at any time when it is unoccupied pending the disposal or intended disposal.

(4)In this section references to the employee having an interest in a residence include—

(a)one or more members of the employee’s family or household having such an interest, or

(b)the employee and one or more members of the employee’s family or household having such an interest.

(5)A loan is a “related loan” for this purpose if—

(a)it was raised to obtain an interest in the former residence, or

(b)it is secured on such an interest, or

(c)part of it was so raised and the rest of it is so secured.

280Transporting belongingsU.K.

(1)The following benefits are within this section—

(a)the transportation of domestic belongings from the employee’s former residence to the employee’s new residence, and

(b)the effecting of insurance to cover such transportation.

(2)The following expenses are within this section—

(a)expenses connected with such transportation, and

(b)the costs of any such insurance.

(3)In this section—

  • “domestic belongings” means belongings of the employee or of members of the employee’s family or household, and

  • “transportation” includes—

    (a)

    packing and unpacking belongings,

    (b)

    temporarily storing them, where there is not a direct move from the former to the new residence,

    (c)

    detaching domestic fittings from the former residence, where they are to be taken to the new residence, and

    (d)

    attaching domestic fittings to the new residence and adapting them, where they are brought from the former residence.

281Travelling and subsistenceU.K.

(1)The following benefits are within this section—

(a)subsistence and facilities for travel provided for the employee and members of the employee’s family or household for temporary visits to the new area for purposes connected with the change of residence,

(b)any other subsistence provided for the employee,

(c)facilities provided for the employee for travel between the employee’s former residence and—

(i)the place where the employee’s new duties are normally performed, or

(ii)the new place where the duties of the employee’s employment are normally performed, or

(iii)temporary living accommodation of the employee,

(d)where the employment change is within section 273(2)(b) or (c) (change of duties or place of performance), facilities provided for the employee for travel before the change between the employee’s new residence and—

(i)the place where the employee normally performs the duties of the employment before the change, or

(ii)temporary living accommodation of the employee,

(e)facilities provided for the employee and members of the employee’s family or household for travel from the employee’s former residence to the employee’s new residence in connection with the change of residence,

(f)subsistence provided for a relevant child while the child stays in education-linked living accommodation,

(g)facilities provided for a relevant child for travel between education-linked living accommodation and the employee’s accommodation.

(2)For the purposes of this section, “education-linked living accommodation”, in relation to a relevant child, means living accommodation where the child stays for the purpose of securing continuity in education, being—

(a)accommodation in the new area where the child stays before the employee’s change of residence,

(b)accommodation in the former area where the child stays after that change,

(c)accommodation in the new area where the child stays while the employee is living in temporary living accommodation in the former area, or

(d)accommodation in the former area where the child stays while the employee is living in temporary living accommodation in the new area.

(3)For the purposes of subsection (1)(g) “the employee’s accommodation”, in relation to travel to or from education-linked accommodation, means—

(a)if that accommodation is within subsection (2)(a), the employee’s former residence,

(b)if that accommodation is within subsection (2)(b), the employee’s new residence, and

(c)if that accommodation is within subsection (2)(c) or (d), the employee’s temporary accommodation.

(4)The cost of providing subsistence or travel of a kind described in subsection (1) is an expense within this section.

(5)Subsections (1) and (4) are subject to section 282 (exclusion from this section of benefits and expenses where deduction allowed), and subsection (1) is also subject to section 283 (exclusion from this section of taxable car and van facilities).

(6)In this section—

  • “new duties” means—

    (a)

    if the employment change is within section 273(2)(a) (change of employer), the duties of the employee’s new employment, and

    (b)

    if the employment change is within section 273(2)(b) (change of duties), the new duties of the employment,

  • “former area” means the area round or near the former residence of the employee,

  • “new area” means—

    (a)

    if the employment change is within section 273(2)(a) or (b) (change of employer or duties), the area round or near the place where the employee’s new duties normally are or are to be performed, and

    (b)

    if the employment change is within section 273(2)(c) (change of place of performance), the area round or near the new place where the duties of the employee’s employment normally are or are to be performed,

  • “relevant child” means a person who is a member of the employee’s family or household and is aged under 19 at the beginning of the tax year in which the employment change occurs, and

  • “subsistence” means food, drink and temporary living accommodation.

282Exclusion from section 281 of benefits and expenses where deduction allowedU.K.

(1)Benefits and expenses are excluded from section 281 (travelling and subsistence) if or to the extent that an amount is deductible in respect of the cost of the benefits or of the expenses under any of the following provisions.

(2)They are—

(a)section 341 (travel at start or finish of overseas employment),

(b)section 342 (travel between employments where duties performed abroad), and

(c)Chapter 5 of Part 5 except section 376 (deductions for earnings representing benefits or reimbursed expenses in respect of certain foreign travel).

(3)If an amount is so deductible in respect of part only of the cost of a benefit, the part of the benefit excluded by this section is to be determined on a just and reasonable basis.

283Exclusion from section 281 of taxable car and van facilitiesU.K.

(1)A car or van is not treated as a facility for the purposes of section 281(1) if in the tax year in which it is provided it is also made available—

(a)to the employee or members of the employee’s family or household for private use not falling within section 281(1),

(b)by reason of the employee’s employment, and

(c)without any transfer of the property in it.

(2)The following sections apply for the purposes of this section as they apply for the purposes of Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits)—

(a)section 115 (meaning of “car” and “van”),

(b)section 117 (meaning of car or van made available by reason of employment), and

(c)section 118 (availability for private use).

284Bridging loan expensesU.K.

(1)Expenses are within this section if—

(a)the employee has an interest in the former residence and disposes of it because of the change of residence,

(b)the employee acquires an interest in the new residence, and

(c)the expenses are interest payable by the employee in respect of a loan raised by the employee wholly or partly because expenditure is incurred in connection with that acquisition before the proceeds of that disposal become available.

This is subject to subsections (2) and (3).

(2)Interest is only within this section if or to the extent that the loan is used—

(a)for acquiring the employee’s interest in the new residence, or

(b)for redeeming a loan—

(i)which was raised by the employee to obtain an interest in the former residence,

(ii)which is secured on such an interest, or

(iii)which was partly so raised and the rest of which is so secured.

(3)If the loan exceeds the market value of the employee’s interest in the former residence at the time of acquisition of the new residence, the interest on the excess is not within this section.

(4)If subsection (3) applies in a case where the loan is used partly for purposes within subsection (2) and partly for other purposes, the amount of the interest within this section is the appropriate fraction of the total interest.

(5)The appropriate fraction is—

or, if it is smaller—

where—

MV is the market value of the employee’s interest in the former residence at the time of acquisition of the new residence,

PL is the part of the loan used for purposes within subsection (2), and

L is the amount of the loan.

(6)In this section—

(a)references to a loan raised by the employee include a loan raised by—

(i)one or more members of the employee’s family or household, or

(ii)the employee and one or more members of the employee’s family or household, and

(b)references to the employee having, disposing of or acquiring an interest in a residence include—

(i)one or more members of the employee’s family or household having, disposing of or acquiring such an interest, or

(ii)the employee and one or more members of the employee’s family or household having, disposing of or acquiring such an interest.

285Replacement of domestic goodsU.K.

(1)Benefits and expenses are within this section if—

(a)the employee has an interest in the former residence and disposes of it because of the change of residence,

(b)the employee acquires an interest in the new residence,

(c)in the case of benefits, they are domestic goods provided to replace goods used at the former residence which are unsuitable for use at the new residence, and

(d)in the case of expenses, they are incurred on the purchase of domestic goods intended for such replacement.

(2)In this section references to the employee having, disposing of or acquiring an interest in a residence include—

(a)one or more members of the employee’s family or household having, disposing of or acquiring such an interest, or

(b)the employee and one or more members of the employee’s family or household having, disposing of or acquiring such an interest.

286Power to amend sections [F666277] to 285U.K.

(1)The Treasury may by regulations amend sections [F666277] to 285 so as to secure that benefits or expenses which would not otherwise fall within any of those sections do so.

(2)The regulations may include such supplementary, incidental or consequential provisions as appear to the Treasury to be necessary or expedient.

(3)Those provisions may be made by amending this Chapter or otherwise.

(4)The regulations apply to a change of an employee’s residence resulting from an employment change occurring on or after the day specified in the regulations for this purpose.

Textual Amendments

F666Words in s. 286 substituted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 17 para. 9(2)

Limit on exemptionU.K.

287Limit on exemptionU.K.

(1)If in the case of any change of residence the value of the exemption exceeds £8,000, section 271 (exemption of removal benefits and expenses) does not apply to the excess.

(2)The value of the exemption is an amount equal to the sum of—

(a)the section 62 earnings, F667...

(b)the benefits code earnings (after taking account of section 64(2)(b) where otherwise an amount that falls within paragraph (a) would be included)[F668, and

(c)the Part 7A employment income]

(3)In this section “the section 62 earnings” means all earnings within section 62 (earnings) in respect of which section 271 would prevent liability to income tax from arising if this section were disregarded.

(4)In this section “the benefits code earnings” means all earnings—

(a)which are treated as such under the benefits code (except earnings so treated under Chapter 7 of Part 3 (taxable benefits: loans)), and

(b)in respect of which section 271 would prevent liability to income tax from arising if this section were disregarded.

(5)In the case of living accommodation, the amount that would be so treated is to be taken to be equal to—

where—

CE is the cash equivalent of the accommodation under Chapter 5 of Part 3 (taxable benefits: living accommodation) for the period in which the accommodation is provided (calculated as mentioned in section 103), and

D is any amount deductible under section 364 (deductions where living accommodation provided).

[F669(6)In this section “the Part 7A employment income” means the amount in respect of which section 271 (when read with section 554P) would prevent liability to income tax arising if this section were to be disregarded.]

Textual Amendments

F667Word in s. 287(2) omitted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 13(2)(a)

F668S. 287(2)(c) and word inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 13(2)(b)

F669S. 287(6) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 13(3)

Special exemption and relief for bridging loansU.K.

288Limited exemption of certain bridging loans connected with employment movesU.K.

(1)No liability to income tax arises by virtue of Chapter 7 of Part 3 (taxable benefits: loans) in respect of a loan if—

(a)it is a removal benefit (see subsection (2)),

(b)the unused removal benefit exemption condition is met (see subsection (3)), and

(c)the loan is discharged before the end of the exempted loan discharge period (see subsection (4)).

(2)For the purposes of this section and section 289, a loan is a removal benefit if—

(a)it is raised by the employee in connection with a change of residence meeting the conditions in section 273 (conditions applicable to change of residence),

(b)the employee has an interest in the former residence and disposes of it in consequence of the change of residence,

(c)the employee acquires an interest in the new residence,

(d)the loan is raised wholly or partly because expenditure is incurred in connection with that acquisition before the proceeds of that disposal become available, and

(e)the loan is made before the limitation day.

(3)For the purposes of this section and section 289 the unused removal benefit exemption condition is that, in the case of the particular change of residence—

(a)the sum specified in section 287(1) (limit on exemption), exceeds

(b)the amount referred to in section 287(2) (the value of the exemption);

and for those purposes that excess is “the unused exemption”.

(4)In this section and section 289 “the exempted loan discharge period”, in relation to a loan, means the period of N days beginning with the day on which it is made, taking N as the number obtained by applying the following formula and, if that does not give a whole number, rounding up the result to the nearest whole number—

where—

A is the unused exemption,

B is the maximum amount of the loan outstanding in the period beginning with the time when the loan is made and ending with the limitation day, and

C is the official rate of interest in force when the loan is made (expressed as a percentage).

(5)In this section—

(a)references to a loan raised by the employee include a loan raised by—

(i)one or more members of the employee’s family or household, or

(ii)the employee and one or more members of the employee’s family or household, and

(b)references to the employee having, disposing of or acquiring an interest in a residence include—

(i)one or more members of the employee’s family or household having, disposing of or acquiring such an interest, or

(ii)the employee and one or more members of the employee’s family or household having, disposing of or acquiring such an interest.

(6)The tax payable in respect of a loan for a tax year ending before the limitation day may be decided on the basis that the unused removal benefit exemption condition will not be met.

289Relief for certain bridging loans not qualifying for exemption under section 288U.K.

(1)This subsection applies to a loan if—

(a)it is a removal benefit (see section 288(2)),

(b)the unused removal benefit exemption condition is met (see section 288(3)), and

(c)the loan is not discharged before the end of the exempted loan discharge period (see section 288(4)).

(2)A loan to which subsection (1) applies is to be treated for the purposes of Chapter 7 of Part 3 (taxable benefits: loans) as if it was made on the day after the last day of the exempted loan discharge period.

(3)Subsection (2) does not apply for the purposes of sections 176, 177, 180, 189 and 190.

(4)The tax payable in respect of a loan for a tax year ending before the limitation day may be decided on the basis that subsections (1) and (2) will not apply because the unused removal benefit exemption condition will not be met.

[F670CHAPTER 7AU.K.Exemptions: amounts which would otherwise be deductible

Textual Amendments

F670Pt. 4 Ch. 7A inserted (with effect in accordance with s. 11(2) of the amending Act) by Finance Act 2015 (c. 11), s. 11(1)

289AExemption for paid or reimbursed expensesU.K.

(1)No liability to income tax arises by virtue of Chapter 3 of Part 3 (taxable benefits: expenses payments) in respect of an amount (“amount A”) paid or reimbursed by a person to an employee (whether or not an employee of the person) in respect of expenses if—

(a)an amount equal to or exceeding amount A would (ignoring this section) be allowed as a deduction from the employee's earnings under Chapter 2 or 5 of Part 5 in respect of the expenses, and

(b)the payment or reimbursement is not provided pursuant to relevant salary sacrifice arrangements.

(2)No liability to income tax arises in respect of an amount paid or reimbursed by a person (“the payer”) to an employee (whether or not an employee of the payer) in respect of expenses if—

(a)the amount has been calculated and paid or reimbursed in an approved way (see subsection (6)),

(b)the payment or reimbursement is not provided pursuant to relevant salary sacrifice arrangements, and

(c)conditions A and B are met.

[F671(2A)No liability to income tax arises in respect of an amount paid or reimbursed by a person (“the payer”) to an employee (whether or not an employee of the payer) for expenses in the course of qualifying travel if—

(a)the amount has been calculated and paid or reimbursed in accordance with regulations made by the Commissioners for Her Majesty's Revenue and Customs,

(b)the payment or reimbursement is not provided pursuant to relevant salary sacrifice arrangements, and

(c)condition C is met.]

(3)Condition A is that the payer or another person operates a system for checking—

(a)that the employee is, or employees are, in fact incurring and paying amounts in respect of expenses of the same kind, and

(b)that a deduction would (ignoring this section) be allowed under Chapter 2 or 5 of Part 5 in respect of those amounts.

(4)Condition B is that neither the payer nor any other person operating the system knows or suspects, or could reasonably be expected to know or suspect—

(a)that the employee has not incurred and paid an amount in respect of the expenses, or

(b)that a deduction from the employee's earnings would not be allowed under Chapter 2 or 5 of Part 5 in respect of the amount.

[F672(4A)Condition C is that—

(a)the payer or another person operates a system for checking that the employee has undertaken the qualifying travel in relation to which the amount is paid or reimbursed, and

(b)neither the payer nor any other person operating the system knows or suspects, or could reasonably be expected to know or suspect, that the travel was not undertaken.]

(5)[F673In this section “relevant ” ] , in relation to an employee to whom an amount is paid or reimbursed [F674for or] in respect of expenses, means arrangements (whenever made, whether before or after the employment began) under which—

(a)the employee gives up the right to receive an amount of general earnings or specific employment income in return for the payment or reimbursement, or

(b)the amount of other general earnings or specific employment income received by the employee depends on the amount of the payment or reimbursement.

[F675(5A)In this section “qualifying travel” means travel for which a deduction from the employee's earnings would be allowed under Chapter 2 or 5 of Part 5.]

(6)For the purposes of [F676subsection (2)] , a sum is calculated and paid or reimbursed in an approved way if—

(a)it is calculated and paid or reimbursed in accordance with regulations made by the Commissioners for Her Majesty's Revenue and Customs, or

(b)it is calculated and paid or reimbursed in accordance with an approval given under section 289B.

(7)Regulations made under subsection [F677(2A)(a) or] (6)(a) may make different provision for different purposes.

[F678(8)Regulations made under subsection (2A)(a) may contain provision about calculating amounts that is framed by reference to rates (for expenses) published from time to time by the Commissioners for Her Majesty's Revenue and Customs.]

Textual Amendments

F671S. 289A(2A) inserted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(2)

F672S. 289A(4A) inserted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(3)

F673Words in s. 289A(5) substituted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(4)(a)

F674Words in s. 289A(5) inserted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(4)(b)

F675S. 289A(5A) inserted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(5)

F676Words in s. 289A(6) substituted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(6)

F677Words in s. 289A(7) inserted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(7)

F678S. 289A(8) inserted (with effect in accordance with s. 10(9) of the amending Act) by Finance Act 2019 (c. 1), s. 10(8)

289BApproval to pay or reimburse expenses at a flat rateU.K.

(1)A person (“the applicant”) may apply to Her Majesty's Revenue and Customs for approval to pay or reimburse expenses of the applicant's employees, or employees of another person, at a rate set out in the application (“the proposed rate”).

(2)An officer of Revenue and Customs may give the approval if satisfied that any calculation of a payment or reimbursement of expenses in accordance with the proposed rate, or such other rate as is agreed between the applicant and the officer, would be a reasonable estimate of the amount of expenses actually incurred.

(3)An approval under subsection (2) takes effect in accordance with a notice (an “approval notice”) given to the applicant by an officer of Revenue and Customs.

(4)An approval notice must specify—

(a)the rate at which expenses may be paid or reimbursed,

(b)the day from which the approval takes effect, that day not being earlier than the day on which the approval notice is given,

(c)the day on which the approval ceases to have effect, that day not being later than the end of the period of 5 years beginning with the day on which the approval takes effect, and

(d)the type of expenses to which the approval relates.

(5)An approval notice may specify that the approval is subject to conditions specified or described in the notice.

(6)An application for an approval under this section must be in such form and manner, and contain such information, as is specified by Her Majesty's Revenue and Customs.

289CRevocation of approvalsU.K.

(1)An officer of Revenue and Customs may, if in the officer's opinion there is reason to do so, revoke an approval given under section 289B by giving a further notice (a “revocation notice”) to either or both of the following—

(a)the person who applied for the approval, and

(b)the person who is paying or reimbursing expenses in accordance with the approval.

(2)A revocation notice may revoke the approval from—

(a)the day on which the approval took effect, or

(b)a later day specified in the notice.

(3)A revocation under subsection (1) may be in relation to all expenses or expenses of a description specified in the revocation notice.

(4)If the revocation notice revokes the approval from the day on which the approval took effect—

(a)any liability to tax that would have arisen in respect of the payment or reimbursement of expenses if the approval had never been given in relation to such expenses is to be treated as having arisen, and

(b)any person who has made, and any employee who has received, a payment or reimbursement of expenses calculated in accordance with the approval must make all the returns which they would have had to make if the approval had never been given in relation to such expenses.

(5)If the revocation notice revokes the approval from a later day—

(a)any liability to tax that would have arisen in respect of the payment or reimbursement of expenses if the approval had ceased to have effect on that day in relation to such expenses is to be treated as having arisen, and

(b)any person who has made, and any employee who has received, a payment or reimbursement of expenses calculated in accordance with the approval must make all the returns which they would have had to make if the approval had ceased to have effect in relation to such expenses on that day.

289DExemption for other benefitsU.K.

(1)No liability to income tax arises by virtue of any provision of the benefits code in respect of an amount (“amount A”) treated as earnings of an employee as a result of the provision of a benefit if—

(a)an amount equal to amount A would (ignoring this section) be allowed as a deduction from the employee's earnings under Chapter 3 of Part 5 in respect of the provision of the benefit, and

(b)the benefit is not provided pursuant to relevant salary sacrifice arrangements.

(2)“Relevant salary sacrifice arrangements”, in relation to an employee to whom a benefit is provided, means arrangements (whenever made, whether before or after the employment began) under which—

(a)the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the benefit, or

(b)the amount of other general earnings or specific employment income received by the employee depends on the provision of the benefit.

289EAnti-avoidanceU.K.

(1)This section applies if conditions A to C are met.

(2)Condition A is that, pursuant to arrangements, an amount—

(a)is paid or reimbursed to an employee in respect of expenses, or

(b)is treated as earnings of an employee as a result of the provision of a benefit,

which, in the absence of this section, would have been exempt from income tax.

(3)Condition B is that, in the absence of those arrangements, the employee would have received a greater amount of general earnings or specific employment income in respect of which—

(a)tax would have been chargeable, or

(b)national insurance contributions would have been payable (whether by the employee or another person).

(4)Condition C is that the main purpose, or one of the main purposes, of the arrangements is the avoidance of tax or national insurance contributions.

(5)If this section applies—

(a)the exemption conferred by section 289A does not apply in respect of the amount paid or reimbursed as mentioned in subsection (2)(a), and

(b)the exemption conferred by section 289D does not apply in respect of the amount treated as earnings as mentioned in subsection (2)(b).

(6)In this section “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable.]

Chapter 8U.K.Exemptions: special kinds of employees

Ministers of religionU.K.

290Accommodation benefits of ministers of religionU.K.

(1)No liability to income tax in respect of a person employed as a full-time minister arises by virtue of—

(a)the payment or reimbursement of a statutory amount payable in connection with qualifying premises, or

(b)the reimbursement of a statutory deduction made in connection with qualifying premises.

(2)No liability to income tax in respect of a person employed as a full-time minister arises by virtue of the payment or reimbursement of expenses incurred in connection with providing living accommodation in qualifying premises if the employment is [F679lower-paid employment as a minister of religion (see section 290D)].

(3)Subsection (1) does not apply if or to the extent that the amount or deduction is properly attributable to a part of the premises for which the minister receives rent.

(4)Premises are qualifying premises in relation to a person employed as a minister if—

(a)an interest in them belongs to a charity or an ecclesiastical corporation, and

(b)because of that interest and by reason of holding the employment, the minister has a residence in them from which to perform the duties of the employment.

(5)In this section—

  • F680...

  • “full-time minister” means a person in full-time employment as a minister of a religious denomination,

  • “statutory amount” means an amount paid in pursuance of a provision in, or having the force of, an Act, and

  • “statutory deduction” means a deduction made in pursuance of such a provision.

Textual Amendments

F679Words in s. 290(2) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 18

F680Words in s. 290(5) omitted (coming into force for the tax year 2012-13 and subsequent tax years) by virtue of Finance Act 2010 (c. 13), Sch. 6 paras. 17(5), 34(2); S.I. 2012/736, art. 13

[F681290AAccommodation outgoings of [F682lower-paid] ministers of religionU.K.

(1)No liability to income tax arises in respect of a person in lower-paid employment as a minister of [F683religion] by virtue of the payment or reimbursement of accommodation outgoings.

(2)Subsection (1) does not apply if the minister is paid an allowance intended to be used, wholly or in part, for paying accommodation outgoings (as to which see section 290B).

(3)In this section—

  • “accommodation outgoings” means amounts incurred by the minister in—

    (a)

    heating, lighting or cleaning qualifying premises; or

    (b)

    maintaining a garden forming part of qualifying premises;

  • F684...

  • “qualifying premises” has the same meaning as in section 290.

Textual Amendments

F681Ss. 290A, 290B inserted (with effect in accordance with art. 2(4) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2010 (S.I. 2010/157), arts. 1, 2(3)

F682Words in s. 290A heading inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 19(c)

F683Word in s. 290A(1) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 19(a)

F684Words in s. 290A(3) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 19(b)

290BAllowances paid to [F685lower-paid] ministers of religion in respect of accommodation outgoingsU.K.

(1)This section applies where a person in lower-paid employment as a minister of [F686religion] is paid an allowance intended to be used, wholly or in part, for paying accommodation outgoings.

(2)No liability to tax arises by virtue of the payment of the allowance to the extent that it is used for paying accommodation outgoings.

(3)In this section—

  • “accommodation outgoings” [F687has the same meaning] as in section 290A;

  • “qualifying premises” has the same meaning as in section 290.]

Textual Amendments

F681Ss. 290A, 290B inserted (with effect in accordance with art. 2(4) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2010 (S.I. 2010/157), arts. 1, 2(3)

F685Words in s. 290B heading inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 20(c)

F686Word in s. 290B(1) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 20(a)

F687Words in s. 290B(3) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 20(b)

[F688290CProvisions of benefits code not applicable to lower-paid ministers of religionU.K.

(1)This section applies where a person is in employment which is lower-paid employment as a minister of religion in relation to a tax year.

(2)No liability to income tax arises in respect of the person in relation to the tax year by virtue of any of the following Chapters of the benefits code—

(a)Chapter 3 (taxable benefits: expenses payments);

(b)Chapter 6 (taxable benefits: cars, vans and related benefits);

(c)Chapter 7 (taxable benefits: loans);

(d)Chapter 10 (taxable benefits: residual liability to charge).

(3)Subsection (2)—

(a)means that in any of those Chapters a reference to an employee does not include an employee whose employment is within the exclusion in that subsection, if the context is such that the reference is to an employee in relation to whom the Chapter applies, but

(b)does not restrict the meaning of references to employees in other contexts.

(4)Subsection (2) has effect subject to—

(a)section 188(2) (discharge of loan: where employment becomes lower-paid), and

(b)section 290G (employment in two or more related employments).

Textual Amendments

F688Ss. 290C-290G inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), s. 13(2)

290DMeaning of “lower-paid employment as a minister of religion”U.K.

(1)For the purposes of this Part an employment is “lower-paid employment as a minister of religion” in relation to a tax year if—

(a)the employment is direct employment as a minister of a religious denomination, and

(b)the earnings rate for the employment for the year (calculated under section 290E) is less than £8,500.

(2)An employment is not “direct employment” for the purposes of subsection (1)(a) if—

(a)it is an employment which is treated as existing under—

(i)section 56(2) (deemed employment of worker by intermediary), or

(ii)section 61G(2) (deemed employment of worker by managed service company), or

(b)an amount counts as employment income in respect of it by virtue of section 554Z2(1) (treatment of relevant step under Part 7A (employment income provided through third parties)).

(3)Subsection (1) is subject to section 290G.

Textual Amendments

F688Ss. 290C-290G inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), s. 13(2)

290ECalculation of earnings rate for a tax yearU.K.

(1)For any tax year the earnings rate for an employment is to be calculated as follows—

  • Step 1 Find the total of the following amounts—

    (a)

    the total amount of the earnings from the employment for the year within Chapter 1 of Part 3 (earnings),

    (b)

    the total of any amounts that are treated as earnings from the employment for the year under the benefits code (see subsections (2) and (3)), and

    (c)

    the total of any amounts that are treated as earnings from the employment for the year under Chapter 12 of Part 3 (other amounts treated as earnings),

    excluding any exempt income, other than any attributable to section 290A or 290B (accommodation outgoings of ministers of religion).

  • Step 2 Add to that total any extra amount required to be added for the year by section 290F (extra amounts to be added in connection with a car).

  • Step 3 Subtract the total amount of any authorised deductions (see subsection (4)) from the result of step 2.

  • Step 4 The earnings rate for the employment for the year is given by the formula—

    where—

    R is the result of step 3,

    Y is the number of days in the year, and

    E is the number of days in the year when the employment is held.

(2)Section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion) is to be disregarded for the purpose of determining any amount under step 1.

(3)If the benefit of living accommodation is to be taken into account under step 1, the cash equivalent is to be calculated in accordance with section 105 (even if the cost of providing the accommodation exceeds £75,000).

(4)For the purposes of step 3 “authorised deduction” means any deduction that would (assuming it was an amount of taxable earnings) be allowed from any amount within step 1 under—

  • section 346 (employee liabilities),

  • section 370 (travel costs and expenses where duties performed abroad: employee's travel),

  • section 371 (travel costs and expenses where duties performed abroad: visiting spouse's, civil partner's or child's travel),

  • section 373 ([F689non-resident or qualifying new resident] employee's travel costs and expenses where duties performed in UK),

  • section 374 ([F689non-resident or qualifying new resident] employee's spouse's, civil partner's or child's travel costs and expenses where duties performed in UK),

  • section 376 (foreign accommodation and subsistence costs and expenses (overseas employments)),

  • section 713 (payroll giving to charities),

  • sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or

  • section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions).

Textual Amendments

F688Ss. 290C-290G inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), s. 13(2)

F689Words in s. 290E(4) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(4) (with Sch. 8 Pt. 3)

290FExtra amounts to be added in connection with a carU.K.

(1)The provisions of this section apply for the purposes of section 290E in the case of a tax year in which a car is made available as mentioned in section 114(1) (cars, vans and related benefits) by reason of the employment.

(2)Subsection (3) applies if in the tax year—

(a)an alternative to the benefit of the car is offered, and

(b)the amount that would be earnings within Chapter 1 of Part 3 if the benefit of the car were to be determined by reference to the alternative offered exceeds the benefit code earnings (see subsection (4)).

(3)The amount of the excess is an extra amount to be added under step 2 in section 290E(1).

(4)For the purposes of subsection (2) “the benefit code earnings” is the total for the year of—

(a)the cash equivalent of the benefit of the car (calculated in accordance with Chapter 6 of Part 3 (taxable benefits: cars, vans etc)), and

(b)the cash equivalent (calculated in accordance with that Chapter) of the benefit of any fuel provided for the car by reason of the employment.

(5)Section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion) is to be disregarded for the purpose of determining any amount under this section.

Textual Amendments

F688Ss. 290C-290G inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), s. 13(2)

290GRelated employmentsU.K.

(1)This section applies if a person is employed in two or more related employments.

(2)None of the employments is to be regarded as lower-paid employment as a minister of religion in relation to a tax year if—

(a)the total of the earnings rates for the employments for the year (calculated in each case under section 290E) is £8,500 or more, or

(b)any of them is an employment falling outside the exclusion contained in section 290C(2) (provisions of benefits code not applicable to lower-paid ministers of religion).

(3)For the purposes of this section two employments are “related” if—

(a)both are with the same employer, or

(b)one is with a body or partnership (“A”) and the other is either—

(i)with an individual, partnership or body that controls A (“B”), or

(ii)with another partnership or body also controlled by B.

(4)Section 69 (extended meaning of “control”) applies for the purposes of this section as it applies for the purposes of the benefits code.]

Textual Amendments

F688Ss. 290C-290G inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), s. 13(2)

MPs, government ministers etc.U.K.

291Termination payments to MPs and others ceasing to hold officeU.K.

(1)No liability to income tax in respect of earnings arises by virtue of any grant or payment to which this section applies (but see Chapter 3 of Part 6: payments and benefits on termination of employment etc.).

(2)This section applies to grants and payments—

[F690(a)made under section 5(1) of the Parliamentary Standards Act 2009 in connection with a person's ceasing to be a member of the House of Commons,]

(b)made under section 4 of the Ministerial and other Pensions and Salaries Act 1991 (c. 5) (grants to persons ceasing to hold certain ministerial and other offices),

(c)made under section 3 of the European Parliament (Pay and Pensions) Act 1979 (c. 50) (resettlement grants for persons ceasing to be Representatives), [F691or under Article 13 of the Statute for Members of the European Parliament (transitional allowances),]

(d)made under section 81(3) of the Scotland Act 1998 (c. 46) to a person—

(i)ceasing to be a member of the Scottish Parliament on its dissolution, or

(ii)ceasing to hold an office corresponding to a relevant office,

[F692(e)made under section 20(3) of the Government of Wales Act 2006 to a person—

(i)ceasing to be a member of the National Assembly for Wales; or

(ii)ceasing to hold office as the Presiding Officer, Deputy Presiding Officer, or such other office in connection with the Assembly as the Assembly may determine, but continuing to be an Assembly Member,

(ea)made under section 53(3) of the Government of Wales Act 2006 to a person ceasing to be a member of the Welsh Assembly GovernmentF693...]

(f)made under section 48(1) of the Northern Ireland Act 1998 (c. 47) to a person—

(i)ceasing to be a member of the Northern Ireland Assembly on its dissolution, or

(ii)ceasing to hold an office corresponding to a relevant office[F694, or

(g)made under section 26A of the Greater London Authority Act 1999 (payments on ceasing to hold office as Mayor of London or as a member of the London Assembly).]

(3)In this section “a relevant office” has the same meaning as in section 4 of the Ministerial and other Pensions and Salaries Act 1991.

Textual Amendments

F690S. 291(2)(a) substituted (with effect in accordance with s. 15(2) of the amending Act) by Finance Act 2012 (c. 14), s. 15(1)

F691Words in s. 291(2)(c) inserted (with effect in accordance with s. 56(3) of the amending Act) by Finance Act 2009 (c. 10), s. 56(2)

F693Word in s. 291(2)(ea) omitted (with effect in accordance with s. 52(4) of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 52(2)

F694S. 291(2)(g) and word inserted (with effect in accordance with s. 52(4) of the amending Act) by Finance Act 2008 (c. 9), s. 52(3)

[F695292Accommodation expenses of MPsU.K.

(1)No liability to income tax arises in respect of a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 if the payment is—

(a)expressed to be made in respect of accommodation expenses, or

(b)related to or in consequence of a payment expressed to be so made.

(2)“Accommodation expenses” means expenses necessarily incurred on overnight accommodation that is required for the performance of the member's parliamentary duties in or about the Palace of Westminster or the member's constituency.

(3)But the cost of an overnight stay in a hotel that was required only because, on that night, the member had been required to be at the House of Commons because the House was sitting late does not count as accommodation expenses for the purposes of this section, unless the member had been required to be at the House because it was sitting beyond 1 a.m.

(4)Subsection (1) does not apply to a loan for a deposit payable at the commencement of a tenancy.

[F696(5)The reference in subsection (1) to a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 includes a payment made under that section to another person at the direction of a member (see section 6(7) of that Act).]]

Textual Amendments

F695S. 292 substituted (with effect in accordance with Sch. 4 para. 1(4)(5) of the amending Act) by Finance (No. 2) Act 2010 (c. 31), Sch. 4 para. 1(2)

F696S. 292(5) inserted (with effect in accordance with s. 37(2) of the amending Act) by Finance Act 2011 (c. 11), s. 37(1)

293Overnight expenses of other elected representativesU.K.

(1)No liability to income tax arises in respect of a payment to which this section applies if it is expressed to be made in respect of a member’s necessary overnight expenses.

(2)This section applies to payments—

(a)made to members of the Scottish Parliament under section 81(2) of the Scotland Act 1998 (c. 46),

(b)made to members of the National Assembly for Wales under [F697section 20(2) of the Government of Wales Act 2006 or to a member of the Welsh Assembly Government under section 53(2) of that Act], or

(c)made to members of the Northern Ireland Assembly under section 47(2) of the Northern Ireland Act 1998 (c. 47).

(3)In this section “a member’s necessary overnight expenses” means additional expenses necessarily incurred by a member for the purpose of performing duties as a member in staying overnight away from the member’s only or main residence—

(a)in the area in which the Parliament or Assembly to which the member belongs sits, or

(b)in the constituency or region which the member represents.

Textual Amendments

[F698293A UK travel and subsistence expenses of MPsU.K.

(1)No liability to income tax arises in respect of a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 if the payment is expressed to be made—

(a)in respect of relevant UK travel expenses, or

(b)in respect of relevant subsistence expenses.

(2)“Relevant UK travel expenses” means expenses necessarily incurred on journeys of the following kinds within the United Kingdom—

(a)journeys made by the member that are necessary for the performance of the member's parliamentary duties, and

(b)if the member shares caring responsibilities with a spouse or partner, journeys made by the spouse or partner between the member's London Area residence and the member's constituency residence.

(3)“Relevant subsistence expenses” means expenses necessarily incurred on an evening meal (excluding alcoholic drinks) eaten on the Parliamentary Estate, where the member is required to be at the House of Commons because the House is sitting beyond 7.30 p.m.

(4)“Caring responsibilities” and “London Area” have the same meaning in subsection (2)(b) as they have in the scheme in effect for the time being under section 5 of the Parliamentary Standards Act 2009.]

Textual Amendments

F698S. 293A inserted (with effect in accordance with Sch. 4 para. 2(2)(3) of the amending Act) by Finance (No. 2) Act 2010 (c. 31), Sch. 4 para. 2(1)

[F699293B UK travel expenses of other elected representativesU.K.

(1)No liability to income tax arises in respect of a payment to which this section applies if it is expressed to be made in respect of relevant UK travel expenses.

(2)This section applies to payments—

(a)made to members of the Scottish Parliament under section 81(2) of the Scotland Act 1998,

(b)made to members of the National Assembly for Wales under section 20(2) of the Government of Wales Act 2006 or to a member of the Welsh Assembly Government under section 53(2) of that Act, or

(c)made to members of the Northern Ireland Assembly under section 47(2) of the Northern Ireland Act 1998.

(3)In this section “relevant UK travel expenses” means expenses necessarily incurred on journeys of the following kinds within the United Kingdom—

(a)journeys within subsection (4) made by the member that are necessary for the performance of his or her duties as a member;

(b)if the member shares caring responsibilities with a spouse or partner, journeys made by the spouse or partner between the constituency or region and the member's parliamentary home.

(4)The journeys referred to in subsection (3)(a) are those—

(a)between the constituency or region and the Parliament or Assembly to which the member belongs,

(b)between the constituency or region and the member's parliamentary home, or

(c)within the constituency or region, but not excluded by subsection (5).

(5)A journey is excluded if—

(a)in the case of a member who has only one local office, it is between the member's local home and that office, and

(b)in any other case, it is between the member's local home and the principal local office.

(6)In this section—

  • “constituency or region”, in relation to a member, means the constituency or region which the member represents and the area within 20 miles of the boundary of that constituency or region;

  • “local office”, in relation to a member, means an office which is situated in the constituency or region and occupied by the member for the purposes of performing duties as a member;

  • “the member's local home” means a residence of the member situated in the constituency or region;

  • “the member's parliamentary home” means the member's only or main residence in the area comprising—

    (a)

    the main site of the Parliament or Assembly to which the member belongs, and

    (b)

    the area within 20 miles of that site;

  • “principal local office”, in relation to a member, means the local office most frequently occupied by the member for the purposes of performing duties as a member.

(7)A person has “caring responsibilities” if the person—

(a)has parental responsibility for a dependent child aged under 17 or for a child aged 17 or 18 who is in full-time education, or

(b)is the primary carer for a family member in receipt of—

(i)attendance allowance,

(ii)disability living allowance at the middle or highest rate for personal care,

(iii)the daily living component of personal independence payment, or

(iv)constant attendance allowance at or above the maximum rate with an industrial injuries disablement benefit, or the basic (full day) rate with a war disablement pension.

(8)The Treasury may by order amend the definition of “caring responsibilities” in subsection (7).]

Textual Amendments

F699S. 293B inserted (with effect in accordance with s. 10(2) of the amending Act) by Finance Act 2013 (c. 29), s. 10(1)

[F701294[F700European] travel expenses of MPs and other representativesU.K.

(1)No liability to income tax arises in respect of a sum that is paid to—

(a)a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009,

(b)a member of the Scottish Parliament under section 81(2) of the Scotland Act 1998,

(c)a member of the National Assembly for Wales under section 20(2) of the Government of Wales Act 2006 or a member of the Welsh Assembly Government under section 53(2) of that Act, or

(d)a member of the Northern Ireland Assembly under section 47(2) of the Northern Ireland Act 1998,

and expressed to be made in respect of European travel expenses.]

[F702(2)“European travel expenses” means the cost of, and any additional expenses incurred in, travelling between the United Kingdom and a relevant European location.

(3)“Relevant European location” means—

(a)a European Union institution or agency, or

(b)the national parliament of—

(i)another member State,

(ii)a candidate or applicant country, or

(iii)[F703any other country that is a member of the Council of Europe.]

(4)The Treasury may by order amend subsection (3) by—

(a)adding a European location,

(b)removing a European location, or

(c)varying the description of a European location.]

Textual Amendments

F700Word in s. 294 heading substituted (with effect in accordance with s. 82(5) of the amending Act) by Finance Act 2004 (c. 12), s. 82(4)

F701S. 294(1) substituted (with effect in accordance with Sch. 4 para. 1(4)(5) of the amending Act) by Finance (No. 2) Act 2010 (c. 31), Sch. 4 para. 3(2)

F702S. 294(2)-(4) substituted (with effect in accordance with s. 82(5) of the amending Act) by Finance Act 2004 (c. 12), s. 82(3)

F703S. 294(3)(b)(iii) substituted (with effect in accordance with Sch. 4 para. 3(4)(5) of the amending Act) by Finance (No. 2) Act 2010 (c. 31), Sch. 4 para. 3(3)

295Transport and subsistence for Government ministers etc.U.K.

(1)No liability to income tax arises in respect of the provision of transport or subsistence provided or made available by or on behalf of the Crown to—

(a)the holder of a ministerial office, or

(b)a member of the family or household of the holder of a ministerial office.

(2)No liability to income tax arises in respect of payments and reimbursements by or on behalf of the Crown of expenses incurred in connection with the provision of transport or subsistence to a person within subsection (1).

(3)“Ministerial office” means—

(a)an office in Her Majesty’s Government in the United Kingdom,

(b)any other office which is one of the offices and positions in respect of which salaries are payable under section 1 of the Ministerial and other Salaries Act 1975 (c. 27), and

(c)an office under one of the following Acts which corresponds to an office within paragraph (a) or (b)—

(i)the Scotland Act 1998 (c. 46),

(ii)[F704the Government of Wales Act 2006], or

(iii)the Northern Ireland Act 1998 (c. 47).

(4)In determining whether a particular person holds an office within subsection (3)(b), it is irrelevant whether or not a salary is paid or payable to that person under the Ministerial and other Salaries Act 1975.

(5)In this section references to the provision of transport to a person include references to—

(a)the provision or making available to that person of a vehicle with or without a driver,

(b)the provision of fuel for a vehicle provided or made available to that person, and

(c)the provision of any other benefit in connection with such a vehicle.

(6)In this section—

(a)“subsistence” includes food and drink and temporary living accommodation, and

(b)“vehicle” means a mechanically propelled road vehicle.

Textual Amendments

[F705Members of local authorities etcU.K.

Textual Amendments

F705S. 295A and cross-heading inserted (with effect in accordance with s. 29(7) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 29(5)

295ATravel expenses of members of local authorities etcU.K.

(1)No liability to income tax arises in respect of a qualifying payment made to a member of a relevant authority for travel expenses incurred by the member if—

(a)the payment is for expenses other than those related to the member's use of a vehicle to which Chapter 2 applies, and

(b)the expenses are not excluded by subsection (2).

(2)Expenses are excluded by this subsection if—

(a)they are incurred on a journey between the member's home and permanent workplace, and

(b)the member's home is situated more than 20 miles outside the boundary of the area of the relevant authority.

(3)In this section “permanent workplace” has the same meaning as in Part 5 (see section 339).

(4)The Treasury may by regulations—

(a)provide for bodies specified in the regulations (which must be local authorities or bodies that have similar or related functions or purposes) to be relevant authorities for the purposes of this section,

(b)provide for references in this section to a member of a relevant authority to be read as references to a member of a description prescribed in the regulations, and

(c)define what is meant by “qualifying payment” for the purposes of this section.

(5)The regulations may contain transitional provision and savings.]

Armed forcesU.K.

296Armed forces' leave travel facilitiesU.K.

(1)No liability to income tax arises in respect of—

(a)the provision of travel facilities for a member of the armed forces of the Crown going on or returning from leave, or

(b)a payment made in respect of such travel.

(2)In subsection (1) “travel facilities” does not include a vehicle.

297Armed forces' food, drink and mess allowancesU.K.

(1)No liability to income tax arises in respect of allowances if—

(a)they are payable out of the public revenue to any description of members of the armed forces of the Crown, and

(b)the Treasury certifies that they are payable to them instead of food or drink normally supplied to members of the armed forces.

(2)No liability to income tax arises in respect of allowances if—

(a)they are payable out of the public revenue in respect of any description of members of the armed forces of the Crown, and

(b)the Treasury certifies that they are so payable as a contribution to the expenses of a mess.

[F706297AArmed forces: the Operational AllowanceU.K.

(1)No liability to income tax arises in respect of payments to members of the armed forces of the Crown of the Operational Allowance.

(2)The Operational Allowance is an allowance designated as such [F707under a Royal Warrant made under section 333 of the Armed Forces Act 2006] .]

Textual Amendments

F706S. 297A inserted (with effect in accordance with s. 64(2) of the amending Act) by Finance Act 2007 (c. 11), s. 64(1)

F707Words in s. 297A(2) substituted (with effect in accordance with s. 16(5) of the amending Act) by Finance Act 2012 (c. 14), s. 16(2)

[F708297BArmed forces: the Council Tax ReliefU.K.

(1)No liability to income tax arises in respect of payments of the Council Tax Relief to members of the armed forces of the Crown.

(2)Payments of the Council Tax Relief are payments designated as such [F709under a Royal Warrant made under section 333 of the Armed Forces Act 2006] .]

Textual Amendments

F708S. 297B inserted (with effect in accordance with s. 51(2) of the amending Act) by Finance Act 2008 (c. 9), s. 51(1)

F709Words in s. 297B(2) substituted (with effect in accordance with s. 16(5) of the amending Act) by Finance Act 2012 (c. 14), s. 16(3)

[F710297CArmed forces: Continuity of Education AllowanceU.K.

(1)No liability to income tax arises in respect of payments of the Continuity of Education Allowance to or in respect of members of the armed forces of the Crown during their employment under the Crown or after their deaths.

(2)The Continuity of Education Allowance is an allowance designated as such under a Royal Warrant made under section 333 of the Armed Forces Act 2006.]

Textual Amendments

F710S. 297C inserted (with effect in accordance with s. 16(5) of the amending Act) by Finance Act 2012 (c. 14), s. 16(4)

[F711297DArmed forces: accommodation allowancesU.K.

(1)No liability to income tax arises in respect of payments of accommodation allowances to, or in respect of, a member of the armed forces of the Crown.

(2)An “accommodation allowance” is an allowance—

(a)payable out of the public revenue,

(b)for, or towards, costs of accommodation, and

(c)in respect of which any conditions specified in regulations made by the Treasury are met.

(3)The provision that may be made by regulations under subsection (2)(c) includes provision framed by reference to a scheme (by whatever name called), or document, as it has effect from time to time.

(4)Regulations under this section may make—

(a)different provision for different cases, and

(b)different provision for different areas.

(5)Regulations under this section that do not increase any person's liability to income tax may have effect in relation to times before they are made.]

Textual Amendments

F711S. 297D inserted (with effect in accordance with s. 8(2) of the amending Act) by Finance Act 2018 (c. 3), s. 8(1); S.I. 2019/1160, reg. 2

298Reserve and auxiliary forces' training allowancesU.K.

No liability to income tax arises in respect of the following sums if they are payable out of the public revenue to members of the reserve and auxiliary forces of the Crown—

(a)training expenses allowances, and

(b)bounties payable in consideration of the members undertaking certain training and attaining a particular standard of efficiency.

Crown employeesU.K.

299Crown employees' foreign service allowancesU.K.

(1)No liability to income tax arises in respect of an allowance paid to a person in employment under the Crown if it is certified to represent compensation for the extra cost of being obliged to live outside the United Kingdom in order to perform the duties of the employment.

(2)A certificate under subsection (1) may only be given by—

(a)the Treasury,

(b)the Secretary of State,

(c)the Lord Chancellor,

(d)the Chancellor of the Exchequer,

(e)the Minister for the Civil Service,

(f)the Lord President of the Council,

(g)the Lord Privy Seal, or

(h)the Attorney General.

[F712Voluntary office-holdersU.K.

Textual Amendments

299AVoluntary office-holders: compensation for lost employment incomeU.K.

(1)No liability to income tax arises in respect of a payment made by a relevant authority to a person if—

(a)the person holds a voluntary office with the authority,

(b)the person carries out duties of the office in a period in which he or she is also employed, and

(c)the payment is made solely to compensate the person for lost employment income for the period (and accordingly does not exceed the amount of that income).

(2)For the purposes of subsection (1) a person holds a voluntary office if, at the time the payment referred to in that subsection is made, the person—

(a)is not entitled to any payment or benefit in connection with carrying out the duties of the office,

(b)has not received any such payment or benefit, and

(c)does not expect to receive any such payment or benefit.

(3)For the purposes of subsection (2)(a), (b) and (c) disregard—

(a)a payment [F713(whether an advance payment or a reimbursement)] in respect of reasonable expenses incurred in carrying out the duties of the office, and

(b)a payment to which subsection (1) or section 16A of ITTOIA 2005 applies.

(4)In subsection (1)(c) “lost employment income” means the difference between—

(a)the amount of employment income, after deduction of tax and national insurance contributions, that the person would have received from the employment for the period if he or she had not carried out the duties of the office, and

(b)the amount of employment income, after deduction of tax and national insurance contributions, that the person did receive from the employment for the period.

(5)In subsection (1) “relevant authority” means any of the following—

Textual Amendments

F713Words in s. 299A(3)(a) inserted (6.4.2020 with effect in relation to the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 14(2)(3)

[F714299BVoluntary office-holders: payments in respect of expensesU.K.

(1)No liability to income tax arises in respect of a payment to a person who holds a voluntary office if the payment is in respect of reasonable expenses incurred in carrying out the duties of that office.

(2)It does not matter whether—

(a)the payment is an advance payment or a reimbursement;

(b)the person who makes the payment is the person with whom the office is held.

(3)Subsections (2) and (3) of section 299A apply for the purposes of subsection (1) of this section as they apply for the purposes of subsection (1) of that section.]

Textual Amendments

F714S. 299B inserted (6.4.2020 with effect in relation to the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 14(1)(3)

GovernmentU.K.

  • A government department

  • The Welsh Ministers and the Counsel General to the Welsh Government

  • The Scottish Ministers

  • The holder of an office in the Scottish Administration which, for the purposes of the Scotland Act 1998, is not a ministerial office (see section 126(8) of that Act)

  • A Northern Ireland department

Local governmentU.K.

  • A county, district or parish council in England

  • The council of a London borough

  • The Common Council of the City of London

  • The Greater London Authority

  • The Council of the Isles of Scilly

  • A county, county borough or community council in Wales

  • A council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 or community council in Scotland

  • A district council in Northern Ireland

Trade unionsU.K.

  • An organisation the name of which is entered in the list maintained by the Certification Officer under section 2 of the Trade Union and Labour Relations (Consolidation) Act 1992

  • An organisation the name of which is entered in the list maintained by the Certification Officer for Northern Ireland under Article 5 of the Industrial Relations (Northern Ireland) Order 1992 (S.I. 1992/807 (N.I. 5))

Local medical committeesU.K.

  • A Local Medical Committee (see section 97(4) of the National Health Service Act 2006)

Other public bodiesU.K.

  • A body (other than a company) that is established by or under a statutory provision for the purpose of carrying out functions conferred on it by or under a statutory provision.

(6)In this section—

  • “company” means a company as defined by section 1 of the Companies Act 2006;

    references to a relevant authority include a company the activities of which consist solely of carrying out some or all of the functions of that authority, otherwise than for profit;

  • “statutory provision” includes any provision made by or under an Act of Parliament, an Act of the Scottish Parliament, any Northern Ireland legislation, or any Act or Measure of the National Assembly for Wales.

(7)Section 16A of ITTOIA 2005 (voluntary office-holders: compensation for lost profits) contains equivalent provision for holders of a voluntary office who carry on a trade, profession or vocation.]

Consuls, foreign agents etc.U.K.

300ConsulsU.K.

(1)No liability to income tax arises in respect of income arising from the office of a consul in the United Kingdom in the service of a foreign state.

(2)Such income is also to be disregarded in estimating the amount of income for any income tax purposes.

(3)In this section “consul” means a person recognised by Her Majesty as being a consul-general, consul, vice-consul or consular agent.

301Official agentsU.K.

(1)No liability to income tax arises in respect of income arising from employment as an official agent in the United Kingdom for a foreign state if conditions A and B are met.

(2)Condition A is that the employee is neither—

(a)a Commonwealth citizen, nor

(b)a citizen of the Republic of Ireland.

(3)Condition B is that the functions of the employment are not exercised in connection with a trade, business or other undertaking carried on for the purposes of profit.

(4)Such income is also to be disregarded in estimating the amount of income for any income tax purposes.

(5)In this section “official agent” means a person who is not a consul (as defined in section 300) but is employed on the staff of—

(a)a consulate, or

(b)an official department or agency of a foreign state.

(6)Subsection (5)(b) does not apply to a department or agency which carries on a trade, business or other undertaking for the purposes of profit.

302Consular employeesU.K.

(1)No liability to income tax arises in respect of income arising from employment in the United Kingdom as a consular employee for a foreign state if—

(a)Her Majesty by Order in Council directs that this section applies to the foreign state for the purpose of giving effect to a reciprocal arrangement with that state, and

(b)condition A or B is met.

(2)Condition A is that the employee is a national of the foreign state.

(3)Condition B is that the employee is not a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen.

(4)In this section—

  • “consular employee” includes any person employed for the purposes of the official business of a consular officer at—

    (a)

    any consulate,

    (b)

    any consular establishment, or

    (c)

    any other premises used for those purposes, and

  • “reciprocal arrangement” means a consular convention or other arrangement with a foreign state, making similar provision to that made by this section [F715, sections 646A and 681A of this Act and section 771 of ITTOIA 2005 (relevant foreign income of consular officers and employees)] in the case of Her Majesty’s consular officers or employees in that state.

(5)An Order in Council under subsection (1) may limit the operation of this section in relation to a state in any way appearing to Her Majesty necessary or expedient having regard to the arrangement with the state.

(6)Such an Order—

(a)may be made so as to have effect from a date earlier than that on which it is made, but not earlier than the arrangement in question comes into force, and

(b)may contain such transitional provisions as appear to Her Majesty necessary or expedient.

(7)A statutory instrument containing such an Order is subject to annulment in pursuance of a resolution of the House of Commons.

(8)This section does not affect section 301 (official agents).

Textual Amendments

Visiting forces and staff of designated allied headquartersU.K.

303Visiting forces [F716etc] U.K.

(1)No liability to income tax arises in respect of earnings if—

(a)they are paid by the government of a designated country to a member of a visiting force of that country or of a civilian component of such a force, and

(b)that person is not a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen.

(2)For the purposes of subsection (1)—

(a)members of the armed forces of a designated country who are attached to a designated [F717international military] headquarters are treated as a visiting force of that country, and

(b)whether a person is a member of a civilian component of such a force is to be determined accordingly.

(3)No liability to income tax arises in respect of earnings if they are paid by a designated allied headquarters to an employee of a category for the time being agreed between Her Majesty’s government in the United Kingdom and the other members of the North Atlantic Council.

(4)But where the employee is a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen, subsection (3) only applies if it is necessary for it to do so to give effect to an agreement between parties to the North Atlantic Treaty.

[F718(4A)No liability to income tax arises in respect of earnings if—

(a)they are paid by the government of a designated country to a person belonging to the EU civilian staff, and

(b)that person is not a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen.]

(5)Subsections (1) and (2) are to be interpreted as if—

(a)they were in Part 1 of the Visiting Forces Act 1952 (c. 67), and

(b)references in that Act to a country to which a provision of that Act applies were references to a designated country.

(6)In this section—

  • “allied headquarters” means an international military headquarters established under the North Atlantic Treaty, F719...

  • “designated” means designated for the purpose in question by or under an Order in Council made for giving effect to an international agreement[F720, and

  • “ the EU civilian staff ” means designated for the purpose in question by or under an Order in Council made for giving effect to an international agreement.

    (a)

    civilian personnel seconded by a member State to an EU institution for the purposes of activities (including exercises) relating to the preparation for, and execution of, tasks mentioned in Article 43(1) of the Treaty on European Union (tasks relating to a common security and defence policy), as amended from time to time, and

    (b)

    civilian personnel (other than locally hired personnel)—

    (i)

    made available to the EU by a member State to work with designated international military headquarters or a force of a designated country, or

    (ii)

    otherwise made available to the EU by a member State for the purposes of activities of the kind referred to in paragraph (a).]

Textual Amendments

F716Words in s. 303 heading substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 37 para. 4(5)

F717Words in s. 303(2)(a) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 37 para. 4(2)

F718S. 303(4A) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 37 para. 4(3)

F719Word in s. 303(6) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 37 para. 4(4)(a)

F720Words in s. 303(6) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 37 para. 4(4)(b)

Detached national expertsU.K.

304Experts seconded to European CommissionU.K.

(1)No liability to income tax arises in respect of daily subsistence allowances paid by the European Commission to persons whose services are made available to the Commission by their employers under the detached national experts scheme.

(2)“The detached national experts scheme” means—

(a)the scheme relating to national experts seconded to the European Commission which was established by the Commission on 26th July 1988, as it has effect for the time being, or

(b)any scheme having effect for the time being which replaces that scheme.

[F721304AExperts seconded to other European Union bodiesU.K.

(1)No liability to income tax arises in respect of any subsistence allowances paid by a relevant EU body to persons who, because of their expertise in matters relating to the subject matter of the functions of the relevant EU body, have been seconded to the body by their employers.

(2)Each of the following is a “relevant EU body”—

(a)the European Medicines Agency, established as the European Agency for the Evaluation of Medicinal Products by Council Regulation (EEC) No 2309/93 of 22 July 1993,

(b)the European Police College, established by Council Decision of 20 September 2005 (2005/681/JHA),

(c)the European Banking Authority, established by Regulation (EU) No 1093/2010 of 24 November 2010, and

(d)any other body established by an EU instrument which is designated as a relevant EU body for the purposes of this section by an order made by the Treasury.]

Textual Amendments

F721S. 304A inserted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2011 (c. 11), s. 38(1)

Offshore oil and gas workersU.K.

305Offshore oil and gas workers: mainland transfersU.K.

(1)No liability to income tax arises in respect of—

(a)the provision for an employee who has a permanent workplace at an offshore installation of—

(i)transfer transport,

(ii)related accommodation and subsistence, or

(iii)local transport, or

(b)the payment or reimbursement of reasonable expenses incurred by such an employee on such transport or accommodation and subsistence.

(2)Subsection (1)(a)(ii) only applies if the related accommodation and subsistence is provided at reasonable cost.

(3)In this section “transfer transport” means transport by sea or air between the mainland of Great Britain or Northern Ireland and the offshore installation, which meets conditions A and B.

(4)Condition A is that the place of arrival or departure on the mainland is one to or from which transport between the mainland and the offshore installation is provided for employees generally.

(5)Condition B is that the cost of the transport would not be deductible under Part 5 if the employee incurred and paid it.

(6)In this section—

  • “related accommodation and subsistence” means overnight accommodation and subsistence in the vicinity of the place of departure or arrival on the mainland, which is necessary because of the time at which transfer transport is to be taken,

  • “local transport” means transport between a place where the employee is provided with related accommodation and subsistence and the place of departure or arrival on the mainland,

  • F722. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • “workplace” and “permanent workplace” have the meaning given by section 339.

Textual Amendments

F722Words in s. 305(6) repealed (with effect in accordance with Sch. 27 para. 16 of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 13, Sch. 42 Pt. 2(19)

Miners etc.U.K.

306Miners etc: coal and allowances in lieu of coalU.K.

(1)No liability to income tax arises in respect of the provision of coal or smokeless fuel or an allowance paid in lieu of such provision if the employee is a colliery worker and the condition in subsection (2) is met.

(2)That condition is that the amount of coal or fuel provided or in respect of which the allowance is paid does not substantially exceed the amount reasonably required for personal use.

(3)That condition is assumed to be met unless the contrary is shown.

(4)In this section “colliery worker” means a coal miner or any other person employed at or about a colliery otherwise than in clerical, administrative or technical work.

[F723CarersU.K.

Textual Amendments

F723S. 306A and cross-heading inserted (with effect in accordance with s. 14(4) of the amending Act) by Finance Act 2015 (c. 11), s. 14(2)

306ACarers: board and lodgingU.K.

(1)For the purposes of this section an individual is employed as a home care worker if the duties of the employment consist wholly or mainly of the provision of personal care to another individual (“the recipient”) at the recipient's home, in a case where the recipient is in need of personal care because of—

(a)old age,

(b)mental or physical disability,

(c)past or present dependence on alcohol or drugs,

(d)past or present illness, or

(e)past or present mental disorder.

(2)No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of the provision of board or lodging (or both) to an individual employed as a home care worker if the provision is—

(a)on a reasonable scale,

(b)at the recipient's home, and

(c)by reason of the individual's employment as a home care worker.]

[F724Professional sportspersonsU.K.

Textual Amendments

F724S. 306B and cross-heading inserted (with effect in accordance with Sch. 2 para. 4(1) of the amending Act) by Finance Act 2016 (c. 24), Sch. 2 para. 2

306BLimited exemption for sporting testimonial paymentsU.K.

(1)This section applies to any sporting testimonial payments which are—

(a)made out of money raised by a sporting testimonial (“the sporting testimonial”), and

(b)treated by virtue of section 226E as earnings of a person (“S”).

(2)No liability to income tax arises in respect of sporting testimonial payments to which this section applies.

(3)Subsection (2) has effect subject to and in accordance with the following provisions.

(4)It only applies—

(a)if the controller of the relevant event or activity (or of all the relevant events or activities in a series) constituting the sporting testimonial is an independent person,

(b)if S has not already benefitted from an exemption under this section in relation to one or more sporting testimonial payments made out of money raised by another sporting testimonial, and

(c)where the sporting testimonial consists of a series of relevant events or activities taking place over more than a year, if the sporting testimonial payment is made out of money raised by events or activities taking place within the period of one year beginning with the day on which the first event or activity in the series took place.

(5)It only applies to the first £100,000 of sporting testimonial payments made out of money raised by the sporting testimonial.

(6)If sporting testimonial payments are made (out of money raised by the sporting testimonial) in two or more tax years, any part of the exempt amount that is not used in the first of those years is to be carried forward to the next tax year (and so on).

(7)This section applies to sporting testimonial payments made to or to the order of the personal representatives of S (where S has died) but only if the payments are made within the period of 24 months beginning with the date of death.

(8)In subsection (4)(a) “independent person” means a person who is not (or where the controller is a committee, a committee none of whose members are)—

(a)S or a person connected with S,

(b)an employer or former employer of S or a person connected with an employer or former employer of S, or

(c)a person acting for or on behalf of a person mentioned in paragraph (a) or (b).

(9)If the first relevant event or activity in a series took place before 6 April 2017, subsection (4)(c) has effect as if it referred to the year beginning with 6 April 2017.

(10)Section 993 of ITA 2007 (meaning of “connected” persons) has effect for the purposes of this section.

(11)Terms used in this section and section 226E have the same meaning as in that section.]

Chapter 9U.K.Exemptions: pension provision

307Death or retirement benefit provisionU.K.

(1)No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of provision made by an employee’s employer [F725under a registered pension scheme or otherwise] for a retirement or death benefit.

[F726(1A)Subsection (1) does not apply to provision made for insuring against the risk that a retirement or death benefit under an employer-financed retirement benefits scheme cannot be paid or given because of the employer’s insolvency.

(1B)In subsection (1A) “employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 (see section 393A).]

(2)In [F727this section] “retirement or death benefit” means a pension, annuity, lump sum, gratuity or other similar benefit which will be paid or given to the employee [F728, or paid or given in respect of the employee to any other individual or to a charity, ] in the event of the employee’s retirement or death.

Textual Amendments

F725Words in s. 307(1) inserted (6.4.2006) by Finance Act 2004 (c. 12), ss. 201(1), 284(1) (with Sch. 36)

F726S. 307(1A)(1B) inserted (6.4.2006) by Finance Act 2004 (c. 12), ss. 248(2), 284(1) (with Sch. 36)

F727Words in s. 307(2) substituted (6.4.2006) by Finance Act 2004 (c. 12), ss. 248(3), 284(1) (with Sch. 36)

F728Words in s. 307(2) substituted (with effect in accordance with s. 11(2) of the amending Act) by Finance Act 2019 (c. 1), s. 11(1)

Modifications etc. (not altering text)

C29S. 307 applied (with effect in accordance with reg. 1(2) of the amending S.I.) by The Pension Protection Fund (Tax) (2005-06) Regulations 2005 (S.I. 2005/1907), regs. 1(1), 14

[F729308Exemption of contributions to registered pension schemeU.K.

No liability to income tax arises in respect of earnings where an employee’s employer makes contributions under a registered pension scheme [F730in respect of the employee].]

Textual Amendments

F729S. 308 substituted (6.4.2006) by Finance Act 2004 (c. 12), ss. 201(2), 284(1) (with Sch. 36)

F730Words in s. 308 inserted (with effect in accordance with s. 11(2) of the amending Act) by Finance Act 2013 (c. 29), s. 11(1)

[F731308AExemption of contributions to overseas pension schemeU.K.

(1)No liability to income tax arises in respect of earnings where an employer makes contributions under a qualifying overseas pension scheme in respect of an employee who is a relevant migrant member of the pension scheme.

(2)In subsection (1)—

  • “qualifying overseas pension scheme”, and

  • “relevant migrant member”,

  • have the same meaning as in Schedule 33 to FA 2004 (overseas pension schemes: migrant member relief).]

Textual Amendments

F731S. 308A inserted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 33 para. 3 (with Sch. 36)

Modifications etc. (not altering text)

[F732308BIndependent advice in respect of conversions and transfers of pension scheme benefitsU.K.

(1)No liability to income tax arises in respect of—

(a)the provision to an employee or former employee of appropriate independent advice, or

(b)the payment or reimbursement, to or in respect of an employee or former employee, of the cost of such advice,

if conditions A to C are met.

(2)Condition A is that the provision, payment or reimbursement is required by regulations under section 49 or 52 of the Pension Schemes Act 2015 (power to require employer to arrange independent advice in respect of conversions and transfers).

(3)If condition A is met only as respects part of the payment or reimbursement because the amount of the payment or reimbursement exceeds the amount required to be paid or reimbursed, subsection (1) applies in respect of that part.

(4)Condition B is that the provision, payment or reimbursement is not pursuant to relevant salary sacrifice arrangements.

(5)Condition C is that such other requirements as may be specified in regulations made by the Treasury are satisfied in relation to the provision, payment or reimbursement.

(6)In this section—

  • “appropriate independent advice”—

    (a)

    in relation to England and Wales and Scotland, has the meaning given by regulations under section 48 of the Pension Schemes Act 2015;

    (b)

    in relation to Northern Ireland, has the meaning given by regulations under section 51 of that Act;

  • “relevant salary sacrifice arrangements” means arrangements (whenever made, whether before or after the employment began) under which an employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of appropriate independent advice or the payment or reimbursement of the cost of such advice.]

Textual Amendments

F732S. 308B inserted (with effect in accordance with s. 54(3) of the amending Act) by Pension Schemes Act 2015 (c. 8), ss. 54(1), 89(3)(b) (with s. 87)

[F733308CProvision of pensions advice: limited exemptionU.K.

(1)No liability to income tax arises in respect of—

(a)the provision of relevant pensions advice to an employee or former or prospective employee, or

(b)the payment or reimbursement of costs incurred, by or in respect of an employee or former or prospective employee, in obtaining relevant pensions advice,

if Condition A or B is met.

(2)But subsection (1) does not apply in relation to a person in a tax year so far as the value of the exemption in the person's case in that year exceeds £500.

(3)The “value of the exemption”, in relation to a person and a tax year, is the amount exempted by subsection (1) from income tax in the person's case in that year, disregarding subsection (2) for this purpose.

(4)If in a tax year there is in relation to an individual more than one person who is an employer or former employer, subsections (1) to (3) apply in relation to the individual as employee or former or prospective employee of any one of those persons separately from their application in relation to the individual as employee or former or prospective employee of any other of those persons.

(5)“Relevant pensions advice”, in relation to a person, means information, or advice, in connection with—

(a)the person's pension arrangements, or

(b)the use of the person's pension funds.

(6)Condition A is that the relevant pensions advice, or payment or reimbursement, is provided under a scheme that is open—

(a)to the employer's employees generally, or

(b)generally to the employer's employees at a particular location.

(7)Condition B is that the relevant pensions advice, or payment or reimbursement, is provided under a scheme that is open generally to the employer's employees, or generally to those of the employer's employees at a particular location, who—

(a)have reached the minimum qualifying age, or

(b)meet the ill-health condition.

(8)The “minimum qualifying age”, in relation to an employee, means the employee's relevant pension age less 5 years.

(9)“Relevant pension age”, in relation to an employee, means—

[F734(a)if any of paragraphs 22, 23, 23ZB or 23ZC of Schedule 36 to FA 2004 apply in relation to the employee, the lowest protected pension age that applies as a result of those paragraphs (in relation to the employee or, as the case may be, to sums or assets that relate to the employee), or]

(b)in any other case, the employee's normal minimum pension age, as defined by section 279(1) of FA 2004.

(10)The “ill-health condition” is met by an employee if the employer is satisfied, on the basis of evidence provided by a registered medical practitioner, that the employee is (and will continue to be) incapable of carrying on his or her occupation because of physical or mental impairment.]

Textual Amendments

F733S. 308C inserted (with effect in accordance with s. 3(5) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 3(1)

Chapter 10U.K.Exemptions: termination of employment

Redundancy paymentsU.K.

309Limited exemptions for statutory redundancy paymentsU.K.

(1)No liability to income tax in respect of earnings arises by virtue of a redundancy payment or an approved contractual payment, except where subsection (2) applies.

(2)Where an approved contractual payment exceeds the amount which would have been due if a redundancy payment had been payable, the excess is liable to income tax.

(3)No liability to income tax in respect of employment income other than earnings arises by virtue of a redundancy payment or an approved contractual payment, except where it does so by virtue of Chapter 3 of Part 6 (payments and benefits on termination of employment etc.).

(4)For the purposes of this section—

(a)a statutory payment in respect of a redundancy payment is to be treated as paid on account of the redundancy payment, and

(b)a statutory payment in respect of an approved contractual payment is to be treated as paid on account of the approved contractual payment.

(5)In this section—

  • “approved contractual payment” means a payment to a person on the termination of the person’s employment under an agreement in respect of which an order is in force under section 157 of ERA 1996 or Article 192 of ER(NI)O 1996,

  • “redundancy payment” means a redundancy payment under Part 11 of ERA 1996 or Part 12 of ER(NI)O 1996, and

  • “statutory payment” means a payment under section 167(1) of ERA 1996 or Article 202(1) of ER(NI)O 1996.

(6)In subsection (5) “employment”, in relation to a person, has the meaning given in section 230(5) of ERA 1996 or Article 3(5) of ER(NI)O 1996.

Outplacement benefitsU.K.

310Counselling and other outplacement servicesU.K.

(1)No liability to income tax arises in respect of—

(a)the provision of services to a person in connection with the cessation of the person’s employment, or

(b)the payment or reimbursement of—

(i)fees for such provision, or

(ii)travelling expenses incurred in connection with such provision,

if conditions A to D and, in the case of travel expenses, condition E are met.

(2)Condition A is that the only or main purpose of the provision of the services is to enable the person to do either or both of the following—

(a)to adjust to the cessation of the employment, or

(b)to find other gainful employment (including self-employment).

(3)Condition B is that the services consist wholly of any or all of the following—

(a)giving advice and guidance,

(b)imparting or improving skills,

(c)providing or making available the use of office equipment or similar facilities.

(4)Condition C is that the person has been employed F735... in the employment which is ceasing throughout the period of 2 years ending—

(a)at the time when the services begin to be provided, or

(b)if earlier, at the time when the employment ceases.

(5)Condition D is that the opportunity to receive the services, on similar terms as to payment or reimbursement of any expenses incurred in connection with their provision, is available—

(a)generally to employees or former employees of the person’s employer in that employment, or

(b)to a particular class or classes of them.

(6)Condition E is that the travel expenses are expenses—

(a)in respect of which, on the assumptions in subsection (7), mileage allowance relief under Chapter 2 of this Part would be available if no mileage allowance payments had been made, or

(b)which, on those assumptions, would be deductible under Part 5.

(7)The assumptions are—

(a)that receiving the services is one of the duties of the employee’s employment,

(b)that the employee incurs and pays the expenses, and

(c)if the employment has in fact ceased, that it continues.

(8)In this section “mileage allowance payments” has the meaning given by section 229(2).

Textual Amendments

F735Word in s. 310(4) repealed (with effect in accordance with s. 18(5) of the amending Act) by Finance Act 2005 (c. 7), s. 18(2), Sch. 11 Pt. 2(1)

311Retraining coursesU.K.

(1)No liability to income tax arises in respect of the payment or reimbursement of retraining course expenses by a person (“the employer”) if the course conditions, the employment conditions and, in the case of travel expenses, the conditions in subsection (5) are met.

(2)In subsection (1) “retraining course expenses” means—

(a)fees for the attendance of another person (“the employee”) at a training course,

(b)travelling expenses incurred in connection with it,

(c)fees for an examination taken during or at the end of it, or

(d)the cost of any books which are essential for a person attending it.

(3)The course conditions are that—

(a)the course provides training designed to impart or improve skills or knowledge relevant to, and intended to be used in the course of, gainful employment (including self-employment) of any description,

(b)it is entirely devoted to the teaching or practical application (or both) of the skills or knowledge, [F736and]

(c)it lasts no more than [F737two years]. F738...

(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)The employment conditions are that—

(a)the employee begins the course while employed by the employer or within the period of one year after the employment ceases,

(b)the employee ceases to be employed by the employer before the end of the period of 2 years beginning at the end of the course and is not re-employed by the employer within the period of 2 years after so ceasing,

(c)the employee is employed F739... in the employment which is ceasing throughout the period of 2 years ending—

(i)when the employee begins the course, or

(ii)if earlier, when the employment ceases, and

(d)the opportunity to undertake the course, on similar terms as to payment or reimbursement of amounts within subsection (1), is available—

(i)generally to the employee’s fellow employees or former fellow employees in that employment, or

(ii)to a particular class or classes of them.

(5)The travel expenses must be—

(a)expenses in respect of which, on the assumptions in subsection (6), mileage allowance relief under Chapter 2 of this Part would be available if no mileage allowance payments had been made, or

(b)expenses which, on those assumptions, would be deductible under Part 5.

(6)The assumptions are—

(a)that attendance at the course is one of the duties of the employee’s employment,

(b)that the employee incurs and pays the expenses, and

(c)if the employee has in fact ceased to be employed by the employer, that the employee continues to be employed by the employer.

(7)In this section “mileage allowance payments” has the meaning given by section 229(2).

Textual Amendments

F736Word in s. 311(3)(b) inserted (with effect in accordance with s. 18(5) of the amending Act) by Finance Act 2005 (c. 7), s. 18(3)(a)

F737Words in s. 311(3)(c) substituted (with effect in accordance with s. 18(5) of the amending Act) by Finance Act 2005 (c. 7), s. 18(3)(b)

F738S. 311(3)(d) repealed (with effect in accordance with s. 18(5) of the amending Act) by Finance Act 2005 (c. 7), s. 18(3)(c), Sch. 11 Pt. 2(1)

F739Word in s. 311(4)(c) repealed (with effect in accordance with s. 18(5) of the amending Act) by Finance Act 2005 (c. 7), s. 18(4), Sch. 11 Pt. 2(1)

312Recovery of taxU.K.

(1)This section applies if—

(a)a person’s liability to tax for a tax year has been determined on the assumption that section 311(1) applies, and

(b)subsequently—

(i)the condition in section 311(4)(a) is not met because of the person’s failure to begin the course within the period of one year after ceasing to be employed, or

(ii)the condition in section 311(4)(b) is not met because of the person’s continued employment or re-employment.

(2)An assessment of an amount or further amount of tax due as a result of the condition not being met may be made under section 29(1) of TMA 1970.

(3)Such an assessment must be made before the end of the period of 6 years immediately following the end of the tax year in which subsection (1) first applies.

(4)If subsection (1)(b)(i) or (ii) applies, the person’s employer or former employer must give [F165an officer of Revenue and Customs] a notice containing particulars of the person’s failure to begin the course or continued employment or re-employment within 60 days of coming to know of it.

(5)If [F165an officer of Revenue and Customs] [F740has] reason to believe that a person has failed to give such a notice, [F741the officer] may by notice require the person to provide such information as [F741the officer] may reasonably require for the purposes of this section about—

(a)the failure to begin the course,

(b)the continued employment, or

(c)the re-employment.

(6)A notice under subsection (5) may specify a time (not less than 60 days) within which the required information must be provided.

Textual Amendments

[F742CHAPTER 10AU.K.Exemptions: bonus payments by certain employers

Textual Amendments

F742Pt. 4 Ch. 10A inserted (with effect in accordance with Sch. 37 para. 8 of the amending Act) by Finance Act 2014 (c. 26), Sch. 37 para. 5

312ALimited exemption for qualifying bonus paymentsU.K.

(1)This section applies in relation to qualifying bonus payments made, in a tax year (“the tax year”), by an employer which is a company to an employee or former employee of the employer.

(2)No liability to income tax arises in respect of the qualifying bonus payments if, or to the extent that, the total chargeable amount in respect of those payments does not exceed £3,600 (“the exempt amount”).

(3)If qualifying bonus payments are made to the same person by two or more employers in the tax year, subsection (2) applies separately in relation to the total payments made by each employer, unless subsection (4) applies.

(4)If two or more employers are members of the same group at the time each of them first makes a qualifying bonus payment to the employee or former employee in the tax year, subsection (2) applies as if the reference to the qualifying bonus payments were to all the qualifying bonus payments made by those employers to the employee or former employee in that tax year.

(5)If, in a tax year—

(a)an employer makes a payment when it is a member of a group, and

(b)later in that tax year the employer ceases to be a member of that group,

the employer is treated for the purposes of this section as remaining a member of that group for the remainder of the tax year (without prejudice to it also being a member of any other group).

(6)In applying subsection (2)—

(a)the exempt amount is set against payments in the order in which they are made, and

(b)if two or more payments are made on the same day, which together take the total payments made in the tax year over the exempt amount, subsection (7) applies to determine the amount of each of those payments which is exempt.

(7)In a case within subsection (6)(b), the amount of a payment which is exempt is given by the formula—

where—

P is the amount of the payment,

SP is the sum of that payment and the other payments made on the same day, and

REA is so much of the exempt amount as remains after taking account of any qualifying bonus payments previously made in the tax year.

(8)Where subsection (2) applies separately to different payments by virtue of subsection (3), subsections (6) and (7) also apply to those payments separately.

(9)The Treasury may by order increase or reduce the sum of money specified in subsection (2).

(10)A statutory instrument containing an order under this section which reduces the sum of money specified may not be made unless a draft of it has been laid before and approved by a resolution of the House of Commons.

(11)In this section “chargeable amount”, in respect of a qualifying bonus payment, means the amount of employment income which would be charged to tax in respect of that qualifying bonus payment, apart from this section.

312B“Qualifying bonus payments”U.K.

(1)A payment made by an employer (“E”) to an employee or former employee is a qualifying bonus payment if—

(a)it does not consist of regular salary or wages,

(b)it is awarded under a scheme which meets the participation requirement and the equality requirement (see section 312C),

(c)E meets the trading requirement (see section 312D) throughout the qualifying period,

(d)E meets the indirect employee-ownership requirement (see section 312E) throughout the qualifying period,

(e)E meets the office-holder requirement (see section 312F) at the time the payment is made and on at least the requisite number of days in the qualifying period (whether or not those days are consecutive),

(f)E is not a service company (see section 312G),

(g)the payment is not excluded (see section 312H), and

(h)where it is a payment to a former employee, it is made in the period of 12 months beginning with the day the employment ceased.

(2)In this section “the qualifying period”, in relation to a payment, means the period of 12 months ending with the day on which the payment is made.

(3)But in a case where E meets the indirect employee-ownership requirement on the day on which the payment is made—

(a)if the controlling interest requirement was first met during that 12 month period, the qualifying period does not include any time before it was met, and

(b)if the all-employee benefit requirement was first met during that 12 month period, the qualifying period does not include any time before that requirement was met.

(4)In this section “the requisite number of days” means—

(a)if the qualifying period is 12 months, the number of days in that period reduced by 90, and

(b)if the qualifying period is a shorter period by virtue of subsection (3), the number of days in that period reduced by the corresponding fraction of 90 days.

312CSection 312B: the participation and equality requirementsU.K.

(1)For the purposes of section 312B—

(a)the participation requirement is that all persons in relevant employment when the award is determined must be eligible to participate in that and any other award under the scheme, and

(b)the equality requirement is that every employee who participates in an award under the scheme must do so on the same terms.

(2)A person is in “relevant employment” if—

(a)where E is a member of a group, the person is employed by any company which is a member of the group, and

(b)in any other case, the person is employed by E.

[F743(2A)The participation requirement is not infringed by reason of the exclusion of directors of the company from participating in an award.]

(3)The participation requirement is not infringed by reason of a person in relevant employment being excluded from participating in an award because, at the time the award is determined, the person has less than the minimum period of continuous service in relevant employment required by E.

But the minimum period required by E for this purpose must not exceed 12 months.

(4)The participation requirement is not infringed—

(a)by reason of a person being excluded from participating in an award where—

(i)disciplinary proceedings have been taken against the person by E which have resulted in a finding of gross misconduct against the person, and

(ii)that finding was made in the period of 12 months immediately before the time the award is determined,

(b)by reason of a person's eligibility to participate in an award being conditional, in a case where the person is at the time of the award subject to disciplinary proceedings taken by E, upon those proceedings being concluded and no finding of gross misconduct being made against that person, or

(c)by a person being treated as never having been eligible to participate in an award where, after the award was made but before the payment is made—

(i)a finding of gross misconduct is made against that person in disciplinary proceedings taken by E after the award was made, or

(ii)that person is summarily dismissed from the employment.

(5)The equality requirement is infringed if the amount of an award to an employee under the scheme is determined by reference to factors other than those mentioned in subsection (6).

(6)The equality requirement is not infringed by reason of the amount of an award under the scheme to employees participating in the award being determined by reference to—

(a)an employee's remuneration,

(b)an employee's length of service, or

(c)hours worked by an employee;

but this is subject to subsections (7) and (8).

(7)The equality requirement is infringed if an award is made on terms such that some (but not all) of the employees participating in the award receive nothing.

(8)If the amount of an award is determined by reference to more than one of the factors mentioned in subsection (6), the equality requirement is infringed unless—

(a)each factor gives rise to a separate entitlement related to the level of remuneration, length of service or (as the case may be) hours worked, and

(b)the total entitlement is the sum of those separate entitlements.

(9)Subject to subsection (6), the equality requirement is infringed if any feature of the scheme has, or is likely to have, the effect of conferring benefits wholly or mainly on those participating in the award who are—

(a)directors or former directors, or

(b)employees receiving the higher or highest levels of remuneration, or

(c)employees who—

(i)are employed in a particular part of the business carried on by E or, if E is a member of a group, the group, or

(ii)carry on particular kinds of activities.

(10)In subsections (1)(b), (5), (6), (7) and (9) references to an employee include a former employee, so, when applying those subsections in relation to a former employee, any reference to remuneration, length of service, hours worked, being employed in a particular part of a business or carrying on particular activities is to be read as relating to that former employment.

Textual Amendments

F743S. 312C(2A) inserted (with effect in accordance with Sch. 6 para. 8(2) of the amending Act) by Finance Act 2025 (c. 8), Sch. 6 para. 8(1)

312DSection 312B: the trading requirementU.K.

(1)For the purposes of section 312B, a company meets the trading requirement if—

(a)it is a trading company which is not a member of a group, or

(b)it is a member of a trading group.

(2)“Trading company” means a company carrying on trading activities whose activities do not include to a substantial extent activities other than trading activities.

(3)“Trading group” means a group—

(a)one or more of whose members carry on trading group activities, and

(b)the activities of whose members, taken together, do not include to a substantial extent activities other than trading group activities.

(4)In this section—

  • “trading activities” means activities carried on by the company in the course of, or for the purposes of, a trade being carried on by it;

  • “trading group activities” means activities carried on by a member of the group in the course of, or for the purposes of, a trade being carried on by any member of the group.

(5)For the purposes of determining whether a company is a trading company or a member of a trading group—

(a)the activities of the members of a group are to be treated as one business (with the result that activities are disregarded to the extent that they are intra-group activities), and

(b)a business carried on by a company in partnership with one or more other persons is to be treated as not being a trading activity.

312ESection 312B: the indirect employee-ownership requirementU.K.

(1)For the purposes of section 312B, a company meets the indirect employee-ownership requirement if—

(a)a settlement meets the controlling interest requirement in respect of—

(i)the company, or

(ii)if the company is a member of a trading group, but not the principal company, that principal company, and

(b)the settlement meets the all-employee benefit requirement.

(2)For this purpose—

(a)section 236M of TCGA 1992 applies to determine if a settlement meets the controlling interest requirement in respect of the company mentioned in subsection (1)(a)(i) or (ii) (as the case may be), and

(b)sections 236J and 236K of that Act apply to determine if the settlement meets the all-employee benefit requirement (but see subsection (3)).

(3)If a settlement would not otherwise meet the all-employee benefit requirement at any time during the qualifying period, section 236L of TCGA 1992 applies for the purposes of subsection (1)(b), unless the all-employee benefit requirement has (ignoring that section) previously been met at any time in the period—

(a)beginning with 10 December 2013, and

(b)ending immediately before that time.

(4)For the purposes of subsections (2) and (3)—

(a)in sections 236I to 236M of TCGA 1992 references to C are to be read as references to the company in respect of which the settlement is required to meet the controlling interest requirement (see subsection (1)(a)), and

(b)section 236L of that Act applies as if the reference in subsection (1)(c) of that section to the period of 12 months ending with the time in question were a reference to the period of 12 months ending with the date the payment is made (even if the qualifying period is a period of less than 12 months by virtue of section 312B(3)).

312FSection 312B: the office-holder requirementU.K.

(1)For the purposes of section 312B, a company meets the officer-holder requirement if the appropriate fraction does not exceed 2/5.

(2)“The appropriate fraction” means—

where—

ND is the number of persons who are one or both of the following—

(a)

a director or other office-holder of the company;

(b)

an employee of the company connected with a person within paragraph (a);

NE is the number of persons who are employees (or office-holders) of the company.

312G“Service company”U.K.

(1)For the purposes of section 312B, “service company” means—

(a)a managed service company within the meaning of section 61B, or

(b)a company (“SC”) in respect of which Conditions A and B are met.

(2)Condition A is that the business carried on by SC consists substantially of the provision of the services of persons employed by it.

(3)Condition B is that the majority of those services are provided to persons—

(a)to whom subsection (4) applies, but

(b)who are not members of the same group as the company which makes the payment.

(4)This subsection applies to—

(a)a person who controls or has controlled, or two or more persons who together control or have controlled, SC or any company of which SC is a 51% subsidiary at the time the payment is made,

(b)a person who, or two or more persons who together, at any time before the time the payment is made—

(i)employed all or a majority of the employees of SC, or

(ii)employed all or a majority of the employees of SC and other companies which are members of the same group as SC at the time the payment is made (taken together), and

(c)any company which is a 51% subsidiary of, controlled by or connected or associated with, any person within paragraph (a) or (b).

(5)For the purposes of subsection (4)—

(a)a partnership is to be treated as a single person, and

(b)where a partner (alone or together with others) has control of a company, the partnership is to be treated as having (in the same way) control of that company.

(6)The following provisions apply for the purposes of this section—

(a)section 449 of CTA 2010 (“associated company”);

(b)section 995 of ITA 2007 (meaning of “control”);

(c)section 286 of TCGA 1992 (connected persons: interpretation).

312HExcluded paymentsU.K.

(1)For the purposes of section 312B, a payment is “excluded” if the employee is a party to arrangements (whether made before or after the beginning of the employee's employment) under which—

(a)the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the payment, or

(b)the employee and employer agree that the employee is to receive the payment rather than receive some other description of employment income.

(2)In this section references to an employee include a former employee.

312IInterpretation of Chapter 10AU.K.

(1)In this Chapter—

  • “company” has the meaning given by section 170(9) of TCGA 1992;

  • “trade” means any trade which is conducted on a commercial basis and with a view to the realisation of profits.

(2)In this Chapter—

(a)references to a group, to membership of a group, to the principal company of a group or to being members of the same group, are to be construed in accordance with section 170 of TCGA 1992, and

(b)references to a group are to be construed with any necessary modifications where applied to a company incorporated under the law of a country or territory outside the United Kingdom.

(3)For the purposes of this Chapter, a payment is treated as made when it would be treated as received for the purposes of Chapter 4 of Part 2 if it were not a qualifying bonus payment (see section 18).

(4)In this Chapter references to a payment to an employee or former employee include a payment to the personal representatives of an employee or former employee who has died if the payment is made within the period of 12 months beginning with the date of death.]

Chapter 11U.K.Miscellaneous exemptions

Living accommodationU.K.

313Repairs and alterations to living accommodationU.K.

(1)This section applies where living accommodation is provided by reason of a person’s employment.

(2)No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of—

(a)alterations and additions to the premises which are of a structural nature, or

(b)landlord’s repairs to the premises.

(3)In this section “landlord’s repairs” means repairs of a kind which are the obligation of the lessor under the covenants implied by section 11(1) of the Landlord and Tenant Act 1985 (c. 70) (lessor’s repairing obligations in short leases) where premises are let under a lease to which that section applies.

314Council tax etc. paid for certain living accommodationU.K.

(1)This section applies if living accommodation provided for an employee falls within the exception in one of the following provisions—

  • section 99(1) (accommodation necessary for proper performance of duties),

  • section 99(2) (accommodation provided for better performance of duties), or

  • section 100 (accommodation provided as a result of security threat).

(2)No liability to income tax arises by virtue of—

(a)any payment to, for or on behalf of the employee, or

(b)any reimbursement of any payment by the employee,

in respect of council tax or rates, or water or sewerage charges, in respect of the accommodation.

315Limited exemption for expenses connected with certain living accommodationU.K.

(1)This section applies if—

(a)living accommodation is provided for an employee in a tax year, and

(b)conditions A and B are met.

(2)Condition A is that the accommodation falls within the exception in one of the following provisions—

  • section 99(1) (accommodation necessary for proper performance of duties),

  • section 99(2) (accommodation provided for better performance of duties), or

  • section 100 (accommodation provided as a result of security threat).

(3)Condition B is that there is an amount of earnings from the employment in the tax year by virtue of expenditure, or the reimbursement to the employee of expenditure, on—

(a)heating, lighting or cleaning the premises,

(b)repairs to the premises, their maintenance or decoration, or

(c)the provision in the premises of furniture, equipment or other items which are normal for domestic occupation.

(4)If this section applies, no liability to income tax arises in respect of the earnings mentioned in subsection (3) to the extent that they exceed—

where—

DA is the number of reckonable days in the tax year (a “reckonable day” being a day on which—

  • (a) the accommodation is provided, and

  • (b) the employment is held by the employee),

DE is—

  • (a) the number of days in that year, or

  • (b) if the employment is held for only part of that year, the number of days in that part,

NE is the net amount of the earnings from the employment in the tax year (see subsection (5)),

SMG is, where the expenses are incurred by a person other than the employee, so much of any sum made good by the employee to that other person as is properly attributable to the expenses.

(5)To calculate the net amount of the earnings from the employment—

Step 1

Take the earnings from the employment, leaving out of account the expenses in question.

Step 2

Add, in the case of employment by a company, the earnings from any employment by an associated company.

A company is “associated” with another for this purpose if one has control of the other or both are under the control of the same person.

Step 3

Deduct any deductions allowable under—

(a)section 232 (giving effect to mileage allowance relief) or Part 5 of this Act,

[F744(b)sections 188 to 194 of FA 2004 (contributions to registered pension schemes), or]

(c)section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions from earnings).

Textual Amendments

F744Words in s. 315(5) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 59 (with Sch. 36)

Work accommodation, supplies etc.U.K.

316Accommodation, supplies and services used in employment dutiesU.K.

(1)No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of the provision for an employee of accommodation, supplies or services used by the employee in performing duties of the employment if conditions A and B are met.

(2)Condition A is that any use of the accommodation, supplies or services for private purposes by the employee or members of the employee’s family or household is not significant.

(3)For this purpose, use “for private purposes” means—

(a)use that is not use in performing the duties of the employee’s employment, and

(b)use that is at the same time both use in performing the duties of an employee’s employment and other use.

(4)Condition B is that where the provision is otherwise than on premises occupied by the person making it—

(a)its sole purpose is to enable the employee to perform the duties of the employee’s employment, and

(b)what is provided is not an excluded benefit.

(5)The following are excluded benefits unless regulations under subsection (6) provide otherwise—

(a)a motor vehicle, boat or aircraft, and

(b)a benefit that involves—

(i)the extension, conversion or alteration of living accommodation, or

(ii)the construction, extension, conversion or alteration of a building or other structure on land adjacent to and enjoyed with such accommodation.

(6)The Treasury may make provision by regulations as to what is an excluded benefit for the purposes of subsection (4)(b).

(7)The regulations may provide that a benefit is an excluded benefit only if such conditions as may be prescribed are met as to the terms on which, and persons to whom, it is provided.

[F745316AHomeworker’s additional household expensesU.K.

(1)This section applies where an employer makes a payment to an employee in respect of reasonable additional household expenses which the employee incurs in carrying out duties of the employment at home under homeworking arrangements.

(2)No liability to income tax arises in respect of the payment.

(3)In this section, in relation to an employee—

  • “homeworking arrangements” means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home; and

  • “household expenses” means expenses connected with the day to day running of the employee’s home.]

Textual Amendments

F745S. 316A inserted (with effect in accordance with s. 137(2) of the amending Act) by Finance Act 2003 (c. 14), s. 137(1)

Workplace mealsU.K.

317Subsidised mealsU.K.

[F746(1)No liability to income tax arises in respect of the provision for an employee by the employer of free or subsidised meals if they are provided—

(a)in a canteen, or

(b)on the employer’s business premises,

and conditions A to [F747D] are met.]

(2)Condition A is that the meals are provided on a reasonable scale.

(3)Condition B is that all the employer’s employees or all of them at a particular location may obtain one or both of the following—

(a)a free or subsidised meal, or

(b)a free or subsidised meal voucher or token.

(4)Condition C is that if the meals are provided in the restaurant or dining room of a hotel or a catering or similar business at a time when meals are being served to the public—

(a)part of the restaurant or dining room is designated for the use of employees only, and

(b)the meals are taken in that part.

[F748(4A)Condition D is that the provision is not pursuant to—

(a)relevant salary sacrifice arrangements, or

(b)relevant flexible remuneration arrangements.]

(5)In this section “free or subsidised meal voucher or token” means a voucher, ticket, pass or other document or token which—

(a)is intended to enable a person to obtain a meal, and

(b)is provided to the employee free of charge or for less than the cost of the meals to be obtained by it.

[F749(5A)In this section—

  • “relevant salary sacrifice arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of free or subsidised meals;

  • “relevant flexible remuneration arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee and employer agree that the employee is to be provided with free or subsidised meals rather than receive some other description of employment income.]

(6)In this section “meals” includes light refreshments.

Textual Amendments

F746S. 317(1) substituted (with effect in accordance with Sch. 17 para. 1(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 17 para. 1(1)

F747Word in s. 317(1) substituted (with effect for the tax year 2011-12 and subsequent tax years in accordance with s. 60(5) of the amending Act) by Finance Act 2010 (c. 13), s. 60(2)

F748S. 317(4A) inserted (with effect for the tax year 2011-12 and subsequent tax years in accordance with s. 60(5) of the amending Act) by Finance Act 2010 (c. 13), s. 60(3)

F749S. 317(5A) inserted (with effect for the tax year 2011-12 and subsequent tax years in accordance with s. 60(5) of the amending Act) by Finance Act 2010 (c. 13), s. 60(4)

ChildcareU.K.

[F750318Childcare: exemption for employer-provided careU.K.

(1)[F751No liability to income tax arises] in respect of the provision for an employee of care for a child if conditions A to D are met.

For the meaning of “care” and “child”, see section 318B.

(2)If those conditions are met only as respects part of the provision, no such liability arises in respect of that part.

(3)Condition A is that the child—

(a)is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense,

(b)is resident with the employee, or

(c)is a person in respect of whom the employee has parental responsibility.

For the meaning of “parental responsibility”, see section 318B.

(4)Condition B is that—

(a)the premises on which the care is provided are not used wholly or mainly as a private dwelling, and

(b)any applicable registration requirement is met.

(5)The registration requirements are—

[F752(za)in England, that under F753... Part 3 of the Childcare Act 2006;]

(a)in F754... Wales, that under [F755Part 2 of the Children and Families (Wales) Measure 2010];

(b)in Scotland, that under [F756Part 5 of the Public Services Reform (Scotland) Act 2010] ;

(c)in Northern Ireland, that under Part XI of the Children (Northern Ireland) Order 1995.

(6)Condition C is that—

(a)the premises on which the care is provided are made available by the scheme employer alone, or

(b)the partnership requirements are met.

In this section “scheme employer” means the employer operating the scheme under which the care is provided (who need not be the employer of the employee).

(7)The partnership requirements are—

(a)that the care is provided under arrangements made by persons who include the scheme employer,

(b)that the premises on which it is provided are made available by one or more of those persons, and

(c)that under the arrangements the scheme employer is wholly or partly responsible for financing and managing the provision of the care.

(8)Condition D is that the care is provided under a scheme that is open—

(a)to the scheme employer’s employees generally, or

(b)generally to those of the scheme employer’s employees at a particular location,

and that the employee to whom it is provided is either an employee of the scheme employer or is an employee working at the same location as employees of the scheme employer to whom the scheme is open.]

Textual Amendments

F750Ss. 318-318D substituted for s. 318 (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 1

F751Words in s. 318(1) substituted (with effect in accordance with s. 16(7) of the amending Act) by Finance Act 2005 (c. 7), s. 16(5)

F753Words in s. 318(5)(za) omitted (18.7.2009) by virtue of The Income Tax (Qualifying Child Care) Regulations 2009 (S.I. 2009/1544), regs. 1(2), 2

F754Words in s. 318(5)(a) omitted (1.9.2008) by virtue of The Income Tax (Qualifying Child Care) Regulations 2008 (S.I. 2008/2170), regs. 1, 2(b)

[F750318AChildcare: limited exemption for other careU.K.

(1)If conditions A to [F757D] are met in relation to the provision for an [F758eligible] employee of care for a [F759child—

(a)no liability to income tax arises by virtue of section 62 (general definition of earnings), and

(b)liability to income tax by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) arises only in respect of so much of the [F760amount treated as earnings in respect of the benefit by virtue of section 203(1) or 203A(1) (as the case may be)] as exceeds the exempt amount.]

For [F761the meaning of “eligible employee”, see section 318AZA, and for] the meaning of “care” and “child”, see section 318B.

(2)If those conditions are met only as respects part of the provision, subsection (1) applies in respect of that part.

(3)Condition A is that the child—

(a)is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense, or

(b)is resident with the employee and is a person in respect of whom the employee has parental responsibility.

For the meaning of “parental responsibility”, see section 318B.

(4)Condition B is that the care is qualifying child care.

For the meaning of “qualifying child care”, see section 318C.

(5)Condition C is that the care is provided under a scheme that is open—

(a)to the employer’s [F762eligible] employees generally, or

(b)generally to those at a particular location.

[F763(5A)Where the scheme under which the care is provided involves—

(a)relevant salary sacrifice arrangements, or

(b)relevant flexible remuneration arrangements,

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

(5B)In subsection (5A)—

  • “relevant salary sacrifice arrangements” means arrangements (whenever made) under which the employees for whom the care is provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the care;

  • “relevant flexible remuneration arrangements” means arrangements (whenever made) under which the employees for whom the care is provided agree with the employer that they are to be provided with the care rather than receive some other description of employment income;

  • “relevant low-paid employees” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.]

[F764(5C)Condition D is that the employer has, at the required time, made an estimate of the employee's relevant earnings amount for the tax year in respect of which the care is provided (see section 318AA).]

(6)For the purposes of this section the “exempt amount”, in any tax year, is [F765the appropriate amount] for each qualifying week in that year.

[F766(6A)In subsection (6) “the appropriate amount”, in the case of an employee, means—

(a)if the relevant earnings amount in the case of the employee for the tax year, as estimated in accordance with subsection (5C), exceeds the higher rate limit for the tax year, [F767£25] ,

(b)if the relevant earnings amount in the case of the employee for the tax year, as so estimated, exceeds the basic rate limit for the tax year but does not exceed the higher rate limit for the tax year, £28, and

(c)otherwise, £55.]

(7)A “qualifying week” means a tax week in which care is provided for a child in circumstances in which conditions A to C are met.

A “tax week” means one of the successive periods in a tax year beginning with the first day of that year and every seventh day after that (so that the last day of a tax year or, in the case of a tax year ending in a leap year, the last two days is treated as a separate week).

(8)An employee is only entitled to one exempt amount even if care is provided for more than one child.

But it does not matter that another person may also be entitled to an exempt amount in respect of the same child.

(9)An employee is not entitled to an exempt amount under this section and under section 270A (limited exemption for childcare vouchers) in respect of the same tax week.]

Textual Amendments

F750Ss. 318-318D substituted for s. 318 (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 1

F757Word in s. 318A(1) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 4(2)

F758Word in s. 318A(1) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 64(2)(a), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F759Words in s. 318A(1) substituted (with effect in accordance with s. 16(7) of the amending Act) by Finance Act 2005 (c. 7), s. 16(6)

F760Words in s. 318A(1)(b) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 55

F761Words in s. 318A(1) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 64(2)(b), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F762Word in s. 318A(5)(a) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 64(3), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F763S. 318A(5A)(5B) inserted (with effect in accordance with s. 36(3) of the amending Act) by Finance Act 2011 (c. 11), s. 36(2)

F764S. 318A(5C) inserted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 4(3)

F765Words in s. 318A(6) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 4(4)

F766S. 318A(6A) inserted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 4(5)

F767Word in s. 318A(6A)(a) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax (Exempt Amount for Childcare Vouchers and for Employer Contracted Childcare) Order 2013 (S.I. 2013/513), arts. 1(2), 2(3)

[F768318AZAMeaning of “eligible employee”U.K.

(1)An employee is an eligible employee for the purposes of section 318A if conditions A to C are met in relation to the employee.

(2)Condition A is that the employee—

(a)was employed by the employer immediately before the relevant day, and

(b)has not ceased to be employed by the employer on or after that day.

(3)“The relevant day” means the day specified by the Treasury in regulations for the purposes of this section.

(4)Condition B is that there has not been a period of 52 tax weeks ending on or after the relevant day which has not included at least one qualifying week.

(5)In subsection (4)—

  • “qualifying week” means a tax week in which care for a child has been provided for the employee under the scheme by the employer in circumstances in which conditions A to D in section 318A are met, and

  • “tax week” has the meaning given by section 318A(7).

(6)Condition C is that the employee has not given the employer a childcare account notice.

(7)A “childcare account notice” is a written notice informing the employer that the employee wishes to leave the scheme in order to be able to open a childcare account under section 17 of the Childcare Payments Act 2014 or enable the employee's partner to do so.

(8)In subsection (7) “partner” is to be read in accordance with regulations made under section 3(5) of that Act.

(9)For the meaning of “care” and “child”, see section 318B.]

Textual Amendments

[F769318AAMeaning of “relevant earnings amount” and “required time”U.K.

(1)For the purposes of section 318A, “relevant earnings amount”, in the case of an employee provided with care by an employer for any qualifying week in a tax year, means—

(a)the aggregate of—

(i)the amount of any relevant earnings for the tax year from employment by the employer, and

(ii)any amounts treated under Chapters 2 to 12 of Part 3 as earnings from such employment, less

(b)the aggregate of any excluded amounts.

(2)But if the employee becomes employed by the employer during the tax year, what would otherwise be the amount of the aggregate mentioned in subsection (1)(a) is the relevant multiple of that amount; and the relevant multiple is—

where RD is the number of days in the period beginning with the day on which the employee becomes employed by the employer and ending with the tax year.

(3)In subsection (1)—

  • “relevant earnings” has the same meaning as in subsection (1)(a) of section 270B (see subsection (3) of that section), and

  • “excluded amounts” has the same meaning as in subsection (1)(b) of section 270B (see subsection (4) of that section).

(4)In section 318A “the required time”, in the case of an employee, means—

(a)if the employee joins the scheme under which the care is provided at a time during the tax year, that time, and

(b)otherwise, the beginning of the tax year.

(5)For the purposes of subsection (5)(a) the employee is taken to join the scheme as soon as—

(a)the employer has agreed that care will be provided under the scheme for the employee, and

(b)there is a child falling within section 318A(3)(a) or (b) in relation to the employee.

(6)The Treasury may by order amend this section.]

Textual Amendments

F769S. 318AA inserted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 5

[F750318BChildcare: meaning of “care”, “child” and “parental responsibility”U.K.

(1)For the purposes of sections [F770318 to 318AZA] (exemptions for employer-provided or employer-contracted childcare) “care” means any form of care or supervised activity that is not provided in the course of the child’s compulsory education.

(2)For the purposes of those sections a person is a “child” until the last day of the week in which falls the 1st September following the child’s fifteenth birthday (or sixteenth birthday if the child is disabled).

(3)For the purposes of subsection (2) a child is disabled if—

(a)a disability living allowance [F771or personal independence payment] is payable in respect of him, or has ceased to be payable solely because he is a patient,

[F772(aa)disability assistance is given in respect of the child in accordance with regulations made under section 31 of the Social Security (Scotland) Act 2018,]

[F773(b)he is certified as severely sight impaired or blind by a consultant ophthalmologist, or]

(c)he ceased to be [F774certified as severely sight impaired or blind by a consultant ophthalmologist] within the previous 28 weeks.

(4)In subsection (3)(a) “patient” means a person (other than a person who is serving a sentence imposed by a court in a prison or youth custody institution or, in Scotland, a young offenders' institution) who is regarded as receiving free in-patient treatment within the meaning of the Social Security (Hospital In-Patients) Regulations 1975 or the Social Security (Hospital In-Patients) Regulations (Northern Ireland) 1975.

(5)For the purposes of sections 318 and 318A “parental responsibility” means all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and the child’s property.

(6)In this section and section 318C “local authority” means—

(a)in relation to England, the council of a county or district, a metropolitan district, a London Borough, the Common Council of the City of London or the Council of the Isles of Scilly;

(b)in relation to Wales, the council of a county or county borough;

(c)in relation to Scotland, a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994.]

Textual Amendments

F750Ss. 318-318D substituted for s. 318 (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 1

F770Words in s. 318B(1) substituted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 64(5), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F771Words in s. 318B(3)(a) inserted (with effect in accordance with s. 12(2) of the amending Act) by Finance Act 2013 (c. 29), s. 12(1)

[F750318CChildcare: meaning of “qualifying child care”U.K.

(1)For the purposes of section 318A “qualifying child care” means registered or approved care within any of subsections (2) to (6) below that is not excluded by subsection (7) below.

(2)Care provided for a child in England is registered or approved care if it is provided—

F775(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F776(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F777(ba)by a person registered under Part 3 of the Childcare Act 2006,]

[F778(c)by or under the direction of the proprietor of a school on the school premises (subject to subsection (2B)),] [F779or]

F780(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F781(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F782...

F783(ea). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F784(eb). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F785(f)by a carer supplied by a person registered under Chapter 2 of Part 1 of the Health and Social Care Act 2008 in respect of the activity within paragraph 1 of Schedule 1 (regulated activities: personal care) to the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014.]

F786(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F787(2A)In subsection (2)(c)—

  • “proprietor”, in relation to a school, means—

    (a)

    the governing body incorporated under section 19 of the Education Act 2002, or

    (b)

    if there is no such body, the person or body of persons responsible for the management of the school;

  • “school” means a school that Her Majesty’s Chief Inspector of Education, Children’s Services and Skills (the “Chief Inspector”) is or may be required to inspect;

  • “school premises” means premises that may be inspected as part of an inspection of the school by the Chief Inspector.

(2B)Care provided for a child in England is not registered or approved care under subsection (2)(c) if—

(a)it is provided during school hours for a child who has reached compulsory school age, or

(b)it is provided in breach of a requirement to register under Part 3 of the Childcare Act 2006.]

(3)Care provided for a child in Wales is registered or approved care if it is provided—

(a)by a person registered under [F788Part 2 of the Children and Families (Wales) Measure 2010],

[F789(b)by a person in circumstances where, but for article 11, 12 or 14 of the Child Minding and Day Care Exceptions (Wales) Order 2010, the care would be day care for the purposes of Part 2 of the Children and Families (Wales) Measure 2010,]

(c)in the case of care provided for a child out of school hours F790..., by a school on school premises or by a local authority, F791...

(d)by a child care provider approved by an organisation accredited under the Tax Credit (New Category of Child Care Provider) Regulations 1999 F791[F792...

[F793(e)by a person who is employed or engaged under a contract for services to provide care and support by the provider of a domiciliary support service within the meaning of Part 1 of the Regulation and Inspection of Social Care (Wales) Act 2016]]F794...

[F795(f)by a child care provider approved under the Tax Credits (Approval of Child Care Providers) (Wales) Scheme 2007 [F796or the Approval of Home Childcare Providers (Wales) Scheme 2021]]F797

[F798(g)by a foster parent in relation to a child (other than one whom the foster parent is fostering) in circumstances where, but for the fact that the child is too old, the care would be—

(i)child minding, or day care, for the purposes of Part 2 of the Children and Families (Wales) Measure 2010, or

(ii)qualifying child care for the purposes of the Tax Credits (Approval of Child Care Providers) (Wales) Scheme 2007 [F799or the Approval of Home Childcare Providers (Wales) Scheme 2021]F797.]

(4)Care provided for a child in Scotland is registered or approved care if it is provided—

(a)by a person in circumstances where the care service provided by him—

(i)consists of child minding or of day care of children [F800as defined by paragraphs 12 and 13 respectively of schedule 12 to the Public Services Reform (Scotland) Act 2010] , and

(ii)is registered under [F801Chapter 3 of Part 5] of that Act F802... [F803or]

(b)by a local authority in circumstances where the care service provided by the local authority—

(i)consists of child minding or of day care of children [F804as defined by paragraphs 12 and 13 respectively of schedule 12 to the Public Services Reform (Scotland) Act 2010], and

(ii)is registered under [F805Chapter 4 of Part 5] of that Act, F806...

F806(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Care provided for a child in Northern Ireland is registered or approved care if it is provided—

(a)by a person registered under Part XI of the Children (Northern Ireland) Order 1995, or

(b)by an institution or establishment that does not need to be registered under that Part to provide the care because of an exemption under Article 121 of that Order, F807...

(c)in the case of care provided for a child out of school hours F808..., by a school on school premises or by an education and library board or an HSS trust.

F809(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F810(e)by a home child care provider approved in accordance with the Tax Credits (Approval of Home Child Care Providers) Scheme (Northern Ireland) 2006][F811, or

(f)by a foster parent in relation to a child (other than one whom the foster parent is fostering) in circumstances where, but for the fact that the child is too old, the care would be—

(i)child minding, or day care, for the purposes of Part XI of the Children (Northern Ireland) Order 1995, or

(ii)qualifying child care for the purposes of the Tax Credits (Approval of Home Child Care Providers) Scheme (Northern Ireland) 2006.]

(6)Care provided for a child outside the United Kingdom is registered or approved child care if it is provided by a child care provider [F812within regulation 14(2)(d)(i) of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002.]

(7)Child care is excluded from section 318A—

(a)if it is provided by the partner of the employee in question, F813...

(b)if it is provided by a relative of the child wholly or mainly in the child’s home or (if different) the home of a person having parental responsibility for the child[F814, F815...

(c)in the case of care falling within subsection F816... [F817(3)(f)], if—

(i)it is provided wholly or mainly in the home of a relative of the child, and

(ii)the provider usually provides care there solely in respect of one or more children to whom the provider is a relative][F818, or

(d)if it is provided by a foster parent[F819, F820... in respect of a child whom that person is fostering F820... ]].

(8)In subsection (7)—

  • “partner” means one of a [F821couple (within the meaning given by section 137(1) of SSCBA 1992 or section 133(1) of SSCB(NI)A 1992)]; and

  • “relative” means parent, grandparent, aunt, uncle, brother or sister, whether by blood, half blood or marriage [F822or civil partnership].

[F823(9)In subsection (7)(c), “relative in relation to a child, also includes—

(a)a local authority foster parent in relation to the child,

(b)a foster parent with whom the child has been placed by a voluntary organisation,

(c)a person who fosters the child privately (within the meaning of section 66 of the Children Act 1989, or

(d)a step-parent of the child.].

[F824(10)In this section “foster parent” in relation to a child—

(a)in relation to England, means a person with whom the child is placed under the Fostering Services Regulations 2002;

(b)in relation to Wales, means a person with whom the child is placed under the Fostering Services (Wales) Regulations 2003; and

(c)in relation to Northern Ireland, means a person with whom the child is placed under the Foster Placement (Children) Regulations (Northern Ireland) 1996.

F825(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]]

Textual Amendments

F750Ss. 318-318D substituted for s. 318 (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 1

F781S. 318C(2)(e) omitted (with effect in accordance with reg. 1(2) of the amending S.I.) by virtue of The Section 318C Income Tax (Earnings and Pensions) Act 2003 (Amendment) Regulations 2005 (S.I. 2005/770), regs. 1(1), 3(a)

F784S. 318C(2)(eb) and preceding word omitted (1.9.2008) by virtue of The Income Tax (Qualifying Child Care) Regulations 2008 (S.I. 2008/2170), regs. 1, 3(2)(d)

F791Word in s. 318C(3)(c)(d) omitted (6.4.2007) by virtue of The Income Tax (Qualifying Child Care) Regulations 2007 (S.I. 2007/849), regs. 1, 2(3)(b)

F795S. 318C(3)(f) and preceding word inserted (6.4.2007) by The Income Tax (Qualifying Child Care) Regulations 2007 (S.I. 2007/849), regs. 1, 2(3)(c)

F797The scheme was made by the Welsh Ministers using the power granted to them by section 60 of the Government of Wales Act 2006 (c. 32). The scheme is available at: https://gov.wales/approval-home-childcare-providers-wales-scheme-2021 and a hard copy is available free of charge by request at Her Majesty’s Revenue and Customs, 100 Parliament Street, London SW1A 2BQ.

F806S. 318C(4)(c) and preceding word omitted (6.4.2011) by virtue of The Income Tax (Qualifying Child Care) Regulations 2011 (S.I. 2011/775), regs. 1, 3(3)(b)

F808Words in s. 318C(5)(c) omitted (6.4.2007) by virtue of The Income Tax (Qualifying Child Care) Regulations 2007 (S.I. 2007/849), regs. 1, 2(4)

F809S. 318C(5)(d) and following word omitted (6.4.2011) by virtue of The Income Tax (Qualifying Child Care) Regulations 2011 (S.I. 2011/775), regs. 1, 3(4)(a)

F811S. 318C(5)(f) and preceding word inserted (6.4.2011) by The Income Tax (Qualifying Child Care) Regulations 2011 (S.I. 2011/775), regs. 1, 3(4)(b)

F820Words in s. 318C(7)(d) omitted (6.4.2011) by virtue of The Income Tax (Qualifying Child Care) Regulations 2011 (S.I. 2011/775), regs. 1, 3(5)

[F750318DChildcare: power to vary [F826amounts which are the] exempt amount and qualifying conditionsU.K.

(1)The Treasury may by order amend section [F827318A(6A)] (employer-contracted care: the [F828amounts which are the exempt amount) so as to substitute different sums of money for those] for the time being specified.

(2)The Treasury may by regulations make such amendments of the provisions of sections 318 to 318C relating to the qualifying conditions for the exemptions conferred by sections 318 and 318A as appear to them appropriate having regard to the corresponding provisions of regulations under section 12 of the Tax Credits Act 2002 relating to entitlement to the child care element of working tax credit [F829or section 12 of the Welfare Reform Act 2012 [F830or Article 17 of the Welfare Reform (Northern Ireland) Order 2015] relating to amounts in respect of childcare costs that may be included in the calculation of an award of universal credit] .]

Textual Amendments

F750Ss. 318-318D substituted for s. 318 (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 1

F826Words in s. 318D heading inserted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 6

F827Word in s. 318D(1) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 6(a)

F828Words in s. 318D(1) substituted (with effect in accordance with Sch. 8 paras. 7-10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 8 para. 6(b)

Telephones and computer equipmentU.K.

[F831319Mobile telephonesU.K.

(1)No liability to income tax arises by virtue of section 62 (general definition of earnings) or Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of the provision of one mobile telephone for an employee without any transfer of property in it.

(2)In this section “mobile telephone” means telephone apparatus which—

(a)is not physically connected to a land-line, and

(b)is not used only as a wireless extension to a telephone which is physically connected to a land-line,

or any thing which may be used in such apparatus for the purpose of gaining access to, or using, a public electronic communications service.

(3)In this section the reference to the provision of a mobile telephone includes a reference to the provision, together with the mobile telephone provided, of access to, or the use of, a public electronic communications service by means of one mobile telephone number.

(4)For the purposes of subsection (2) “telephone apparatus” means wireless telegraphy apparatus designed or adapted for the primary purpose of transmitting and receiving spoken messages and used in connection with a public electronic communications service.]

Textual Amendments

F831S. 319 substituted (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 60(4) of the amending Act) by Finance Act 2006 (c. 25), s. 60(3) (with s. 60(5))

F832320Limited exemption for computer equipmentU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F832S. 320 repealed (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 61(2) of the amending Act) by Finance Act 2006 (c. 25), s. 61(1), Sch. 26 Pt. 3(7) (with s. 61(3))

[F833Eye tests and special corrective appliancesU.K.

Textual Amendments

F833S. 320A and cross-heading inserted (with effect for the year 2006-07 and subsequent years of assessment in accordance with s. 62(5) of the amending Act) by Finance Act 2006 (c. 25), s. 62(2)

320AEye tests and special corrective appliancesU.K.

(1)No liability to income tax arises in respect of the provision for an employee of—

(a)an eye and eyesight test, or

(b)special corrective appliances that an eye and eyesight test shows are necessary,

if conditions A and B are met.

(2)Condition A is that the provision of the test or appliances is required by regulations made under the Health and Safety at Work etc. Act 1974.

(3)Condition B is that tests and appliances of the kind mentioned in subsection (1) are made available generally to those employees of the employer in question for whom they are required to be provided by the regulations.]

[F834Health-screening and medical check-upsU.K.

Textual Amendments

F834S. 320B and cross-heading inserted (with effect in accordance with s. 55(5) of the amending Act) by Finance Act 2009 (c. 10), s. 55(4)

320BHealth-screening and medical check-upsU.K.

(1)No liability to income tax arises in respect of the provision for an employee, on behalf of an employer, of a health-screening assessment or a medical check-up.

(2)Subsection (1) does not apply—

(a)to more than one health-screening assessment provided in a tax year by any one employer or by any of a number of persons who are employers of the employee at the same time, or

(b)to more than one medical check-up so provided.

(3)In this section—

  • “health-screening assessment” means an assessment to identify employees who might be at particular risk of ill-health, and

  • “medical check-up” means a physical examination of the employee by a health professional for (and only for) determining the employee's state of health.]

[F835Recommended medical treatmentU.K.

Textual Amendments

F835S. 320C and cross-heading inserted (1.1.2015) by Finance Act 2014 (c. 26), s. 12(2)(4); S.I. 2014/3226, art. 2

320CRecommended medical treatmentU.K.

(1)No liability to income tax arises in respect of—

(a)the provision to an employee of recommended medical treatment, or

(b)the payment or reimbursement, to or in respect of an employee, of the cost of such treatment,

if that provision, payment or reimbursement is not pursuant to relevant salary sacrifice arrangements or relevant flexible remuneration arrangements.

(2)But subsection (1) does not apply in a tax year if, and to the extent that, the value of the exemption in that year exceeds £500.

(3)Medical treatment is “recommended” if it is provided to the employee in accordance with a recommendation which—

(a)is made to the employee as part of occupational health services provided to the employee by a service provided—

(i)under section 2 of the Employment and Training Act 1973 (arrangements for the purpose of assisting persons to retain employment etc), or

(ii)by, or in accordance with arrangements made by, the employer,

(b)is made for the purpose of assisting the employee to return to work after a period of absence due to injury or ill health, and

(c)meets any other requirements specified in regulations made by the Treasury.

(4)Regulations under subsection (3)(c) may, in particular, specify that the recommendation must be one given after the employee has been assessed as unfit for work—

(a)for at least the specified number of consecutive days, and

(b)in the specified manner by a person of a specified description.

(5)The Treasury may by order amend subsection (3)(a) so as to add, amend or remove a reference to any enactment.

(6)“The value of the exemption”, in a tax year, is an amount equal to the sum of—

(a)all earnings within section 62 (earnings), and

(b)all earnings which are treated as such under the benefits code,

in respect of which subsection (1) would prevent liability to income tax from arising in the tax year disregarding subsection (2).

(7)In this section—

  • “medical treatment” means all procedures for diagnosing or treating any physical or mental illness, infirmity or defect;

  • “relevant salary sacrifice arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of recommended medical treatment or the payment or reimbursement of the cost of such treatment;

  • “relevant flexible remuneration arrangements” means arrangements (whenever made, whether before or after the employment began) under which the employee and employer agree that the employee is to be provided with recommended medical treatment or the cost of such treatment is to be paid or reimbursed, rather than the employee receiving some other description of employment income;

  • “specified” means specified in regulations under subsection (3)(c).]

Awards and giftsU.K.

321Suggestion awardsU.K.

(1)This section applies where an employer establishes a scheme for the making of suggestions that is open on the same terms—

(a)to employees of the employer generally, or

(b)to a particular description of them.

(2)No liability to income tax arises in respect of an encouragement award or financial benefit award made under the scheme for a suggestion which meets conditions A to C if, or to the extent that, it does not exceed the permitted maximum for the award under section 322.

(3)Condition A is that the suggestion relates to the activities carried on by the employer.

(4)Condition B is that the suggestion is made by an employee who could not reasonably be expected to make it in the course of the duties of the employment, having regard to the employee’s experience.

(5)Condition C is that the suggestion is not made at a meeting held for the purpose of proposing suggestions.

(6)In this section and section 322—

  • “encouragement award” means an award, other than a financial benefit award, made for a suggestion with intrinsic merit or showing special effort, and

  • “financial benefit award” means an award for a suggestion relating to an improvement in efficiency or effectiveness which the employer has decided to adopt and reasonably expects will result in a financial benefit.

322Suggestion awards: “the permitted maximum”U.K.

(1)The permitted maximum for an encouragement award for the purposes of section 321 (suggestion awards) is £25.

(2)The permitted maximum for a financial benefit award where no such award for the suggestion has been made before is—

(a)if only one such award is made for the suggestion, the suggestion maximum, and

(b)if two or more such awards are made on the same occasion to different persons for the suggestion, the appropriate proportion of the suggestion maximum.

(3)If on a later occasion or occasions one or more further such awards are made for the same suggestion, the permitted maximum for each is—

(a)if only one such award is made for the suggestion on that occasion, the residue of the suggestion maximum, and

(b)if two or more such awards are made on the same occasion to different persons for the suggestion, the appropriate proportion of that residue.

(4)The suggestion maximum for a financial benefit award is the financial benefit share or £5000 if that is less.

(5)In subsection (4) “the financial benefit share” means the greater of—

(a)half the financial benefit reasonably expected to result from the adoption of the suggestion for the first year after its adoption, and

(b)one-tenth of the financial benefit reasonably expected to result from its adoption for the first 5 years after its adoption.

(6)In this section—

  • “the appropriate proportion” means such proportion as the award bears to the total of the financial benefit awards made on the same occasion for the suggestion,

  • “the residue of the suggestion maximum” means the suggestion maximum less the total previous exemption, and

  • “the total previous exemption” means the total of the amounts exempted from income tax under section 321 in respect of financial benefit awards for the suggestion made on previous occasions.

323Long service awardsU.K.

(1)No liability to income tax arises in respect of a long service award which meets the condition in subsection (3) if or to the extent that the chargeable amount does not exceed the permitted maximum.

(2)In subsection (1)—

  • “chargeable amount” means the amount of employment income which would be charged to tax in respect of the award apart from subsection (1),

  • “long service award” means an award made to an employee to mark not less than 20 years' service with the same employer, and

  • “permitted maximum” means [F836£50] for each year of service in respect of which the award is made.

(3)The condition is that the award must take the form of—

(a)tangible moveable property,

(b)shares in a company which is, or belongs to the same group as, the employer, or

(c)the provision of any other benefit except—

(i)a payment,

(ii)a cash voucher,

(iii)a credit-token,

(iv)securities,

(v)shares not within paragraph (b), or

(vi)an interest in or rights over securities or shares.

(4)Subsection (1) does not apply to an award (“the later award”) if another award to mark a particular period of service with the same employer has been made to the employee in the period of 10 years ending with the date on which the later award is made.

(5)For the purposes of this section, service is treated as being with the same employer if it is with two or more employers—

(a)each of whom is a successor or predecessor of the others, or

(b)one of whom is a company which belongs or has belonged to the same group as the others or a predecessor or successor of the others.

(6)In this section “group” means a body corporate and its 51% subsidiaries.

Textual Amendments

[F837323ATrivial benefits provided by employersU.K.

(1)No liability to income tax arises in respect of a benefit provided by, or on behalf of, an employer to an employee or a member of the employee's family or household if—

(a)conditions A to D are met, or

(b)in a case where subsection (2) applies, conditions A to E are met.

(2)This subsection applies where—

(a)the employer is a close company, and

(b)the employee is—

(i)a person who is a director or other office-holder of the employer, or

(ii)a member of the family or household of such a person.

(3)Condition A is that the benefit is not cash or a cash voucher within the meaning of section 75.

(4)Condition B is that the benefit cost of the benefit does not exceed £50.

(5)In this section “benefit cost”, in relation to a benefit, means—

(a)the cost of providing the benefit, or

(b)if the benefit is provided to more than one person and the nature of the benefit or the scale of its provision means it is impracticable to calculate the cost of providing it to each person to whom it is provided, the average cost per person of providing the benefit.

(6)For the purposes of subsection (5)(b), the average cost per person of providing a benefit is found by dividing the total cost of providing the benefit by the number of persons to whom the benefit is provided.

(7)Condition C is that the benefit is not provided pursuant to relevant salary sacrifice arrangements or any other contractual obligation.

(8)“Relevant salary sacrifice arrangements”, in relation to the provision of a benefit to an employee or to a member of an employee's family or household, means arrangements (whenever made, whether before or after the employment began) under which the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the benefit.

(9)Condition D is that the benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services.

(10)Condition E is that—

(a)the benefit cost of the benefit provided to the employee, or

(b)in a case where the benefit is provided to a member of the employee's family or household who is not an employee of the employer, the amount of the benefit cost allocated to the employee in accordance with section 323B(4),

does not exceed the employee's available exempt amount (see section 323B).

Textual Amendments

F837Ss. 323A-323C inserted (with effect in accordance with s. 13(5) of the amending Act) by Finance Act 2016 (c. 24), s. 13(2)

Modifications etc. (not altering text)

C32S. 323A(2) applied by S.I. 2007/3537, Sch. para. 22(2)(a) (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) (Amendment) Regulations 2016 (S.I. 2016/1036), regs. 1(1), 4)

323BSection 323A: calculation of available exempt amountU.K.

(1)The “available exempt amount”, in relation to an employee of an employer, is the amount found by deducting from the annual exempt amount the aggregate of—

(a)the benefit cost of eligible benefits provided earlier in the tax year by, or on behalf of, the employer to the employee, and

(b)any amounts allocated to the employee in accordance with subsection (4) in respect of eligible benefits provided earlier in the tax year by, or on behalf of, the employer to a member of the employee's family or household who was not at that time an employee of the employer.

(2)The annual exempt amount is £300.

(3)For the purposes of subsection (1) “eligible benefits” means benefits in respect of which conditions A to D in section 323A are met.

(4)The amount allocated to an employee of an employer in respect of a benefit provided to a person (“P”) who—

(a)is a member of the employee's family or household, and

(b)is not an employee of the employer,

is the benefit cost of that benefit divided by the number of persons who meet the condition in subsection (5) and are members of P's family or household.

(5)This condition is met if the person is—

(a)a director or other office-holder of the employer,

(b)an employee of the employer who is a member of the family or household of a person within paragraph (a), or

(c)a former employee of the employer who—

(i)was a director or other office-holder at any time when the employer was a close company, or

(ii)is a member of the family or household of such a person.

(6)In this section “benefit cost” has the same meaning as in section 323A.

Textual Amendments

F837Ss. 323A-323C inserted (with effect in accordance with s. 13(5) of the amending Act) by Finance Act 2016 (c. 24), s. 13(2)

Modifications etc. (not altering text)

C33S. 323B(4) modified by S.I. 2007/3537, Sch. para. 22(2)(b) (as inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) (Amendment) Regulations 2016 (S.I. 2016/1036), regs. 1(1), 4)

323CPower to amend sections 323A and 323BU.K.

(1)The Treasury may by regulations amend section 323A so as to alter the conditions which must be met for the exemption conferred by section 323A(1) to apply.

(2)Regulations under subsection (1) may include any amendment of section 323B that is appropriate in consequence of an amendment made under subsection (1).

(3)The Treasury must not make regulations under subsection (1) unless a draft of the regulations has been laid before and approved by a resolution of the House of Commons.]

Textual Amendments

F837Ss. 323A-323C inserted (with effect in accordance with s. 13(5) of the amending Act) by Finance Act 2016 (c. 24), s. 13(2)

324Small gifts from third partiesU.K.

(1)No liability to income tax arises in respect of a gift provided for an employee or a member of the employee’s family or household if conditions A to E are met.

(2)Condition A is that the gift is not provided by the employer or a person connected with the employer.

(3)Condition B is that neither the employer nor a person connected with the employer has directly or indirectly procured the gift.

(4)Condition C is that the gift is not made in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services.

(5)Condition D is that the gift is not cash or securities or the use of a service.

(6)Condition E is that the total cost to the donor of all the eligible gifts in respect of the employee in question during the tax year does not exceed [F838£250].

(7)For the purposes of condition E, the total cost to the donor includes any value added tax payable on the supply of the gifts to the donor, whether or not the donor is entitled to a credit or repayment in respect of that tax.

(8)In this section “eligible gifts” means all gifts which—

(a)meet conditions A to D, or

(b)are non-cash vouchers or credit-tokens and meet—

(i)conditions A to C, and

(ii)conditions A and B in section 270 (exemption for small gifts of vouchers and tokens from third parties).

(9)Subsection (1) does not apply to non-cash vouchers and credit-tokens (but see section 270 which makes provision for a corresponding exemption for them).

Textual Amendments

Overseas medical treatmentU.K.

325Overseas medical treatmentU.K.

(1)No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of—

(a)providing an employee with medical treatment outside the United Kingdom where the need for it arises while the employee is outside the United Kingdom for the purpose of performing the duties of the employment, or

(b)providing an employee with insurance against the cost of providing such treatment.

(2)For the purposes of this section—

(a)“medical treatment” includes all procedures for diagnosing or treating any physical or mental illness, infirmity or defect, and

(b)providing a person with medical treatment includes providing for the person to be an in-patient so that such treatment can be given.

[F839325AHealth and employment insurance paymentsU.K.

(1)No liability to income tax in respect of employment income arises on any payment if or to the extent that—

(a)were the payment an annual payment falling within Chapter 7 of Part 5 of ITTOIA 2005, it would be exempt from income tax under section 735 of that Act (health and employment insurance payments), and

(b)it meets conditions A and B.

(2)Condition A is that the payments are made—

(a)to a person (“the employee”) who made payments or contributions in respect of premiums under an insurance policy which another person took out wholly or partly for the employee's benefit, or

(b)to the employee's [F840spouse or civil partner] .

(3)Condition B is that the payments are attributable on a just and reasonable basis to the payments or contributions in respect of premiums.]

Textual Amendments

F840Words in s. 325A(2)(b) substituted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 145

Expenses incidental to sale etc. of assetU.K.

326Expenses incidental to transfer of a kind not normally met by transferorU.K.

(1)No liability to income tax arises by virtue of the payment or reimbursement of expenses which—

(a)are incidental to, and incurred wholly and exclusively as a result of, an employment-related asset transfer, and

(b)are of a kind not normally met by the transferor.

(2)There is an “employment-related asset transfer” if—

(a)an asset or the beneficial interest in an asset is transferred to an employee’s employer or a person nominated by the employer, and

(b)the right or opportunity to make the transfer arose by reason of the employment.

(3)In this section references to a transfer are to a sale or any other kind of disposal.

[F841Monitoring schemesU.K.

Textual Amendments

F841S. 326A and cross-heading inserted (with effect in accordance with s. 39(2) of the amending Act) by Finance Act 2011 (c. 11), s. 39(1)

326AFees relating to monitoring schemes relating to vulnerable personsU.K.

(1)No liability to income tax arises by virtue of the payment or reimbursement of a fee in respect of [F842—]

[F843(a)]an application to join the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007 (asp 14) (scheme to collate and disclose information about individuals working with vulnerable persons).

[F844(b)a fee paid by virtue of section 116A(4)(b) or (5)(b) of the Police Act 1997 (“the Police Act”) (fee for up-dating certificates);

(c)a fee paid under—

(i)section 113A(1)(b) of the Police Act (fee for criminal record certificates);

(ii)section 113B(1)(b) of the Police Act (fee for enhanced criminal record certificates);

(iii)iii)section 114(1)(b) of the Police Act (fee for criminal record certificates: Crown employment); or

(iv)iv)section 116(1)(b) of the Police Act (fee for enhanced criminal record certificates: judicial appointments and Crown employment);

where the application is made at the same time as an application under section 116A(4) or (5) of the Police Act for the certificate to be subject to up-date arrangements.

(2)The Treasury may by order amend subsection (1) so as—

(a)to add to the fees covered by that subsection a fee of a specified kind payable in connection with a scheme for England and Wales or Northern Ireland which corresponds to the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007, or

(b)to amend or remove a reference to a fee added under paragraph (a).]]

Textual Amendments

F842Word in s. 326A(1) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax (Monitoring Schemes Relating to Vulnerable Persons) Order 2013 (S.I. 2013/1133), arts. 1(2), 2(a)

F843Words in s. 326A(1) renumbered as s. 326A(1)(a) (with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax (Monitoring Schemes Relating to Vulnerable Persons) Order 2013 (S.I. 2013/1133), arts. 1(2), 2(b)

F844S. 326A(1)(b)(c) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax (Monitoring Schemes Relating to Vulnerable Persons) Order 2013 (S.I. 2013/1133), arts. 1(2), 2(c)

[F845Employee shareholder agreementsU.K.

Textual Amendments

F845S. 326B and cross-heading inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 37, 38; S.I. 2013/1755, art. 2

326BAdvice relating to proposed employee shareholder agreementsU.K.

(1)No liability to income tax arises by virtue of—

(a)the provision of relevant advice by a relevant independent adviser, or

(b)the payment or reimbursement, in accordance with section 205A(7) of the Employment Rights Act 1996, of any reasonable costs incurred in obtaining relevant advice.

(2)“Relevant advice” means—

(a)advice, other than tax advice, which is provided for the purposes of section 205A(6)(a) of that Act (advice as to terms and effect of employee shareholder agreement), and

(b)tax advice which is so provided and consists only of an explanation of the tax effects of employee shareholder agreements generally.

(3)In this section—

  • “employee shareholder agreement” means an agreement by virtue of which an employee is an employee shareholder (see section 205A(1)(a) to (d) of that Act);

  • “relevant independent adviser” has the meaning that it has for the purposes of section 203(3)(c) of that Act.]

Part 5U.K.Employment income: deductions allowed from earnings

Chapter 1U.K.Deductions allowed from earnings: general rules

IntroductionU.K.

327Deductions from earnings: generalU.K.

(1)This Part provides for deductions that are allowed from the taxable earnings from an employment in a tax year in calculating the net taxable earnings from the employment in the tax year for the purposes of Part 2 (see section 11(1)).

(2)In this Part, unless otherwise indicated by the context—

(a)references to the earnings from which deductions are allowed are references to the taxable earnings mentioned in subsection (1), and

(b)references to the tax year are references to the tax year mentioned there.

(3)The deductions for which this Part provides are those allowed under—

  • Chapter 2 (deductions for employee’s expenses),

  • Chapter 3 (deductions from benefits code earnings),

  • Chapter 4 (fixed allowances for employee’s expenses),

  • Chapter 5 (deductions for earnings representing benefits or reimbursed expenses), and

  • Chapter 6 (deductions from seafarers' earnings).

(4)Further provision about deductions from earnings is made in—

  • section 232 (giving effect to mileage allowance relief),

  • F846... and

  • section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions from earnings).

(5)Further provision about deductions from income including earnings is made in—

  • Part 12 (payroll giving), [F847and

  • sections 188 to 194 of FA 2004 (contributions to registered pension schemes).]

Textual Amendments

F846Words in s. 327(4) repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 60(2), Sch. 42 Pt. 3 (with Sch. 36)

F847Words in s. 327(5) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 60(3) (with Sch. 36)

General rulesU.K.

328The income from which deductions may be madeU.K.

(1)The general rule is that deductions under this Part are allowed—

(a)from any earnings from the employment in question, and

(b)not from earnings from any other employment.

This is subject to subsections (2) to (4).

(2)Deductions under section 351 (expenses of ministers of religion) are allowed from earnings from any employment as a minister of a religious denomination.

(3)Deductions under section 368 (fixed sum deductions from earnings payable out of public revenue) are allowed only from earnings payable out of the public revenue.

(4)Deductions limited to specified earnings (see subsection (5)) are allowed—

(a)only from earnings from the employment that are taxable earnings under certain of the charging provisions of Chapters 4 and 5 of Part 2, and

(b)not from other earnings from it.

(5)“Deductions limited to specified earnings” are deductions under—

  • sections 336 to 342 (deductions from earnings charged on receipt: see sections 335(2) and 354),

  • section 353 (deductions from earnings charged on remittance),

  • sections 370 to 374 (travel deductions from earnings charged on receipt),

  • F848...

Textual Amendments

F848Words in s. 328(5) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 32

329Deductions from earnings not to exceed earningsU.K.

(1)The amount of a deduction allowed under this Part may not exceed the earnings from which it is deductible.

[F849(1A)If the earnings from which a deduction allowed under this Part is deductible include earnings that are “excluded” within the meaning of section 15(1A)—

(a)the amount of the deduction allowed is a proportion of the amount that would be allowed under this Part if the tax year were not a split year, and

(b)that proportion is equal to the proportion that the part of the earnings that is not “excluded” bears to the total earnings.]

(2)If two or more deductions allowed under this Part are deductible from the same earnings, the amounts deductible may not in aggregate exceed those earnings [F850(or, in a case within subsection (1A), the part of those earnings that is not “excluded”)] .

(3)If deductions allowed otherwise than under this Part fall to be allowed from the same earnings as amounts deductible under this Part, the amounts deductible under this Part may not exceed the earnings [F851(or, in a case within subsection (1A), the part of the earnings that is not “excluded”)] remaining after the other deductions.

(4)Subsections (1) and (2) do not apply to a deduction under section 351 (expenses of ministers of religion), and subsection (3) applies as if such a deduction were allowed otherwise than under this Part.

(5)This section is to be disregarded for the purposes of the deductibility provisions (see section 332).

(6)See also [F852section 128 of ITA 2007] (which provides that where a loss in an employment is sustained, relief may be given against other income).

Textual Amendments

F849S. 329(1A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 64(2)

F850Words in s. 329(2) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 64(3)

F851Words in s. 329(3) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 64(4)

F852Words in s. 329(6) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 434 (with Sch. 2)

330Prevention of double deductionsU.K.

(1)A deduction from earnings under this Part is not allowed more than once in respect of the same costs or expenses.

(2)If apart from this subsection—

(a)a deduction would be allowed under Chapter 4 of this Part (fixed allowances for employee’s expenses) for a sum fixed by reference to any kind of expenses, and

(b)the employee would be entitled under another provision to a deduction for an amount paid in respect of the same kind of expenses,

only one of those deductions is allowed.

331Order for making deductionsU.K.

(1)This Part needs to be read with [F853section 25(1) to (3) of ITA 2007] (general rule that deductions are to be allowed in the order resulting in the greatest reduction of liability to income tax).

(2)In the case of deductions under this Part, the general rule in that section is subject to—

(a)section 23(3) (which requires certain deductions to be made in order to establish “chargeable overseas earnings”), and

(b)section 381 (which requires deductions under other provisions to be taken into account before deductions under Chapter 6 of this Part (seafarers)).

Textual Amendments

F853Words in s. 331(1) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 300 (with Sch. 9 paras. 1-9, 22)

332Meaning of “the deductibility provisions”U.K.

For the purposes of this Part, “the deductibility provisions” means the following provisions (which refer to amounts or expenses that would be deductible if they were incurred and paid by an employee)—

  • the definition of “business travel” in section 171(1) (definitions for Chapter 6 of Part 3),

  • section 179(6) (exception for certain advances for necessary expenses),

  • the definition of “business travel” in section 236(1) (definitions for Chapter 2 of Part 4),

  • section 240(1)(c) and (5) (exemption of incidental overnight expenses and benefits),

  • section 252(3) (exception from exemption of work-related training provision for non-deductible travel expenses),

  • section 257(3) (exception from exemption for individual learning account training provision for non-deductible travel expenses),

  • section 305(5) (offshore oil and gas workers: mainland transfers),

  • section 310(6)(b) (counselling and other outplacement services),

  • section 311(5)(b) (retraining courses),

  • section 361(b) (scope of Chapter 3 of this Part: cost of benefits deductible as if paid by employee),

  • section 362(1)(c) and (2)(b) (deductions where non-cash voucher provided),

  • section 363(1)(b) and (2)(b) (deductions where credit-token provided),

  • section 364(1)(b) and (2) (deductions where living accommodation provided),

  • section 365(1)(b) and (2) (deductions where employment-related benefit provided).

Chapter 2U.K.Deductions for employee’s expenses

Modifications etc. (not altering text)

C34Pt. 5 Ch. 2 restricted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 33 para. 1(5) (with Sch. 36)

IntroductionU.K.

333Scope of this Chapter: expenses paid by the employeeU.K.

(1)A deduction from a person’s earnings for an amount is allowed under the following provisions of this Chapter only if the amount—

(a)is paid by the person, or

(b)is paid on the person’s behalf by someone else and is included in the earnings.

(2)In the following provisions of this Chapter, in relation to a deduction from a person’s earnings, references to the person paying an amount include references to the amount being paid on the person’s behalf by someone else if or to the extent that the amount is included in the earnings.

(3)Subsection (1)(b) does not apply to the deductions under—

(a)section 351(2) and (3) (expenses of ministers of religion), and

(b)section 355 (deductions for corresponding payments by [F854qualifying new resident] employees with foreign employers),

and subsection (2) does not apply in the case of those deductions.

(4)Chapter 3 of this Part provides for deductions where—

(a)a person’s earnings include an amount treated as earnings under Chapter 4, 5 or 10 of Part 3 (taxable benefits: vouchers etc., living accommodation and residual liability to charge), and

(b)an amount in respect of the benefit in question would be deductible under this Chapter if the person had incurred and paid it.

Textual Amendments

F854Words in s. 333(3)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(5) (with Sch. 8 Pt. 3)

334Effect of reimbursement etc.U.K.

(1)For the purposes of this Chapter, a person may be regarded as paying an amount despite—

(a)its reimbursement, or

(b)any other payment from another person in respect of the amount.

(2)But where a reimbursement or such other payment is made in respect of an amount, a deduction for the amount is allowed under the following provisions of this Chapter only if or to the extent that—

(a)the reimbursement, or

(b)so much of the other payment as relates to the amount,

is included in the person’s earnings.

(3)This section does not apply to a deduction allowed under section 351 (expenses of ministers of religion).

(4)This section is to be disregarded for the purposes of the deductibility provisions.

335Application of deductions provisions: “earnings charged on receipt” and “earnings charged on remittance”U.K.

(1)The availability of certain deductions under this Chapter depends on whether the earnings are earnings charged on receipt or earnings charged on remittance.

(2)Sections 336 to 342—

(a)only apply if the earnings from which the deduction is to be made are earnings charged on receipt, and

(b)apply subject to section 354(1) if the earnings from the employment also include other earnings.

(3)Section 353 (which provides for a deduction for expenses of the kind to which sections 336 to 342 apply)—

(a)only applies if the earnings from which the deduction is to be made are earnings charged on remittance, and

(b)applies subject to section 354(2) if the earnings from the employment also include other earnings.

(4)In this Part—

  • “earnings charged on receipt” means earnings which are taxable earnings under section 15F855... or 27, and

  • “earnings charged on remittance” means earnings which are taxable earnings under section 22 or 26.

Textual Amendments

F855Words in s. 335(4) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 26

General rule for deduction of employee’s expensesU.K.

336Deductions for expenses: the general ruleU.K.

(1)The general rule is that a deduction from earnings is allowed for an amount if—

(a)the employee is obliged to incur and pay it as holder of the employment, and

(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.

(2)The following provisions of this Chapter contain additional rules allowing deductions for particular kinds of expenses and rules preventing particular kinds of deductions.

(3)No deduction is allowed under this section for an amount that is deductible under sections 337 to 342 (travel expenses).

Travel expensesU.K.

337Travel in performance of dutiesU.K.

(1)A deduction from earnings is allowed for travel expenses if—

(a)the employee is obliged to incur and pay them as holder of the employment, and

(b)the expenses are necessarily incurred on travelling in the performance of the duties of the employment.

(2)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

338Travel for necessary attendanceU.K.

(1)A deduction from earnings is allowed for travel expenses if—

(a)the employee is obliged to incur and pay them as holder of the employment, and

(b)the expenses are attributable to the employee’s necessary attendance at any place in the performance of the duties of the employment.

(2)Subsection (1) does not apply to the expenses of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting.

(3)In this section “ordinary commuting” means travel between—

(a)the employee’s home and a permanent workplace, or

(b)a place that is not a workplace and a permanent workplace.

(4)Subsection (1) does not apply to the expenses of private travel or travel between any two places that is for practical purposes substantially private travel.

(5)In subsection (4) “private travel” means travel between—

(a)the employee’s home and a place that is not a workplace, or

(b)two places neither of which is a workplace.

(6)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

339Meaning of “workplace” and “permanent workplace”U.K.

(1)In this Part “workplace”, in relation to an employment, means a place at which the employee’s attendance is necessary in the performance of the duties of the employment.

(2)In this Part “permanent workplace”, in relation to an employment, means a place which—

(a)the employee regularly attends in the performance of the duties of the employment, and

(b)is not a temporary workplace.

This is subject to subsections (4) and (8).

(3)In subsection (2) “temporary workplace”, in relation to an employment, means a place which the employee attends in the performance of the duties of the employment—

(a)for the purpose of performing a task of limited duration, or

(b)for some other temporary purpose.

This is subject to subsections (4) and (5).

(4)A place which the employee regularly attends in the performance of the duties of the employment is treated as a permanent workplace and not a temporary workplace if—

(a)it forms the base from which those duties are performed, or

(b)the tasks to be carried out in the performance of those duties are allocated there.

(5)A place is not regarded as a temporary workplace if the employee’s attendance is—

(a)in the course of a period of continuous work at that place—

(i)lasting more than 24 months, or

(ii)comprising all or almost all of the period for which the employee is likely to hold the employment, or

(b)at a time when it is reasonable to assume that it will be in the course of such a period.

(6)For the purposes of subsection (5), a period is a period of continuous work at a place if over the period the duties of the employment are performed to a significant extent at the place.

(7)An actual or contemplated modification of the place at which duties are performed is to be disregarded for the purposes of subsections (5) and (6) if it does not, or would not, have any substantial effect on the employee’s journey, or expenses of travelling, to and from the place where they are performed.

(8)An employee is treated as having a permanent workplace consisting of an area if—

(a)the duties of the employment are defined by reference to an area (whether or not they also require attendance at places outside it),

(b)in the performance of those duties the employee attends different places within the area,

(c)none of the places the employee attends in the performance of those duties is a permanent workplace, and

(d)the area would be a permanent workplace if subsections (2), (3), (5), (6) and (7) referred to the area where they refer to a place.

[F856339ATravel for necessary attendance: employment intermediariesU.K.

(1)This section applies where an individual (“the worker”)—

(a)personally provides services (which are not excluded services) to another person (“the client”), and

(b)the services are provided not under a contract directly between the client or a person connected with the client and the worker but under arrangements involving an employment intermediary.

This is subject to the following provisions of this section.

(2)Where this section applies, each engagement is for the purposes of sections 338 and 339 to be regarded as a separate employment.

(3)This section does not apply if it is shown that the manner in which the worker provides the services is not subject to (or to the right of) supervision, direction or control by any person.

(4)Subsection (3) does not apply in relation to an engagement if—

(a)Chapter 8 of Part 2 applies in relation to the engagement,

(b)the conditions in section 51, 52 or 53 are met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(5)This section does not apply in relation to an engagement if—

(a)Chapter 8 of Part 2 does not apply in relation to the engagement merely because the circumstances in section 49(1)(c) are not met,

(b)assuming those circumstances were met, the conditions in section 51, 52 or 53 would be met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(6)In determining for the purposes of subsection (4) or (5) whether the conditions in section 51, 52 or 53 are or would be met in relation to the employment intermediary—

(a)in section 51(1)—

(i)disregard “either” in the opening words, and

(ii)disregard paragraph (b) (and the preceding or), and

(b)read references to the intermediary as references to the employment intermediary.

[F857(6A)Subsection (3) does not apply in relation to an engagement if—

(a)sections 61N to 61R in Chapter 10 of Part 2 apply in relation to the engagement,

(b)one of Conditions A to C in section 61N is met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(6B)This section does not apply in relation to an engagement if—

(a)sections 61N to 61R in Chapter 10 of Part 2 do not apply in relation to the engagement because the circumstances in section 61M(1)(d) are not met,

(b)assuming those circumstances were met, one of Conditions A to C in section 61N would be met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(6C)In determining for the purposes of subsection (6A) or (6B) whether one of Conditions A to C in section 61N is or would be met in relation to the employment intermediary, read references to the intermediary as references to the employment intermediary.]

(7)Subsection (8) applies if—

(a)the client or a relevant person provides the employment intermediary (whether before or after the worker begins to provide the services) with a fraudulent document which is intended to constitute evidence that, by virtue of subsection (3), this section does not or will not apply in relation to the services,

(b)that section is taken not to apply in relation to the services, and

(c)in consequence, the employment intermediary does not under PAYE regulations deduct and account for an amount that would have been deducted and accounted for under those regulations if this section had been taken to apply in relation to the services.

(8)For the purpose of recovering the amount referred to in subsection (7)(c) (“the unpaid tax”)—

(a)the worker is to be treated as having an employment with the client or relevant person who provided the document, the duties of which consist of the services, and

(b)the client or relevant person is under PAYE regulations to account for the unpaid tax as if it arose in respect of earnings from that employment.

(9)In subsections (7) and (8) “relevant person” means a person, other than the client, the worker or a person connected with the employment intermediary, who—

(a)is resident, or has a place of business, in the United Kingdom, and

(b)is party to a contract with the employment intermediary or a person connected with the employment intermediary under or in consequence of which—

(i)the services are provided, or

(ii)the employment intermediary, or a person connected with the employment intermediary, makes payments in respect of the services.

(10)In determining whether this section applies, no regard is to be had to any arrangements the main purpose, or one of the main purposes, of which is to secure that this section does not to any extent apply.

(11)In this section—

  • “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not enforceable, and any associated operations;

  • “employment intermediary” means a person, other than the worker or the client, who carries on a business (whether or not with a view to profit and whether or not in conjunction with any other business) of supplying labour;

  • “engagement” means any such provision of service as is mentioned in subsection (1)(a);

  • “excluded services” means services provided wholly in the client's home;

  • “managed service company” means a company which—

    (a)

    is a managed service company within the meaning given by section 61B, or

    (b)

    would be such a company disregarding subsection (1)(c) of that section.]

Textual Amendments

F856S. 339A inserted (with effect in accordance with s. 14(6) of the amending Act) by Finance Act 2016 (c. 24), s. 14(1)

F857Ss. 339A(6A)-(6C) inserted (with effect in accordance with Sch. 1 para. 15 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 12

340Travel between group employmentsU.K.

(1)A deduction from earnings from an employment is allowed for travel expenses if conditions A to D are met.

(2)Condition A is that the employee is obliged to incur and pay the expenses.

(3)Condition B is that the travel is for the purpose of performing duties of the employment at the destination.

(4)Condition C is that the employee has performed duties of another employment at the place of departure.

(5)Condition D is that the employments are with companies in the same group.

(6)In this section “group” means a company and its 51% subsidiaries.

(7)For the purposes of sections 353 and 354 (special rules for earnings with a foreign element), the expenses are treated as incurred in the performance of the duties to be performed at the destination.

(8)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

[F858340ATravel between linked employmentsU.K.

(1)A deduction from earnings from an employment is allowed for travel expenses if conditions A to E are met.

(2)Condition A is that the employee is obliged to incur and pay the expenses.

(3)Condition B is that the travel—

(a)takes place within the United Kingdom, and

(b)is for the purpose of performing duties of the employment at the destination.

(4)Condition C is that the employee has performed duties of another employment at the place of departure.

(5)Condition D is that—

(a)at least one of the employments is as a director of a company (“company X”), and

(b)the other employment is also with a company (“company Y”) but not necessarily as a director of it.

(6)Condition E is that the employee was appointed as a director of company X because company Y, or a company in the same group as company Y, has a shareholding or other financial interest in company X.

(7)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

(8)In this section—

  • “director” has the same meaning as in the benefits code (see section 67), and

  • “group” means a company and its 51% subsidiaries.]

Textual Amendments

F858S. 340A inserted (with effect in accordance with art. 4 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2014 (S.I. 2014/211), arts. 1, 2(2)

341Travel at start or finish of overseas employmentU.K.

(1)A deduction from earnings from an employment is allowed for starting travel expenses and finishing travel expenses if conditions A to C are met.

(2)Condition A is that the duties of the employment are performed wholly outside the United Kingdom.

(3)Condition B is that the employee is [F859UK resident].

(4)Condition C is that in a case where the employer is a foreign employer, the employee is [F860not a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).]

(5)If the travel is only partly attributable to the taking up or termination of the employment, this section applies only to the part of the expenses properly so attributable.

(6)Subsection (7) applies if in the tax year the employment is in substance one whose duties fall to be performed outside the United Kingdom.

(7)Duties of the employment performed in the United Kingdom, whose performance is merely incidental to the performance of duties outside the United Kingdom, are to be treated for the purposes of subsection (2) as performed outside the United Kingdom.

(8)In this section—

  • “starting travel expenses” means expenses incurred by the employee in travelling from a place in the United Kingdom to take up the employment,

  • “finishing travel expenses” means expenses incurred by the employee in travelling to a place in the United Kingdom on the termination of the employment, and

  • “employee” includes a person who is to be, or has ceased to be, an employee.

(9)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

Textual Amendments

F859Words in s. 341(3) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 33

F860Words in s. 341(4) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(6) (with Sch. 8 Pt. 3)

342Travel between employments where duties performed abroadU.K.

(1)A deduction from earnings from an employment is allowed for travel expenses incurred by the employee if conditions A to F are met.

(2)Condition A is that the travel is for the purpose of performing duties of the employment at the destination.

(3)Condition B is that the employee has performed duties of another employment at the place of departure.

(4)Condition C is that the place of departure or the destination or both are outside the United Kingdom.

(5)Condition D is that the duties of one or both of the employments are performed wholly or partly outside the United Kingdom.

(6)Condition E is that the employee is [F861UK resident].

(7)Condition F is that in a case where the employer is a foreign employer, the employee is [F862not a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).]

(8)If the travel is only partly attributable to the purpose of performing duties of the employment at the destination, this section applies only to the part of the expenses properly so attributable.

(9)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

Textual Amendments

F861Words in s. 342(6) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 34

F862Words in s. 342(7) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(7) (with Sch. 8 Pt. 3)

Fees and subscriptionsU.K.

343Deduction for professional membership feesU.K.

(1)A deduction from earnings from an employment is allowed for an amount paid in respect of a professional fee if—

(a)the duties of the employment involve the practice of the profession to which the fee relates, and

(b)the registration, certification, licensing or other matter in respect of which the fee is payable is a condition, or one of alternative conditions, which must be met if that profession is to be practised in the performance of those duties.

(2)In this section “professional fee” means a fee mentioned in the following Table.

Table

Health professionals

1.Fee payable for entry or retention of a name in any of the following—

F863(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)the register maintained by the Registrar of Chiropractors,

[F864(c) the dental care professionals register,]

(d)the dentists register,

(e)the register of dispensing opticians,

(f)the register maintained by [F865the Health and Care Professions Council] ,

F866(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h)the register of medical practitioners,

(i)the register maintained by the Nursing and Midwifery Council,

(j)either of the registers of opthalmic opticians,

(k)the register maintained by the Registrar of Osteopaths,

[F867(l) the register maintained under article 19 of the Pharmacy Order 2010 so far as relating to pharmacists or pharmacy technicians,]

[F868(n)the register of pharmaceutical chemists kept under Articles 6 and 9 of the Pharmacy (Northern Ireland) Order 1976.]

F869[F870(o). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(p)the register maintained by the Care Council for Wales,

(q)the register maintained by the Scottish Social Services Council,

(r)the register maintained by the Northern Ireland Social Care Council,]

[F871(s)the register of social workers in England kept under section 39(1) of the Children and Social Work Act 2017,]

[F872(t)the register kept under the Anaesthesia Associates and Physician Associates Order 2024.]

[F873 1A. Trainee registration fee payable by a specialty registrar to a body which recommends specialty registrars to the registrar of the General Medical Council for the award of a certificate of completion of training under section 34L of the Medical Act 1983.]

[F874 1B. Trainee registration fee payable by a person listed in the dentists register to a body which provides evidence to the General Dental Council relating to a person’s suitability to be awarded a Certificate of Completion of Specialist Training in a specialist branch of dentistry pursuant to regulations made under section 26(3) and (4) of the Dentists Act 1984]

F863 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.Fee payable for entry or retention of a name in any of the following—

(a)the register maintained by the registrar appointed by the Farriers Registration Council,

(b)the supplementary veterinary register,

(c)the register of veterinary surgeons.

[F875(ca) any list or register of veterinary nurses maintained by the Royal College of Veterinary Surgeons,]

[F876(d)the register maintained by the Animal Medicines Training Regulatory Authority pursuant to paragraph 13 of Schedule 3 to the Veterinary Medicines Regulations 2006.]

Legal professionals

4.Fee payable to the Council for Licensed Conveyancers on the issue of a licence to practise as a licensed conveyancer.

5.Fee and contribution to the compensation fund or Guarantee Fund payable on the issue of a solicitor’s practising certificate.

[F877 5A. Fee payable to the Costs Lawyer Standards Board on applying for a costs lawyer practising certificate.]

Architects

6.Fee payable for entry or retention of a name in the Register of Architects.

Teachers [F878etc]

7.Fee payable for entry or retention of a name in any of the following—

F879(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)the register maintained by the General Teaching Council for Scotland,

(c)the register maintained by the [F880Education Workforce Council].

[F881(d)the register maintained by the General Teaching Council for Northern Ireland.]

[F882Patent attorneys] and [F883trade mark attorneys]

8.Registration fee payable by—

(a)a registered [F882patent attorney],

(b)a registered [F883trade mark attorney].

9.Practising fee payable by—

(a)a registered [F882patent attorney],

(b)a registered [F883trade mark attorney].

Occupations in the transport sector

10.Fee payable by a driving instructor for entry or retention of a name in the register of approved instructors or on the issue or renewal of a licence authorising its holder to give paid instruction in the driving of a motor car.

11.Fee (including any related medical or technical examination fee) payable, on the issue or renewal of a licence by the Civil Aviation Authority, by—

(a)an aircraft maintenance engineer,

(b)an air traffic controller or student air traffic controller,

(c)a member of the flight crew of an aircraft registered in the United Kingdom,

(d)a flight information service officer.

12.Fee (including any related medical examination fee) payable—

(a)on the issue or renewal of a licence authorising its holder to drive a large goods vehicle or a passenger-carrying vehicle,

(b)by an officer or other seaman on the issue, renewal or endorsement of a certificate, licence or other document which is required as evidence of his qualification or competence to serve in a ship.

13.Fee payable by a seafarer employed in a sea-going United Kingdom ship on the issue or renewal of a medical fitness certificate.

[F884 14.Fee payable by a person employed or to be employed at a United Kingdom airport for a criminal records check required for the issue of a security pass authorising him to enter areas within the airport.]

[F885Occupations in the private security industry

15.Fee payable on applying for a licence from the Security Industry Authority under the Private Security Industry Act 2001.]

[F886Occupations in the gambling industry

16.Fee payable—

(a)on applying for a personal licence from the Gambling Commission under the Gambling Act 2005, or

(b)on applying to vary such a licence.

17.Any fee payable to the Gambling Commission under section 132 of that Act.]

(3)The Board of Inland Revenue may make an order adding such fee as is specified in the order to the Table of fees mentioned in subsection (2).

(4)The [F887Commissioners] may make an order if they consider that such fee is payable in respect of any registration, certification, licensing or other matter if it is required as a condition, or one of alternative conditions, of the practice of a profession.

Textual Amendments

F864Words in s. 343(2) substituted (31.7.2006 - see the London Gazette, issue no. 58050 dated 21.7.2006) by The Dentists Act 1984 (Amendment) Order 2005 (S.I. 2005/2011), art. 1(4)-(7), Sch. 6 para. 5 (with Sch. 7) (with transitional provisions in S.I. 2006/1671)

F865Words in section 343(2) Table substituted (1.8.2012) by Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 15 para. 56(d); S.I. 2012/1319, art. 2(4)

F868Words in s. 343(2) Table substituted (coming into force in accordance with art. 1(2)(3) of the amending S.I.) by The Pharmacists and Pharmacy Technicians Order 2007 (S.I. 2007/289), art. 1(2)(3), Sch. 1 para. 9 (which substitution is, as respects para. (n), continued (11.2.2010) by The Pharmacy Order 2010 (S.I. 2010/231), art. 1(2)(c), Sch. 6 para. 2)

F874Words in s. 343(2) Table inserted (6.4.2014) by The Income Tax (Professional Fees) Order 2014 (S.I. 2014/859), arts. 1, 2(a)

F875Words in s. 343(2) Table inserted (6.4.2014) by The Income Tax (Professional Fees) Order 2014 (S.I. 2014/859), arts. 1, 2(b)

F878Word in s. 343(2) Table inserted (1.4.2015) by The Income Tax (Professional Fees) Order 2015 (S.I. 2015/886), arts. 1, 2(b)

F879Words in s. 343(2) omitted (1.4.2012) by virtue of Education Act 2011 (c. 21), s. 82(3), Sch. 2 para. 26; S.I. 2012/924, art. 2

F880Words in s. 343(2) Table substituted (1.4.2015) by The Income Tax (Professional Fees) Order 2015 (S.I. 2015/886), arts. 1, 2(a)

F886Words in s. 343(2) Table inserted (1.12.2012) by The Income Tax (Professional Fees) Order 2012 (S.I. 2012/3004), arts. 1, 2

Modifications etc. (not altering text)

344Deduction for annual subscriptionsU.K.

(1)A deduction from earnings from an employment is allowed for an amount paid in respect of an annual subscription if—

(a)it is paid to a body of persons approved under this section, and

(b)the activities of the body which are directed to one or more of the objects within subsection (2) are of direct benefit to, or concern the profession practised in, the performance of the duties of the employment.

(2)The objects are—

(a)the advancement or dissemination of knowledge (whether generally or among persons belonging to the same or similar professions or occupying the same or similar positions),

(b)the maintenance or improvement of standards of conduct and competence among the members of a profession,

(c)the provision of indemnity or protection to members of a profession against claims in respect of liabilities incurred by them in the exercise of their profession.

(3)[F165An officer of Revenue and Customs] may approve a body of persons under this section if, on an application by the body, [F888the officer] [F889is satisfied] that—

(a)the body is not of a mainly local character,

(b)its activities are carried on otherwise than for profit, and

(c)its activities are wholly or mainly directed to objects within subsection (2).

(4)[F165An officer of Revenue and Customs] must give notice to the body of their decision on the application.

(5)If the activities of the body are to a significant extent directed to objects other than objects within subsection (2), [F165an officer of Revenue and Customs] may—

(a)determine the proportion of the activities directed to objects within subsection (2), and

(b)determine that only such corresponding part of the subscription as is specified by [F165an officer of Revenue and Customs] is allowable under this section.

(6)In determining that part, [F165an officer of Revenue and Customs] must have regard to the proportion of expenditure of the body attributable to objects other than objects within subsection (2) and all other relevant circumstances.

(7)If a body applies for approval under this section and is approved, a subscription paid to it—

(a)before it has applied but in the same tax year as the application, or

(b)after it has applied but before it is approved,

is treated for the purposes of this section as having been paid to an approved body.

Textual Amendments

345Decisions of [F165an officer of Revenue and Customs] under section 344U.K.

(1)[F165An officer of Revenue and Customs] may by notice to the body in question—

(a)withdraw an approval given under section 344, and

(b)withdraw or vary a determination made under that section,

to take account of any change in circumstances.

(2)A body aggrieved by a decision of [F165an officer of Revenue and Customs] under section 344 or subsection (1) may appeal F890....

(3)The notice of appeal must be given to [F165an officer of Revenue and Customs] within 30 days after the date on which notice of their decision was given to the body.

Textual Amendments

Employee liabilities and indemnity insuranceU.K.

346Deduction for employee liabilities [F891and expenses] U.K.

(1)A deduction from earnings from an employment is allowed for any or all of the following—

A. Payment in or towards the discharge of a liability related to the employment.

B. Payment of any costs or expenses incurred in connection with—

(a)a claim that the employee is subject to a liability related to the employment, or

(b)proceedings relating to or arising out of a claim that the employee is subject to a liability related to the employment.

[F892BA. Payment of any costs or expenses not falling within paragraph B which are incurred in connection with the employee giving evidence about matters related to the employment in, or for the purposes of—

(a)a proceeding or other process (whether or not involving the employee), or

(b)an investigation (whether or not likely to lead to any proceeding or other process involving the employee).

BB. Payment of any costs or expenses not falling within paragraph B or BA which are incurred in connection with a proceeding or other process, or an investigation, in which—

(a)acts of the employee related to the employment, or

(b)any other matters related to the employment,

are being or are likely to be considered.]

C. Payment of a premium under a qualifying insurance contract, but only to the extent that the premium relates to—

(a)provision in the contract for the employee to be indemnified against a payment falling within paragraph A, or

(b)provision in the contract for the payment of any costs or expenses falling within paragraph B [F893, BA or BB] .

(2)But a deduction is not allowed for a payment which falls within paragraph A [F894B, BA or BB] if it would be unlawful for the employer to enter into a contract of insurance in respect of the liability, or costs or expenses, in question.

[F895(2A)Nor is a deduction allowed for a payment which falls within [F896any of paragraphs A to C] if the payment is made in pursuance of arrangements the main purpose, or one of the main purposes, of which is the avoidance of tax.]

(3)In this Chapter—

(a)“premium”, in relation to a qualifying insurance contract, means an amount payable to the insurer under the contract, and

(b)where a qualifying insurance contract relates to more than one person, employment or risk, the part of the premium to be treated as relating to each of them is to be determined by apportionment on a just and reasonable basis.

[F897(4)In this section and section 349—

(a)“acts” includes failures to act and acts are “related to the employment” if the employee was acting—

(i)in the employee's capacity as holder of the employment, or

(ii)in any other capacity in which the employee was acting in the performance of the duties of the employment,

(b)“giving evidence” includes making a formal or informal statement or answering questions,

(c)“proceeding or other process” includes any civil, criminal or arbitration proceedings, any disciplinary or regulatory proceedings of any kind and any process operated for resolving disputes or adjudicating on complaints, and

(d)references to a proceeding or other process or an investigation include a reference to a proceeding or other process or an investigation that is likely to take place.]

Textual Amendments

F891Words in s. 346 heading inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(2)(a)

F892Words in s. 346(1) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(2)(b)

F893Words in s. 346(1) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(2)(c)

F894Words in s. 346(2) substituted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(2)(d)

F895S. 346(2A) inserted (with effect in accordance with s. 67(4) of the amending Act) by Finance Act 2009 (c. 10), s. 67(2)

F896Words in s. 346(2A) substituted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(2)(e)

F897S. 346(4) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(2)(f)

347Payments made after leaving the employmentU.K.

(1)A deduction for a payment is not allowed under section 346 if—

(a)the employee has ceased to hold the employment, and

(b)the payment is made after the day on which the employee ceased to hold the employment.

(2)If subsection (1) applies, see section 555 (former employee entitled to deduction [F898in calculating net income]).

Textual Amendments

F898Words in s. 347(2) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 435 (with Sch. 2)

348Liabilities related to the employmentU.K.

For the purposes of this Chapter each of the following kinds of liability is related to the employment— A. Liability imposed upon the employee because he did an act, or failed to do an act—

(a)in his capacity as holder of the employment, or

(b)in any other capacity in which he acted in the performance of the duties of the employment.

B. Liability imposed upon the employee in connection with any proceedings relating to, or arising from, a claim that he is subject to a liability because he did an act, or failed to do an act—

(a)in his capacity as holder of the employment, or

(b)in any other capacity in which he acted in the performance of the duties of the employment.

349Meaning of “qualifying insurance contract”U.K.

(1)In section 346 “qualifying insurance contract” means a contract of insurance which meets conditions A, B, C and D.

(2)Condition A is that, so far as the risks insured against are concerned, the contract only relates to one or more of the following—

(a)the indemnification of an employee against a liability related to the employment,

(b)the indemnification of a person against vicarious liability in respect of a liability related to another person’s employment,

(c)the payment of costs or expenses incurred—

(i)in connection with a claim that a person is subject to a liability to which the insurance relates, or

(ii)in connection with any proceedings relating to or arising out of a claim that a person is subject to a liability to which the insurance relates,

[F899(ca)the payment of costs or expenses incurred in connection with an employee giving evidence about matters related to the employee's employment in, or for the purposes of—

(i)a proceeding or other process (whether or not involving the employee), or

(ii)an investigation (whether or not likely to lead to any proceeding or other process involving the employee),

(cb)the payment of any costs or expenses incurred in connection with a proceeding or other process, or an investigation, in which—

(i)acts of an employee related to the employment, or

(ii)any other matters related to the employment of an employee,

are being or are likely to be considered,]

(d)the indemnification of an employer against loss from a payment made by the employer to an employee in respect of—

(i)a liability related to the employment, or

(ii)any costs or expenses incurred as mentioned in paragraph (c) [F900, (ca) or (cb)].

(3)Condition B is that—

(a)the period of insurance under the contract does not exceed 2 years or, if it does, it does so only because of one or more renewals, each for a period of 2 years or less, and

(b)the insured is not required to renew the contract for any period.

(4)Condition C is—

(a)that the insured is not entitled under the contract to receive any payment or other benefit in addition to—

(i)cover for the risks insured against, and

(ii)any right to renew the contract, or

(b)if the insured is so entitled, that the part of the premium reasonably attributable to the entitlement is not a significant part of the whole premium.

(5)Condition D is that the contract is not connected with another contract.

Textual Amendments

F899S. 349(2)(ca)(cb) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(3)(a)

F900Words in s. 349(2)(d) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(3)(b)

350Connected contractsU.K.

(1)An insurance contract is connected with another contract for the purposes of section 349 if conditions E and F are met—

(a)at the time when both contracts are first in force, or

(b)at any time after that time.

(2)Condition E is that one of the contracts was entered into—

(a)by reference to the other, or

(b)with a view to enabling or facilitating entry into the other on particular terms.

(3)Condition F is that the terms on which one of the contracts was entered into are significantly different from what they would have been if—

(a)it had not been entered into in anticipation of the other being entered into, or

(b)the other had not also been entered into.

(4)If—

(a)there is only one such significant difference in terms, and

(b)the contracts meet conditions A, B and C specified in section 349,

the difference may be disregarded in the following cases.

(5)The first case is where the difference is a reduction in premiums under the contract that is reasonably attributable only to the contract—

(a)containing a right to renew, or

(b)being entered into by way of renewal.

(6)The second case is where—

(a)two or more contracts have been entered into as part of a single transaction, and

(b)the difference is reductions in their premiums that are reasonably attributable only to the premium under each of them having been fixed by reference to the appropriate proportion of the combined premium.

(7)In subsection (6) “the combined premium” means the amount that would have been the total premium under a single contract relating to all the risks covered by the contracts.

Expenses of ministers of religionU.K.

351Expenses of ministers of religionU.K.

(1)A deduction is allowed from any earnings from any employment as a minister of a religious denomination for amounts incurred by the minister wholly, exclusively and necessarily in the performance of duties of such an employment.

(2)If a minister of a religious denomination pays rent in respect of a dwelling-house, part of which is used mainly and substantially for the purposes of such duties, a deduction is allowed from the minister’s earnings from any employment as such a minister for—

(a)one quarter of the rent, or

(b)if less, the part of the rent that, on a just and reasonable apportionment, is attributable to that part of the dwelling-house.

(3)If—

(a)an interest in premises belongs to a charity or an ecclesiastical corporation, and

(b)because of that interest and by reason of holding an employment as a minister of a religious denomination, the minister has a residence in the premises from which to perform the duties of the employment,

a deduction is allowed from the minister’s earnings from any such employment for part of any expenses borne by the minister on the maintenance, repair, insurance or management of the premises.

(4)The amount of the deduction is—

where—

A is the amount of the expenses borne by the minister on the maintenance, repair, insurance or management of the premises, and

B is the amount of those expenses that are allowed under subsection (1).

F901(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Subsection (1) needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

Textual Amendments

F901S. 351(5) omitted (coming into force for the tax year 2012-13 and subsequent tax years) by virtue of Finance Act 2010 (c. 13), Sch. 6 paras. 17(6), 34(2); S.I. 2012/736, art. 13

Agency fees paid by entertainersU.K.

352Limited deduction for agency fees paid by entertainersU.K.

(1)A deduction is allowed from earnings from an employment as an entertainer for agency fees (and any value added tax on them) if the fees are calculated as a percentage of the whole or part of the earnings from the employment.

This is subject to the limit in subsection (2).

(2)Amounts may be deducted under this section in calculating the net taxable earnings from an employment in a tax year only to the extent that, in aggregate, they do not exceed 17.5% of the taxable earnings from the employment in the tax year.

(3)Subsections (4) and (5) apply for the purposes of this section.

(4)“Entertainer” means an actor, dancer, musician, singer or theatrical artist.

(5)“Agency fees”, in relation to an employment, means—

(a)fees paid under a contract between the employee and another person, to whom the fees are paid, who—

(i)agrees under the contract to act as an agent of the employee in connection with the employment, and

(ii)at the time the fees are paid is carrying on an employment agency with a view to profit, and

(b)fees paid under an arrangement under which a co-operative society or the members of such a society agree to act as the employee’s agent in connection with the employment.

(6)For the purposes of subsection (5)—

  • “co-operative society” does not include a society which carries on or intends to carry on business with the object of making profits mainly for the payment of interest, dividends or bonuses on money invested or deposited with or lent to the society or any other person, and

  • “employment agency” has the meaning given by section 13(2) of the Employment Agencies Act 1973 (c. 35).

Special rules for earnings with a foreign elementU.K.

353Deductions from earnings charged on remittanceU.K.

(1)A deduction is allowed from earnings charged on remittance for expenses within subsection (2) if the condition in subsection (3) is met.

(2)The expenses are—

(a)any expenses—

(i)paid by the employee out of the earnings, or

(ii)paid on the employee’s behalf by another person and included in the earnings, and

(b)any other expenses paid in the United Kingdom in the tax year or an earlier tax year in which the employee has been resident in the United Kingdom.

(3)The condition is that the expenses would have been deductible under sections 336 to 342 if the earnings had been earnings charged on receipt in the tax year in which the expenses were incurred.

(4)Where—

(a)any of the deductibility provisions refers to amounts or expenses that would be deductible from earnings if they were paid by a person, and

(b)the earnings in question are earnings charged on remittance,

it is assumed for the purposes of those provisions that the person pays the amounts or expenses out of those earnings.

354Disallowance of expenses relating to earnings taxed on different basis or untaxedU.K.

(1)If the earnings from an employment for a tax year include both earnings charged on receipt and other earnings (except earnings charged under section 22), no deduction is allowed under sections 336 to 342 from the earnings charged on receipt for an amount paid in respect of duties of the employment to which the other earnings relate.

(2)If the earnings from an employment for a tax year include both earnings charged on remittance under section 26 and other earnings, no deduction is allowed under section 353 from the earnings charged on remittance for an amount paid in respect of duties of the employment to which the other earnings relate.

(3)This section is to be disregarded for the purposes of the deductibility provisions.

355Deductions for corresponding payments by [F902qualifying new resident] employees with foreign employersU.K.

(1)An employee may make a claim to [F111the Commissioners for Her Majesty’s Revenue and Customs] under this section if conditions A to D are met.

(2)Condition A is that the employee is [F903a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).]

(3)Condition B is that the employment is with a foreign employer.

(4)Condition C is that the employee has made a payment out of earnings from the employment.

(5)Condition D is that the payment does not reduce the employee’s liability to United Kingdom income tax, but was made in circumstances corresponding to those in which it would do so.

(6)If the [F904Commissioners] are satisfied that conditions A to D are met, they may allow the payment as a deduction under this Chapter.

Textual Amendments

F902Words in s. 355 heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(8)(a) (with Sch. 8 Pt. 3)

F903Words in s. 355(2) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(8)(b) (with Sch. 8 Pt. 3)

Modifications etc. (not altering text)

C36S. 355 restricted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 33 para. 1(5) (with Sch. 36)

Disallowance of business entertainment and gifts expensesU.K.

356Disallowance of business entertainment and gifts expensesU.K.

(1)No deduction from earnings is allowed under this Part for expenses incurred in providing entertainment or a gift in connection with the employer’s trade, business, profession or vocation.

(2)Subsection (1) is subject to the exceptions in—

(a)section 357 (exception where employer’s expenses disallowed), and

(b)section 358 (other exceptions).

(3)For the purposes of this section and those sections—

(a)“entertainment” includes hospitality of any kind, and

(b)expenses incurred in providing entertainment or a gift include expenses incurred in providing anything incidental to the provision of entertainment or a gift.

357Business entertainment and gifts: exception where employer’s expenses disallowedU.K.

(1)The prohibition in section 356 on deducting expenses does not apply if—

(a)the earnings include an amount in respect of the expenses,

(b)the employer—

(i)paid the amount to, or on behalf of, the employee, or

(ii)put it at the employee’s disposal,

exclusively for meeting expenses incurred or to be incurred by the employee in providing the entertainment or gift, and

(c)condition A, B or C is met.

(2)Condition A is that the deduction of the amount falls to be disallowed under [F905section 45 or 867 of ITTOIA 2005 or under] [F906section 1298 of CTA 2009] in calculating the employer’s profits from the trade, profession or vocation in question for the purposes of the Tax Acts (or it would do so apart from the exemption in F907... [F908section 524 of ITA 2007] [F909or section 478 of CTA 2010] or any relief applying in respect of those profits).

[F910(3)Condition B is that the inclusion of the amount falls to be disallowed (or would be disallowed apart from some other relief applying to the employer) under [F911section 1298 of CTA 2009] in calculating—

(a)the employer’s expenses of management for the purposes of giving relief under the Tax Acts, or

[F912(b)the ordinary BLAGAB management expenses of the employer for the purposes of section 76 of FA 2012.]]

(4)Condition C is that—

(a)the employer is a tonnage tax company during the whole or part of the tax year, and

(b)apart from the tonnage tax election, the deduction of the amount included in the employee’s earnings would fall to be disallowed in calculating the employer’s relevant shipping profits.

(5)In subsection (4) “tonnage tax company”, “tonnage tax election” and “relevant shipping profits” have the same meaning as in Schedule 22 to FA 2000.

Textual Amendments

F906Words in s. 357(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 552(2) (with Sch. 2 Pts. 1, 2)

F907Words in s. 357(2) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 385(a), Sch. 3 Pt. 1 (with Sch. 2)

F908Words in s. 357(2) inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 436 (with Sch. 2)

F909Words in s. 357(2) inserted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 385(b) (with Sch. 2)

F911Words in s. 357(3) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 552(3) (with Sch. 2 Pts. 1, 2)

F912S. 357(3)(b) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 111

358Business entertainment and gifts: other exceptionsU.K.

(1)The prohibition in section 356 on deducting expenses does not apply if the expenses are incurred in providing entertainment or gifts for the employer’s employees unless—

(a)they are also provided for others, and

(b)their provision for the employees is incidental to their provision for the others.

(2)For this purpose directors and persons engaged in the management of a company are regarded as employed by it.

(3)The prohibition in section 356 on deducting expenses does not apply if the expenses are incurred in providing a gift which incorporates a conspicuous advertisement for the employer or, if the employer is a company, another company which belongs to the same group as the employer, unless—

(a)the gift is food, drink, tobacco or a token or voucher exchangeable for goods, or

(b)the cost of the gift to the donor, together with any other gifts (except food, drink, tobacco or tokens or vouchers exchangeable for goods) given to the same person in the same tax year, is more than £50.

(4)In subsection (3) “group” means a body corporate and its 51% subsidiaries.

Other rules preventing deductions of particular kindsU.K.

359Disallowance of travel expenses: mileage allowances and reliefsU.K.

(1)No deduction may be made under the travel deductions provisions in respect of travel expenses incurred in connection with the use by the employee of a vehicle that is not a company vehicle if condition A or B is met.

(2)Condition A is that mileage allowance payments are made to the employee in respect of the use of the vehicle.

(3)Condition B is that mileage allowance relief is available in respect of the use of the vehicle by the employee (see section 231).

(4)In this section—

  • “company vehicle” has the meaning given by section 236(2),

  • “mileage allowance payments” has the meaning given by section 229(2), and

  • “the travel deductions provisions” means sections 337 to 342, 370, 371, 373 and 374 (travel expenses) and section 351 (expenses of ministers of religion).

360Disallowance of certain accommodation expenses of MPs and other representativesU.K.

(1)No deduction from earnings is allowed under this Chapter or section 373 ([F913non-resident or qualifying new resident] employee’s travel costs and expenses where duties performed in UK) for accommodation expenses incurred by a member of—

(a)the House of Commons,

(b)the Scottish Parliament,

(c)the National Assembly for Wales, or

(d)the Northern Ireland Assembly.

(2)In this section “accommodation expenses” means expenses incurred in, or in connection with, the provision or use of residential or overnight accommodation to enable the member to perform duties as a member of the Parliament or Assembly in or about—

(a)the place where it sits, or

(b)the constituency or region which the member represents.

[F914(3)In relation to a member of the House of Commons, subsection (3) of section 292 applies for the purposes of this section as it applies for the purposes of that section.]

Textual Amendments

F913Words in s. 360(1) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(9) (with Sch. 8 Pt. 3)

F914S. 360(3) inserted (with effect in accordance with Sch. 4 para. 1(6) of the amending Act) by Finance (No. 2) Act 2010 (c. 31), Sch. 4 para. 1(3)

[F915360ASocial security contributionsU.K.

(1)No deduction from earnings is allowed under this Chapter for any contribution paid by any person under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992.

(2)But this prohibition does not apply to an employer's contribution (see subsection (3)) which is allowable as a deduction—

(a)under section 336 (the general rule),

(b)under any of sections 337 to 342 (travel expenses), or

(c)under section 351(1) (expenses of ministers of religion).

(3)For this purpose “an employer's contribution” means—

(a)a secondary Class 1 contribution,

(b)a Class 1A contribution, or

(c)a Class 1B contribution,

within the meaning of Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992.]

Textual Amendments

Chapter 3U.K.Deductions from benefits code earnings

IntroductionU.K.

361Scope of this Chapter: cost of benefits deductible as if paid by employeeU.K.

A deduction from a person’s earnings is allowed under the following provisions of this Chapter where—

(a)the earnings include an amount treated as earnings under—

(i)Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens),

(ii)Chapter 5 of Part 3 (taxable benefits: living accommodation), or

(iii)Chapter 10 of Part 3 (taxable benefits: residual liability to charge), and

(b)an amount in respect of the benefit in question would be deductible under Chapter 2 or 5 of this Part if the person had incurred and paid it.

Deductions where amounts treated as earnings under the benefits codeU.K.

362Deductions where non-cash voucher providedU.K.

(1)A deduction from earnings is allowed if—

(a)the earnings include an amount treated as earnings under section [F91687(1) or 87A(1) (amount in respect] of benefit of non-cash voucher treated as earnings),

(b)the voucher is exchanged for goods or services (whether in the tax year or a later year), and

(c)had the employee incurred and paid the cost of the goods or services in the tax year, the whole or part of the amount paid would have been deductible from the earnings under Chapter 2 or 5 of this Part.

(2)The deduction is equal to the lesser of—

(a)the amount treated as earnings, and

(b)the amount that would have been so deductible.

Textual Amendments

F916Words in s. 362(1)(a) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 54

363Deductions where credit-token providedU.K.

(1)A deduction from earnings is allowed if—

(a)the earnings include an amount treated as earnings under section [F91794(1) or 94A(1) (amount in respect] of benefit of credit-token treated as earnings), and

(b)had the employee incurred and paid the cost of the goods or services obtained by using the token, the whole or part of the amount paid would have been deductible from the earnings under Chapter 2 or 5 of this Part.

(2)The deduction is equal to the lesser of—

(a)the amount treated as earnings, and

(b)the amount that would have been so deductible.

Textual Amendments

F917Words in s. 363(1)(a) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 56

364Deductions where living accommodation providedU.K.

(1)A deduction from earnings is allowed if—

(a)the earnings include an amount treated as earnings under Chapter 5 of Part 3 (taxable benefits: living accommodation), and

(b)had the employee incurred and paid an amount equal to that amount for the accommodation in the tax year, the whole or part of the amount paid would have been deductible under Chapter 2 or 5 of this Part.

(2)The deduction is equal to the amount that would have been so deductible.

365Deductions where [F918certain employment-related benefits] providedU.K.

(1)A deduction from earnings is allowed if—

(a)the earnings include an amount treated as earnings under Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of a benefit, F919...

[F920(aa)the cost of the benefit was determined under section 204 or 206, and ]

(b)had the employee incurred and paid the cost of the benefit, the whole or part of the amount paid would have been deductible under Chapter 2 or 5 of this Part.

(2)The deduction is equal to the amount that would have been so deductible.

(3)For the purposes of this section, the cost of the benefit is determined in accordance with [F921section 204 or 206] .

Textual Amendments

F918Words in s. 365 heading substituted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(4)(c)

F919Word in s. 365(1)(a) omitted (with effect in accordance with s. 8(5) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 8(4)(a)(i)

F920S. 365(1)(aa) inserted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(4)(a)(ii)

F921Words in s. 365(3) substituted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(4)(b)

Chapter 4U.K.Fixed allowances for employee’s expenses

IntroductionU.K.

366Scope of this Chapter: amounts fixed by TreasuryU.K.

A deduction from an employee’s earnings for an amount is allowed under this Chapter where the amount has been fixed by the Treasury by reference to the employee’s employment.

Fixed sum deductionsU.K.

367Fixed sum deductions for repairing and maintaining work equipmentU.K.

(1)A deduction is allowed for the sum, if any, fixed by the Treasury as in their opinion representing the average annual expenses incurred by employees of the class to which the employee belongs in respect of the repair and maintenance of work equipment.

(2)The Treasury may only fix such a sum for a class of employees if they are satisfied that—

(a)the employees are generally responsible for the whole or part of the expense of repairing and maintaining the work equipment, and

(b)the expenses for which they are generally responsible would be deductible from the employees' earnings under section 336 if paid by them.

(3)No deduction is allowed under this section if the employer pays or reimburses the expenses in respect of which the sum is fixed or would do so if requested.

(4)If the employer pays or reimburses part of those expenses or would do so if requested, the amount of the deduction is reduced by the amount which is or would be paid or reimbursed.

(5)In this section “work equipment” means tools or special clothing.

(6)This section needs to be read with section 330(2) (prevention of double deductions).

368Fixed sum deductions from earnings payable out of public revenueU.K.

(1)A deduction is allowed from earnings payable out of the public revenue for the employee’s fixed sum expenses in respect of the duties to which the earnings relate.

(2)“Fixed sum expenses” means the sum, if any, fixed by the Treasury as in their opinion representing the average annual expenses which employees of the employee’s description are obliged to pay wholly, exclusively and necessarily in the performance of duties to which such earnings relate.

(3)This section needs to be read with section 330(2) (prevention of double deductions).

Chapter 5U.K.Deductions for earnings representing benefits or reimbursed expenses

IntroductionU.K.

369Scope of this Chapter: earnings representing benefits or reimbursed expensesU.K.

(1)A deduction from a person’s earnings for an amount is allowed under the following provisions of this Chapter where the amount is included in the earnings in respect of—

(a)provision made for the person, or

(b)expenses reimbursed by another person.

(2)In this Chapter references to “the included amount” are references to the amount so included.

(3)If the included amount is an amount treated as earnings under—

(a)Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens),

(b)Chapter 5 of Part 3 (taxable benefits: living accommodation), or

(c)Chapter 10 of Part 3 (taxable benefits: residual liability to charge),

a deduction may be allowed instead in respect of the benefit in question under Chapter 3 of this Part (deductions from benefits code earnings).

Travel costs and expenses where duties performed abroadU.K.

370Travel costs and expenses where duties performed abroad: employee’s travelU.K.

(1)A deduction is allowed from earnings which are [F922relevant taxable earnings] if—

(a)the earnings include an amount in respect of—

(i)the provision of travel facilities for a journey made by the employee, or

(ii)the reimbursement of expenses incurred by the employee on such a journey, and

(b)the circumstances fall within Case A, B or C.

(2)The deduction is equal to the included amount.

(3)Case A is where—

(a)the employee is absent from the United Kingdom wholly and exclusively for the purpose of performing the duties of one or more employments,

(b)the duties concerned can only be performed outside the United Kingdom, and

(c)the journey is—

(i)a journey from a place outside the United Kingdom where such duties are performed to a place in the United Kingdom, or

(ii)a return journey following such a journey.

(4)Case B is where—

(a)the duties of the employment are performed partly outside the United Kingdom,

(b)those duties are not performed on a vessel,

(c)the journey is between a place in the United Kingdom and a place outside the United Kingdom where duties of the employment are performed,

(d)the duties performed outside the United Kingdom can only be performed there, and

(e)the journey is made wholly and exclusively for the purpose of performing them or returning after performing them.

(5)Case C is where—

(a)the duties of the employment are performed partly outside the United Kingdom,

(b)those duties are performed on a vessel,

(c)the journey is between a place in the United Kingdom and a place outside the United Kingdom where duties of the employment are performed,

(d)the duties performed outside the United Kingdom can only be performed there, and

(e)the journey is made wholly and exclusively for the purpose of performing those duties, or those duties and other duties of the employment, or returning after performing them.

[F923(6)In this section “relevant taxable earnings” means general earnings for a tax year F924... that—

(a)are taxable earnings under section 15, and

[F925(b)either—

(i)if the tax year is tax year 2024-2025 or an earlier tax year, would be taxable earnings under section 15 even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year, or

(ii)if the tax year is tax year 2025-2026 or a later tax year and the employee is a qualifying new resident for the purposes of Chapter 5C of Part 2 for that tax year, are not qualifying foreign general earnings within the meaning of section 41T (qualifying foreign general earnings).]]

Textual Amendments

F922Words in s. 370(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 27(2)

F923S. 370(6) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 27(3)

F924Words in s. 370(6) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 35

F925S. 370(6)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(10) (with Sch. 8 Pt. 3)

371Travel costs and expenses where duties performed abroad: visiting spouse’s [F926, civil partner's] or child’s travelU.K.

(1)A deduction is allowed from earnings which are [F927relevant taxable earnings] if—

(a)the earnings include an amount in respect of—

(i)the provision of travel facilities for a journey made by the employee’s spouse [F928, civil partner] or child, or

(ii)the reimbursement of expenses incurred by the employee on such a journey, and

(b)conditions A to C are met.

(2)The deduction is equal to the included amount.

(3)Condition A is that the employee is absent from the United Kingdom for a continuous period of at least 60 days for the purpose of performing the duties of one or more employments.

(4)Condition B is that the journey is between a place in the United Kingdom and a place outside the United Kingdom where such duties are performed.

(5)Condition C is that the employee’s spouse [F929, civil partner] or child is—

(a)accompanying the employee at the beginning of the period of absence,

(b)visiting the employee during that period, or

(c)returning to a place in the United Kingdom after so accompanying or visiting the employee.

(6)A deduction is not allowed under this section for more than two outward and two return journeys by the same person in a tax year.

(7)In this section “child” includes a stepchild and an illegitimate child, but not a person who is 18 or over at the beginning of the outward journey.

[F930(8)In this section “relevant taxable earnings” has the meaning given by section 370(6).]

Textual Amendments

F927Words in s. 371(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 28(2)

F930S. 371(8) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 28(3)

372Where seafarers' duties are performedU.K.

For the purposes of—

(a)section 370 (employee’s travel costs and expenses where duties performed abroad), and

(b)section 371 (visiting spouse’s [F931, civil partner's] or child’s travel costs and expenses where duties performed abroad),

whether duties performed on a vessel are performed in or outside the United Kingdom is determined without regard to section 40(2) (certain duties treated as performed in UK).

Textual Amendments

Travel costs and expenses of [F932non-resident or qualifying new resident] employees where duties performed in UKU.K.

Textual Amendments

F932Words in s. 373 cross-heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(11) (with Sch. 8 Pt. 3)

373[F933Non-resident or qualifying new resident] employee’s travel costs and expenses where duties performed in UKU.K.

(1)This section applies if a person (“the employee”) who is [F934non-UK resident or a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)]—

(a)receives earnings from an employment for duties performed in the United Kingdom, and

(b)an amount is included in the earnings in respect of—

(i)the provision of travel facilities for a journey made by the employee, or

(ii)the reimbursement of expenses incurred by the employee on such a journey.

(2)A deduction is allowed from earnings from the employment which are earnings charged on receipt if the journey meets conditions A and B.

(3)Condition A is that the journey ends on, or during the period of 5 years beginning with, a date that is a qualifying arrival date in relation to the employee (see section 375).

(4)Condition B is that the journey is made—

(a)from [F935a country] outside the United Kingdom in which the employee normally lives [F936at the time the journey is made] to a place in the United Kingdom in order to perform duties of the employment, or

(b)to [F937such a] country from a place in the United Kingdom in order to return to [F937such a] country after performing such duties.

(5)If the journey is wholly for a purpose specified in subsection (4), the deduction is equal to the included amount.

(6)If the journey is only partly for such a purpose, the deduction is equal to so much of the included amount as is properly attributable to that purpose.

F938(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F933Words in s. 373 heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(12)(a) (with Sch. 8 Pt. 3)

F934Words in s. 373(1) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(12)(b) (with Sch. 8 Pt. 3)

F935Words in s. 373(4)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(12)(c)(i) (with Sch. 8 Pt. 3)

F936Words in s. 373(4)(a) inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(12)(c)(ii) (with Sch. 8 Pt. 3)

F937Words in s. 373(4)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(12)(d) (with Sch. 8 Pt. 3)

F938S. 373(7) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(12)(e) (with Sch. 8 Pt. 3)

374[F939Non-resident or qualifying new resident] employee’s spouse’s [F940, civil partner's] or child’s travel costs and expenses where duties performed in UKU.K.

(1)This section applies if a person (“the employee”) who is [F941non-UK resident or a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)]—

(a)receives earnings from an employment for duties performed in the United Kingdom, and

(b)an amount is included in the earnings in respect of—

(i)the provision of travel facilities for a journey made by the employee’s spouse [F942, civil partner] or child, or

(ii)the reimbursement of expenses incurred by the employee on such a journey.

(2)A deduction is allowed from earnings from the employment which are earnings charged on receipt if conditions A to C are met.

(3)Condition A is that the journey—

(a)is made between [F943a country] outside the United Kingdom in which the employee normally lives [F944at the time the journey is made] and a place in the United Kingdom, and

(b)ends on, or during the period of 5 years beginning with, a date that is a qualifying arrival date in relation to the employee (see section 375).

(4)Condition B is that the employee is in the United Kingdom for a continuous period of at least 60 days for the purpose of performing the duties of one or more employments from which the employee receives earnings for duties performed in the United Kingdom.

(5)Condition C is that the employee’s spouse [F945, civil partner] or child is—

(a)accompanying the employee at the beginning of that period,

(b)visiting the employee during that period, or

(c)returning to [F946a country] outside the United Kingdom in which the employee normally lives [F947at the time the journey is made], after so accompanying or visiting the employee.

(6)If the journey is wholly for the purpose of so accompanying or visiting the employee or so returning, the deduction is equal to the included amount.

(7)If the journey is only partly for that purpose, the deduction is equal to so much of the included amount as is properly attributable to that purpose.

(8)A deduction is not allowed under this section for more than two inward journeys and two return journeys by the same person in a tax year.

(9)In this section “child” includes a stepchild and an illegitimate child, but not a person who is 18 or over at the beginning of the inward journey.

F948(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F939Words in s. 374 heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(13)(a) (with Sch. 8 Pt. 3)

F941Words in s. 374(1) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(13)(b) (with Sch. 8 Pt. 3)

F943Words in s. 374(3)(a) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(13)(c)(i) (with Sch. 8 Pt. 3)

F944Words in s. 374(3)(a) inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(13)(c)(ii) (with Sch. 8 Pt. 3)

F946Words in s. 374(5)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(13)(d)(i) (with Sch. 8 Pt. 3)

F947Words in s. 374(5)(c) inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(13)(d)(ii) (with Sch. 8 Pt. 3)

F948S. 374(10) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(13)(e) (with Sch. 8 Pt. 3)

375Meaning of “qualifying arrival date”U.K.

(1)For the purposes of sections 373(3) and 374(3), a date is a qualifying arrival date in relation to a person if—

(a)it is a date on which the person arrives in the United Kingdom to perform duties of an employment from which the person receives earnings for duties performed in the United Kingdom, and

(b)condition A or B is met.

(2)Condition A is that the person has not been in the United Kingdom for any purpose during the period of 2 years ending with the day before the date.

(3)Condition B is that the person was not resident in the United Kingdom in either of the 2 tax years preceding the tax year in which the date falls.

(4)If, in a case where condition B applies, there are 2 or more dates in the tax year on which the person arrives in the United Kingdom to perform duties of an employment from which the person receives earnings for duties performed in the United Kingdom, the qualifying arrival date is the earliest of them.

Foreign accommodation and subsistence costs and expensesU.K.

376Foreign accommodation and subsistence costs and expenses (overseas employments)U.K.

(1)A deduction from earnings from an employment is allowed if—

(a)the duties of the employment are performed wholly outside the United Kingdom,

(b)the employee is [F949UK resident],

(c)in a case where the employer is a foreign employer, the employee is [F950not a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)], and

(d)the earnings include an amount in respect of—

(i)the provision of accommodation or subsistence outside the United Kingdom for the employee for the purpose of enabling the employee to perform the duties of the employment, or

(ii)the reimbursement of expenses incurred by the employee on such accommodation or subsistence for that purpose.

(2)If the accommodation or subsistence is wholly for that purpose, the deduction is equal to the included amount.

(3)If the accommodation or subsistence is only partly for that purpose, the deduction is equal to so much of the included amount as is properly attributable to that purpose.

(4)Subsection (5) applies if in the tax year the employment is in substance one whose duties fall to be performed outside the United Kingdom.

(5)Duties of the employment performed in the United Kingdom, whose performance is merely incidental to the performance of duties outside the United Kingdom, are to be treated for the purposes of subsection (1)(a) as performed outside the United Kingdom.

F951(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F949Words in s. 376(1)(b) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 36

F950Words in s. 376(1)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(14)(a) (with Sch. 8 Pt. 3)

F951S. 376(6) omitted (for the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(14)(b) (with Sch. 8 Pt. 3)

Personal security assets and servicesU.K.

377Costs and expenses in respect of personal security assets and servicesU.K.

(1)This section applies if—

(a)there is a special threat to an employee’s personal physical security which arises wholly or mainly because of the employee’s employment,

(b)an asset or service which improves personal security is provided for or used by the employee to meet the threat,

(c)the employee’s earnings include an amount in respect of—

(i)the provision or use, or

(ii)expenses connected with it,

because the whole or part of the cost of the provision or use is borne, or the expenses are reimbursed to the employee, by or on behalf of another person (“the provider”), and

(d)the provider’s sole object in bearing the whole or part of the cost or reimbursing the expenses is meeting the threat.

(2)In the case of such an asset, if the provider intends it to be used solely for the purpose of improving personal physical security, a deduction equal to the included amount is allowed.

(3)If the provider intends the asset to be used solely to improve personal physical security, any use of the asset incidental to that purpose is ignored.

(4)If the provider intends the asset to be used only partly to improve personal physical security, a deduction equal to the proportion of the included amount attributable to the intended use for that purpose is allowed.

(5)In determining whether or not this section applies in relation to an asset, it does not matter if—

(a)the asset becomes fixed to land (even a dwelling or grounds), or

(b)the employee is or becomes entitled—

(i)to the property in the asset, or

(ii)if the asset is a fixture, to any estate or interest in the land concerned.

(6)In the case of a service within subsection (1), if the benefit resulting to the employee consists wholly or mainly of an improvement of the employee’s personal physical security, a deduction equal to the included amount is allowed.

(7)The fact that an asset or a service improves the personal physical security of a member of the employee’s family or household, as well as that of the employee, does not prevent a deduction being allowed.

(8)In this section—

  • “asset” includes equipment or a structure (such as a wall), but not a car, ship or aircraft or a dwelling or grounds appurtenant to a dwelling, and

  • “service” does not include a dwelling or grounds appurtenant to a dwelling.

Chapter 6U.K.Deductions from seafarers' earnings

378Deduction from seafarers' earnings: eligibilityU.K.

(1)A deduction is allowed from earnings from an employment as a seafarer if—

(a)the earnings are [F952relevant general earnings],

(b)the duties of the employment are performed wholly or partly outside the United Kingdom, and

(c)any of those duties are performed in the course of an eligible period.

(2)In this Chapter “eligible period” means a period consisting of at least 365 days which is either—

(a)a period of consecutive days of absence from the United Kingdom, or

(b)a combined period.

(3)A combined period is a period—

(a)at least half of the days in which are days of absence from the United Kingdom, and

(b)which consists of 3 consecutive periods, A, B and C, where—

  • A is a period of consecutive days of absence from the United Kingdom or a period which is itself a combined period,

  • B is a period of not more than 183 days, and

  • C is a period of consecutive days of absence from the United Kingdom.

(4)For this purpose a person is only regarded as being absent from the United Kingdom on any day if absent at the end of the day.

[F953(5)Relevant general earnings” means—

(a)taxable earnings under section 15, 22 or 26, or

(b)general earnings—

(i)to which section 27 applies, and

(ii)which are for a period in which the employee is liable under the law of an EEA State (other than the United Kingdom) to tax in that State by reason of domicile or residence.]

F954(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F952Words in s. 378(1) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 37(2)

F953S. 378(5) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 37(3)

F954S. 378(6) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 37(4)

379Calculating the deductionU.K.

(1)The deduction under section 378—

(a)is allowed from the amount of the earnings from the employment attributable to the eligible period, and

(b)is equal to that amount.

(2)Earnings from the employment for a period of leave immediately after the eligible period are to be regarded as earnings attributable to the eligible period if or to the extent that they are earnings for the tax year in which the eligible period ends.

(3)This section is subject to section 380 (limit on deduction where UK duties etc. make amount unreasonable).

380Limit on deduction where UK duties etc. make amount unreasonableU.K.

(1)If—

(a)section 378 (deduction from seafarers' earnings: eligibility) applies to earnings for a tax year, and

(b)in the tax year the employee performs some of the duties of the employment as a seafarer or of any associated employments in the United Kingdom,

the amount of earnings in respect of which the deduction under this Chapter is allowed is subject to the following limitation.

(2)The amount is restricted to the proportion of the aggregate earnings for that year from the employment as a seafarer and all associated employments that is reasonable having regard to—

(a)the nature of and time devoted to the duties performed outside and in the United Kingdom, and

(b)all other relevant circumstances.

(3)In this section “associated employments” means employments with the same employer or with associated employers.

(4)The same rules for determining whether employers are associated apply for the purposes of this section as apply for section 24(4) (limit on chargeable overseas earnings where duties of associated employment performed in UK) (see section 24(5)).

381Taking account of other deductionsU.K.

For the purposes of sections 379 and 380, the amount of the earnings from an employment for a tax year is the amount remaining after any deductions under—

(a)section 232 (giving effect to mileage allowance relief),

(b)Chapter 2, 3, 4 or 5 of this Part,

[F955(c)section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions from earnings), and

(d)sections 188 to 194 of FA 2004 (contributions to registered pension schemes).]

Textual Amendments

F955S. 381(c)(d) substituted for s. 381(c)-(e) (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 61 (with Sch. 36)

382Duties on board shipU.K.

(1)Duties which a person performs on a ship engaged—

(a)on a voyage beginning or ending outside the United Kingdom (but excluding any part of it beginning and ending in the United Kingdom), or

(b)on a part beginning or ending outside the United Kingdom of any other voyage,

are treated as performed outside the United Kingdom for the purposes of this Chapter.

(2)Duties which a person performs on a vessel engaged on a voyage not extending to a port outside the United Kingdom are treated for the purposes of this Chapter as performed in the United Kingdom.

(3)For the purposes of subsection (1) the areas designated under section 1(7) of the Continental Shelf Act 1964 (c. 29) are treated as part of the United Kingdom.

(4)Subsection (1) applies despite anything to the contrary in section 40 (duties on board vessel or aircraft).

383Place of performance of incidental dutiesU.K.

(1)For the purposes of section 378(1)(b) (deduction from seafarers' earnings: eligibility), duties of an employment as a seafarer which are performed outside the United Kingdom are treated as performed in the United Kingdom if conditions A and B are met.

(2)Condition A is that in the tax year in which the duties are performed the employment is in substance one whose duties fall to be performed in the United Kingdom.

(3)Condition B is that the performance of the duties performed outside the United Kingdom is merely incidental to the performance of duties in the United Kingdom.

(4)Section 39 (duties in UK merely incidental to duties outside UK) does not affect the question—

(a)where any duties are performed, or

(b)whether a person is absent from the United Kingdom,

for the purposes of section 378(1) to (3).

384Meaning of employment “as a seafarer”U.K.

(1)In this Chapter employment “as a seafarer” means an employment (other than Crown employment) consisting of the performance of duties on a ship or of such duties and others incidental to them.

(2)In this section “Crown employment” means employment under the Crown—

(a)which is of a public nature,

[F956(aa)which is not employment in the Royal Fleet Auxiliary Service,] and

(b)the earnings from which are payable out of the public revenue of the United Kingdom or of Northern Ireland.

Textual Amendments

[F957385Meaning of “ship”U.K.

In this Chapter “ship” does not include an offshore installation.]

Textual Amendments

F957S. 385 substituted (with effect in accordance with Sch. 27 para. 16 of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 14

Part 6U.K.Employment income: income which is not earnings or share-related

F958Chapter 1U.K.Payments to non-approved pension schemes

Textual Amendments

F958Pt. 6 Ch. 1 repealed (6.4.2006) by Finance Act 2004 (c. 12), ss. 247, 284(1), Sch. 42 Pt. 3 (with Sch. 36)

F958386Charge on payments to non-approved retirement benefits schemesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F958387Meaning of “non-approved retirement benefits scheme”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F958388Apportionment of payments in respect of more than one employeeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F958389Exception: employments where earnings charged on remittanceU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F958390Exception: non-domiciled employees with foreign employersU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F958391Exception: seafarers with overseas earningsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F958392Relief where no benefits are paid or payableU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 2U.K.Benefits from [F959employer-financed retirement benefits]

Textual Amendments

F959Words in Pt. 6 Ch. 2 heading substituted (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(2), 284(1) (with Sch. 36)

Benefits treated as employment incomeU.K.

[F960393Application of this ChapterU.K.

(1)This Chapter applies to relevant benefits provided under an employer-financed retirement benefits scheme.

(2)Section 393A defines “employer-financed retirement benefits scheme” and section 393B defines “relevant benefits”.]

Textual Amendments

F960Ss. 393-393B substituted for s. 393 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(3), 284(1) (with Sch. 36)

[F960393AEmployer-financed retirement benefits schemeU.K.

(1)In this Chapter “employer-financed retirement benefits scheme” means a scheme for the provision of benefits consisting of or including relevant benefits to or in respect of employees or former employees of an employer.

(2)But neither—

(a)a registered pension scheme, nor

(b)a section 615(3) scheme,

is an employer-financed retirement benefits scheme.

(3)“Section 615(3) scheme” means a superannuation fund to which section 615(3) of ICTA applies.

(4)“Scheme” includes a deed, agreement, series of agreements, or other arrangements.

Textual Amendments

F960Ss. 393-393B substituted for s. 393 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(3), 284(1) (with Sch. 36)

393BRelevant benefitsU.K.

(1)In this Chapter “relevant benefits” means any lump sum, gratuity or other benefit (including a non-cash benefit) provided (or to be provided)—

(a)on or in anticipation of the retirement of an employee or former employee,

(b)on the death of an employee or former employee,

(c)after the retirement or death of an employee or former employee in connection with past service,

(d)on or in anticipation of, or in connection with, any change in the nature of service of an employee, or

(e)to any person by virtue of a pension sharing order or provision relating to an employee or former employee.

(2)But—

(a)benefits charged to tax under Part 9 (pension income) [F961, or that would be charged to tax under that Part but for section 573(2A) or (2B), 646D or 646E] [F962or any deductions under section 574A(3)] ,

(b)benefits chargeable to tax by virtue of Schedule 34 to FA 2004 (which applies certain charges under Part 4 of that Act in relation to non-UK schemes), and

(c)excluded benefits,

are not relevant benefits.

(3)The following are “excluded benefits”—

(a)benefits in respect of ill-health or disablement of an employee during service,

(b)benefits in respect of the death by accident of an employee during service,

(c)benefits under a relevant life policy, and

(d)benefits of any description prescribed by regulations made by the Board of Inland Revenue.

(4)In subsection (3)(c) “relevant life policy” means—

[F963(a) an excepted group life policy as defined in section 480 of ITTOIA 2005,]

(b)a policy of life insurance the terms of which provide for the payment of benefits on the death of a single individual and with respect to which [F964—

(i)condition A in section 481 of that Act would be met if paragraph (a) in that condition referred to the death, in any circumstances or except in specified circumstances, of that individual (rather than the death in any circumstances of each of the individuals insured under the policy) and if the condition did not include paragraph (b), and

(ii)conditions C and D in that section and conditions A and C in section 482 of that Act are met, or]

(c)a policy of life insurance that would be within paragraph (a) or (b) but for the fact that it provides for a benefit which is an excluded benefit under or by virtue of paragraph (a), (b) or (d) of subsection (3).

[F965(4A)Regulations under subsection (3)(d) may include provision having effect in relation to times before they are made.]

(5)In subsection (1)(e) “pension sharing order or provision” means any such order or provision as is mentioned in section 28(1) of WRPA 1999 or Article 25(1) of WRP(NI)O 1999.]

Textual Amendments

F960Ss. 393-393B substituted for s. 393 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(3), 284(1) (with Sch. 36)

F961Words in s. 393B(2)(a) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 18

F962Words in s. 393B(2)(a) inserted (with effect in accordance with Sch. 3 para. 13(2) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 13(1)

F963S. 393B(4)(a) substituted by 2004 c. 12, s. 249(3) (as amended (6.4.2006) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 651(2)(a), Sch. 2 para. 161 (with Sch. 2))

F964Words in s. 393B(4)(b) substituted by 2004 c. 12, s. 249(3) (as amended (6.4.2006) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 651(2)(b), Sch. 2 para. 161 (with Sch. 2))

F965S. 393B(4A) inserted (19.7.2007) by Finance Act 2007 (c. 11), Sch. 20 paras. 21, 24(3)

394Charge on benefit to which this Chapter appliesU.K.

(1)If a benefit to which this Chapter applies is received by an individual, the amount of the benefit counts as employment income of the individual for the relevant tax year.

[F966(1A)Subsection (1) does not apply in relation to the benefit if the total amount of the benefits to which this Chapter applies received by the individual in the relevant tax year does not exceed £100.]

(2)If a benefit to which this Chapter applies is received by a person who is not an individual, the [F967person who is (or persons who are) the responsible person in relation to] the scheme under which the benefit is provided is chargeable [F968to income tax] on the amount of the benefit for the relevant tax year.

(3)In [F969this section] the “relevant tax year” is the tax year in which the benefit is received.

(4)For the purposes of subsection (2), the rate of tax is [F97045%] or such other rate as may for the time being be specified by the Treasury by order.

[F971(4A)Subsection (4B) applies if the receipt of a benefit to which this Chapter applies gives rise to other relevant income of the employee, or the former employee, to or in respect of whom the benefit is provided.

(4B)Subsection (1) or (2) (as the case may be) applies to the amount of the benefit only so far as that amount exceeds the other relevant income.

(4C)In subsections (4A) and (4B) “other relevant income” means—

(a)general earnings of the employee or former employee which are chargeable to income tax,

(b)an amount which counts as employment income of the employee or former employee under Chapter 2 of Part 7A, F972...

[F973(ba)an amount which would count as employment income of the employee or former employee under that Chapter but for the application of section 554Z5 (overlap with earlier relevant step), or]

[F974(c)an amount which would be within paragraph (a), (b) or (ba) apart from—

(i)the employee or former employee having been non-UK resident for any tax year, or

(ii)any tax year having been a split year as respects the employee or former employee.]]

(5)No liability to income tax arises by virtue of any other provision of this Act in respect of a benefit to which this Chapter applies.

[F975(6)Subsection (5) does not affect—

(a)any liability to income tax on general earnings, or

(b)any liability to income tax on an amount which counts as employment income under Chapter 2 of Part 7A.]

Textual Amendments

F966S. 394(1A) inserted (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(5), 284(1) (with Sch. 36)

F967Words in s. 394(2) substituted (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(6), 284(1) (with Sch. 36)

F969Words in s. 394(3) substituted (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(7), 284(1) (with Sch. 36)

F970Word in s. 394(4) substituted (with effect in accordance with s. 1(6) of the amending Act) by Finance Act 2012 (c. 14), s. 1(4)

F971S. 394(4A)-(4C) inserted (with effect in accordance with Sch. 2 paras. 52-59, 60 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 14(2)

F972Word in s. 394(4C)(b) omitted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 45 para. 65(2)

F973S. 394(4C)(ba) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 65(2)

F974S. 394(4C)(c) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 65(3)

F975S. 394(6) inserted (with effect in accordance with Sch. 2 paras. 52-59, 60 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 14(3)

Modifications etc. (not altering text)

C37S. 394 restricted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 36 paras. 54(2)(3)(a), 55(2) (with s. 283(5), Sch. 36)

[F976394ATemporary non-residentsU.K.

(1)This section applies if an individual is temporarily non-resident.

(2)Any benefits within subsection (3) are to be treated for the purposes of section 394(1) as if they were received by the individual in the period of return.

(3)A benefit is within this subsection if—

(a)this Chapter applies to it,

(b)it is in the form of a lump sum,

(c)it is received by the individual in the temporary period of non-residence, and

(d)ignoring this section—

(i)no charge to tax arises by virtue of section 394(1) in respect of it, but

(ii)such a charge would arise if the existence of any double taxation relief arrangements were disregarded.

(4)Subsection (3)(d)(i) includes a case where the charge could be prevented by making a DTR claim, even if no claim is in fact made.

(5)Subsection (2) does not affect the operation of section 394(1A) (and, accordingly, “the relevant tax year” for the purposes of section 394(1A) remains the tax year in which the benefit is actually received).

(6)Nothing in any double taxation relief arrangements is to be read as preventing the individual from being chargeable to income tax in respect of any benefit treated by virtue of this section as received in the period of return (or as preventing a charge to that tax from arising as a result).

(7)Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains—

(a)when an individual is to be regarded as “temporarily non-resident”, and

(b)what “the temporary period of non-residence” and “the period of return” mean.

(8)In this section—

  • “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

  • “DTR claim” means a claim for relief under section 6 of that Act.]

Textual Amendments

F976S. 394A inserted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 125

[F977395Reduction where employee has contributedU.K.

(1)This section applies in relation to a relevant benefit under an employer-financed retirement benefits scheme in the form of a lump sum where, under the scheme, an employee has paid any sum or sums by way of contribution to the provision of the lump sum.

(2)The amount which, by virtue of section 394, counts as employment income, or is chargeable to tax under [F978subsection (2) of that section], is the amount of the lump sum reduced by the sum, or the aggregate of the sums, paid by the employee by way of contribution to the provision of the lump sum.

(3)A reduction under this section may not be claimed in respect of the same contribution in relation to more than one lump sum.

(4)It is to be assumed, unless the contrary is shown, that no reduction is applicable under this section.]

Textual Amendments

F977S. 395 substituted for ss. 395-397 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(8), 284(1) (with Sch. 36)

F978Words in s. 395 substituted by 2004 c. 12, s. 249(8) (as amended (6.4.2006) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 651(3), Sch. 2 para. 161 (with Sch. 2))

Modifications etc. (not altering text)

C38S. 395 modified (22.7.2004) by Finance Act 2004 (c. 12), Sch. 36 paras. 54(3)(b), 55(3) (with s. 283(5), Sch. 36)

[F979395ABenefits under old section 222 schemes not taxed by virtue of section 394U.K.

Section 394 does not apply to a benefit provided under an employer–financed retirement benefits scheme if—

(a)immediately before 6th April 1980 the scheme was approved under section 222 of ICTA 1970,

(b)the scheme was not approved under Chapter II of Part II of FA 1970,

(c)no material changes have been made to the terms on which benefits are provided under the scheme after 5th April 1980, and

(d)no contributions have been paid under the scheme after that date.]

Textual Amendments

F979S. 395A inserted (with effect in accordance with art. 2(2) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2009 (S.I. 2009/730), arts. 1(1), 2

[F980395BExemption or reduction for foreign serviceU.K.

(1)This section applies if—

(a)a benefit to which this Chapter applies is provided to or in respect of an employee or former employee in the form of a lump sum,

(b)the employer-financed retirement benefits scheme under which the lump sum is provided is established in a country or territory outside the United Kingdom,

(c)the lump sum is received by the employee or former employee or a related person,

[F981(ca)the recipient is not resident in the United Kingdom in the tax year in which the lump sum is received,]

(d)all or part of the lump sum (“the relevant part”) would, but for this section, count as employment income by virtue of section 394(1) or be chargeable to income tax under section 394(2) (account having been taken of section 394(4B) and section 395), and

(e)the service in respect of which rights to receive the relevant part of the lump sum accrued (referred to as “reckonable service”) is or includes foreign service.

(2)Section 394(1) or, as the case may be, section 394(2) does not apply to the relevant part of the lump sum if the condition in subsection (3) is met.

(3)The condition is that—

(a)three-quarters or more of the period of reckonable service is made up of foreign service,

(b)if the period of reckonable service exceeds 10 years, the whole of the last 10 years of that period is made up of foreign service, or

(c)if the period of reckonable service exceeds 20 years, one-half or more of that period, including any 10 of the last 20 years, is made up of foreign service.

(4)If the condition in subsection (3) is not met, the amount that counts as employment income by virtue of section 394(1) or, as the case may be, is chargeable to income tax under section 394(2) is to be reduced by the appropriate proportion.

(5)The appropriate proportion is a proportion of the relevant part of the lump sum equal to the proportion that the period of foreign service included in the reckonable service bears to the period of reckonable service.

(6)In determining the service in respect of which rights to receive the relevant part of the lump sum accrued—

(a)service in a previous employment or with a previous employer is to be taken into account if rights to receive the relevant part of the lump sum also accrued in respect of that service, and

(b)it does not matter if the rights originally accrued under a different employer-financed retirement benefits scheme (whether one established in the United Kingdom or in a country or territory outside the United Kingdom).

(7)“Related person”, in relation to an employee or former employee (E), means any of the following—

(a)E’s spouse or civil partner or E’s widow or widower or surviving civil partner,

(b)a person who is financially dependent on E, whose financial relationship with E is one of mutual dependence or who is dependent on E because of physical or mental impairment (or, if the lump sum is paid after E’s death, anyone who was such a person at the time of E’s death), and

(c)E’s personal representatives.

(8)In this section “foreign service” has the meaning given by section [F982395C].]

Textual Amendments

F980S. 395B inserted (with effect in accordance with art. 6 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2014 (S.I. 2014/211), arts. 1, 5(2)

F981S. 395B(1)(ca) inserted (with effect in accordance with Sch. 3 para. 5(4) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 5(2)

F982Word in s. 395B(8) substituted (with effect in accordance with Sch. 3 para. 5(4) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 5(3)

[F983395CMeaning of “foreign service” in section 395BU.K.

(1)In section 395B “foreign service” means service to which subsection (2), (3), (6) or (8) applies.

(2)This subsection applies to service in or after the tax year 2013–14—

(a)to the extent that it consists of duties performed outside the United Kingdom in respect of which earnings would not be relevant earnings, or

(b)if a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers' earnings).

(3)This subsection applies to service in or after the tax year 2003–04 but before the tax year 2013–14 such that—

(a)any earnings from the employment would not be relevant earnings, or

(b)a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers' earnings).

[F984(4)In subsection (2) “relevant earnings” means—

(a)for service in or after the tax year 2025-26, earnings—

(i)to which section 15 applies, and

(ii)if the employee is a qualifying new resident for the purposes of Chapter 5C of Part 2 for that tax year, which are not qualifying foreign general earnings within the meaning of section 41T (qualifying foreign general earnings), and

(b)for service before tax year 2025-26, earnings to which section 15 applies and to which that section would apply even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year.]

(5)In subsection (3) “relevant earnings” means—

(a)for service in or after the tax year 2008–09, earnings—

(i)which are for a tax year in which the employee is ordinarily UK resident,

(ii)to which section 15 applies, and

(iii)to which that section would apply even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year, and

(b)for service before the tax year 2008–09, general earnings to which section 15 or 21 as originally enacted applies.

(6)This subsection applies to service before the tax year 2003–04 and after the tax year 1973–74 such that—

(a)the emoluments from the employment were not chargeable under Case I of Schedule E, or would not have been so chargeable had there been any, or

(b)a deduction equal to the whole amount of the emoluments from the employment was or would have been allowable under a foreign earnings deduction provision.

(7)In subsection (6) “foreign earnings deduction provision” means—

(a)paragraph 1 of Schedule 2 to FA 1974,

(b)paragraph 1 of Schedule 7 to FA 1977, or

(c)section 192A or 193(1) of ICTA.

(8)This subsection applies to service before the tax year 1974-75 such that tax was not chargeable in respect of the emoluments of the employment—

(a)in the tax year 1956–57 or later, under Case I of Schedule E, or

(b)in earlier tax years, under Schedule E,

or it would not have been so chargeable had there been any such emoluments.]

Textual Amendments

F983S. 395C inserted (27.4.2017) by Finance Act 2017 (c. 10), Sch. 3 para. 6

F984S. 395C(4) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(15) (with Sch. 8 Pt. 3)

F977396Certain lump sums not taxed by virtue of section 394U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F977S. 395 substituted for ss. 395-397 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(8), 284(1) (with Sch. 36)

F977397Certain lump sums: calculation of amount taxed by virtue of section 394U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F977S. 395 substituted for ss. 395-397 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(8), 284(1) (with Sch. 36)

Valuation of benefits etc.U.K.

398Valuation of benefitsU.K.

(1)In the case of a cash benefit, for the purposes of this Chapter the amount of a benefit is taken to be the amount received.

(2)In the case of a non-cash benefit, for the purposes of this Chapter the amount of a benefit is taken to be the greater of—

(a)the amount of earnings (as defined in Chapter 1 of Part 3) that the benefit would give rise to if it were received for performance of the duties of an employment (money’s worth), and

(b)the cash equivalent of the benefit under the benefits code if it were so received and the code applied to it.

(3)For the purposes of subsection (2) the benefits code has effect with the modifications in subsections (4) to (6).

(4)References in the benefits code to the employee are to be taken as references to the person by whom the benefit is received.

(5)References in the benefits code to the employer are to be taken as including references to the former employer.

(6)Where—

(a)section 106 (cash equivalent: cost of accommodation over £75,000) applies, and

(b)the amount referred to in section 105(2)(b) (the sum made good) exceeds the amount referred to in section 105(2)(a) (the rental value),

the amount to be subtracted under paragraph (b) of step 4 of the calculation in section 106(2) is that excess (and not only the excess rent referred to there).

399Employment-related loans: interest treated as paidU.K.

(1)This section applies if—

(a)an amount consisting of, or including, an amount representing the benefit of a loan (“a taxable amount”) counts as employment income of an individual in a tax year under section 394(1), or

(b)the [F985person who is (or any of the persons who are) the responsible person in relation to] a scheme is charged to tax on a taxable amount F986... under section 394(2).

(2)The individual or the [F987responsible person] is to be treated for all purposes of the Tax Acts (other than this Chapter) as having paid interest on the loan in the tax year equal to the amount representing the cash equivalent of the loan.

(3)The interest is to be treated—

(a)as accruing during the period in the tax year during which the loan is outstanding, and

(b)as paid at the end of the period.

(4)The interest is not to be treated—

(a)as income of the person making the loan, or

(b)as relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax).

Textual Amendments

F985Words in s. 399(1) substituted (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(9), 284(1) (with Sch. 36)

F987Words in s. 399(2) substituted (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(10), 284(1) (with Sch. 36)

InterpretationU.K.

[F988399AResponsible personU.K.

(1)The following heads specify the person who is, or persons who are, the responsible person in relation to an employer-financed retirement benefits scheme for the purposes of this Chapter.

(2)But if a person is, or persons are, the responsible person in relation to the scheme by virtue of being specified under one head, no-one is the responsible person in relation to the scheme by virtue of being specified under a later head.

Head 1

If there are one or more trustees of the scheme who are resident in the United Kingdom, that trustee or each of those trustees.

Head 2

If there are one or more persons who control the management of the scheme, that person or each of those persons.

Head 3

If alive or still in existence, the employer, or any of the employers, who established the scheme and any person by whom that employer, or any of those employers, has been directly or indirectly succeeded in relation to the provision of benefits under the scheme.

Head 4

Any employer of employees to or in respect of whom benefits are, or are to be, provided under the scheme.

Head 5

If there are one or more trustees of the scheme who are not resident in the United Kingdom, that trustee or each of those trustees.]

Textual Amendments

F988Ss. 399A, 400 substituted for s. 400 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(11), 284(1) (with Sch. 36)

[F988400InterpretationU.K.

In this Chapter—

  • “employer-financed retirement benefits scheme” has the meaning given by section 393A;

  • “relevant benefits” has the meaning given by section 393B; and

  • “responsible person” has the meaning given by section 399A.]

Textual Amendments

F988Ss. 399A, 400 substituted for s. 400 (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(11), 284(1) (with Sch. 36)

Chapter 3U.K.Payments and benefits on termination of employment etc.

PreliminaryU.K.

401Application of this ChapterU.K.

(1)This Chapter applies to payments and other benefits which are received directly or indirectly in consideration or in consequence of, or otherwise in connection with—

(a)the termination of a person’s employment,

(b)a change in the duties of a person’s employment, or

(c)a change in the earnings from a person’s employment,

by the person, or the person’s spouse [F989or civil partner], blood relative, dependant or personal representatives.

(2)Subsection (1) is subject to subsection (3) and sections 405 to [F990414A] (exceptions for certain payments and benefits).

(3)This Chapter does not apply to any payment or other benefit chargeable to income tax apart from this Chapter.

(4)For the purposes of this Chapter—

(a)a payment or other benefit which is provided on behalf of, or to the order of, the employee or former employee is treated as received by the employee or former employee, and

(b)in relation to a payment or other benefit—

(i)any reference to the employee or former employee is to the person mentioned in subsection (1), and

(ii)any reference to the employer or former employer is to be read accordingly.

Textual Amendments

F990Word in s. 401(2) substituted (with effect in accordance with art. 6 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2014 (S.I. 2014/211), arts. 1, 5(3)(a)

402Meaning of “benefit”U.K.

(1)In this Chapter “benefit” includes anything in respect of which, were it received for performance of the duties of the employment, an amount—

(a)would be taxable earnings from the employment, or

(b)would be such earnings apart from an earnings-only exemption.

This is subject to subsections (2) to (4).

(2)In this Chapter “benefit” does not include a benefit received in connection with the termination of a person’s employment that is a benefit which, were it received for performance of the duties of the employment, would fall within—

(a)section 239(4) (exemption of benefits connected with taxable cars and vans and exempt heavy goods vehicles), so far as that section applies to a benefit connected with a car or van,

(b)section 269 (exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle),

(c)section 319 (mobile telephones), or

(d)section 320 (limited exemption for computer equipment).

(3)In this Chapter “benefit” does not include a benefit received in connection with any change in the duties of, or earnings from, a person’s employment to the extent that it is a benefit which, were it received for performance of the duties of the employment, would fall within section 271(1) (limited exemption of removal benefits and expenses).

(4)The right to receive a payment or benefit is not itself a benefit for the purposes of this Chapter.

Payments and benefits treated as employment incomeU.K.

[F991402ASplit of payments and other benefits between sections 402B and 403U.K.

(1)In this Chapter “termination award” means a payment or other benefit to which this Chapter applies because of section 401(1)(a).

(2)Section 402B (termination awards not benefiting from threshold treated as earnings) applies to termination awards to the extent determined under section 402C.

(3)Section 403 (charge on payment or benefit where threshold applies) applies to termination awards so far as they are not ones to which section 402B applies.

(4)Section 403 also applies to payments and other benefits to which this Chapter applies because of section 401(1)(b) or (c) (change in duties or earnings).

Textual Amendments

F991Ss. 402A-402E inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(3)

402BTermination awards not benefiting from threshold to be treated as earningsU.K.

(1)The amount of a termination award to which this section applies—

[F992(a)]is treated as an amount of earnings of the employee, or former employee, from the employment [F993, but

(b)is not capable of being an amount to which section 27 applies by virtue of subsection 1(a) or (b) of that section (UK-based taxable earnings for year when employee not resident in UK).]

(2)See also section 7(3)(b) and (5)(ca) (which cause amounts treated as earnings under this section to be included in general earnings).

(3)Section 403(3) (when benefits are received) does not apply in relation to payments or other benefits to which this section applies.

Textual Amendments

F991Ss. 402A-402E inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(3)

F992Words in s. 402B(1) renumbered as s. 402B(1)(a) (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(6)(a)

F993S. 402B(1)(b) and word inserted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(6)(b)

402CThe termination awards to which section 402B appliesU.K.

(1)This section has effect for the purpose of identifying the extent to which section 402B applies to termination awards in respect of the termination of the employment of the employee.

(2)In this section “relevant termination award” means a termination award that is neither—

(a)a redundancy payment, nor

(b)so much of an approved contractual payment as is equal to or less than the amount which would have been due if a redundancy payment had been payable.

(3)If the post-employment notice pay (see section 402D) in respect of the termination is greater than, or equal to, the total amount of the relevant termination awards in respect of the termination, section 402B applies to all of those relevant termination awards.

(4)If the post-employment notice pay in respect of the termination is less than the total amount of the relevant termination awards in respect of the termination but is not nil—

(a)section 402B applies to a part of those relevant termination awards, and

(b)the amount of that part is equal to the post-employment notice pay.

(5)Section 309(4) to (6) (meaning of “redundancy payment” and “approved contractual payment” etc) apply for the purposes of subsection (2) as they apply for the purposes of section 309.

Textual Amendments

F991Ss. 402A-402E inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(3)

402D“Post-employment notice pay”U.K.

(1)“The post-employment notice pay” in respect of a termination is (subject to subsection (11)) given by—

where—

BP, D and P are given by subsections (3) to (7), and

T is the total of the amounts of any payment or benefit received in connection with the termination which—

(a)

would fall within section 401(1)(a) but for section 401(3),

(b)

is taxable as earnings under Chapter 1 of Part 3,

(c)

is not pay in respect of holiday entitlement for a period before the employment ends, and

(d)

is not a bonus payable for termination of the employment.

(2)If the amount given by the formula in subsection (1) is a negative amount, the post-employment notice pay is nil.

(3)Subject to subsections (5) [F994, (6) and (6A)]—

  • BP is the employee's basic pay (see subsection (7)) from the employment in respect of the last pay period of the employee to end before the trigger date,

  • P is the number of days in that pay period, and

  • D is the number of days in the post-employment notice period.

(4)See section 402E for the meaning of “trigger date” and “post-employment notice period”.

(5)If there is no pay period of the employee which ends before the trigger date then—

  • BP is the employee's basic pay from the employment in respect of the period starting with the first day of the employment and ending with the trigger date,

  • P is the number of days in that period, and

  • D is the number of days in the post-employment notice period.

(6)If the last pay period of the employee to end before the trigger date is a month, [F995the employee's basic pay is paid in equal monthly instalments,] the minimum notice (see section 402E) is given by contractual terms and is expressed to be a whole number of months, and the post-employment notice period is equal in length to the minimum notice or is otherwise a whole number of months, then—

  • BP is the employee's basic pay from the employment in respect of the last pay period of the employee to end before the trigger date,

  • P is 1, and

  • D is the length of the post-employment notice period expressed in months.

[F996(6A)In any other case where the last pay period of the employee to end before the trigger date is a month and the employee's basic pay is paid in equal monthly instalments, then—

  • BP is the employee's basic pay from the employment in respect of the last pay period of the employee to end before the trigger date,

  • P is 30.42, and

  • D is the number of days in the post-employment notice period.]

(7)In this section “basic pay” means—

(a)employment income of the employee from the employment but disregarding—

(i)any amount received by way of overtime, bonus, commission, gratuity or allowance,

(ii)any amount received in connection with the termination of the employment,

(iii)any amount treated as earnings under Chapters 2 to 10 of Part 3 (the benefits code) or which would be so treated apart from section 64,

(iv)any amount which is treated as earnings under Chapter 12 of Part 3 (amounts treated as earnings),

(v)any amount which counts as employment income by virtue of Part 7 (income relating to securities and securities options), and

(vi)any employment-related securities that constitute earnings under Chapter 1 of Part 3 (earnings), and

(b)any amount which the employee has given up the right to receive but which would have fallen within paragraph (a) had the employee not done so.

(8)In subsection (7) “employment-related securities” has the same meaning as it has in Chapter 1 of Part 7 (see section 421B).

(9)The Treasury may by regulations amend this section for the purpose of altering the meaning of “basic pay”.

(10)A statutory instrument containing regulations under subsection (9) may not be made unless a draft of it has been laid before, and approved by a resolution of, the House of Commons.

(11)Where the purpose, or one of the purposes, of any arrangements is the avoidance of tax by causing the post-employment notice pay calculated under subsection (1) to be less than it would otherwise be, the post-employment notice pay is to be treated as the amount which the post-employment notice pay would have been but for the arrangements.

(12)In subsection (11) “arrangements” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

Textual Amendments

F991Ss. 402A-402E inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(3)

F994Words in s. 402D(3) substituted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(7)(a)

F995Words in s. 402D(6) inserted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(7)(b)

F996S. 402D(6A) inserted (with effect in accordance with s. 22(8) of the amending Act) by Finance Act 2021 (c. 26), s. 22(7)(c)

402EMeaning of “trigger date” and “post-employment notice period” in section 402DU.K.

(1)Subsections (2) and (4) to (6) have effect for the purposes of section 402D (and subsection (4) has effect also for the purposes of this section).

(2)The “trigger date” is—

(a)if the termination is not a notice case, the last day of the employment, and

(b)if the termination is a notice case, the day the notice is given.

(3)For the purposes of this section, the termination is a “notice case” if the employer or employee gives notice to the other to terminate the employment, and here it does not matter—

(a)whether the notice is more or less than, or the same as, the minimum notice, or

(b)if the employment ends before the notice expires.

(4)The “minimum notice” is the minimum notice required to be given by the employer to terminate the employee's employment by notice in accordance with the law and contractual terms effective—

(a)where the termination is not a notice case—

(i)immediately before the employment ends, or

(ii)where the employment ends by agreement entered into after the start of the employment, immediately before the agreement is entered into, and

(b)where the termination is a notice case, immediately before the notice is given.

(5)The “post-employment notice period” is the period—

(a)beginning at the end of the last day of the employment, and

(b)ending with the earliest lawful termination date.

(But see subsection (8) for provision about limited-term contracts.)

(6)If the earliest lawful termination date is, or precedes, the last day of the employment, the number of days in the post-employment notice period is nil.

(7)“The earliest lawful termination date” is the last day of the period which—

(a)is equal in length to the minimum notice, and

(b)begins at the end of the trigger date.

(8)In the case of a contract of employment which is a limited-term contract and which does not include provision for termination by notice by the employer, the post-employment notice period is the period—

(a)beginning at the end of the last day of the employment, and

(b)ending with the day of the occurrence of the limiting event.

(9)If, in a case to which subsection (8) applies, on the last day of the employment the day of the occurrence of the limiting event is not ascertained or ascertainable (because, for example, the limiting event is the performance of a task), then subsection (8) has effect as if for paragraph (b) there were substituted—

“(b)ending with the day on which notice would have expired if the employer had, on the last day of the employment, given to the employee the minimum notice required to terminate the contract under section 86 of the Employment Rights Act 1996 (assuming that that section applies to the employment).”

(10)In this section “limited-term contract” and “limiting event” have the same meaning as in the Employment Rights Act 1996 (see section 235(2A) and (2B)).]

Textual Amendments

F991Ss. 402A-402E inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(3)

403Charge on payment or other benefit [F997where threshold applies] U.K.

(1)The amount of a payment or benefit to which this [F998section] applies counts as employment income of the employee or former employee for the relevant tax year if and to the extent that it exceeds the £30,000 threshold.

(2)In this section “the relevant tax year” means the tax year in which the payment or other benefit is received.

(3)For the purposes of this Chapter [F999(but see section 402B(3))] —

(a)a cash benefit is treated as received—

(i)when it is paid or a payment is made on account of it, or

(ii)when the recipient becomes entitled to require payment of or on account of it, and

(b)a non-cash benefit is treated as received when it is used or enjoyed.

(4)For the purposes of this Chapter the amount of a payment or benefit in respect of an employee or former employee exceeds the £30,000 threshold if and to the extent that, [F1000when aggregated with—

(a)other payments or benefits in respect of the employee or former employee that are payments or benefits to which this section applies, and

(b)other payments or benefits in respect of the employee or former employee that are payments or benefits—

(i)received in the tax year 2017-18 or an earlier tax year, and

(ii)to which this Chapter applied in the tax year of receipt,

it exceeds] £30,000 according to the rules in section 404 (how the £30,000 threshold applies).

(5)If it is received after the death of the employee or former employee—

(a)the amount of a payment or benefit to which this [F1001section] applies counts as the employment income of the personal representatives for the relevant year if or to the extent that it exceeds £30,000 according to the rules in section 404, and

(b)the tax is accordingly to be assessed and charged on them and is a debt due from and payable out of the estate.

(6)In this Chapter references to the taxable person are to the person in relation to whom subsection (1) or (5) provides for an amount to count as employment income [F1002or, as the case may be, in relation to whom section 402B(1) provides for an amount to be treated as an amount of earnings] .

Textual Amendments

F997Words in s. 403 heading inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(4)(f)

F998Word in s. 403(1) substituted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(4)(a)

F999Words in s. 403(3) inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(4)(b)

F1000Words in s. 403(4) substituted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(4)(c)

F1001Word in s. 403(5)(a) substituted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(4)(d)

F1002Words in s. 403(6) inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(4)(e)

404How the £30,000 threshold appliesU.K.

(1)For the purpose of the £30,000 threshold in section 403(4) and (5), the payments and other benefits provided in respect of an employee or former employee which are to be aggregated are those provided—

(a)in respect of the same employment,

(b)in respect of different employments with the same employer, and

(c)in respect of employments with employers who are associated.

(2)For this purpose employers are “associated” if on a termination or change date—

(a)one of them is under the control of the other, or

(b)one of them is under the control of a third person who on that termination or change date or another such date controls or is under the control of the other.

(3)In subsection (2)—

(a)references to an employer, or to a person controlling or controlled by an employer, include the successors of the employer or person, and

(b)“termination or change date” means a date on which a termination or change occurs in connection with which a payment or other benefit to which [F1003section 403] applies is received in respect of the employee or former employee.

(4)If payments and other benefits are received in different tax years, the £30,000 is set against the amount of payments and other benefits received in earlier years before those received in later years.

(5)If more than one payment or other benefit is received in a tax year in which the threshold is exceeded—

(a)the £30,000 (or the balance of it) is set against the amounts of cash benefits as they are received, and

(b)any balance at the end of the year is set against the aggregate amount of non-cash benefits received in the year.

[F1004(6)In subsection (3)(b), the reference to a payment or other benefit to which section 403 applies includes a reference to a payment or other benefit—

(a)received in the tax year 2017-18 or an earlier tax year, and

(b)to which this Chapter applied in the tax year of receipt.]

Textual Amendments

F1003Words in s. 404(3)(b) substituted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(5)(a)

F1004S. 404(6) inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(5)(b)

[F1005404AAmounts charged to be treated as highest part of total incomeU.K.

(1)A payment or other benefit which counts as a person's employment income as a result of section 403 is treated as the highest part of the person's total income.

(2)Subsection (1) has effect for all income tax purposes except the purposes of sections 535 to 537 of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief).

(3)See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between—

(a)the rule in subsection (1), and

(b)other rules requiring particular income to be treated as the highest part of a person's total income.]

Textual Amendments

F1005S. 404A inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 437 (with Sch. 2)

[F1006404BPower to vary thresholdU.K.

(1)The Treasury may by regulations amend the listed provisions by substituting, for the amount for the time being mentioned in those provisions, a different amount.

(2)The listed provisions are—

  • subsections (1), (4) and (5) of section 403, and

  • subsections (1), (4) and (5) of section 404 and its heading.

(3)Regulations under this section may include transitional provision.

(4)A statutory instrument containing regulations under this section which reduce the mentioned amount may not be made unless a draft of it has been laid before, and approved by a resolution of, the House of Commons.]

Textual Amendments

F1006S. 404B inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(6)

Exceptions and reductionsU.K.

405Exception for certain payments exempted when received as earningsU.K.

(1)This Chapter does not apply to any payment received in connection with the termination of a person’s employment which, were it received for the performance of the duties of the employment, would fall within section 308 (exemption of contributions to approved personal pension arrangements).

(2)This Chapter does not apply to any payment received in connection with any change in the duties of, or earnings from, a person’s employment to the extent that, were it received for the performance of the duties of the employment, it would fall within section 271(1) (limited exemption of removal benefits and expenses).

406Exception for death or disability payments and benefitsU.K.

[F1007(1) This Chapter does not apply to a payment or other benefit provided—

(a)in connection with the termination of employment by the death of an employee, or

(b)on account of injury to, or disability of, an employee.]

[F1008(2)Although “injury” in subsection (1) includes psychiatric injury, it does not include injured feelings.]

Textual Amendments

F1007S. 406 renumbered as s. 406(1) (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(7)(a)

F1008S. 406(2) inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(7)(b)

407Exception for payments and benefits under tax-exempt pension schemesU.K.

(1)This Chapter does not apply to a payment or other benefit provided under a tax-exempt pension scheme if—

(a)the payment or other benefit is by way of compensation—

(i)for loss of employment, or

(ii)for loss or diminution of earnings, and

the loss or diminution is due to ill-health, or

(b)the payment or other benefit is properly regarded as earned by past service.

(2)For this purpose “tax-exempt pension scheme” means—

[F1009(a)a registered pension scheme,

(aa)a scheme set up by a government outside the United Kingdom for the benefit of employees or primarily for their benefit, or]

(b)any such scheme or fund as was described in section 221(1) and (2) of ICTA 1970 (schemes to which payments could be made without charge to tax under section 220 of ICTA 1970).

F1010(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1009S. 407(2)(a)(aa) substituted for s. 407(2)(a) (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 62(2) (with Sch. 36)

408Exception for contributions to [F1011registered pension schemes] U.K.

(1)This Chapter does not apply to a contribution to a [F1012registered pension scheme] [F1013or an employer-financed retirement benefit scheme] if the contribution is made—

(a)as part of an arrangement relating to the termination of a person’s employment, and

(b)in order to provide benefits for the person in accordance with the terms of the scheme or approved personal pension arrangements.

F1014(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1011Words in s. 408 heading substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 63(4) (with Sch. 36)

F1012Words in s. 408(1) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 63(2) (with Sch. 36)

F1013Words in s. 408(1) inserted (with effect in relation to any time on or after 6.4.2006 in accordance with art. 1(2) of the amending S.I.) by The Taxation of Pension Schemes (Consequential Amendments) (No. 2) Order 2006 (S.I. 2006/1963), arts. 1(1), 2(2)

409Exception for payments and benefits in respect of [F1015certain legal expenses etc] and indemnity insuranceU.K.

(1)This Chapter does not apply to a payment or other benefit received by an individual if or to the extent that—

(a)in the case of a cash benefit, it is provided for meeting the cost of a deductible amount, or

(b)in the case of a non-cash benefit, it is or represents a benefit equivalent to the cost of paying a deductible amount.

(2)For the purposes of this section “deductible amount” means an amount which meets conditions A to C.

(3)Condition A is that the amount is paid by the individual [F1016or by the employer or former employer on behalf of the individual].

(4)Condition B is that a deduction for the amount would have been allowed under section 346 from earnings from the relevant employment, if the individual still held the employment when the amount was paid.

(5)Condition C is that the amount is paid at a time which falls within the run-off period.

(6)In this section and section 410—

  • “relevant employment” means the employment mentioned in section 401(1);

  • “run-off period” means the period which—

    (a)

    starts with the day on which the relevant employment terminated, and

    (b)

    ends with the last day of the sixth tax year following the tax year in which the period started.

Textual Amendments

F1015Words in s. 409 heading substituted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(4)(a)

F1016Words in s. 409(3) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(4)(b)

410Exception for payments and benefits in respect of [F1017certain legal expenses etc] and indemnity insurance: individual deceasedU.K.

(1)This Chapter does not apply to a payment or other benefit received by an individual’s personal representatives if or to the extent that—

(a)in the case of a cash benefit, it is provided for meeting the cost of a deductible amount, or

(b)in the case of a non-cash benefit, it is or represents a benefit equivalent to the cost of paying a deductible amount.

(2)For the purposes of this section “deductible amount” means an amount which meets conditions A to C.

(3)Condition A is that the amount is paid by the individual’s personal representatives [F1018or by the former employer on behalf of the individual's personal representatives] .

(4)Condition B is that a deduction for the amount would have been allowed under section 346 from earnings from the relevant employment, if—

(a)the individual had not died,

(b)the amount had been paid by the individual, and

(c)the individual still held the employment when the amount was paid.

(5)Condition C is that the amount is paid at a time which falls within the run-off period.

Textual Amendments

F1017Words in s. 410 heading substituted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(5)(a)

F1018Words in s. 410(3) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(5)(b)

411Exception for payments and benefits for forcesU.K.

[F1019(1)]This Chapter does not apply to a payment or other benefit provided—

(a)under a Royal Warrant, Queen’s Order or Order in Council relating to members of Her Majesty’s forces, or

(b)by way of payment in commutation of annual or other periodical payments authorised by any such Warrant or Order.

[F1020(2)This Chapter does not apply to a payment or other benefit provided under a scheme established by an order under section 1(1) of the Armed Forces (Pensions and Compensation) Act 2004.]

Textual Amendments

F1019S. 411 renumbered as s. 411(1) (with effect in accordance with s. 63(2) of the amending Act) by Finance Act 2007 (c. 11), s. 63(1)

F1020S. 411(2) inserted (with effect in accordance with s. 63(2) of the amending Act) by Finance Act 2007 (c. 11), s. 63(1)

412Exception for payments and benefits provided by foreign governments etc.U.K.

(1)This Chapter does not apply to—

(a)a benefit provided under a pension scheme administered by the government of an overseas territory within the Commonwealth, or

(b)a payment of compensation for loss of career, interruption of service or disturbance made—

(i)in connection with any change in the constitution of any such overseas territory, and

(ii)to a person who was employed in the public service of the territory before the change.

(2)References in subsection (1) to—

(a)an overseas territory,

(b)the government of such a territory, and

(c)employment in the public service of such a territory,

have the meanings given in section 615 of ICTA.

413Exception in certain cases of foreign serviceU.K.

[F1021(A1)This section applies to a payment or other benefit if—

(a)the payment or other benefit is within section 401(1)(a), and the employee or former employee is non-UK resident for the tax year in which the employment terminates, or

(b)the payment or other benefit is within section 401(1)(b) or (c).]

(1)This Chapter does not apply if the service of the employee or former employee in the employment in respect of which the payment or other benefit is received included foreign service comprising—

(a)three-quarters or more of the whole period of service ending with the date of the termination or change in question, or

(b)if the period of service ending with that date exceeded 10 years, the whole of the last 10 years, or

(c)if the period of service ending with that date exceeded 20 years, one-half or more of that period, including any 10 of the last 20 years.

(2)In subsection (1) “foreign service” means service to which subsection [F1022(2A),] (3), (4) or (6) applies.

[F1023(2A)This subsection applies to service in or after the tax year 2013-14—

(a)to the extent that it consists of duties performed outside the United Kingdom in respect of which earnings would not be relevant earnings, or

(b)if a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers' earnings).]

(3)This subsection applies to service in or after the tax year 2003-04 [F1024but before the tax year 2013-14] such that—

[F1025(a)any earnings from the employment would not be relevant earnings, or]

(b)a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers' earnings).

[F1026(3ZA)In subsection (2A)(a) “relevant earnings” means—

(a)for service in or after the tax year 2025-26, earnings—

(i)to which section 15 applies, and

(ii)if the employee is a qualifying new resident for the purposes of Chapter 5C of Part 2 for that tax year, which are not qualifying foreign general earnings within the meaning of section 41T (qualifying foreign general earnings), and

(b)for service before tax year 2025-26, earnings to which section 15 applies and to which that section would apply even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year.]

[F1027(3A)In subsection (3)(a) “relevant earnings” means—

(a)for service in or after the tax year 2008-09, earnings—

(i)which are for a tax year in which the employee is ordinarily UK resident,

(ii)to which section 15 applies, and

(iii)to which that section would apply, even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year, and

(b)for service before the tax year 2008-09, general earnings to which section 15 or 21 as originally enacted applies.]

(4)This subsection applies to service before the tax year 2003-04 and after the tax year 1973-74 such that—

(a)the emoluments from the employment were not chargeable under Case I of Schedule E, or would not have been so chargeable had there been any, or

(b)a deduction equal to the whole amount of the emoluments from the employment was or would have been allowable under a foreign earnings deduction provision.

(5)In subsection (4) “foreign earnings deduction provision” means—

(a)paragraph 1 of Schedule 2 to FA 1974,

(b)paragraph 1 of Schedule 7 to FA 1977, or

(c)section 192A or 193(1) of ICTA.

(6)This subsection applies to service before the tax year 1974-75 such that tax was not chargeable in respect of the emoluments of the employment—

(a)in the tax year 1956-57 or later, under Case I of Schedule E, or

(b)in earlier tax years, under Schedule E,

or it would not have been so chargeable had there been any such emoluments.

Textual Amendments

F1021S. 413(A1) inserted (with effect in accordance with s. 10(5) of the amending Act) by Finance Act 2018 (c. 3), s. 10(2)

F1022Word in s. 413(2) inserted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 38(2) (with Sch. 46 para. 73)

F1023S. 413(2A) inserted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 38(3) (with Sch. 46 para. 73)

F1024Words in s. 413(3) inserted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 38(4) (with Sch. 46 para. 73)

F1025S. 413(3)(a) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 30(2)

F1026S. 413(3ZA) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 1(16) (with Sch. 8 Pt. 3)

F1027S. 413(3A) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 30(3)

[F1028413AException for payment of certain legal costsU.K.

(1)This Chapter does not apply to a payment which meets conditions A and B.

(2)Condition A is that the payment meets the whole or part of legal costs incurred by the employee exclusively in connection with the termination of the employee’s employment.

(3)Condition B is that either—

(a)the payment is made pursuant to an order of a court or tribunal, or

(b)the termination of the employee’s employment results in a [F1029settlement] agreement between the employer and the employee and —

(i)the [F1029settlement] agreement provides for the payment to be made by the employer, and

(ii)the payment is made directly to the employee’s lawyer.

(4)In this section—

  • F1030...

  • “lawyer” has the same meaning as “qualified lawyer” in section 203(4) of the Employment Rights Act 1996 or article 245(4) of the Employment Rights (Northern Ireland) Order 1996;

  • “legal costs” means fees payable for the services and disbursements of a lawyer.]

Textual Amendments

F1028S. 413A inserted (with effect in accordance with art. 10(4) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2011 (S.I. 2011/1037), arts. 1, 10(3)

414Reduction in other cases of foreign serviceU.K.

(1)This section applies if—

[F1031(za)either—

(i)the payment or other benefit is within section 401(1)(a), and the employee or former employee is non-UK resident for the tax year in which the employment terminates, or

(ii)the payment or other benefit is within section 401(1)(b) or (c),]

(a)the service of the employee or former employee in the employment in respect of which the payment or other benefit is received includes foreign service, and

[F1032(b)section 413(1) does not except the payment or other benefit from the application of this Chapter.]

(2)The taxable person may claim relief in the form of a proportionate reduction of the amount that would [F1033otherwise—

(a)be treated as earnings by section 402B(1), or

(b)count as employment income as a result of section 403]

(3)The proportion is that which the length of the foreign service bears to the whole length of service in the employment before the date of the termination or change in question.

(4)A person’s entitlement to relief under this section is limited as mentioned in subsection (5) if the person is entitled—

(a)to deduct, retain or satisfy income tax out of a payment which the person is liable to make, or

(b)to charge any income tax against another person.

(5)The relief must not reduce the amount of income tax for which the person is liable below the amount the person is entitled so to deduct, retain, satisfy or charge.

(6)In this section “foreign service” has the same meaning as in section 413(2).

Textual Amendments

F1031S. 414(1)(za) inserted (with effect in accordance with s. 10(5) of the amending Act) by Finance Act 2018 (c. 3), s. 10(3)(a)

F1032S. 414(1)(b) substituted (with effect in accordance with s. 10(5) of the amending Act) by Finance Act 2018 (c. 3), s. 10(3)(b)

F1033Words in s. 414(2) substituted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(8)

[F1034414AException for payments and benefits under section 615(3) schemesU.K.

(1)This Chapter does not apply to a payment or other benefit provided in the form of a lump sum under a section 615(3) scheme.

(2)In this section, “section 615(3) scheme” means a superannuation fund to which section 615(3) of ICTA applies.]

Textual Amendments

F1034S. 414A inserted (with effect in accordance with art. 6 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2014 (S.I. 2014/211), arts. 1, 5(3)(b)

[F1035414BException in certain cases of foreign service as seafarerU.K.

(1)This section applies to a payment or other benefit if—

(a)the payment or other benefit is within section 401(1)(a), and

(b)the employee or former employee is UK resident for the tax year in which the employment terminates.

(2)This Chapter does not apply if the service of the employee or former employee in the employment in respect of which the payment or other benefit is received included foreign seafaring service comprising—

(a)three-quarters or more of the whole period of service ending with the date of the termination in question, or

(b)if the period of service ending with that date exceeded 10 years, the whole of the last 10 years, or

(c)if the period of service ending with that date exceeded 20 years, one-half or more of that period, including any 10 of the last 20 years.

(3)In subsection (2) “foreign seafaring service” means service to which subsection (4), (5) or (7) applies.

(4)This subsection applies to service in or after the tax year 2003-04 such that a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers' earnings).

(5)This subsection applies to service before the tax year 2003-04 and after the tax year 1973-74 such that a deduction equal to the whole amount of the emoluments from the employment was or would have been allowable under a seafarers' earnings deduction provision.

(6)In subsection (5) “seafarers' earnings deduction provision” means—

(a)paragraph 1 of Schedule 2 to FA 1974 so far as relating to employment as a seafarer,

(b)paragraph 1 of Schedule 7 to FA 1977 so far as relating to employment as a seafarer,

(c)section 192A of ICTA, or

(d)section 193(1) of ICTA so far as relating to employment as a seafarer.

(7)This subsection applies to service before the tax year 1974-75 in an employment as a seafarer such that tax was not chargeable in respect of the emoluments of the employment—

(a)in the tax year 1956-57 or later, under Case I of Schedule E, or

(b)in earlier tax years, under Schedule E,

or it would not have been so chargeable had there been any such emoluments.

(8)In this section “employment as a seafarer” is to be read in accordance with section 384.

Textual Amendments

F1035Ss. 414B, 414C inserted (with effect in accordance with s. 10(5) of the amending Act) by Finance Act 2018 (c. 3), s. 10(4)

414CReduction in other cases of foreign service as seafarerU.K.

(1)This section applies if—

(a)the payment or other benefit is within section 401(1)(a),

(b)the employee or former employee is UK resident for the tax year in which the employment terminates,

(c)the service of the employee or former employee in the employment in respect of which the payment or other benefit is received includes foreign service, and

(d)section 414B(2) does not except the payment or other benefit from the application of this Chapter.

(2)The taxable person may claim relief in the form of a proportionate reduction of the amount that would otherwise—

(a)be treated as earnings by section 402B(1), or

(b)count as employment income as a result of section 403.

(3)The proportion is that which the length of the foreign seafaring service bears to the whole length of service in the employment before the date of the termination in question.

(4)A person's entitlement to relief under this section is limited as mentioned in subsection (5) if the person is entitled—

(a)to deduct, retain or satisfy income tax out of a payment which the person is liable to make, or

(b)to charge any income tax against another person.

(5)The relief must not reduce the amount of income tax for which the person is liable below the amount the person is entitled so to deduct, retain, satisfy or charge.

(6)In this section “foreign seafaring service” has the same meaning as in section 414B(2).]

Textual Amendments

F1035Ss. 414B, 414C inserted (with effect in accordance with s. 10(5) of the amending Act) by Finance Act 2018 (c. 3), s. 10(4)

General and supplementary provisionsU.K.

415Valuation of benefitsU.K.

(1)In the case of a cash benefit, for the purposes of this Chapter the amount of a payment or other benefit is taken to be the amount received.

(2)In the case of a non-cash benefit, for the purposes of this Chapter the amount of a payment or other benefit is taken to be the greater of—

(a)the amount of earnings (as defined in Chapter 1 of Part 3) that the benefit would give rise to if it were received by an employee within section 15 for performance of the duties of an employment (money’s worth), and

(b)the cash equivalent of the benefit under the benefits code if it were so received and the code applied to it.

(3)For the purposes of subsection (2), the benefits code has effect with the modifications in subsections (4), (6) and (7).

(4)References in the benefits code to the employee are to be taken as references to the taxable person and any other person by whom the benefit is received.

(5)For the purposes of subsection (4), section 401(4)(a) is to be disregarded.

(6)References in the benefits code to the employer are to be taken as including references to the former employer.

(7)Where—

(a)section 106 (cash equivalent: cost of accommodation over £75,000) applies, and

(b)the sum referred to in section 105(2)(b) (the sum made good) exceeds the amount referred to in section 105(2)(a) (the rental value),

the amount to be subtracted under paragraph (b) of step 4 of the calculation in section 106(2) is that excess (and not only the excess rent referred to there).

416Notional interest treated as paid if amount charged for beneficial loanU.K.

(1)This section applies if an amount (“the taxable amount”) consisting of, or including, an amount representing the benefit of a loan counts as a person’s employment income in a tax year under section 403.

(2)That person is to be treated for the purposes of the Tax Acts (other than this Chapter) as having paid interest on the loan in the tax year equal to the lesser of—

(a)the amount representing the cash equivalent of the loan, and

(b)the taxable amount.

(3)The interest is to be treated—

(a)as accruing during the period in the tax year during which the loan is outstanding, and

(b)as paid at the end of the period.

(4)The interest is not to be treated—

(a)as income of the person making the loan, or

(b)as relevant loan interest to which section 369 of ICTA applies (mortgage interest payable under deduction of tax).

Part 7U.K.[F1036Employment income: income and exemptions relating to securities]

Textual Amendments

F1036Pt. 7 heading substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)

Modifications etc. (not altering text)

C39Pt. 7: power to modify conferred (7.4.2005) by Finance Act 2005 (c. 7), s. 21(8)-(10)

[F1037Chapter 1U.K.Introduction

Textual Amendments

F1037Pt. 7 Ch. 1 substituted (with effect in accordance with Sch. 22 para. 2(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 2(1)

GeneralU.K.

417Scope of Part 7U.K.

(1)This Part contains special rules about cases where securities, interests in securities or securities options are acquired in connection with an employment.

(2)The rules are contained in—

  • Chapter 2 (restricted securities),

  • Chapter 3 (convertible securities),

  • Chapter 3A (securities with artificially depressed market value),

  • Chapter 3B (securities with artificially enhanced market value),

  • Chapter 3C (securities acquired for less than market value),

  • Chapter 3D (securities disposed of for more than market value),

  • Chapter 4 (post-acquisition benefits from securities),

  • Chapter 5 (securities options),

  • Chapter 6 (F1038... share incentive plans),

  • Chapter 7 (F1039... SAYE option schemes),

  • Chapter 8 (F1040... CSOP schemes),

  • Chapter 9 (enterprise management incentives), and

  • Chapter 10 (priority share allocations).

(3)The following make provision for amounts to count as employment income—

  • Chapters 2 to 6, and

  • Chapter 8.

(4)The following make provision for exemptions and reliefs from income tax—

  • Chapters 2 and 3, and

  • Chapters 5 to 10.

(5)Chapter 11 contains supplementary provisions relating to employee benefit trusts.

(6)Section 5(1) (application of employment income Parts to office-holders generally) does not apply to Chapters 6 to 10; and section 549(5) makes provision about its application to Chapter 11.

Textual Amendments

F1038Word in s. 417(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 46, 89 (with Sch. 8 paras. 90-96)

F1039Word in s. 417(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 131, 146 (with Sch. 8 paras. 147-157)

F1040Word in s. 417(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 192, 204 (with Sch. 8 paras. 205-215)

418Other related provisionsU.K.

[F1041(A1)This Part needs to be read with Chapter 5B of Part 2 (taxable specific income from employment-related securities etc: internationally mobile employees).]

(1)In Part 3—

  • Chapter 1 (earnings), and

  • Chapter 10 (taxable benefits: residual liability to charge),

may also have effect in relation to securities and interests in securities F1042....

[F1043(1A)But Chapters 1 and 10 of Part 3 do not have effect in relation to—

(a)the acquisition of employment-related securities options (within the meaning of Chapter 5 of Part 7), or

(b)chargeable events (within the meaning given by section 477) occurring in relation to such options.]

(2)Part 7 of Schedule 7 (transitional provisions relating to securities and securities options) may also be relevant.

(3)In view of section 49 of FA 2000 (phasing out of APS schemes) the following are not rewritten in this Act and continue in force unaffected by the repeals made by this Act—

  • section 186 of ICTA (APS schemes) and section 187 of that Act (interpretation) so far as relating to APS schemes, and

  • Schedule 9 to ICTA (approval of share schemes) so far as relating to APS schemes and Schedule 10 to that Act (further provisions about APS schemes).

  • “APS schemes” means profit sharing schemes approved under Schedule 9 to ICTA.

F1044(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1041S. 418(A1) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 7, 47

F1042Words in s. 418(1) omitted (6.4.2016) by virtue of Finance Act 2016 (c. 24), s. 17(1)(4)

F1044S. 418(4) omitted (with effect in accordance with s. 50(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 50(2)(a)

419Negative amounts treated as nilU.K.

If the result given by any formula under any provision of this Part would otherwise be a negative amount, the result is to be taken to be nil instead.

Interpretation of Chapters 1 to 5U.K.

420Meaning of “securities” etcU.K.

(1)Subject to subsections (5) and (6), for the purposes of this Chapter and Chapters 2 to 5 the following are “securities”—

(a)shares in any body corporate (wherever incorporated) or in any unincorporated body constituted under the law of a country or territory outside the United Kingdom,

[F1045(aa)rights under contracts of insurance other than excluded contracts of insurance,]

(b)debentures, debenture stock, loan stock, bonds, certificates of deposit and other instruments creating or acknowledging indebtedness [F1046(other than contracts of insurance)],

(c)warrants and other instruments entitling their holders to subscribe for securities (whether or not in existence or identifiable),

(d)certificates and other instruments conferring rights in respect of securities held by persons other than the persons on whom the rights are conferred and the transfer of which may be effected without the consent of those persons,

(e)units in a collective investment scheme,

(f)[F1047options and] futures, F1048...

(g)rights under contracts for differences or contracts similar to contracts for differences [F1049(other than contracts of insurance)][F1050, [F1051and

(h)arrangements to which section 564G of ITA 2007 (alternative finance arrangements: investment bond arrangements) applies.]]

[F1052(1A)For the purposes of subsection (1)(aa) a contract of insurance is an excluded contract of insurance if it is—

(a)a contract for an annuity which is (or will be) pension income (see Part 9),

(b)a contract of long-term insurance, other than an annuity contract, which does not have a surrender value and is not capable of acquiring one (whether on conversion or in any other circumstances), or

(c)a contract of general insurance other than one which falls, in accordance with generally accepted accounting practice, to be accounted for as a financial asset or liability.

(1B)In this section—

  • “contract of insurance”,

  • “contract of long-term insurance”, and

  • “contract of general insurance”,

have the same meaning as in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.]

(2)In subsection (1)(e) “collective investment scheme” means arrangements—

(a)which are made with respect to property of any description, including money, and

(b)the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.

(3)In subsection (1)(f) “futures” means rights under a contract for the sale of a commodity or other property under which delivery is to be made at a future date at a price agreed when the contract is made; and for this purpose a price is to be taken to be agreed when the contract is made—

(a)if it is left to be determined by reference to the price at which a contract is to be entered into on a market or exchange or could be entered into at a time and place specified in the contract, and

(b)in a case where the contract is expressed to be by reference to a standard lot and quality, even if provision is made for a variation in the price to take account of any variation in quantity or quality on delivery.

(4)For the purposes of subsection (1)(g) a contract similar to a contract for differences is a contract—

(a)which is not a contract for differences, but

(b)the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the value or price of property or an index or other factor designated in the contract.

(5)The following are not “securities” for the purposes of this Chapter or Chapters 2 to 5—

(a)cheques and other bills of exchange, bankers' drafts and letters of credit (other than bills of exchange accepted by a banker),

(b)money and statements showing balances on a current, deposit or savings account,

(c)leases and other dispositions of property and heritable securities, [F1053and]

F1054(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)[F1055securities] options.

(6)The Treasury may by order amend subsections (1) to (5).

(7)An order under subsection (6) may include any appropriate consequential provision (including provision amending any enactment).

(8)In this Chapter and Chapters 2 to 5—

  • “interest”, in relation to securities (or shares), means an interest in them less than full beneficial ownership and includes an interest in proceeds of their sale, but does not include a right to acquire them,

  • “securities option” means a right to acquire securities [F1056other than a right to acquire securities which is acquired pursuant to a right or opportunity made available under arrangements the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions], and

  • “shares” includes stock.

Textual Amendments

F1045S. 420(1)(aa) inserted (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(2)

F1046Words in s. 420(1)(b) inserted (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(3)

F1047Words in s. 420(1)(f) inserted (with effect in accordance with s. 92(5) of the amending Act) by Finance Act 2006 (c. 25), s. 92(2)

F1049Words in s. 420(1)(g) inserted (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(4)

F1051S. 420(1)(h) and preceding word substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 204 (with Sch. 9 paras. 1-9, 22)

F1052S. 420(1A)(1B) inserted (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(5)

F1053Word in s. 420(5)(c) inserted (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(6)(a)

F1054S. 420(5)(d) repealed (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(6)(b), Sch. 11 Pt. 2(1)

F1055Word in s. 420(5)(e) inserted (with effect in accordance with s. 92(5) of the amending Act) by Finance Act 2006 (c. 25), s. 92(3)

F1056Words in s. 420(8) inserted (with effect in accordance with s. 92(5) of the amending Act) by Finance Act 2006 (c. 25), s. 92(4)

421Meaning of “market value” etcU.K.

(1)In this Chapter and Chapters 2 to 5 “market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act.

(2)Where consideration for anything is given in the form of an asset (as opposed to a payment), any reference in this Chapter or any of Chapters 2 to 5 to the amount of the consideration is to the market value of the asset.

421AMeaning of “consideration”U.K.

(1)This section applies for determining for the purposes of Chapters 2 to 5 the amount of the consideration given for anything.

(2)If any consideration is given partly in respect of one thing and partly in respect of another, the amount given in respect of the different things is to determined on a just and reasonable apportionment.

(3)The consideration which is taken to be given wholly or partly for anything does not include the performance of any duties of, or in connection with, an employment.

(4)No amount is to be counted more than once in calculating the amount of any consideration.

Application of Chapters 2 to [F10574A] U.K.

Textual Amendments

F1057Word in s. 421B cross-heading substituted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(3)(b)

421BApplication of Chapters 2 to [F10584A] U.K.

(1)Subject as follows (and to any provision contained in Chapters 2 to [F10594A] ) those Chapters apply to securities, or an interest in securities, acquired by a person where the right or opportunity to acquire the securities or interest is available by reason of an employment of that person or any other person.

(2)For the purposes of subsection (1)—

(a)securities are, or an interest in securities is, acquired at the time when the person acquiring the securities or interest becomes beneficially entitled to those securities or that interest (and not, if different, the time when the securities are, or interest is, conveyed or transferred), and

(b)“employment” includes a former or prospective employment.

(3)A right or opportunity to acquire securities or an interest in securities made available by a person’s employer, or by a person connected with a person’s employer, is to be regarded for the purposes of subsection (1) as available by reason of an employment of that person unless—

(a)the person by whom the right or opportunity is made available is an individual, and

(b)the right or opportunity is made available in the normal course of the domestic, family or personal relationships of that person.

(4)Chapters 2 to [F10604A] cease to apply to securities, or an interest in securities, when subsection (5), (6) or (7) is satisfied.

(5)This subsection is satisfied immediately after the securities are, or the interest in securities is, disposed of otherwise than to an associated person.

(6)This subsection is satisfied immediately before the death of the employee.

(7)This subsection is satisfied 7 years after the first date after the acquisition on which the employee is an employee of none of the following—

(a)the employer,

(b)(if the securities are, or the interest in securities is an interest in, securities issued by a company) the company by which they are issued, or

(c)a person connected with a person within paragraph (a) or (b).

(8)In this Chapter and Chapters 2 to [F10614A] —

  • “the acquisition”, in relation to employment-related securities, means the acquisition of the employment-related securities pursuant to the right or opportunity available by reason of the employment,

  • “the employment”, in relation to employment-related securities, means the employment by reason of which the right or opportunity to acquire the employment-related securities is available (“the employee” and “the employer” being construed accordingly unless otherwise indicated), and

  • “employment-related securities” means securities or an interest in securities to which Chapters 2 to 4 apply (ignoring any provision of any of those Chapters which limits the application of the Chapter to a particular description or descriptions of employment-related securities).

Textual Amendments

F1058Word in s. 421B heading substituted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(3)(b)

F1059Word in s. 421B(1) substituted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(3)(a)

F1060Word in s. 421B(4) substituted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(3)(a)

F1061Word in s. 421B(8) substituted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(3)(a)

421CAssociated personsU.K.

(1)For the purposes of this Chapter and Chapters 2 to 4 the following are “associated persons” in relation to employment-related securities—

(a)the person who acquired the employment-related securities on the acquisition,

(b)(if different) the employee, and

(c)any relevant linked person.

(2)A person is a relevant linked person if—

(a)that person (on the one hand), and

(b)either the person who acquired the employment-related securities on the acquisition or the employee (on the other),

[F1062are or have been connected or (without being or having been connected) are or have been] members of the same household.

(3)But a company which would otherwise be a relevant linked person is not if it is—

(a)the employer,

(b)the person from whom the employment-related securities were acquired,

(c)the person by whom the right or opportunity to acquire the employment-related securities was made available, or

(d)the person by whom the employment-related securities (or the securities in which they are an interest) were issued.

Textual Amendments

F1062Words in s. 421C(2) substituted (18.6.2004 with application in accordance with s. 90(5) of the amending Act) by Finance Act 2004 (c. 12), s. 90(2)

421DReplacement and additional securities and changes in interestsU.K.

(1)Subsections (2) and (3) apply where an associated person is entitled to employment-related securities (the “original securities”) and either—

(a)as a result of the conversion of the original securities (or the securities in which they are an interest), or of any other transaction or series of transactions, that person ceases to be entitled to the original securities but that person or another associated person acquires securities or an interest in securities (the “replacement securities”), or

(b)by virtue of that person being entitled to the original securities, that person or another associated person acquires other securities or an interest in other securities (the “additional securities”).

(2)The replacement securities or the additional securities are to be regarded for the purposes of section 421B(1) (securities acquired pursuant to a right or opportunity available by reason of an employment) as acquired pursuant to the same right or opportunity as the original securities.

(3)Where the market value of the original securities is reduced by reason of the issue of, or of securities including, the replacement securities or the additional securities (or the securities in which they are an interest), the amount of that reduction is to be treated for the purposes of Chapters 2 and 3 as consideration or additional consideration given for the acquisition of the replacement securities or the additional securities [F1063and for the purposes of Chapter 3C as a payment made for their acquisition at or before the time of the acquisition].

(4)Subsections (2) and (3) apply whether or not the replacement securities, or the additional securities, were acquired for consideration [F1064or a payment was made for their acquisition at or before the time of the acquisition].

(5)Where Chapters 2 to [F10654A] apply to an interest in securities, an increase of that interest is to be treated for the purposes of section 421B(1) (securities acquired pursuant to a right or opportunity available by reason of an employment) as a separate interest acquired pursuant to the same right or opportunity as the original interest.

(6)Where Chapters 2 to [F10664A] apply to an interest in securities, a reduction of that interest (otherwise than by a disposal to an associated person) is to be treated for the purposes of those Chapters as the disposal otherwise than to an associated person of a separate interest proportionate to the reduction.

Textual Amendments

F1063Words in s. 421D(3) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 9 para. 35(2)

F1064Words in s. 421D(4) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 9 para. 35(3)

F1065Word in s. 421D(5) substituted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(3)(c)

F1066Word in s. 421D(6) substituted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(3)(c)

F1067421EExclusions: residence etcU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1067S. 421E omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 8, 47

421FExclusions: public offersU.K.

(1)[F1068Chapters 2, 3 and 3C] do not apply in relation to employment-related securities that are shares acquired under the terms of an offer to the public or an interest in shares so acquired.

[F1069(1A)But subsection (1) does not disapply those Chapters if the main purpose (or one of the main purposes)—

(a)of the arrangements under which the right or opportunity under which the shares were acquired, or

(b)for which the shares are held,

is the avoidance of tax or national insurance contributions.]

(2)In a case within subsection (1) of section 544 (exemption for priority share allocations where offer to employees separate from public offer), any acquisition made under the terms of either the public offer or the employee offer within the meaning of that subsection is to be treated for the purposes of this section as made under the terms of an offer to the public.

(3)Subsection (2) applies whether or not there is any benefit within section 544(2) (benefit derived from entitlement to priority allocation exempt from income tax).

Textual Amendments

F1068Words in s. 421F(1) substituted (18.6.2004 with application in accordance with s. 89(4)(5) of the amending Act) by Finance Act 2004 (c. 12), s. 89(2)

F1069S. 421F(1A) inserted (18.6.2004 with application in accordance with s. 89(4)(5) of the amending Act) by Finance Act 2004 (c. 12), s. 89(3)

F1070421GExclusions: approved plan or scheme securitiesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1070S. 421G repealed (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(2), Sch. 42 Pt. 2(11)

421HMeaning of “employee-controlled” etcU.K.

(1)For the purposes of Chapters 2 to 4 a company is “employee-controlled” by virtue of shares of a class if—

(a)the majority of the company’s shares of that class (other than any held by or for the benefit of an associated company) are held by or for the benefit of employees of the company or a company controlled by the company, and

(b)those employees are together able as holders of the shares to control the company.

In this subsection “employee” includes a person who is to be or has been an employee.

(2)In this section and Chapters 2 to 4 “associated company” has the [F1071meaning given by section 449 of CTA 2010].

Textual Amendments

F1071Words in s. 421H(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 386 (with Sch. 2)

421IConsideration for acquisition of employment-related securitiesU.K.

(1)This section applies for determining for the purposes of Chapters 2 to 3A the amount of the consideration given for the acquisition of employment-related securities.

(2)References to consideration given for the acquisition of the employment-related securities are to consideration given by—

(a)the employee, or

(b)(if not the employee) the person by whom the employment-related securities were acquired.

(3)The amount of the consideration given by a person for the acquisition of the employment-related securities includes the amount of any consideration given for a right to acquire the employment-related securities.

(4)If the right to acquire the employment-related securities (“the new option”) is the whole or part of the consideration for the assignment or release of another right to acquire them (“the old option”), the amount of the consideration given for the new option is to be treated as being the sum of—

(a)the amount by which the amount of the consideration given for the old option exceeds the amount of any consideration for the assignment or release of the old option, apart from the new option, and

(b)any valuable consideration given for the new option, apart from the old option.

(5)Two or more transactions are to be treated for the purposes of subsection (4) as a single transaction by which a right to acquire the employment-related securities is assigned for a consideration which consists of or includes another right to acquire the employment-related securities if—

(a)the transactions result in a person ceasing to hold a right to acquire the employment-related securities and that person or a connected person coming to hold another right to acquire them, and

(b)one or more of the transactions is effected under arrangements to which two or more persons who hold rights to acquire the employment-related securities, in respect of which there may be a liability to tax under Chapter 5 of this Part (securities options), are parties.

(6)Subsection (5) applies regardless of the order in which the assignment and the acquisition occur.

(7)In this section “release”, in relation to a right to acquire the employment-related securities, includes agreeing to the restriction of the exercise of the right.

InformationU.K.

421JDuty to provide informationU.K.

(1)This section applies in relation to reportable events.

(2)Section 421K explains what are reportable events for the purposes of this section.

F1072(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)[F165An officer of Revenue and Customs] may by notice require any person to provide [F1073the officer] with such particulars of any reportable events—

(a)which take place in a period specified in the notice, and

(b)in relation to which that person is a responsible person,

as are required by the notice or, if no reportable event in relation to which that person is a responsible person has taken place in that period, to state that fact.

(5)A notice under subsection (4) must specify a date by which it must be complied with.

(6)That date must not be less than 30 days after the date when the notice is given.

F1074(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1075(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)Section 421L explains who are the responsible persons in relation to a reportable event.

(10)The particulars required [F1076by a notice under] this section must be provided in a form specified by [F111the Commissioners for Her Majesty’s Revenue and Customs].

F1077(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1078(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1072S. 421J(3) omitted (with effect in accordance with Sch. 8 para. 233 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 227(2), 232

F1074S. 421J(7) omitted (with effect in accordance with Sch. 8 para. 233 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 227(2), 232

F1075S. 421J(8) omitted (with effect in accordance with Sch. 8 para. 233 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 227(2), 232

F1076Words in s. 421J(10) substituted (with effect in accordance with Sch. 8 para. 233 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 227(3), 232

F1077S. 421J(11) omitted (with effect in accordance with Sch. 8 para. 233 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 227(2), 232

F1078S. 421J(12) omitted (with effect in accordance with Sch. 8 para. 233 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 227(2), 232

[F1079421JAAnnual returnsU.K.

(1)This section applies in relation to a person who is (or has been) a responsible person (see section 421L) in relation to reportable events (see section 421K).

(2)The person must give to Her Majesty's Revenue and Customs (“HMRC”) a return for each tax year falling (wholly or partly) in the person's reportable event period.

(3)The person's “reportable event period” is the period—

(a)beginning when the first reportable event occurs in relation to which the person is a responsible person, and

(b)ending when the person will no longer be a responsible person in relation to reportable events.

(4)The return for a tax year must—

(a)contain, or be accompanied by, such information as HMRC may require, and

(b)be given on or before 6 July in the following tax year.

(5)The information which may be required under subsection (4)(a) includes (in particular) information to enable HMRC to determine the liability to tax, including capital gains tax, of any employee.

(6)If the person becomes aware that—

(a)anything which should have been included in, or should have accompanied, a return for a tax year was not included in, or did not accompany, the return,

(b)anything which should not have been included in, or should not have accompanied, a return for a tax year was included in, or accompanied, the return, or

(c)any other error or inaccuracy has occurred in relation to a return for a tax year,

the person must give an amended return correcting the position to HMRC without delay.

(7)A person's return for a tax year under this section need not contain, or be accompanied by, duplicate information and a person is not required to give a return for a tax year under this section if it would only contain, or be accompanied by, duplicate information.

(8)“Duplicate information” means information which is contained in or accompanies—

(a)a return which another person gives for the tax year under this section, or

(b)a return which any person gives for the tax year under any of the following provisions—

(i)paragraph 81B of Schedule 2 (annual return for Schedule 2 SIP);

(ii)paragraph 40B of Schedule 3 (annual return for Schedule 3 SAYE option scheme);

(iii)paragraph 28B of Schedule 4 (annual return for Schedule 4 CSOP scheme);

(iv)paragraph 52 of Schedule 5 (annual return for company whose shares are subject to qualifying options under the EMI code).

Textual Amendments

F1079Ss. 421JA-421JF inserted (with effect in accordance with Sch. 8 para. 234 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 228, 232

421JBReturns to be given electronicallyU.K.

(1)A return under section 421JA, and any information accompanying the return, must be given electronically.

(2)But, if HMRC consider it appropriate to do so, HMRC may allow a person to give a return or any accompanying information in another way; and, if HMRC do so, the return or information must be given in that other way.

(3)The Commissioners for Her Majesty's Revenue and Customs—

(a)must prescribe how returns and accompanying information are to be given electronically;

(b)may make different provision for different cases or circumstances.

Textual Amendments

F1079Ss. 421JA-421JF inserted (with effect in accordance with Sch. 8 para. 234 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 228, 232

421JCPenalties for late returnsU.K.

(1)This section applies if a person fails to give a return under section 421JA for a tax year (containing, or accompanied by, all required information) on or before the date mentioned in section 421JA(4)(b) (“the date for delivery”).

(2)The person is liable for a penalty of £100.

(3)If the person's failure continues after the end of the period of 3 months beginning with the date for delivery, the person is liable for a further penalty of £300.

(4)If the person's failure continues after the end of the period of 6 months beginning with the date for delivery, the person is liable for a further penalty of £300.

(5)The person is liable for a further penalty under this subsection if—

(a)the person's failure continues after the end of the period of 9 months beginning with the date for delivery,

(b)HMRC decide that such a penalty should be payable, and

(c)HMRC give notice to the person specifying the period in respect of which the penalty is payable.

(The person may be liable for more than one penalty under this subsection.)

(6)The penalty under subsection (5) is £10 for each day that the failure continues during the period specified in the notice under subsection (5)(c).

(7)The period specified in the notice under subsection (5)(c)—

(a)may begin earlier than the date on which the notice is given, but

(b)may not begin until after the end of the period mentioned in subsection (5)(a) or, if relevant, the end of any period specified in any previous notice under subsection (5)(c) given in relation to the failure.

(8)Liability for a penalty under this section does not arise if the person satisfies HMRC (or, on an appeal under section 421JF, the tribunal) that there is a reasonable excuse for the person's failure.

(9)For the purposes of subsection (8)—

(a)an insufficiency of funds is not a reasonable excuse, unless attributable to events outside the person's control,

(b)where the person relies on any other person to do anything, that is not a reasonable excuse unless the (first mentioned) person took reasonable care to avoid the failure, and

(c)where the person had a reasonable excuse for the failure but the excuse ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Textual Amendments

F1079Ss. 421JA-421JF inserted (with effect in accordance with Sch. 8 para. 234 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 228, 232

421JDPenalty if information not given correctlyU.K.

(1)This section applies if a return under section 421JA, or any information accompanying such a return—

(a)is given otherwise than in accordance with section 421JB, or

(b)contains a material inaccuracy—

(i)which is careless or deliberate, or

(ii)which is not corrected as required by section 421JA(6).

(2)The person in question is liable for a penalty of an amount decided by HMRC.

(3)The penalty must not exceed £5,000.

(4)For the purposes of subsection (1)(b)(i) an inaccuracy is careless if it is due to a failure by the person in question to take reasonable care.

Textual Amendments

F1079Ss. 421JA-421JF inserted (with effect in accordance with Sch. 8 para. 234 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 228, 232

421JEAssessment of penaltiesU.K.

(1)This section applies if a person is liable for a penalty under section 421JC or 421JD.

(2)HMRC must assess the penalty and notify the person of the assessment.

(3)Subject to subsection (4), the assessment must be made no later than 12 months after the date on which the person becomes liable for the penalty.

(4)In the case of a penalty under section 421JD(1)(b), the assessment must be made no later than—

(a)12 months after the date on which HMRC become aware of the inaccuracy, and

(b)6 years after the date on which the person becomes liable for the penalty.

(5)A penalty payable under this Part must be paid—

(a)no later than 30 days after the date on which the notice under subsection (2) is given to the person, or

(b)if notice of appeal is given against the penalty under section 421JF(1) or (2), no later than 30 days after the date on which the appeal is determined or withdrawn.

(6)The penalty may be enforced as if it were income tax or, if the person is a company within the charge to corporation tax, corporation tax charged in an assessment and due and payable.

(7)Sections 100 to 103 of TMA 1970 do not apply to a penalty under section 421JC or 421JD.

Textual Amendments

F1079Ss. 421JA-421JF inserted (with effect in accordance with Sch. 8 para. 234 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 228, 232

421JFAppealsU.K.

(1)A person may appeal against a decision of HMRC that the person is liable for a penalty under section 421JC or 421JD.

(2)A person may appeal against a decision of HMRC as to the amount of a penalty payable by the person under section 421JC or 421JD.

(3)Notice of appeal must be given to HMRC no later than 30 days after the date on which the notice under section 421JE(2) is given to the person.

(4)On an appeal under subsection (1) which is notified to the tribunal, the tribunal may affirm or cancel the decision.

(5)On an appeal under subsection (2) which is notified to the tribunal, the tribunal may—

(a)affirm the amount of the penalty decided, or

(b)substitute another amount for that amount.

(6)Subject to this section and section 421JE, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this section as they have effect in relation to an appeal against an assessment to income tax or, if the person is a company within the charge to corporation tax, corporation tax.]

Textual Amendments

F1079Ss. 421JA-421JF inserted (with effect in accordance with Sch. 8 para. 234 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 228, 232

421KReportable eventsU.K.

(1)This section applies for the purposes of [F1080sections 421J and 421JA (duties to provide information and annual returns)].

(2)Each of the events mentioned in subsection (3) is a reportable event.

(3)The events are—

(a)an acquisition (or an event treated as an acquisition) of securities, an interest in securities or a securities option pursuant to a right or opportunity available by reason of the employment of the person who acquires the securities, interest in securities or securities option or of any other person,

(b)an event which is a chargeable event in relation to securities, or an interest in securities, for the purposes of section 426 (chargeable events in relation to restricted securities and restricted interests in securities),

(c)an event which is a chargeable event in relation to securities, or an interest in securities, for the purposes of section 438 (chargeable events in relation to convertible securities and interests in convertible securities),

(d)the doing of anything which gives rise to a taxable amount counting as employment income under section 446L (artificial enhancement of market value of securities),

(e)an event which discharges a notional loan relating to securities, or an interest in securities, under section 446U (securities and interests in securities acquired for less than market value),

(f)a disposal of securities, or an interest in securities, by virtue of which Chapter 3D of this Part applies (securities and interests in securities disposed of for more than market value),

(g)the receipt of a benefit which gives rise to a taxable amount counting as employment income under section 447 (charge on benefit from securities or interest in securities) [F1081or would give rise to such an amount but for Chapter 4A (shares in research institution spin-out companies)],

(h)the assignment or release of a securities option acquired pursuant to a right or opportunity available by reason of the employment of the person who acquires the securities option or any other person, and

(i)the receipt of a benefit in money or money’s worth which is (or by virtue of section 477(6) is to be regarded as being) received in connection with such a securities option.

Textual Amendments

F1080Words in s. 421K(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 229, 232

F1081Words in s. 421K(3)(g) inserted (with effect in accordance with s. 20(5) of the amending Act) by Finance Act 2005 (c. 7), s. 20(4)

421LPersons to whom section 421J appliesU.K.

(1)This section applies for the purposes of [F1082sections 421J and 421JA (duties to provide information and annual returns)] .

(2)Each of the following persons is a responsible person in relation to a reportable event.

(3)The persons are—

(a)the employer in question,

(b)any host employer of the employee in question,

[F1083(ba)if the employee in question is a continental shelf worker and PAYE regulations do not apply to the employer in question, any person who is a relevant person in relation to the employee in question,]

(c)the person from whom the securities in question were, or interest or option in question was, acquired, and

(d)in relation to a reportable event concerning securities or an interest in securities which are not excluded securities, the person by whom the securities were issued.

(4)In subsection (3)(b) “host employer” means a person other than the employer in question—

(a)for whom the employee in question works at the time of the reportable event, and

(b)who would, by virtue of subsection (2) of section 689 (employees of non-UK employers working for a person other than the employer), be treated for the purposes of PAYE regulations as making a payment of PAYE income of the employee in question if a payment to which subsection (5) would apply were made by the employer in question in respect of the period during which the employee works for the other person.

(5)For the purposes of subsection (4)(b) this subsection would apply to a payment if—

(a)it were a payment of PAYE income of the employee, and

(b)the conditions in subsection (1)(c) and (d) of section 689 were satisfied in relation to the payment.

[F1084(5A)In subsection (3)(ba) “continental shelf worker” and “relevant person” have the meaning given by section 689A(11) (PAYE: oil and gas workers on the continental shelf).]

(6)For the purposes of subsection (3)(d) securities are excluded securities in relation to a reportable event if they are—

(a)loan stock, bonds or other instruments creating or acknowledging indebtedness issued by or on behalf of any national or regional government or local authority (in the United Kingdom or elsewhere) or any body whose members consists of states, national or regional governments or local authorities, or

(b)securities which are issued by a person who, at the time of the reportable event, is not connected with the employer in question and which are listed [F1085on a recognised stock exchange or dealt in on any designated market in the United Kingdom].

[F1086(7)In subsection (6)(b) “designated” means designated by an order made by the Commissioners for Her Majesty's Revenue and Customs for the purposes of that provision.

(8)An order under subsection (7) may—

(a)designate a market by name or by reference to any class or description of market, and

(b)vary or revoke a previous order under that subsection.]]

Textual Amendments

F1082Words in s. 421L(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 230, 232

F1085Words in s. 421L(6)(b) substituted (19.7.2007) by Finance Act 2007 (c. 11), Sch. 26 para. 10(2)(a)

F1086S. 421L(7)(8) inserted (19.7.2007) by Finance Act 2007 (c. 11), Sch. 26 para. 10(2)(b)

[F1087Chapter 2U.K.Restricted securities

Textual Amendments

F1087Pt. 7 Ch. 2 substituted (1.9.2003 with effect in accordance with Sch. 22 para. 3(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 3(1); S.I. 2003/1997, art. 2

IntroductionU.K.

422Application of this ChapterU.K.

This Chapter applies to employment-related securities if they are—

(a)restricted securities, or

(b)a restricted interest in securities,

at the time of the acquisition.

Modifications etc. (not altering text)

C40S. 422 modified (with application in accordance with Sch. 2 para. 4(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 4(4)

423“Restricted securities” and “restricted interest in securities”U.K.

(1)For the purposes of this Chapter employment-related securities are restricted securities or a restricted interest in securities if—

(a)there is any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) applies, and

(b)the market value of the employment-related securities is less than it would be but for that provision.

(2)This subsection applies to provision under which—

(a)there will be a transfer, reversion or forfeiture of the employment-related securities, or (if the employment-related securities are an interest in securities) of the interest or the securities, if certain circumstances arise or do not arise,

(b)as a result of the transfer, reversion or forfeiture the person by whom the employment-related securities are held will cease to be beneficially entitled to the employment-related securities, and

(c)that person will not be entitled on the transfer, reversion or forfeiture to receive in respect of the employment-related securities an amount of at least their market value (determined as if there were no provision for transfer, reversion or forfeiture) at the time of the transfer, reversion or forfeiture.

(3)This subsection applies to provision under which there is a restriction on—

(a)the freedom of the person by whom the employment-related securities are held to dispose of the employment-related securities or proceeds of their sale,

(b)the right of that person to retain the employment-related securities or proceeds of their sale, or

(c)any other right conferred by the employment-related securities,

(not being provision to which subsection (2) applies).

(4)This subsection applies to provision under which the disposal or retention of the employment-related securities, or the exercise of a right conferred by the employment-related securities, may result in a disadvantage to—

(a)the person by whom the employment-related securities are held,

(b)the employee (if not the person by whom they are held), or

(c)any person connected with the person by whom they are held or with the employee,

(not being provision to which subsection (2) or (3) applies).

424ExceptionsU.K.

[F1088(1) Employment-related securities are not restricted securities or a restricted interest in securities by reason only that any one or more of the following is the case—

(a)the employment-related securities (or the securities in which they are an interest) are unpaid or partly paid shares which may be forfeited for non-payment of calls and there is no restriction on the meeting of calls by the person by whom they are held, [F1089or]

(b)that person may be required to offer for sale or transfer the employment-related securities on the employee ceasing, as a result of misconduct, to be employed by the employer or a person connected with the employer, or

F1090(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F1091(2)Subsection (1) does not apply if the main purpose (or one of the main purposes) of the arrangements under which the right or opportunity to acquire the employment-related securities is made available is the avoidance of tax or national insurance contributions.]

Textual Amendments

F1088S. 424 renumbered as s. 424(1) (with effect in accordance with Sch. 2 para. 4(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 4(1)

F1089Word in s. 424(1)(a) inserted (with effect in accordance with Sch. 2 para. 4(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 4(2)(a)

F1090S. 424(1)(c) repealed (with effect in accordance with Sch. 2 para. 4(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 4(2)(b), Sch. 11 Pt. 2(1)

F1091S. 424(2) inserted (with effect in accordance with Sch. 2 para. 4(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 4(3)

Tax exemption on acquisitionU.K.

425No charge in respect of acquisition in certain casesU.K.

(1)Subsection (2) applies if the employment-related securities—

(a)are restricted securities, or a restricted interest in securities, by virtue of subsection (2) of section 423 (provision for transfer, reversion or forfeiture) at the time of the acquisition, and

(b)will cease to be restricted securities, or a restricted interest in securities, by virtue of that subsection within 5 years after the acquisition (whether or not they may remain restricted securities or a restricted interest in securities by virtue of the application of subsection (3) or (4) of that section).

(2)No liability to income tax arises in respect of the acquisition, except as provided by—

(a)Chapter 3 of this Part (acquisition by conversion),

(b)Chapter 3C of this Part (acquisition for less than market value), or

(c)Chapter 5 of this Part (acquisition pursuant to securities option).

(3)But the employer and the employee may elect that subsection (2) is not to apply to the employment-related securities.

(4)An election under subsection (3)—

(a)is to be made by agreement by the employer and the employee, and

(b)is irrevocable.

(5)Such an agreement—

(a)must be made in a form approved by [F111the Commissioners for Her Majesty’s Revenue and Customs] , and

(b)may not be made more than 14 days after the acquisition.

[F1092(6)No election may be made under subsection (3) unless, at the time of the acquisition, the earnings from the employment are (or would be if there were any) general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies.]

Textual Amendments

F1092S. 425(6) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 9, 47

Tax charge on post-acquisition chargeable eventsU.K.

426Charge on occurrence of chargeable eventU.K.

[F1093(1)If a chargeable event occurs in relation to the employment-related securities, the taxable amount counts as employment income of the employee for the relevant tax year.

(2)For this purpose—

(a)“chargeable event” has the meaning given by section 427,

(b)“the taxable amount”is the amount determined under section 428, and

(c)“the relevant tax year”is the tax year in which the chargeable event occurs.

(3)Relief may be available under section 428A (relief for secondary Class 1 contributions met by employee) against an amount counting as employment income under this section.]

(5)This section is subject to section 429 (case outside charge under this section).

Textual Amendments

F1093S. 426(1)-(3) substituted for s. 426(1)-(4) (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 1(2); S.I. 2004/1945, art. 2

427Chargeable eventsU.K.

(1)This section applies for the purposes of section 426 (charge on occurrence of chargeable event).

(2)Any of the events mentioned in subsection (3) is a “chargeable event” in relation to the employment-related securities.

(3)The events are—

(a)the employment-related securities ceasing to be restricted securities, or a restricted interest in securities, in circumstances in which an associated person is beneficially entitled to the employment-related securities after the event,

(b)the variation of any restriction relating to the employment-related securities in such circumstances (without the employment-related securities ceasing to be restricted securities or a restricted interest in securities), and

(c)the disposal for consideration of the employment-related securities, or any interest in them, by an associated person otherwise than to another associated person (at a time when they are still restricted securities or a restricted interest in securities).

(4)For the purposes of this Chapter there is a variation of a restriction relating to the employment-related securities if any restriction in relation to them is removed or varied.

428F1094Amount of chargeU.K.

(1)The taxable amount for the purposes of section 426 (charge on occurrence of chargeable event) is—

(2)UMV is what would be the market value of the employment-related securities immediately after the chargeable event but for any restrictions.

(3)IUP is—

where—

IUMV is what would have been the market value of the employment-related securities at the time of the acquisition but for any restrictions, and

DA is the total of any deductible amounts.

(4)PCP is the aggregate of the result of the application of the formula—

on each previous event (if any) occurring since the acquisition that was a chargeable event for the purposes of section 426 in relation to the employment-related securities (and so is nil if there has not been such a previous event).

(5)OP is—

where AMV is the actual market value of the employment-related securities immediately after the chargeable event.

(6)CE is any expenses incurred by the holder of the employment-related securities in connection with—

(a)the employment-related securities ceasing to be restricted securities or a restricted interest in securities,

(b)the variation of a restriction relating to the employment-related securities, or

(c)the disposal of the employment-related securities,

together (if the chargeable event is one within section 427(3)(a) or (b) (lifting of restrictions and variation of restriction)) with any consideration given for the employment-related securities ceasing to be restricted securities or a restricted interest in securities or the variation of a restriction relating to the employment-related securities.

[F1095(6A)CE also includes any amount that has counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A in relation to the employment-related securities where the relevant step (within the meaning of that Part) was taken before the chargeable event occurred.]

(7)For the purposes of this section each of the following is a “deductible amount”—

(a)the amount of any consideration given for the acquisition of the employment-related securities,

(b)any amount that constituted earnings from the employee’s employment under Chapter 1 of Part 3 (earnings) in respect of the acquisition of the employment-related securities [F1096(other than an amount of exempt income)],

[F1097(ba)any amount treated as earnings from the employee's employment under section 226A (employee shareholder shares: amount treated as earnings) in respect of the acquisition of the employment-related securities (other than an amount of exempt income),]

[F1098(bb)any amount that was charged to non-UK income tax in respect of the acquisition of the employment-related securities, but only so far as that amount exceeds any amount within paragraph (b) or (ba),]

(c)any amount that counted as employment income in relation to the employment-related securities under Chapter 2 or 4 of this Part as originally enacted,

(d)if the employment-related securities were acquired on a conversion of other employment-related securities, any amount that counted as employment income of the employee under Chapter 3 of this Part (including that Chapter as originally enacted) (convertible securities) by reason of the conversion, and

(e)if the acquisition of the employment-related securities was pursuant to a securities option, any amount that counted as employment income of the employee under section 476 (or section 476 or 477 as originally enacted) (acquisition of securities pursuant to securities option) by reason of the acquisition.

[F1099(7A)In subsection (7)(b) and (ba) the references to an amount of exempt income, in a case in which the amount that constituted, or was treated as, earnings in respect of the acquisition was not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applied, includes any amount that would have been an amount of exempt income if any of those charging provisions had applied.

(7B)In subsection (7)(bb) “non-UK income tax” means a tax chargeable on income under the law of a territory outside the United Kingdom that corresponds to United Kingdom income tax.

(7C)A tax is not outside the scope of subsection (7B) by reason only that it—

(a)is chargeable under the law of a province, state or other part of a country, or

(b)is levied by or on behalf of a municipality or other local body.]

(8)If the employment-related securities are convertible securities, or an interest in convertible securities, their market value is to be determined for the purposes of this section as if they were not.

(9)Where the chargeable event is one within section 427(3)(c) (disposal) and CD is less than AMV, the taxable amount for the purposes of section 426 is the amount determined under subsection (1) multiplied by—

where—

CD is the consideration given for the employment-related securities, and

AMV is the actual market value of the employment-related securities immediately after the chargeable event.

[F1100(10)But subsection (9) does not apply if something which affects the employment-related securities has been done (at or before the time of the chargeable event) as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]

Textual Amendments

F1094The words "(other than an amount of exempt income)" inserted at the end of s. 428(2)(b) as originally enacted (with effect in accordance with s. 49(10) of the amending Act) by Finance Act 2008 (c. 9), s. 49(3)

F1095S. 428(6A) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 15

F1096Words in s. 428(7)(b) inserted (with effect in accordance with s. 49(11) of the amending Act) by Finance Act 2008 (c. 9), s. 49(4)

F1097S. 428(7)(ba) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 5, 38; S.I. 2013/1755, art. 2

F1098S. 428(7)(bb) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 10(2), 47

F1099S. 428(7A)-(7C) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 10(3), 47

F1100S. 428(10) inserted (with effect in accordance with Sch. 2 para. 5(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 5

[F1101428ARelief for secondary Class 1 contributions met by employeeU.K.

(1)Relief is available under this section against an amount counting as employment income under section 426 (“the employment income amount”) if—

(a)an agreement having effect under paragraph 3A of Schedule 1 to the Contributions and Benefits Act has been entered into allowing the secondary contributor to recover from the employee the whole or part of any secondary Class 1 contribution in respect of that amount, or

(b)an election having effect under paragraph 3B of that Schedule is in force which has the effect of transferring to the employee the whole or part of the liability to pay secondary Class 1 contributions in respect of that amount.

(2)The amount of the relief is the total of—

(a)any amount that under the agreement referred to in subsection (1)(a) is recovered in respect of the employment income amount by the secondary contributor before 5th June in the tax year following that in which the chargeable event occurs, and

(b)the amount of any liability in respect of the employment income amount that, by virtue of the election referred to in subsection (1)(b), has become the employee’s liability.

(3)If notice of withdrawal of approval of the election is given, the amount of the liability referred to in subsection (2)(b) is limited to the amount met before 5th June in the tax year following that in which the chargeable event occurs.

(4)Relief under this section is given by way of deduction from the amount otherwise counting as employment income.

(5)Relief under this section does not affect the amount to be taken into account—

(a)as employment income in determining contributions payable under the Contributions and Benefits Act, or

(b)as relevant employment income for the purposes of paragraph 3A or 3B of Schedule 1 to that Act.

(6)In this section—

  • “approval”, in relation to an election, means approval by [F165an officer of Revenue and Customs] under paragraph 3B of Schedule 1 to the Contributions and Benefits Act, and

  • “secondary contributor” has the same meaning as in that Act (see section 7).]

Textual Amendments

429Case outside charge under section 426U.K.

(1)Section 426 (charge on occurrence of chargeable event) does not apply if—

(a)the employment-related securities are shares (or an interest in shares) in a company of a class,

(b)the provision by virtue of which the employment-related securities are restricted securities, or a restricted interest in securities, applies to all the company’s shares of the class,

[F1102(ba)subsection (1A) is satisfied,]

(c)all the company’s shares of the class (other than the employment-related securities) are affected by an event similar to that which is a chargeable event in relation to the employment-related securities, and

(d)subsection (3) or (4) is satisfied.

(1A)[F1103This subsection is satisfied unless something which affects the employment-related securities has been done (at or before the time when section 426 would apply) as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]

(2)For the purposes of subsection (1)(c) shares are affected by an event similar to that which is a chargeable event in relation to the employment-related securities—

(a)in the case of a chargeable event within section 427(3)(a) (lifting of restrictions), if the provision mentioned in subsection (1)(b) ceases to apply to them,

(b)in the case of a chargeable event within section 427(3)(b) (variation of restriction), if that provision is varied in relation to them in the same way as in relation to the employment-related securities, or

(c)in the case of a chargeable event within section 427(3)(c) (disposal), if they are disposed of.

(3)This subsection is satisfied if, immediately before the event that would be a chargeable event, the company is employee-controlled by virtue of holdings of shares of the class.

(4)This subsection is satisfied if, immediately before that event, the majority of the company’s shares of the class are not [F1104employment-related securities.]

F1105(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1102S. 429(1)(ba) inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(a)(3)(8), 86(1)

F1103S. 429(1A) substituted (with effect in accordance with Sch. 2 para. 6(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 6

F1104Words in s. 429(4) substituted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(a)(5)(8), 86(1)

F1105S. 429(5) repealed (with effect in accordance with s. 86(8) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)

430Election for outstanding restrictions to be ignoredU.K.

(1)The employer and the employee may elect that—

(a)on a chargeable event the taxable amount for the purposes of section 426 is to be determined by applying section 428(1) as if it did not include a reference to OP, and

(b)sections 426 to 429 are not to apply to the employment-related securities after that chargeable event.

(2)An election under this section—

(a)is to be made by agreement by the employer and the employee, and

(b)is irrevocable.

(3)Such an agreement—

(a)must be made in a form approved by [F111the Commissioners for Her Majesty’s Revenue and Customs] , and

(b)may not be made more than 14 days after the chargeable event.

[F1106(4)No election may be made under this section unless, at the time of the chargeable event, the earnings from the employment are (or would be if there were any) general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies.]

Textual Amendments

F1106S. 430(4) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 11, 47

[F1107430AApplication of this Chapter where securities exchanged for further securitiesU.K.

(1)This section applies if—

(a)an associated person disposes of the employment-related securities (“the old securities”) for consideration, otherwise than to another associated person,

(b)the whole or part of the consideration consists of, or includes, other securities which are restricted securities (“the new securities”) being acquired by an associated person,

(c)the value of the consideration determined in accordance with subsection (2) is no more than what would have been the market value of the old securities immediately before the disposal but for any restrictions, and

(d)the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of the disposal.

(2)The value of the consideration is the sum of—

(a)what would have been the market value of the new securities immediately before the disposal but for any restrictions, and

(b)the value of the rest of the consideration (if any).

(3)If the consideration consists partly of the new securities and partly of other consideration, the disposal is to be treated for the purposes of this Chapter as being two separate disposals as follows—

(a)a disposal, that is a chargeable event within section 427(3)(c), of the appropriate amount of the old securities (see subsection (4)) for such of the consideration as does not consist of the new securities, and

(b)a disposal, to which this section applies, of the remaining old securities for consideration consisting wholly of the new securities.

(4)In subsection (3)(a) the appropriate amount of the old securities is—

where—

OS is the total number of the old securities,

OC is the value of such of the consideration as does not consist of the new securities, and

TC is value of the consideration determined in accordance with subsection (2).

(5)If the consideration consists wholly of the new securities—

(a)neither the disposal of the old securities, nor the acquisition of the new securities, gives rise to any liability to income tax,

(b)the disposal is not a chargeable event within section 427(3)(c), and

(c)this Chapter applies to the new securities as it applies to the old securities, subject to subsections (6) to (17).

(6)Sections 425 and 431 do not apply in relation to the new securities.

(7)If, at the time of the disposal, sections 426 to 429 do not apply to the old securities by virtue of—

(a)an election made under section 430(1) or 431(1) in relation to the old securities, or

(b)this subsection,

sections 426 to 430 do not apply to the new securities.

(8)If there is a chargeable event for the purposes of section 426 in relation to any of the new securities, for the purposes of section 428 (amount of charge)—

(a)IUP (see subsection (3) of that section) is to be determined in accordance with subsection (9), and

(b)PCP (see subsection (4) of that section) is to be determined in accordance with subsection (10).

(9)IUP is equal to what IUP was, for the purposes of determining the taxable amount for the purposes of section 426, in relation to chargeable events relating to the old securities that occurred before the disposal (or what it would have been had there been any such chargeable events).

(10)PCP is the aggregate of—

(a)PCP determined in accordance with section 428(4), and

(b)what PCP would have been, for the purposes of determining the taxable amount for the purposes of section 426, if a chargeable event relating to the old securities had occurred immediately before the disposal but after any chargeable events relating to the old securities that actually did occur before the disposal.

(11)Subsections (12) to (14) apply if—

(a)section 425(2) (no liability to income tax on acquisition of certain securities subject to forfeiture etc) applied in relation to the old securities, and

(b)at the time of the disposal, there is still a restriction relating to those securities such that they are restricted securities by virtue of section 423(2) (provision for forfeiture etc).

(12)This Chapter has effect in relation to any of the new securities that are not restricted securities by virtue of section 423(2) as if—

(a)there were a restriction relating to them (“the deemed restriction”) corresponding to the restriction relating to the old securities mentioned in subsection (11)(b), and

(b)immediately after their acquisition, the deemed restriction were removed.

(13)Subsection (14) applies if—

(a)there is a restriction by virtue of which some or all of the new securities are, at the time of the disposal, restricted securities, by virtue of subsection (2) of section 423, and

(b)within 5 years after the acquisition of the old securities, the restriction is not removed or varied such that the new securities to which it relates cease to be restricted securities by virtue of that subsection.

(14)For the purposes of this Chapter the restriction mentioned in subsection (13) is to be treated as being removed 5 years after the acquisition of the old securities.

(15)Subsection (16) applies if, at the time of the disposal—

(a)there is a restriction relating to the old securities such that they are restricted securities by virtue of section 423(2), and

(b)subsections (13) and (14) apply in relation to the old securities (including by virtue of subsection (16)).

(16)Subsections (12) to (14) apply in relation to the new securities, but—

(a)the reference in subsection (12)(a) to the restriction mentioned in subsection (11)(b) is to be read as a reference to the restriction mentioned in subsection (15)(a), and

(b)the references in subsections (13)(b) and (14) to the acquisition of the old securities are to be read as references to the acquisition of the original forfeitable securities.

(17)In subsection (16) “original forfeitable securities” means the restricted securities by virtue of the application to which of section 425(2) subsections (13) and (14) apply to the old securities.

(18)In this section references to restricted securities include a restricted interest in securities.]

Textual Amendments

F1107S. 430A inserted (17.7.2014) by virtue of Finance Act 2014 (c. 26), Sch. 9 para. 36

431Election for full or partial disapplication of this ChapterU.K.

(1)The employer and the employee may elect in relation to employment-related securities which are restricted securities or a restricted interest in securities that—

(a)for the relevant tax purposes their market value at the time of the acquisition is to be calculated as if they were not, and

(b)sections 425 to 430 are not to apply to the employment-related securities.

(2)Or the employer and the employee may elect in relation to employment-related securities which are restricted securities or a restricted interest in securities that—

(a)for the relevant tax purposes their market value at the time of the acquisition is to be calculated, and

(b)sections 425 to 430 are to apply to the employment-related securities,

as if any specified restriction did not apply to the employment-related securities.

(3)For the purposes of subsections (1) and (2) “the relevant tax purposes” are—

(a)determining any amount that is to constitute earnings from the employment under Chapter 1 of Part 3 (earnings),

[F1108(aa)determining any amount that is to be treated as earnings from the employment where section 226A applies (employee shareholder shares: amount treated as earnings),]

(b)determining the amount of any gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(a) (conversion),

(c)operating Chapter 3C of this Part (acquisition of securities for less than market value), F1109...

(d)determining any amount that counts as employment income of the employee under Chapter 5 of this Part (securities acquired pursuant to securities option) [F1110, and

(e)determining any amount that counts as employment income of the employee in respect of the employment under Chapter 2 of Part 7A (employment income provided through third parties)]

(4)An election under this section—

(a)is to be made by agreement by the employer and the employee, and

(b)is irrevocable.

(5)Such an agreement—

(a)must be made in a form approved by [F111the Commissioners for Her Majesty’s Revenue and Customs] and

(b)may not be made more than 14 days after the acquisition.

[F1111(6)No election may be made under this section unless, at the time of the acquisition, the earnings from the employment are (or would be if there were any) general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies.]

Textual Amendments

F1108S. 431(3)(aa) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 6, 38; S.I. 2013/1755, art. 2

F1109Word in s. 431(3) omitted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 16(a)

F1110S. 431(3)(e) and word inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 16(b)

F1111S. 431(6) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 12, 47

Modifications etc. (not altering text)

C41S. 431 applied (with modifications) (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 91(2)

[F1112431AShares under [F1113tax advantaged] plan or schemeU.K.

(1)Where employment-related securities are restricted securities or a restricted interest in securities, the employer and the employee are to be treated as making an election under section 431(1) in relation to the employment-related securities if they are shares, or an interest in shares, to which this subsection applies.

(2)Subsection (1) applies to—

(a)shares awarded or acquired under [F1114a Schedule 2] share incentive plan (within the meaning of Chapter 6 of this Part) in circumstances in which (in accordance with section 490) no liability to income tax arises,

(b)shares acquired by the exercise of a share option granted under [F1115a Schedule 3] SAYE option scheme (within the meaning of Chapter 7 of this Part) in circumstances in which (in accordance with section 519) no liability to income tax arises,

(c)shares acquired by the exercise of a share option granted under [F1116a Schedule 4] CSOP scheme (within the meaning of Chapter 8 of this Part) in circumstances in which (in accordance with section 524) no liability to income tax arises, and

(d)shares acquired by the exercise of a qualifying option within the meaning of section 527(4) (enterprise management incentives) in circumstances in which (in accordance with section 530) no liability to income tax arises.]

Textual Amendments

F1112S. 431A inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(3)

F1113Words in s. 431A heading substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 47(2), 89 (with Sch. 8 paras. 90-96)

F1114Words in s. 431A(2)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 47(3), 89 (with Sch. 8 paras. 90-96)

F1115Words in s. 431A(2)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 132, 146 (with Sch. 8 paras. 147-157)

F1116Words in s. 431A(2)(c) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 193, 204 (with Sch. 8 paras. 205-215)

[F1117431BSecurities acquired for purpose of avoidanceU.K.

Where employment-related securities are restricted securities or a restricted interest in securities, the employer and the employee are to be treated as making an election under section 431(1) in relation to the employment-related securities if

[F1118(a) the main purpose (or one of the main purposes) of the arrangements under which the right or opportunity to acquire the employment-related securities is made available is the avoidance of tax or national insurance contributions] [F1119, and]

[F1120(b)at the time of the acquisition, the earnings from the employment are (or would be if there were any) general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies.]]

Textual Amendments

F1117S. 431B inserted (with effect in accordance with Sch. 2 para. 7(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 7(1)

432DefinitionsU.K.

(1)In this Chapter—

  • “interest”, in relation to securities,

  • “securities”,

  • “securities option”, and

  • “shares”,

  • have the meaning indicated in section 420.

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)For the purposes of this Chapter sections 421(2) and 421A apply for determining the amount of the consideration given for anything and section 421I applies for determining the amount of the consideration given for the acquisition of employment-related securities.

(4)In this Chapter—

  • “the acquisition”,

  • “the employee” (except in section 429),

  • “the employer”,

  • “the employment”, and

  • “employment-related securities”,

  • have the meaning indicated in section 421B(8).

(5)In this Chapter “associated person” has the meaning indicated in section 421C.

(6)In this Chapter—

  • “associated company”, and

  • “employee-controlled”,

  • have the meaning indicated in section 421H.

(7)In this Chapter—

  • “restricted interest in securities”, and

  • “restricted securities”,

  • have the meaning indicated in sections 423 and 424.

(8)In this Chapter “restriction”, in relation to securities or an interest in securities, means provision relating to the securities or interest which is made by any contract, agreement, arrangement or condition and to which any of subsections (2) to (4) of section 423 applies.

(9)In this Chapter “variation”, in relation to a restriction, has the meaning indicated in section 427(4).

(10)In this Chapter “convertible securities” has the same meaning as in Chapter 3 of this Part (see section 436).]

[F1121Chapter 3U.K.Convertible securities

Textual Amendments

F1121Pt. 7 Ch. 3 substituted (1.9.2003 with effect in accordance with Sch. 22 para. 4(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 4(1); S.I. 2003/1997, art. 2

IntroductionU.K.

435Application of this ChapterU.K.

This Chapter applies to employment-related securities if they are—

(a)convertible securities, or

(b)an interest in convertible securities,

at the time of the acquisition.

436“Convertible securities”U.K.

For the purposes of this Chapter securities are convertible securities if—

(a)they confer on the holder an [F1122entitlement (whether immediate or deferred and whether conditional or unconditional)] to convert them into securities of a different description,

(b)a contract, agreement, arrangement or condition authorises or requires the grant of such an entitlement to the holder if certain circumstances arise, or do not arise, or

(c)a contract, agreement, arrangement or condition makes provision for the conversion of the securities (otherwise than by the holder) into securities of a different description.

Textual Amendments

F1122Words in s. 436(a) substituted (with effect in accordance with Sch. 2 para. 9(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 9(1)

Tax relief on acquisitionU.K.

437Adjustment of chargeU.K.

[F1123(1) For the purposes of—

(a)any liability to tax under Chapter 1 of Part 3 (earnings), Chapter 10 of Part 3 (taxable benefits: residual liability to charge) [F1124, section 226A (employee shareholder shares: amount treated as earnings)] or Chapter 5 of this Part (acquisition of securities pursuant to securities option) [F1125or Chapter 2 of Part 7A (employment income provided through third parties)], and

(b)the operation of Chapter 3C of this Part (acquisition of securities for less than market value),

the market value of the employment-related securities is to be determined as if they were not convertible securities or an interest in convertible securities]

[F1126(2)Subsection (1) does not apply if the main purpose (or one of the main purposes) of the arrangements under which the right or opportunity to acquire the employment-related securities is made available is the avoidance of tax or national insurance contributions unless the market value of the employment-related securities determined under subsection (1) would be greater than that determined under subsection (3).

(3)Where subsection (1) does not apply by virtue of subsection (2) the market value of the employment-related securities is to be determined—

(a)where the securities which are (or an interest in which is) the employment-related securities fall within paragraph (a) of section 436 and the entitlement to convert is not both immediate and unconditional, as if it were,

(b)where they fall within paragraph (b) of that section, as if the circumstances are such that an entitlement to convert arises immediately, and

(c)where they fall within paragraph (c) of that section, as if provision were made for their immediate conversion;

and in each case is to be determined as if they were immediately and fully convertible.

(4)In subsection (3) “immediately and fully convertible” means convertible immediately after the acquisition of the employment-related securities so as to obtain the maximum gain that would be possible on a conversion at that time (assuming, where the securities into which the securities may be converted were not in existence at that time and it is appropriate to do so, that they were) without giving any consideration for the conversion or incurring any expenses in connection with it.]

Textual Amendments

F1123S. 437(1): s. 437 renumbered as s. 437(1) (with effect in accordance with Sch. 2 para. 9(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 9(2)

F1124Words in s. 437(1)(a) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 7, 38; S.I. 2013/1755, art. 2

F1125Words in s. 437(1)(a) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 17

F1126S. 437(2)-(4) inserted (with effect in accordance with Sch. 2 para. 9(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 9(3)

Tax charge on post-acquisition chargeable eventsU.K.

438Charge on occurrence of chargeable eventU.K.

[F1127(1)If a chargeable event occurs in relation to the employment-related securities, the taxable amount counts as employment income of the employee for the relevant tax year.

(2)For this purpose—

(a)“chargeable event” has the meaning given by section 439,

(b)“the taxable amount”is the amount determined under section 440, and

(c)“the relevant tax year”is the tax year in which the chargeable event occurs.

(3)Relief may be available under section 442A (relief for secondary Class 1 contributions met by employee) against an amount counting as employment income under this section.]

(5)This section is subject to section 443 (case outside charge under this section).

Textual Amendments

F1127S. 438(1)-(3) substituted for s. 438(1)-(4) (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 2(2); S.I. 2004/1945, art. 2

439Chargeable eventsU.K.

(1)This section applies for the purposes of section 438 (charge on occurrence of chargeable event).

(2)Any of the events mentioned in subsection (3) is a “chargeable event” in relation to the employment-related securities.

(3)The events are—

(a)the conversion of the employment-related securities (or the securities in which they are an interest) into securities of a different description in circumstances in which an associated person is beneficially entitled to the securities into which the employment-related securities are converted,

(b)the disposal for consideration of the employment-related securities, or any interest in them, by an associated person otherwise than to another associated person (at a time when they are still convertible securities or an interest in convertible securities),

(c)the release for consideration of the entitlement to convert the employment-related securities (or the securities in which they are an interest) into securities of a different description, and

(d)the receipt by an associated person of a benefit in money or money’s worth in connection with the entitlement to convert (other than securities acquired on the conversion of the employment-related securities or consideration such as is mentioned in paragraph (b) or (c)).

(4)A benefit received on account of any disability (within the meaning of [F1128the Equality Act 2010 in England and Wales and Scotland, or] the Disability Discrimination Act 1995) of the employee is to be disregarded for the purposes of subsection (3)(d).

Textual Amendments

F1128Words in s. 439(4) inserted by Equality Act 2010 (c. 15), Sch. 26 para. 51 (as inserted (1.10.2010) by S.I. 2010/2279, art. 1(2), Sch. 1 para. 5) (with S.I. 2010/2317, art. 2)

440Amount of chargeU.K.

(1)The taxable amount for the purposes of section 438 (charge on occurrence of chargeable event) is—

(2)AG is the amount of any gain realised on the occurrence of the chargeable event.

(3)CE is the amount of any consideration given for the entitlement to convert the employment-related securities or the securities in which they are an interest together with the amount of any expenses incurred by the holder of the employment-related securities in connection with the conversion, disposal, release or receipt.

[F1129(3A)If (because of subsection (2) of section 437) subsection (1) of that section did not apply in relation to the employment-related securities, the taxable amount is to be reduced by the amount by which—

(a)the market value of the employment-related securities for the purposes specified in that subsection, exceeded

(b)what it would have been had that subsection applied,

(less the aggregate of any amount by which the taxable amount on any previous chargeable event relating to the employment-related securities has been reduced under this subsection).]

(4)Section 441 explains what is the amount of any gain realised on the occurrence of a chargeable event.

(5)Section 442 explains whether consideration is given for the entitlement to convert the employment-related securities or the securities in which they are an interest and, if it is, what is its amount.

Textual Amendments

F1129S. 440(3A) inserted (with effect in accordance with Sch. 2 para. 10(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 10(1)

441Amount of gain realised on occurrence of chargeable eventU.K.

(1)This section applies for the purposes of section 440 (amount of charge on occurrence of chargeable event).

(2)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(a) (conversion) is—

(3)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(b) (disposal) is—

(4)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(c) (release of entitlement to convert) is the amount of the consideration received by an associated person in respect of the release.

(5)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(d) (receipt of benefit) is the amount or market value of the benefit.

(6)CMVCS—

(a)if the employment-related securities are securities, is the market value at the time of the chargeable event of the securities into which they are converted (determined, where those securities are themselves convertible securities, as if they were not), or

(b)if the employment-related securities are an interest in securities, is the same proportion of that market value as the market value of the interest in the securities in which the employment-related securities are an interest bears to the market value of those securities.

(7)CMVERS is the market value of the employment-related securities at the time of the chargeable event determined as if they were not convertible securities or an interest in convertible securities.

(8)CC is the amount of any consideration given for the conversion of the employment-related securities.

(9)DC is the amount of the consideration given on the disposal.

[F1130(10)Subsection (11) applies for the purposes of subsection (2) or (3) if—

(a)prior to the acquisition, the employment-related securities were the subject of a relevant step within the meaning of Part 7A by reason of which Chapter 2 of that Part applied in respect of the employment, and

(b)the amount mentioned in subsection (11)(a) is higher than the amount mentioned in subsection (11)(b).

(11)The amount of the gain realised is reduced (but not below nil) by the amount equal to—

(a)the amount that counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A, less

(b)the market value of the employment-related securities when the relevant step was taken determined as if they were not convertible securities or an interest in convertible securities.]

Textual Amendments

F1130S. 441(10)(11) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 18

442Amount of consideration given for entitlement to convertU.K.

(1)This section applies for the purposes of section 440 (amount of charge on occurrence of chargeable event).

(2)Consideration is to be regarded as given for the entitlement to convert the employment-related securities (or the securities in which they are an interest) if (and only if) ACS exceeds NCMV.

(3)The amount of the consideration to be regarded as so given is the amount of the excess.

(4)ACS is the amount of the consideration given for the acquisition of the employment-related securities.

(5)NCMV is the market value of the employment-related securities at the time of the acquisition, determined as if they were not convertible securities or an interest in convertible securities.

[F1131442ARelief for secondary Class 1 contributions met by employeeU.K.

(1)Relief is available under this section against an amount counting as employment income under section 438 (“the employment income amount”) if—

(a)an agreement having effect under paragraph 3A of Schedule 1 to the Contributions and Benefits Act has been entered into allowing the secondary contributor to recover from the employee the whole or part of any secondary Class 1 contribution in respect of that amount, or

(b)an election having effect under paragraph 3B of that Schedule is in force which has the effect of transferring to the employee the whole or part of the liability to pay secondary Class 1 contributions in respect of that amount.

(2)The amount of the relief is the total of—

(a)any amount that under the agreement referred to in subsection (1)(a) is recovered in respect of the employment income amount by the secondary contributor before 5th June in the tax year following that in which the chargeable event occurs, and

(b)the amount of any liability in respect of the employment income amount that, by virtue of the election referred to in subsection (1)(b), has become the employee’s liability.

(3)If notice of withdrawal of approval of the election is given, the amount of the liability referred to in subsection (2)(b) is limited to the amount met before 5th June in the tax year following that in which the gain is realised.

(4)Relief under this section is given by way of deduction from the amount otherwise counting as employment income.

(5)Relief under this section does not affect the amount to be taken into account—

(a)as employment income in determining contributions payable under the Contributions and Benefits Act, or

(b)as relevant employment income for the purposes of paragraph 3A or 3B of Schedule 1 to that Act.

(6)In this section—

  • “approval”, in relation to an election, means approval by [F165an officer of Revenue and Customs] under paragraph 3B of Schedule 1 to the Contributions and Benefits Act, and

  • “secondary contributor” has the same meaning as in that Act (see section 7).]

Textual Amendments

443Case outside charge under section 438U.K.

(1)Section 438 (charge on occurrence of chargeable event) does not apply if—

(a)the employment-related securities are shares (or an interest in shares) in a company of a class,

(b)all the company’s shares of the class are convertible securities,

[F1132(ba)subsection (1A) is satisfied,]

(c)all the company’s shares of the class (other than the employment-related securities) are affected by an event similar to that which is a chargeable event in relation to the employment-related securities, and

(d)subsection (3) or (4) is satisfied.

[F1133(1A)This subsection is satisfied unless something which affects the employment-related securities has been done (at or before the time when section 438 would apply) as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]

(2)For the purposes of subsection (1)(c) shares are affected by an event similar to that which is a chargeable event in relation to the employment-related securities—

(a)in the case of a chargeable event within section 439(3)(a) (conversion), if they are converted into securities of a different description,

(b)in the case of a chargeable event within section 439(3)(b) (disposal), if they are disposed of,

(c)in the case of a chargeable event within section 439(3)(c) (release of entitlement to convert), if the entitlement to convert them into securities of a different description is released, or

(d)in the case of a chargeable event within section 439(3)(d) (receipt of benefit), if a similar benefit is received in respect of the entitlement to convert them.

(3)This subsection is satisfied if, immediately before the event that would be a chargeable event, the company is employee-controlled by virtue of holdings of shares of the class.

(4)This subsection is satisfied if, immediately before that event, the majority of the company’s shares of the class are not [F1134employment-related securities.]

F1135(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1132S. 443(1)(ba) inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(b)(3)(8), 86(1)

F1133S. 443(1A) substituted (with effect in accordance with Sch. 2 para. 11(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 11(1)

F1134Words in s. 443(4) substituted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(b)(5)(8), 86(1)

F1135S. 443(5) repealed (with effect in accordance with s. 86(8) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)

SupplementaryU.K.

444DefinitionsU.K.

(1)In this Chapter—

  • “interest”, in relation to securities,

  • “securities”, and

  • “shares”,

  • have the meaning indicated in section 420.

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)For the purposes of this Chapter sections 421(2) and 421A apply for determining the amount of the consideration given for anything and section 421I applies for determining the amount of the consideration given for the acquisition of employment-related securities.

(4)In this Chapter—

  • “the acquisition”,

  • “the employee” (except in section 443), and

  • “employment-related securities”,

  • have the meaning indicated in section 421B(8).

(5)In this Chapter “associated person” has the meaning indicated in section 421C.

(6)In this Chapter—

  • “associated company”, and

  • “employee-controlled”,

  • have the meaning indicated in section 421H.

(7)In this Chapter “convertible securities” has the meaning indicated in section 436.]

[F1136Chapter 3AU.K.Securities with artificially depressed market value

Textual Amendments

F1136Pt. 7 Ch. 3A inserted (16.4.2003 with effect in accordance with Sch. 22 para. 5(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 5(1)

IntroductionU.K.

446AApplication of this ChapterU.K.

(1)This Chapter applies in certain cases where the market value of employment-related securities (or other relevant securities or interests in securities) is reduced by things done otherwise than for genuine commercial purposes.

(2)The following are among the things that are, for the purposes of this Chapter, done otherwise than for genuine commercial purposes—

(a)anything done as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax or national insurance contributions, and

(b)any transaction between companies which are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length (other than a payment for group relief).

(3)In subsection (2)(b)—

(a)“group” means a company and its 51% subsidiaries, and

(b)“group relief” has the same meaning as in [F1137section 183(1) of CTA 2010].

Textual Amendments

F1137Words in s. 446A(3)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 387 (with Sch. 2)

Tax charge on acquisitionU.K.

446BCharge on acquisitionU.K.

(1)This section applies where the market value of employment-related securities at the time of the acquisition has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the acquisition.

(2)The taxable amount determined under section 446C counts as employment income of the employee for the tax year in which the acquisition occurs.

(3)But this section does not apply if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applies in relation to the employment-related securities.

(4)This section does not affect any liability to income tax arising in respect of the acquisition of the employment-related securities under—

(a)Chapter 1 of Part 3 (earnings),

(b)Chapter 10 of Part 3 (taxable benefits: residual liability to charge),

[F1138(ba)section 226A (employee shareholder shares: amount treated as earnings),]

(c)Chapter 3 of this Part (acquisition by conversion),

(d)Chapter 3C of this Part (acquisition for less than market value), F1139...

(e)Chapter 5 of this Part (acquisition pursuant to securities option) [F1140, or

(f)Chapter 2 of Part 7A (employment income provided through third parties)]

Textual Amendments

F1138S. 446B(4)(ba) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 8, 38; S.I. 2013/1755, art. 2

F1139Word in s. 446B(4) omitted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 19(a)

F1140S. 446B(4)(f) and word inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 19(b)

446CAmount of chargeU.K.

(1)The taxable amount for the purposes of section 446B (charge on acquisition) is—

(2)FMV is what would be the market value of the employment-related securities at the time of the acquisition if the things mentioned in section 446B(1) had not been done.

(3)MV is the actual market value of the employment-related securities at the time of the acquisition.

(4)But where what would be MV is less than the amount of any consideration given for the acquisition of the employment-related securities, MV is the amount of that consideration.

[F1141(4A)Subsection (4B) applies if, prior to the acquisition, the employment-related securities were the subject of a relevant step within the meaning of Part 7A by reason of which Chapter 2 of that Part applied in respect of the employment.

(4B)If what would be MV in accordance with subsection (3) or (4) (as the case may be) is less than the amount that counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A, MV is the amount of that employment income instead of the amount determined in accordance with subsection (3) or (4).]

(5)This section is subject to section 446D (restricted securities and convertible securities).

Textual Amendments

F1141S. 446C(4A)(4B) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 20

446DRestricted securities and convertible securitiesU.K.

(1)Where the employment-related securities are restricted securities or a restricted interest in securities, FMV (but not MV) is to be determined as if the employment-related securities were not restricted securities or a restricted interest in securities; and, accordingly, sections 426 to 431 (post-acquisition charges on restricted securities) do not apply to the employment-related securities.

(2)Where the employment-related securities are convertible securities or an interest in convertible securities, FMV and MV are to be determined as if they were not.

Other tax chargesU.K.

446ECharge on restricted securitiesU.K.

(1)This section applies where the market value of employment-related securities which are restricted securities or a restricted interest in securities is artificially low—

(a)immediately after an event which is a chargeable event in relation to the employment-related securities for the purposes of section 426 (charge on restricted securities),

[F1142(aa)immediately before the employment-related securities are disposed of (in circumstances which do not constitute such an event) or are cancelled without being disposed of,] or

(b)on 5th April in any year.

(2)The market value of the employment-related securities is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the relevant period.

[F1143(3)“The relevant period”is the period beginning—

(a)if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applied in relation to the employment-related securities, 7 years before the acquisition, and

(b)in any other case, 7 years before the relevant date,

and ending with the relevant date.

(4)“The relevant date”is—

(a)in a case within subsection (1)(a), the date on which the chargeable event concerned occurs,

(b)in a case within subsection (1)(aa), the date on which the disposal or cancellation concerned occurs, and

(c)in a case within subsection (1)(b), the 5th April concerned.

(5)Where this section applies in a case within subsection (1)(aa) or (b), a chargeable event within section 427(3)(a) (lifting of restrictions) is to be treated as occurring in relation to the employment-related securities on the relevant date.

(6)In every case where this section applies, subsection (1) of section 428 (amount of charge on restricted securities) applies as if the reference in subsection (2) of that section to what would be the market value of the employment-related securities immediately after the chargeable event but for any restrictions were to what would be their market value at the appropriate time but for the matters to be disregarded.

(7)“The appropriate time”is—

(a)in a case within subsection (1)(a) or (b), the time immediately after the chargeable event concerned, and

(b)in a case within subsection (1)(aa), the time immediately before the chargeable event concerned.

(8)“The matters to be disregarded” are—

(a)any restrictions,

(b)the things done as mentioned in subsection (2), and

(c)if the employment-related securities are about to be disposed of or cancelled, that fact.

(9)Where this section applies in a case within subsection (1)(aa), section 428(1) applies with the omission of the reference to OP.

(10)Where this section applies in a case within subsection (1)(a) and the chargeable event concerned is within section 427(3)(c) (disposal for consideration), section 428 applies with the omission of subsection (9) (case where consideration is less than actual market value).]

Textual Amendments

F1142S. 446E(1)(aa) inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), s. 87(2)(4) (with s. 87(5))

F1143Ss. 446E(3)-(10) substituted for (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), s. 87(3)(4) (with s. 87(5))

446FAdjustment of market value: conditional interestsU.K.

(1)This section applies where the market value of an employee’s interest in shares which is only conditional is artificially low immediately after a chargeable event relating to the shares under section 427 as originally enacted.

(2)The market value of the shares is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period beginning—

(a)7 years before the chargeable event, or

(b)with 16th April 2003,

whichever is later.

(3)There is a chargeable event in relation to shares if section 427 (as originally enacted) applies in relation to them.

(4)The reference in the definition of MV in section 428(1) (as originally enacted) to the market value of the employee’s interest is to what would be the market value but for the reduction as a result of the things done as mentioned in subsection (2).

(5)Expressions used in this section and in Chapter 2 of this Part as originally enacted have the same meaning in this section as in that Chapter.

446GAdjustment of market value: consideration for entitlement to convertU.K.

(1)This section applies where the market value of employment-related securities which are convertible securities or an interest in convertible securities (determined as if they were not) has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the acquisition.

(2)The reference to the market value of the employment-related securities in the definition of NCMV in section 442(5) (value of convertible securities at time of acquisition) is to what would be the market value but for the reduction as a result of the things done as mentioned in subsection (1) (and but for the fact that they are convertible securities or an interest in convertible securities).

446HAdjustment of market value: charge on conversionU.K.

(1)This section applies where the market value of securities (“the converted securities”) into which employment-related securities (or securities in which employment-related securities are an interest) are converted is artificially low at the time of an event which is a chargeable event in relation to the employment-related securities by virtue of section 439(3)(a) (conversion).

(2)The market value of the converted securities is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the chargeable event.

(3)The references to the market value of the converted securities in the definition of CMVCS in section 441(6) (amount of gain realised by conversion) are to what would be the market value but for the reduction as a result of the things done as mentioned in subsection (2).

446IAdjustment of consideration or benefit receivedU.K.

(1)This section applies where any consideration or benefit mentioned in—

(a)section 428(9) (consideration on disposal of restricted securities),

(b)section 441(4), (5) or (9) (consideration for disposal of convertible securities or release of entitlement to convert or benefit received in respect of entitlement to convert),

(c)section 446C(4) (securities with artificially depressed market value: MV to be amount of consideration),

(d)sections 446X and 446Y(3) (consideration for disposal of securities exceeding market value), or

(e)section 448 (securities benefit not otherwise subject to tax),

consists (in whole or in part) in the provision of securities or an interest in securities the market value of which is artificially low.

(2)The market value of any securities or interest in securities is artificially low where it has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the receipt of the consideration or benefit.

(3)The market value of the consideration or benefit consisting in the provision of the securities or interest in securities is for the purposes of the provision or provisions concerned to be taken to be what it would be but for the reduction as a result of the things done as mentioned in subsection (2).

[F1144446IADisapplication of exceptions from chargesU.K.

(1)Section 429 (exception from charge under section 426 for certain company shares) does not prevent section 426 (restricted securities: chargeable events) applying in relation to an event if section 446E or 446I(1)(a) would have effect in relation to the event.

(2)Section 443 (exception from charge under section 438 for certain company shares) does not prevent section 438 (convertible securities: chargeable events) applying in relation to an event if section 446G, 446H or 446I(1)(b) would have effect in relation to the event.

(3)Section 446R (exception from charge under Chapter 3C for certain company shares) does not prevent that Chapter (securities acquired for less than market value) applying in relation to employment-related securities if section 446B would have effect in relation to them.

(4)Section 449 (exception from charge under Chapter 4 for certain company shares) does not prevent that Chapter (benefits from securities) applying in relation to a benefit if section 446I(1)(e) would have effect in relation to the benefit.]

Textual Amendments

F1144S. 446IA inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), s. 86(6)(8)

SupplementaryU.K.

446JDefinitionsU.K.

(1)In this Chapter—

  • “interest”, in relation to securities, and

  • “securities”,

  • have the meaning indicated in section 420.

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)For the purposes of this Chapter sections 421(2) and 421A apply for determining the amount of the consideration given for anything and section 421I applies for determining the amount of the consideration given for the acquisition of employment-related securities.

(4)In this Chapter—

  • “the acquisition”,

  • “the employee”, and

  • “employment-related securities”,

  • have the meaning indicated in section 421B(8).

(5)In this Chapter—

  • “restricted interest in securities”, and

  • “restricted securities”,

  • have the same meaning as in Chapter 2 of this Part (see sections 423 and 424).

(6)In this Chapter “restriction” has the same meaning as in Chapter 2 of this Part (see section 432(8)).

(7)In this Chapter “convertible securities” has the same meaning as in Chapter 3 of this Part (see section 436).]

[F1145Chapter 3BU.K.Securities with artificially enhanced market value

Textual Amendments

F1145Pt. 7 Ch. 3B inserted (16.4.2003 with effect in accordance with Sch. 22 para. 6(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 6(1)

IntroductionU.K.

446KApplication of this ChapterU.K.

(1)This Chapter applies in certain cases where the market value of employment-related securities is increased by things done otherwise than for genuine commercial purposes.

(2)The following are among the things that are, for the purposes of this Chapter, done otherwise than for genuine commercial purposes—

(a)anything done as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax or national insurance contributions, and

(b)any transaction between companies which are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length (other than a payment for group relief).

(3)In subsection (2)(b)—

(a)“group” means a company and its 51% subsidiaries, and

(b)“group relief” has the same meaning as in [F1146section 183(1) of CTA 2010].

(4)In this Chapter, in relation to the market value of the employment-related securities—

  • “non-commercial increase” means an increase in the market value as a result of anything done otherwise than for genuine commercial purposes, and

  • “non-commercial reduction” means a reduction in the market value as a result of anything done otherwise than for genuine commercial purposes.

Textual Amendments

F1146Words in s. 446K(3)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 388 (with Sch. 2)

Charge on non-commercial increasesU.K.

446LCharge on non-commercial increasesU.K.

(1)This section applies in relation to employment-related securities where on a date that is the valuation date in relation to a relevant period IMV is at least 10% greater than MV.

(2)The taxable amount determined under subsection (4) counts as employment income of the employee for the relevant tax year (but subject to sections 446M and 446N).

(3)The “relevant tax year” is the tax year in which the valuation date falls.

(4)The taxable amount is—

(5)IMV is the market value of the employment-related securities on the valuation date.

(6)MV is the amount that would be the market value of the employment-related securities on the valuation date if any non-commercial increases during the relevant period were disregarded.

(7)For the purposes of subsections (5) and (6)—

(a)any restrictions having effect in relation to the employment-related securities on the valuation date, and

(b)any non-commercial reductions during the relevant period,

are to be disregarded.

446MSecurities subject to restriction on valuation dateU.K.

(1)This section applies where on the valuation date the employment-related securities are relevant restricted securities.

(2)The amount determined under section 446L(4) is to be multiplied by CP.

(3)CP is—

where OP is the amount that would be determined under section 428(5) (amount of charge on chargeable event in relation to restricted securities) on the valuation date if there were on that date a chargeable event (resulting in no tax charge).

(4)For the purposes of this section the employment-related securities are relevant restricted securities if they are restricted securities or a restricted interest in securities but are not subject to—

(a)an election under section 430 (election to ignore outstanding restrictions) in relation to a chargeable event which occurred before the valuation date, or

(b)an election under section 431(1) (election to treat securities as not subject to restrictions).

(5)If sections 425 to 430 apply to the employment-related securities in accordance with section 431(2) (election to treat securities as not subject to specified restrictions), the reference in subsection (3) to the amount that would be determined under section 428(5) is to the amount that would be so determined in accordance with section 431(2).

446NSecurities subject to restriction during relevant periodU.K.

(1)This section applies where the employment-related securities have been restricted securities or a restricted interest in securities at any time during the relevant period.

(2)DA is to be deducted from the amount determined under section 446L(4) (or, where section 446M applies, the amount determined under sections 446L(4) and 446M).

(3)DA is the aggregate of the amounts arrived at under subsection (4) in relation to each event occurring during the relevant period that is a chargeable event in relation to the employment-related securities.

(4)The amount is—

(5)TA is the taxable amount actually determined under section 428 in relation to the chargeable event.

(6)AR TA is the taxable amount which would have been determined under section 428 in relation to the chargeable event if any non-commercial increases during the period—

(a)beginning at the same time as the relevant period, and

(b)ending immediately before the chargeable event,

had been disregarded.

[F1147(7)If any of the employment income arising under section 426 by virtue of the chargeable event is foreign securities income within the meaning of section 41C, reduce the taxable amount mentioned in subsection (5) by the amount of the foreign securities income.

(8)If any of the employment income that would have arisen (if the non-commercial interests mentioned in subsection (6) had been disregarded) under section 426 by virtue of the chargeable event would have been foreign securities income (within that meaning), reduce the taxable amount mentioned in subsection (6) by the amount of the foreign securities income.]

Textual Amendments

F1147S. 446N(7)(8) inserted (with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 32

[F1148446NADisapplication of exceptions from chargesU.K.

(1)None of the provisions specified in subsection (2) (exceptions from charges for certain company shares) apply in relation to employment-related securities if the market value of the employment-related securities at the time of the acquisition has been increased by at least 10% by non-commercial increases within the period of 7 years ending with the acquisition.

(2)The provisions are—

(a)section 429 (restricted securities),

(b)section 443 (convertible securities),

(c)section 446R (securities acquired for less than market value), and

(d)section 449 (post-acquisition benefits from securities).

(3)If section 446L (market value on valuation date increased by more than 10% by non-commercial increases during relevant period) applies in relation to employment-related securities, section 429 does not subsequently apply in relation to the employment-related securities.]

Textual Amendments

F1148S. 446NA inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), s. 86(7)(8)

SupplementaryU.K.

446O“Relevant period” and “valuation date”U.K.

(1)This section explains what is meant by “relevant period” and “valuation date” in this Chapter.

(2)The first relevant period in relation to employment-related securities is the period beginning with the date of the acquisition and ending with the following 5th April.

(3)After the first relevant period, each period beginning with 6th April and ending with the following 5th April is a relevant period in relation to the employment-related securities.

(4)But if this Chapter ceases to apply to the employment-related securities during a relevant period, the relevant period ends with the date on which this Chapter ceases to apply to them.

(5)And if this Chapter ceases to apply to an interest in the employment-related securities during a relevant period, the relevant period ends in relation to that interest with the date on which this Chapter ceases to apply to that interest.

(6)In a case where subsection (5) applies, this Chapter has effect separately in relation to that interest and the remainder of the employment-related securities.

(7)In this Chapter “valuation date”, in relation to a relevant period, means the date with which the relevant period ends.

Modifications etc. (not altering text)

C42S. 446O modified (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(8)(a)

446PDefinitionsU.K.

(1)In this Chapter “interest”, in relation to securities, has the meaning indicated in section 420.

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)In this Chapter—

  • “the acquisition”,

  • “the employee”, and

  • “employment-related securities”,

  • have the meaning indicated in section 421B(8).

(4)In this Chapter—

  • “restricted interest in securities”, and

  • “restricted securities”,

  • have the same meaning as in Chapter 2 of this Part (see sections 423 and 424).

(5)In this Chapter “chargeable event” means an event which is a chargeable event for the purposes of section 426.

(6)In this Chapter “restriction” has the same meaning as in Chapter 2 of this Part (see section 432(8)).

(7)In this Chapter—

  • “non-commercial increase”, and

  • “non-commercial reduction”,

  • have the meaning indicated in section 446K(4).

(8)In this Chapter—

  • “relevant period”, and

  • “valuation date”,

  • have the meaning indicated in section 446O.]

[F1149Chapter 3CU.K.Securities acquired for less than market value

Textual Amendments

F1149Pt. 7 Ch. 3C inserted (with effect in accordance with Sch. 22 para. 7(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 7(1)

446QApplication of this ChapterU.K.

(1)This Chapter applies if—

(a)no payment is made for employment-related securities at or before the time of the acquisition, or

(b)the payment made for employment-related securities at or before that time is less than their market value.

(2)For the purposes of subsection (1) any obligation to make a payment or further payment after the time of the acquisition is to be disregarded.

(3)Where the employment-related securities are, or are an interest in, securities which are not fully paid up, the reference in subsection (1) to the market value of the employment-related securities is to what it would be if the securities were fully paid up.

(4)If section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applies in relation to the employment-related securities, this Chapter has effect as if the employment-related securities were not acquired until the occurrence of the first event which is a chargeable event for the purposes of section 426 in relation to the employment-related securities.

(5)This section is subject to section 446R (case outside this Chapter).

446RCase outside this ChapterU.K.

(1)This Chapter does not apply if—

(a)the employment-related securities are shares (or an interest in shares) in a company of a class,

(b)all the company’s shares of the class are acquired either for no payment or for a payment less than their market value,

[F1150(ba)subsection (1A) is satisfied,] and

(c)subsection (3) or (4) is satisfied.

[F1151(1A)This subsection is satisfied unless something which affects the employment-related securities has been done (at or before the time of the acquisition) as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]

(2)Where the company’s shares of the class are not fully paid up, the reference in subsection (1) to their market value is to what it would be if they were fully paid up.

(3)This subsection is satisfied if, at the time of the acquisition of the employment-related securities, the company is employee-controlled by virtue of holdings of shares of the class.

(4)This subsection is satisfied if, at that time, the majority of the company’s shares of the class are not [F1152employment-related securities.]

F1153(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1150S. 446R(1)(ba) inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(c)(3)(8), 86(1)

F1151S. 446R(1A) substituted (with effect in accordance with Sch. 2 para. 13(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 13

F1152Words in s. 446R(4) substituted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(c)(5)(8), 86(1)

F1153S. 446R(5) repealed (with effect in accordance with s. 86(8) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)

446SNotional loanU.K.

(1)Where this Chapter applies an interest-free loan (“the notional loan”) is to be treated as having been made to the employee by the employer at the time of the acquisition.

(2)The provisions listed in subsection (3) apply as though the notional loan were an employment-related loan as defined in section 174 if and for so long as the employment has not terminated.

(3)The provisions are—

  • section 175 (benefit of taxable cheap loan treated as earnings),

  • section 178 (exception for loans where interest qualifies for tax relief),

  • section 180 (threshold for benefit of loan to be treated as earnings),

  • section 182 (normal method of calculation: averaging),

  • section 183 (alternative method of calculation),

  • section 184 (interest treated as paid),

  • section 185 (apportionment of cash equivalent in case of joint loan etc), and

  • section 187 (aggregation of loans by close company to director).

[F1154(4)This section is not affected by section 554Z2(2).]

Textual Amendments

F1154S. 446S(4) inserted (with effect in accordance with Sch . 2 para. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 21

446TAmount of notional loanU.K.

(1)The amount of the notional loan initially outstanding is—

where—

MV is the market value of the employment-related securities at the time of the acquisition, and

DA is the total of any deductible amounts.

(2)Where the employment-related securities are, or are an interest in, securities which are not fully paid up, the reference in subsection (1) to the market value of the employment-related securities is to what it would be if the securities were fully paid up.

(3)For the purposes of subsection (1) each of the following is a “deductible amount”—

(a)any payment made for the employment-related securities by the employee, and any payment so made by the person by whom they were acquired (if not the employee), at or before the time of the acquisition,

(b)any amount that constitutes earnings from the employee’s employment under Chapter 1 of Part 3 (earnings) in respect of the acquisition of the employment-related securities [F1155(other than an amount of exempt income)],

[F1156(ba)any amount treated as earnings from the employee's employment under section 226A (employee shareholder shares: amount treated as earnings) in respect of the acquisition of the employment-related securities (other than an amount of exempt income),]

(c)if section 425(2) (no charge on acquisition of certain restricted securities or restricted interests in securities) applies in relation to the employment-related securities, any amount that counts as employment income of the employee under section 426 by reason of the first event which is a chargeable event for the purposes of that section in relation to the employment-related securities,

(d)if the employment-related securities were acquired on a conversion of other employment-related securities, any amount that counts as employment income of the employee under section 438 (charge on conversion) by reason of the conversion, F1157...

(e)if the acquisition is pursuant to a securities option, any amount that counted as employment income of the employee under section 476 (acquisition of securities pursuant to securities option) in respect of the acquisition [F1158, and

(f)any amount that has counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A in relation to the employment-related securities.]

[F1159(3A)In subsection (3)(b) and (ba) the references to an amount of exempt income, in a case in which the amount that constitutes, or is treated as, earnings in respect of the acquisition is not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applies, includes any amount that would be an amount of exempt income if any of those charging provisions were to apply.]

(4)The amount of the notional loan outstanding at any subsequent time is the difference between—

(a)the amount initially outstanding, and

(b)the amount of any payments or further payments made for the employment-related securities after the acquisition but before that time.

Textual Amendments

F1155Words in s. 446T(3)(b) inserted (with effect in accordance with s. 49(12) of the amending Act) by Finance Act 2008 (c. 9), s. 49(5)

F1156S. 446T(3)(ba) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 9, 38; S.I. 2013/1755, art. 2

F1157Word in s. 446T(3) omitted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 22(a)

F1158S. 446T(3)(f) and word inserted (with effect in accordance with Sch . 2 para. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 22(b)

F1159S. 446T(3A) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 13, 47

446UDischarge of notional loanU.K.

(1)The notional loan is treated as discharged when—

(a)the employment-related securities are disposed of otherwise than to an associated person, F1160...

[F1161(b)if there is an outstanding or contingent liability to pay for the employment-related securities, that liability is released, extinguished, transferred or adjusted so as no longer to bind any associated person (except in circumstances in which subsection (4)(aa) applies), or]

[F1162(c)something which affects the employment-related securities is done as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]

[F1163(1A)Subsection (1)(a) does not apply if, at the time of the acquisition, there was an actual or contingent liability to make one or more further payments equal to the amount initially outstanding for the employment-related securities.]

(2)If the notional loan is discharged as the result of an event specified in subsection (1), the amount of the notional loan outstanding immediately before the occurrence of the event counts as employment income of the employee for the relevant tax year (whether or not the employment has terminated before or since the acquisition).

(3)The “relevant tax year” is the tax year in which the notional loan is treated as discharged.

(4)The notional loan is also treated as discharged when—

(a)payments or further payments for the employment-related securities equal to the amount initially outstanding in relation to them have been made by an associated person, F1164...

[F1165(aa)the employment-related securities, together with the liability to make such further payment or payments, are disposed of otherwise than to an associated person and for consideration of an amount that reflects the transfer of the liability, or]

(b)the employee dies.

Textual Amendments

F1160Word in s. 446U(1)(a) omitted (17.7.2014) by virtue of Finance Act 2014 (c. 26), Sch. 9 para. 37(2)

F1162S. 446U(1)(c) and word inserted (with effect in accordance with Sch. 2 para. 14(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 14

F1164Word in s. 446U(4)(a) omitted (17.7.2014) by virtue of Finance Act 2014 (c. 26), Sch. 9 para. 37(4)

[F1166446UAPre-acquisition avoidance casesU.K.

(1)Sections 446S to 446U do not apply if the main purpose (or one of the main purposes) of the arrangements under which the right or opportunity to acquire the employment-related securities is made available is the avoidance of tax or national insurance contributions.

(2)But instead an amount equal to what would (apart from this section) be the amount of the notional loan initially outstanding by virtue of sections 446S and 446T counts as employment income of the employee for the tax year in which the acquisition takes place.]

Textual Amendments

F1166S. 446UA inserted (with effect in accordance with Sch. 2 para. 15(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 15

446VChapter to be additional to other income tax chargesU.K.

This Chapter does not affect any liability to income tax arising in respect of the acquisition under—

(a)Chapter 1 of Part 3 (earnings),

(b)Chapter 10 of Part 3 (taxable benefits: residual liability to charge),

[F1167(ba)section 226A (employee shareholder shares: amount treated as earnings),]

(c)Chapter 3 of this Part (acquisition by conversion),

(d)Chapter 3A of this Part (securities with artificially depressed market value), F1168...

(e)Chapter 5 of this Part (acquisition of securities pursuant to securities option) [F1169, or

(f)Chapter 2 of Part 7A (employment income provided through third parties)]

Textual Amendments

F1168Word in s. 446V omitted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 23(a)

F1169S. 446V(f) and word inserted (with effect in accordance with Sch . 2 para. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 23(b)

446WDefinitionsU.K.

(1)In this Chapter—

  • “interest”, in relation to securities,

  • “securities”,

  • “securities option”, and

  • “shares”,

  • have the meaning indicated in section 420.

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)In this Chapter “the acquisition” has the meaning indicated in section 421B(8) (but subject to section 446Q(4)).

(4)In this Chapter—

  • “the employment”,

  • “the employee” (except in section 446R),

  • “the employer”, and

  • “employment-related securities”,

  • have the meaning indicated in section 421B(8).

(5)In this Chapter “associated person” has the meaning indicated in section 421C.

(6)In this Chapter—

  • “associated company”, and

  • “employee-controlled”,

  • have the meaning indicated in section 421H.

(7)In this Chapter “the notional loan” has the meaning indicated in section 446S(1).]

[F1170Chapter 3DU.K.Securities disposed of for more than market value

Textual Amendments

F1170Pt. 7 Ch. 3D inserted (with effect in accordance with Sch. 22 para. 8(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 8(1)

446XApplication of this ChapterU.K.

This Chapter applies if—

(a)employment-related securities are disposed of by an associated person so that no associated person is any longer beneficially entitled to them, and

(b)the disposal is for a consideration which exceeds the market value of the employment-related securities at the time of the disposal.

446YAmount treated as incomeU.K.

(1)Where this Chapter applies the amount determined under subsection (3) counts as employment income of the employee for the relevant tax year.

(2)The “relevant tax year” is the tax year in which the disposal occurs.

(3)The amount is—

where—

CD is the amount of the consideration given on the disposal,

MV is the market value of the employment-related securities at the time of the disposal, and

DA is the amount of any expenses incurred in connection with the disposal.

446ZDefinitionsU.K.

(1)In this Chapter “market value” has the meaning indicated in section 421(1).

(2)For the purposes of this Chapter sections 421(2) and 421A apply for determining the amount of the consideration given for anything.

(3)In this Chapter—

  • “the employee”, and

  • “employment-related securities”,

  • have the meaning indicated in section 421B(8).

(4)In this Chapter “associated person” has the meaning indicated in section 421C.]

[F1171Chapter 4U.K.Post-acquisition benefits from securities

Textual Amendments

F1171Pt. 7 Ch. 4 (ss. 447-450) substituted for Pt. 7 Ch. 4 (ss. 447-470) (16.4.2003 with effect in accordance with Sch. 22 para. 9(2)-(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 9(1)

447Charge on other chargeable benefits from securitiesU.K.

(1)This Chapter applies if an associated person receives a benefit [F1172in connection with employment-related securities] .

(2)The taxable amount determined under section 448 counts as employment income of the employee for the relevant tax year.

(3)The “relevant tax year” is the tax year in which the benefit is received.

(4)[F1173If the benefit is otherwise chargeable to income tax this section does not apply unless something has been done which affects the employment-related securities as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]

(5)This section is subject to section 449 (case outside this Chapter).

Textual Amendments

F1172Words in s. 447(1) substituted (with effect in accordance with Sch. 2 para. 18(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 18(2)

F1173S. 447(4) substituted (with effect in accordance with Sch. 2 para. 18(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 18(3)

448Amount of chargeU.K.

The taxable amount for the purposes of section 447 (charge on other chargeable benefits) is the amount or market value of the benefit.

449Case outside this ChapterU.K.

(1)This Chapter does not apply if—

(a)the employment-related securities are shares (or an interest in shares) in a company of a class,

(b)a similar benefit is received by the owners of all the company’s shares of the class,

[F1174(ba)subsection (1A) is satisfied,] and

(c)subsection (2) or (3) is satisfied.

[F1175(1A)This subsection is satisfied unless something which affects the employment-related securities has been done as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.]

(2)This subsection is satisfied if, immediately before the receipt of the benefit, the company is employee-controlled by virtue of holdings of shares of the class.

(3)This subsection is satisfied if, immediately before the receipt of the benefit, the majority of the company’s shares of the class are not [F1176employment-related securities.]

F1177(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1174S. 449(1)(ba) inserted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(d)(3)(8), 86(1)

F1175S. 449(1A) substituted (with effect in accordance with Sch. 2 para. 19(2) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 19

F1176Words in s. 449(3) substituted (retrospective to 7.5.2004) by Finance Act 2004 (c. 12), ss. 86(2)(d)(5)(8), 86(1)

F1177S. 449(4) repealed (with effect in accordance with s. 86(8) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)

450DefinitionsU.K.

(1)In this Chapter—

  • “interest”, in relation to shares, and

  • “shares”,

  • have the meaning indicated in section 420(8).

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)In this Chapter—

  • “the employee” (except in section 449), and

  • “employment-related securities”,

  • have the meaning indicated in section 421B(8).

(4)In this Chapter “associated person” has the meaning indicated in section 421C.

(5)In this Chapter—

  • “associated company”, and

  • “employee-controlled”,

  • have the meaning indicated in section 421H.]

Tax charge where restrictions or rights variedU.K.

F1171451Amount of chargeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171452Cases outside charge under section 449U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Modifications etc. (not altering text)

C43S. 452(1) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

C44S. 452(2)(a) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

C45S. 452(2)(c)(d) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

C46S. 452(2)(c)(d) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

Tax charge on increase in value of shares of dependent subsidiariesU.K.

F1171453Charge on increase in value of shares of dependent subsidiaryU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171454Chargeable increasesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171455Amount of chargeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171456Cases outside charge under section 453U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax charge on other benefits from sharesU.K.

F1171457Charge on other chargeable benefits from sharesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171458Chargeable benefitsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171459Amount of chargeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171460Cases outside charge under section 457U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary provisionsU.K.

F1171461Related acquisitions of additional sharesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171462Company reorganisations etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171463Disposals of shares to connected persons etc. ignoredU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171464Application to interests in sharesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171465Duty to notify acquisitions of shares or interests in sharesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171466Duty to notify chargeable events and chargeable benefitsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

InterpretationU.K.

F1171467Meaning of “dependent subsidiary”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171468Meaning of “employee-controlled”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171469Shares “held by outside shareholders”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1171470Minor definitionsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F1178Chapter 4AU.K.Shares in research institution spin-out companies

Textual Amendments

F1178Pt. 7 Ch. 4A inserted (with effect in accordance with s. 20(5)-(7) of the amending Act) by Finance Act 2005 (c. 7), s. 20(1)

IntroductionU.K.

451Application of this ChapterU.K.

(1)This Chapter applies where—

(a)an agreement is made for one or more transfers of intellectual property (an “intellectual property agreement”) from one or more research institutions to a company (a “spin-out company”),

(b)a person acquires shares (or an interest in shares) in the spin-out company before the intellectual property agreement is made or within the period of 183 days beginning with the date on which it is made,

(c)the right or opportunity to acquire the shares (or interest in shares) was available by reason of employment by the research institution (or any of them) or by the spin-out company, and

(d)the person is involved in research in relation to any of the intellectual property that is the subject of the intellectual property agreement.

(2)But this Chapter does not apply if the avoidance of tax or national insurance is the main purpose (or one of the main purposes) of the arrangements under which the right or opportunity to acquire the shares (or interest in shares) is made available.

Tax relief on acquisitionU.K.

452Market value on acquisitionU.K.

(1)For the relevant tax purposes the market value of the shares (or interest in shares) at the time of the acquisition is to be calculated disregarding the effect on that market value of the intellectual property agreement and any transfer of intellectual property pursuant to it.

(2)For the purposes of subsection (1) “the relevant tax purposes” are—

(a)determining any amount that is to constitute earnings from the employment under Chapter 1 of Part 3 (earnings),

(b)determining the amount of any gain realised on the occurrence of an event that is a chargeable event by virtue of section 439(3)(a) (conversion),

(c)operating Chapter 3C of this Part (acquisition of securities for less than market value), F1179...

(d)determining any amount that counts as employment income of the employee under Chapter 5 of this Part (securities acquired pursuant to securities option)[F1180, and

(e)determining any amount that counts as employment income of the employee in respect of the employment under Chapter 2 of Part 7A (employment income provided through third parties)]

Textual Amendments

F1179Word in s. 452(2) omitted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 24(a)

F1180S. 452(2)(e) and word inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 24(b)

Modifications etc. (not altering text)

C43S. 452(1) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

C44S. 452(2)(a) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

C45S. 452(2)(c)(d) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

Tax relief following acquisitionU.K.

453Taxable amount under Chapter 4U.K.

(1)If the shares are (or interest in shares is) acquired before the intellectual property agreement is made, or before any transfer of intellectual property pursuant to it, and any benefit deriving from the intellectual property agreement or any such transfer is received by the employee in connection with the shares (or interest in shares), the taxable amount determined under section 448 (post-acquisition benefits from securities: amount of charge) is to be treated as nil.

(2)But this section does not apply if something which affects the shares (or interest in shares) has been done (at or before the time when the intellectual property agreement is made or intellectual property is transferred) as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax or national insurance contributions.

Modifications etc. (not altering text)

C47S. 453(1) applied (with effect in accordance with s. 21(1) of the amending Act) by Finance Act 2005 (c. 7), s. 21(2)

Disapplication of Chapters 2 and 3BU.K.

454Deemed election for disapplication of Chapter 2U.K.

(1)If the shares are restricted securities (or the interest in shares is a restricted interest in securities), the employer and the employee are to be treated as making an election under section 431(1) (election for disapplication of Chapter 2) in relation to the shares (or interest in shares).

(2)But the employer and the employee may agree that subsection (1) is not to apply in relation to the shares (or interest in shares).

(3)An agreement under subsection (2) is irrevocable and—

(a)must be made in a form approved by the Board of the Inland Revenue, and

(b)may not be made more than 14 days after the acquisition.

(4)If the employer and the employee make an agreement under subsection (2) in relation to the shares (or interest in shares), subsection (5) applies for the purposes of determining the taxable amount for the purposes of section 426 (charge on occurrence of chargeable event) on the occurrence on any chargeable event in relation to the shares (or interest in shares).

(5)In determining under section 428(3) (amount of charge) what would have been the market value of the shares (or interest in shares) at the time of the acquisition but for any restrictions (IUMV), that market value is to be calculated disregarding the effect on that market value of the intellectual property agreement and any transfer of intellectual property pursuant to it.

455Disapplication of Chapter 3BU.K.

For the purposes of Chapter 3B (securities with artificially enhanced market value) neither the intellectual property agreement nor any transfer of intellectual property pursuant to it are things done otherwise than for genuine commercial purposes.

SupplementaryU.K.

456Meaning of “intellectual property” and “transfer”U.K.

(1)In this Chapter “intellectual property” means—

(a)any patent, trade mark, registered design, copyright or design right, plant breeders' rights or rights under section 7 of the Plant Varieties Act 1997,

(b)any right under the law of a country or territory outside the United Kingdom corresponding to, or similar to, a right within paragraph (a),

(c)any information or technique not protected by a right within paragraph (a) or (b) but having industrial, commercial or other economic value,

(d)any licence or other right in respect of anything within paragraph (a), (b) or (c), or

(e)any goodwill (having the meaning that it has for accounting purposes) associated with anything within paragraphs (a) to (d).

(2)The Treasury may by order amend the definition of “intellectual property” in subsection (1).

(3)For the purposes of this Chapter a transfer of intellectual property includes—

(a)a sale of the intellectual property,

(b)the grant of a licence or other right in respect of it, and

(c)the assignment of a licence or other right in respect of it.

457Meaning of “research institution”U.K.

(1)In this Chapter “research institution” means—

[F1181(a)any university or other institution receiving a grant (including a recurrent grant towards its costs), loan, financial support, financial assistance, financial resources or payment under—

(i)section 65 of the Further and Higher Education Act 1992,

(ii)regulations made under section 485 of the Education Act 1996,

(iii)section 34 of the Learning and Skills Act 2000,

(iv)section 14 of the Education Act 2002,

(v)section 86 of the Education Act 2005,

(vi)section 100 of the Apprenticeships, Skills, Children and Learning Act 2009, or

(vii)section 39 or 97 of the Higher Education and Research Act 2017,

(aa)any institution maintained by a local authority in England or Wales in the exercise of their further and higher education functions,

(ab)any institution within the higher education sector for the purposes of the Further and Higher Education (Scotland) Act 1992,

(ac)any college of further education within the meaning of section 36(1) of the Further and Higher Education (Scotland) Act 1992,

(ad)any central institution within the meaning of section 135(1) of the Education (Scotland) Act 1980,

(ae)the Queen’s University of Belfast or the University of Ulster,

(af)a college of education in Northern Ireland within the meaning of Article 2(2) of the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3)), or

(ag)any institution providing in Northern Ireland further education as defined in Article 3 of the Further Education (Northern Ireland) Order 1997 (S.I. 1997/1772 (N.I. 15)), or]

(b)any institution that carries out research activities otherwise than for profit and that is neither controlled nor wholly or mainly funded by a person who carries on activities for profit.

(2)The Treasury may by order amend subsection (1) to include in or exclude from the definition of “research institution” a person specified in the order or persons of a description specified in the order.

Textual Amendments

458Meaning of “involved in research”U.K.

For the purposes of this Chapter a person is involved in research in relation to any intellectual property transferred or to be transferred from one or more research institutions if—

(a)he has been actively engaged for the research institution (or any of them) in connection with research (whether as an employee or otherwise), and

(b)that research is relevant to anything to which the intellectual property relates.

459Transfer of intellectual property by controlled companyU.K.

(1)For the purposes of this Chapter where a research institution has control of a company, a transfer of intellectual property from the company is to be treated as a transfer from the research institution.

(2)For the purposes of this Chapter where two or more research institutions together have control of a company, a transfer of intellectual property from the company is to be treated as a transfer from those research institutions.

(3)In this section “control” means control within the meaning [F1182given by sections 450 and 451 of CTA 2010].

Textual Amendments

F1182Words in s. 459(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 389 (with Sch. 2)

460DefinitionsU.K.

(1)In this Chapter—

  • “interest”, in relation to shares, and

  • “shares”,

have the meaning indicated in section 420.

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)In this Chapter—

  • “the acquisition”,

  • “the employee”, and

  • “the employer”,

have the meaning indicated in section 421B(8).

(4)In this Chapter—

  • “restricted interest in securities”, and

  • “restricted securities”,

have the meaning indicated in sections 423 and 424.]

[F1183Chapter 5U.K.Securities options

Textual Amendments

F1183Pt. 7 Ch. 5 substituted (16.4.2003 for specified purposes and otherwise 1.9.2003 with effect in accordance with Sch. 22 para. 10(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 10(1); S.I. 2003/1997, art. 2

IntroductionU.K.

471Options to which this Chapter appliesU.K.

(1)This Chapter applies to a securities option acquired by a person where the right or opportunity to acquire the securities option is available by reason of an employment of that person or any other person.

(2)For the purposes of subsection (1) “employment” includes a former or prospective employment.

(3)A right or opportunity to acquire a securities option made available by a person’s employer, or a person connected with a person’s employer, is to be regarded for the purposes of subsection (1) as available by reason of an employment of that person unless—

(a)the person by whom the right or opportunity is made available is an individual, and

(b)the right or opportunity is made available in the normal course of the domestic, family or personal relationships of that person.

(4)A right or opportunity to acquire a securities option available by reason of holding employment-related securities is to be regarded for the purposes of subsection (1) as available by reason of the same employment as that by reason of which the right or opportunity to acquire the employment-related securities was available.

(5)In this Chapter—

  • “the acquisition”, in relation to an employment-related securities option, means the acquisition of the employment-related securities option pursuant to the right or opportunity available by reason of the employment,

  • “the employment” means the employment by reason of which the right or opportunity to acquire the employment-related securities option is available (“the employee” and “the employer” being construed accordingly), and

  • “employment-related securities option” means a securities option to which this Chapter applies.

472Associated personsU.K.

(1)For the purposes of this Chapter the following are “associated persons” in relation to an employment-related securities option—

(a)the person who acquired the employment-related securities option on the acquisition,

(b)(if different) the employee, and

(c)any relevant linked person.

(2)A person is a relevant linked person if—

(a)that person (on the one hand), and

(b)either the person who acquired the employment-related securities option on the acquisition or the employee (on the other),

[F1184are or have been connected or (without being or having been connected) are or have been] members of the same household.

(3)But a company which would otherwise be a relevant linked person is not if it is—

(a)the employer,

(b)the person from whom the employment-related securities option was acquired, or

(c)the person by whom the right or opportunity to acquire the employment-related securities option was made available.

Textual Amendments

F1184Words in s. 472(2) substituted (18.6.2004 with application in accordance with s. 90(5) of the amending Act) by Finance Act 2004 (c. 12), s. 90(3)

473Introduction to taxation of securities optionsU.K.

(1)The starting-point is that section 475 contains an exemption from the liability to tax that might otherwise arise under—

(a)Chapter 1 of Part 3 (earnings), or

(b)Chapter 10 of that Part (taxable benefits: residual liability to charge),

when an employment-related securities option is acquired.

(2)Liability to tax may arise, when securities are acquired pursuant to the employment-related securities option, under—

(a)section 446B (charge on acquisition where market value of securities or interest artificially depressed),

(b)Chapter 3C of this Part (acquisition of securities for less than market value), or

(c)section 476 (acquisition of securities pursuant to securities option).

(3)Liability to tax may also arise by virtue of section 476 when—

(a)the employment-related securities option is assigned or released, or

(b)a benefit is received in connection with the employment-related securities option.

(4)There are special rules relating to share options acquired under—

(a)[F1185Schedule 3] SAYE option schemes (see Chapter 7 of this Part),

(b)[F1186Schedule 4] CSOP schemes (see Chapter 8 of this Part), or

(c)enterprise management incentives (see Chapter 9 of this Part).

Textual Amendments

F1187474Cases where this Chapter does not applyU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1187S. 474 omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 14, 47

Tax relief on acquisition of optionU.K.

475No charge in respect of acquisition of optionU.K.

(1)No liability to income tax arises in respect of the acquisition of an employment-related securities option.

(2)Subsection (1) is subject to section 526 (F1188... CSOP schemes: charge where share option granted at a discount).

Textual Amendments

F1188Word in s. 475(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 195, 204 (with Sch. 8 paras. 205-215)

Tax charge on post-acquisition chargeable eventsU.K.

476Charge on occurrence of chargeable eventU.K.

[F1189(1)If a chargeable event occurs in relation to an employment-related securities option, the taxable amount counts as employment income of the employee for the relevant tax year.

(2)For this purpose—

(a)“chargeable event” has the meaning given by section 477,

(b)“the taxable amount”is the amount determined under section 478, and

(c)“the relevant tax year”is the tax year in which the chargeable event occurs.

(3)Relief under section 481 or 482 (relief for secondary Class 1 contributions or special contribution met by employee) may be available against an amount counting as employment income under this section.]

[F1190(5)If the employee has been divested of the employment-related securities option by operation of law—

(a)income tax is charged on the amount determined under section 478, and

(b)the person liable for any tax so charged is the relevant person in relation to the chargeable event (see section 477(7)).]

[F1191(5A)An amount charged under subsection (5)(a) is treated for income tax purposes as an amount of income.]

(6)This section is subject to—

  • section 519 (F1192... SAYE option schemes: no charge in respect of exercise of share option by employee),

  • section 524 (F1193... CSOP schemes: no charge in respect of exercise of share option by employee), and

  • section 530 (enterprise management incentives: no charge on exercise by employee of option to acquire shares at market value).

Textual Amendments

F1189S. 476(1)-(3) substituted for s. 476(1)-(4) (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 3(2); S.I. 2004/1945, art. 2

F1191S. 476(5A) inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 438 (with Sch. 2)

F1192Word in s. 476(6) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 134, 146 (with Sch. 8 paras. 147-157)

F1193Word in s. 476(6) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 196, 204 (with Sch. 8 paras. 205-215)

477Chargeable eventsU.K.

(1)This section applies for the purposes of section 476 (charge on occurrence of chargeable event).

(2)Any of the events mentioned in subsection (3) is a “chargeable event” in relation to the employment-related securities option unless it occurs on or after the death of the employee.

(3)The events are—

(a)the acquisition of securities pursuant to the employment-related securities option by an associated person,

(b)the assignment for consideration of the employment-related securities option by an associated person otherwise than to another associated person or the release for consideration of the employment-related securities option by an associated person, or

(c)the receipt by an associated person of a benefit [F1194in connection with the employment-related securities option (other than one within paragraph (a) or (b)).]

(4)For the purposes of subsection (3)(a) securities are acquired at the time when a beneficial interest is acquired (and not, if different, the time when the securities are conveyed or transferred).

(5)A benefit received on account of any disability (within the meaning of [F1195the Equality Act 2010 in England and Wales and Scotland, or] the Disability Discrimination Act 1995) of the employee is to be disregarded for the purposes of subsection (3)(c).

(6)A benefit in money or money’s worth received in consideration for or otherwise in connection with—

(a)failing or undertaking not to acquire securities pursuant to the employment-related securities option, or

(b)granting or undertaking to grant to another person a right to acquire securities which are subject to the employment-related securities option or any interest in them,

is to be regarded for the purposes of subsection (3)(c) as received in connection with the employment-related securities option.

(7)For the purposes of section 476(5) [F1196(charge to income tax)] the relevant person in relation to a chargeable event is—

(a)in the case of an event that is a chargeable event by virtue of subsection (3)(a), the person by whom the securities are acquired, and

(b)in the case of an event that is a chargeable event by virtue of subsection (3)(b) or (c), the person by whom the consideration or benefit is received.

Textual Amendments

F1194Words in s. 477(3)(c) substituted (18.6.2004 with application in accordance with s. 90(5) of the amending Act) by Finance Act 2004 (c. 12), s. 90(4)

F1195Words in s. 477(5) inserted by Equality Act 2010 (c. 15), Sch. 26 para. 52 (as inserted (1.10.2010) by S.I. 2010/2279, art. 1(2), Sch. 1 para. 5) (with S.I. 2010/2317, art. 2)

478Amount of chargeU.K.

(1)The taxable amount for the purposes of section 476 (charge on occurrence of chargeable event) is—

where—

AG is the amount of any gain realised on the occurrence of the chargeable event, and

DA is the total of any deductible amounts.

(2)Section 479 explains what is the amount of any gain realised on the occurrence of a chargeable event.

(3)Section 480 specifies what are deductible amounts.

479Amount of gain realised on occurrence of chargeable eventU.K.

(1)This section applies for the purposes of section 478 (amount of charge on occurrence of chargeable event).

(2)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 477(3)(a) (acquisition of securities) is (subject to subsection (4))—

(3)In subsection (2)—

  • MV is the market value of the securities that are acquired at the time when they are acquired, and

  • C is the amount of any consideration given for the securities that are acquired.

F1197(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)But the amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 477(3)(a) (acquisition of securities) is calculated—

(a)if section 531 (enterprise management incentives: limitation of charge on exercise of option to acquire shares below market value) applies, in accordance with that section, and

(b)if section 532 (enterprise management incentives: modified tax consequences following disqualifying events) applies, in accordance with that section.

(5)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 477(3)(b) (assignment or release of option) is the amount of the consideration given for the assignment or release.

(6)The amount of the gain realised on the occurrence of an event that is a chargeable event by virtue of section 477(3)(c) (receipt of benefit in connection with option) is the amount or market value of the benefit.

(7)But if—

(a)the consideration mentioned in subsection (5), or

(b)the benefit mentioned in subsection (6),

consists (in whole or in part) in the provision of securities or an interest in securities the market value of which has been reduced by at least 10% as a result of things done otherwise than for genuine commercial purposes within the period of 7 years ending with the receipt of the consideration or benefit, its market value is to be taken to be what it would be but for the reduction.

(8)The following are among the things that are, for the purposes of subsection (7), done otherwise than for genuine commercial purposes—

(a)anything done as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax or national insurance contributions, and

(b)any transaction between companies which are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length (other than a payment for group relief).

(9)In subsection (8)(b)—

(a)“group” means a company and its 51% subsidiaries, and

(b)“group relief” has the same meaning as in [F1198section 183(1) of CTA 2010].

Textual Amendments

F1197S. 479(3A) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(3)(a)

F1198Words in s. 479(9)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 390 (with Sch. 2)

480Deductible amountsU.K.

(1)This section applies for the purposes of section 478 (amount of charge on occurrence of chargeable event).

(2)The amount of—

(a)any consideration given for the acquisition of the employment-related securities option, and

(b)the amount of any expenses incurred in connection with the acquisition of securities, assignment, release or receipt which constitutes the chargeable event,

is a deductible amount.

(3)Where in consequence of—

(a)the acquisition of the employment-related securities option,

(b)the acquisition of securities pursuant to the employment-related securities option, or

(c)a transaction of which the acquisition of the employment-related securities option or the acquisition of securities pursuant to the employment-related securities option forms part,

there is a reduction in the market value of any employment-related securities to which an associated person is beneficially entitled, the amount of the reduction is to be treated for the purposes of subsection (2) as consideration (or additional consideration) given for the acquisition of the employment-related securities option.

(4)If an amount counts as employment income of the employee under section 526 (F1199... CSOP schemes: charge where option granted at a discount) in respect of the employment-related securities option, so much of that amount as is attributable to the shares in question is a deductible amount.

(5)The following are also deductible amounts—

(a)any amount that constituted earnings from the employment under Chapter 1 of Part 3 (earnings) in respect of the acquisition of the employment-related securities option [F1200(other than an amount of exempt income)],

(b)any amount that was treated as earnings from the employment under Chapter 10 of that Part (taxable benefits: residual liability to charge) in respect of the acquisition of the employment-related securities option, F1201...

(c)the amount of any gain by a previous holder on an assignment of the employment-related securities option which would have been a deductible cost by virtue of subsection (2)(c) of section 479 (as originally enacted) on an exercise of the option at a time when that section was in force[F1202, and

(d)any amount that has counted as employment income of the employee in respect of the employment under Chapter 2 of Part 7A in relation to the employment-related securities option or to any sum of money or asset held solely for the purposes of the option.]

[F1203(5A)In subsection (5)(a) the reference to an amount of exempt income, in a case in which the amount that constituted earnings in respect of the acquisition was not an amount of general earnings to which any of the charging provisions of Chapters 4 and 5 of Part 2 applied, includes any amount that would have been an amount of exempt income if any of those charging provisions had applied.]

(6)If there has been a previous chargeable event in relation to the employment-related securities option (or if section 476 or 477 as originally enacted applied to the option by virtue of an earlier event), so much of any deductible amount as was deducted in calculating the taxable amount on the occasion of that event is to be regarded as not being a deductible amount.

F1204(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1199Word in s. 480(4) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 197, 204 (with Sch. 8 paras. 205-215)

F1200Words in s. 480(5)(a) inserted (with effect in accordance with s. 49(11) of the amending Act) by Finance Act 2008 (c. 9), s. 49(6)

F1201Word in s. 480(5) omitted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 2 para. 25(a)

F1202S. 480(5)(d) and word inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 25(b)

F1203S. 480(5A) inserted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 15, 47

481 [F1205Relief for] secondary Class 1 contributions met by employeeU.K.

(1)[F1206Relief is available under this section against an amount counting as employment income under section 476 if] —

(a)an agreement having effect under paragraph 3A of Schedule 1 to the Contributions and Benefits Act has been entered into allowing the secondary contributor to recover from the employee the whole or part of any secondary Class 1 contributions in respect of the gain, or

(b)an election having effect under paragraph 3B of Schedule 1 to that Act is in force which has the effect of transferring to the employee the whole or part of the liability to pay secondary Class 1 contributions in respect of the gain.

(2)[F1207The amount of the relief is the total of] —

(a)any amount that under the agreement referred to in subsection (1)(a) is recovered in respect of the gain by the secondary contributor before 5th June in the tax year following that in which the gain is realised, and

(b)the amount of any liability in respect of the gain that, by virtue of the election referred to in subsection (1)(b), has become the employee’s liability.

(3)If notice of withdrawal of approval of the election is given, the amount of any liability in respect of the gain for the purposes of subsection (2)(b) is limited to the amount of the liability met before 5th June in the tax year following that in which the gain is realised.

(4)Subsection (1) does not apply in respect of a liability to pay Class 1 contributions which is prevented from arising by virtue of section 2(1)(a) of the Social Security Contributions (Share Options) Act 2001 (liability to pay Class 1 contributions in respect of gains replaced by liability to pay special contribution).

[F1208(4A)Relief under this section is given by way of deduction from the amount otherwise counting as employment income.

(4B)Relief under this section does not affect the amount to be taken into account—

(a)as employment income in determining contributions payable under the Contributions and Benefits Act, or

(b)as relevant employment income for the purposes of paragraph 3A or 3B of Schedule 1 to that Act.]

(5)In this section—

  • “approval”, in relation to an election, means approval by [F111the Commissioners for Her Majesty’s Revenue and Customs] under paragraph 3B of Schedule 1 to the Contributions and Benefits Act, and

  • “secondary contributor” has the same meaning as in that Act (see section 7).

Textual Amendments

F1205Words in s. 481 heading substituted (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 3(4)(a); S.I. 2004/1945, art. 2

F1206Words in s. 481(1) substituted (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 3(4)(b); S.I. 2004/1945, art. 2

F1207Words in s. 481(2) substituted (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 3(4)(c); S.I. 2004/1945, art. 2

482 [F1209Relief for] special contribution met by employeeU.K.

(1)[F1210Relief is available under this section against an amount counting as employment income under section 476 if] conditions A to D are met.

(2)Condition A is that a notice in respect the employment-related securities option was given to [F111the Commissioners for Her Majesty’s Revenue and Customs] in accordance with section 1 of the Social Security Contributions (Share Options) Act 2001 before 11th August 2001.

(3)Condition B is that the person, or one of the persons, who gave that notice is a person who (apart from that Act) was liable, or would have become liable, by virtue of an election under paragraph 3B of Schedule 1 to the Contributions and Benefits Act, to pay secondary Class 1 contributions in respect of an event which is a chargeable event for the purposes of section 476.

(4)Condition C is that that person became liable to pay a special contribution under section 2 of the Social Security Contributions (Share Options) Act 2001 in respect of the employment-related securities option.

(5)Condition D is that that person met that liability before 11th August 2001 or before the end of such further period as [F111the Commissioners for Her Majesty’s Revenue and Customs] directed under section 2(5) of that Act.

[F1211(6)The amount of the relief is the amount of the liability referred to in subsection (4).

(7)Relief under this section is given by way of deduction from the amount otherwise counting as employment income.]

Textual Amendments

F1209Words in s. 482 heading substituted (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 3(5)(a); S.I. 2004/1945, art. 2

F1210Words in s. 482(1) substituted (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 3(5)(b); S.I. 2004/1945, art. 2

Supplementary provisionsU.K.

483Application of this Chapter where option exchanged for anotherU.K.

(1)This section applies if—

(a)the employment-related securities option (the “old option”) is assigned or released, and

(b)the whole or part of the consideration for the assignment or release consists of or includes another securities option (the “new option”).

(2)For the purposes of section 479(5) (amount of gain realised by assigning or releasing option) the new option is not to be treated as consideration given for the assignment or release of the old option.

(3)This Chapter applies to the new option as it applies to the old option.

(4)For the purposes of section 480(2) (consideration for acquisition of option) the amount of the consideration given for the acquisition of the new option is to be treated as being the sum of—

(a)the amount by which the amount of the consideration given for the acquisition of the old option exceeds the amount of any consideration given for the assignment or release of the old option, apart from the new option, and

(b)any valuable consideration given for the acquisition of the new option, apart from the old option.

(5)Two or more transactions are to be treated for the purposes of subsection (1) as a single transaction by which one option is assigned for a consideration which consists of or includes another option if—

(a)the transactions result in—

(i)a person ceasing to hold an option, and

(ii)that person or a connected person coming to hold another option, and

(b)one or more of the transactions is effected under arrangements to which two or more persons holding options, in respect of which there may be liability to tax under this Chapter, are parties.

(6)Subsection (5) applies regardless of the order in which the assignments and the acquisition occur.

484DefinitionsU.K.

(1)In this Chapter—

  • “securities”, and

  • “securities option”,

  • have the meaning indicated in section 420.

(2)In this Chapter “market value” has the meaning indicated in section 421(1).

(3)For the purposes of this Chapter sections 421(2) and 421A apply for determining the amount of consideration given for anything.

(4)In this Chapter “employment-related securities” has the same meaning as in Chapter 1 of this Part (see section 421B(8)).

(5)In this Chapter—

  • “the acquisition”,

  • “the employee”,

  • “the employer”,

  • “the employment”, and

  • “employment-related securities option”,

  • have the meaning indicated in section 471(5).

(6)In this Chapter “associated person” has the meaning indicated in section 472.

(7)In this Chapter—

  • “secondary Class 1 contributions” has the same meaning as in the Contributions and Benefits Act (see section 1 of that Act), F1212...

  • F1212...]

Textual Amendments

Supplementary provisionsU.K.

F1183485Application of this Chapter where share option exchanged for anotherU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1183486Duty to notify matters relating to share optionsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1183487Minor definitionsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 6U.K.F1213... share incentive plans

Textual Amendments

F1213Word in Pt. 7 Ch. 6 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 2, 89 (with Sch. 8 paras. 90-96)

IntroductionU.K.

488F1214... Share incentive plans (SIPs)U.K.

(1)This Chapter provides—

F1215(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)for exemptions from income tax in connection with shares obtained under [F1216share incentive plans (“SIPs”) which are Schedule 2 SIPs],

(c)for amounts to count as employment income in certain circumstances in connection with such plans, and

(d)for the making of PAYE deductions in connection with such amounts.

F1217(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The provisions of—

(a)this and the following sections of this Chapter,

(b)Schedule 2, and

(c)the provisions mentioned in section 515 (tax advantages and charges under other Acts),

together constitute “the SIP code”.

(4)In the SIP code—

  • F1218...

  • “PAYE deduction” means a deduction required by PAYE regulations;

  • [F1219“Schedule 2 SIP” is to be read in accordance with paragraph 1 and Part 10 of Schedule 2;]

  • a “share incentive plan” (or “SIP” for short) means a plan established by a company providing—

    (a)

    for shares to be appropriated to employees without payment (“free shares”), or

    (b)

    for shares to be acquired on behalf of employees out of sums deducted from their salary (“partnership shares”).

(5)Other expressions used in the SIP code and contained in the index at the end of Schedule 2 have the meaning indicated by the index.

Textual Amendments

F1214Word in s. 488 heading omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 3(2), 89 (with Sch. 8 paras. 90-96)

F1215S. 488(1)(a) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 3(3)(a), 89 (with Sch. 8 paras. 90-96)

F1216Words in s. 488(1)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 3(3)(b), 89 (with Sch. 8 paras. 90-96)

F1217S. 488(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 3(4), 89 (with Sch. 8 paras. 90-96)

F1218Words in s. 488(4) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 3(5)(a), 89 (with Sch. 8 paras. 90-96)

F1219Words in s. 488(4) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 3(5)(b), 89 (with Sch. 8 paras. 90-96)

Scope of tax advantagesU.K.

489Operation of tax advantages in connection with [F1220Schedule 2] SIPU.K.

(1)Sections 490 to 499 apply for income tax purposes in connection with shares awarded under [F1221a Schedule 2] SIP.

(2)But those sections do not apply to an individual if, at the time of the award of shares in question, the earnings from the eligible employment are not (or would not be if there were any) general earnings to which any of the charging provisions of Chapter 4 or 5 of Part 2 apply.

(3)“The eligible employment” means the employment which results in the individual meeting the employment requirement in relation to the plan.

[F1222(4)And those sections do not apply if the main purpose (or one of the main purposes) of the arrangements under which the shares in question are awarded or acquired is the avoidance of tax or national insurance contributions.]

Textual Amendments

F1220Words in s. 489 heading substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 4(2), 89 (with Sch. 8 paras. 90-96)

F1222S. 489(4) inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(4)

Tax advantages connected with award of sharesU.K.

490No charge on award or acquisition of shares: generalU.K.

(1)This section applies—

(a)on the award to an employee of free, matching or partnership shares under the plan, or

(b)on the acquisition on behalf of an employee of dividend shares under the plan.

(2)The employee is not liable to income tax on the value of the beneficial interest in the shares that passes to the employee at the time of the award or acquisition.

F1223491No charge on award of shares as taxable benefitU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1223S. 491 repealed (with effect in accordance with Sch. 22 para. 26(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 26(1), Sch. 43 Pt. 3(4)

492No charge on partnership share money deducted from salaryU.K.

(1)An employee is not liable to income tax under Part 2 on any amount of the employee’s salary which is deducted as partnership share money under a partnership share agreement.

F1224(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1224S. 492(2) repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

493No charge on acquisition of dividend sharesU.K.

F1225(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1225(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)[F1226Section 1105(3) of CTA 2010] (information relating to distributions to be provided by nominee) does not apply to any amount applied by the trustees in acquiring dividend shares on behalf of a participant.

[F1227(3A)For the exemption of such amounts from income tax, see section 770 of ITTOIA 2005 (amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment).]

F1228(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Subsection (3) is subject to paragraph 80(4)(c) of Schedule 2 (information required where dividend shares cease to be subject to plan).

Textual Amendments

F1226Words in s. 493(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 391 (with Sch. 2)

Tax advantages connected with holding of sharesU.K.

F1229494No charge on removal of restrictions applying to sharesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1229S. 494 repealed (with effect in accordance with Sch. 22 para. 27(2) of the amending Act and otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 27(1), Sch. 43 Pt. 3(4); S.I. 2003/1997, art. 2

F1230495No charge on increase in value of shares of dependent subsidiaryU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1230S. 495 repealed (16.4.2003 with effect in accordance with Sch. 22 para. 28(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 28(1), Sch. 43 Pt. 3(4)

[F1231496No charge on cash dividend retained for reinvestmentU.K.

For the exemption from income tax of amounts retained under paragraph 68(2) of Schedule 2 (amount of cash dividend not reinvested), see section 770 of ITTOIA 2005 (amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment).]

Textual Amendments

Tax advantages connected with shares ceasing to be subject to planU.K.

497Limitations on charges on shares ceasing to be subject to planU.K.

(1)No liability to income tax arises on free or matching shares ceasing to be subject to the plan, except as provided by—

(a)section 505 (charge on free or matching shares ceasing to be subject to plan), or

(b)section 507 (charge on disposal of beneficial interest during holding period).

(2)No liability to income tax arises on partnership shares ceasing to be subject to the plan, except as provided by section 506 (charge on partnership shares ceasing to be subject to plan).

(3)No liability to income tax arises on dividend shares ceasing to be subject to the plan, except [F1232under Chapter 3 or 4 of Part 4 of ITTOIA 2005 (dividends etc. from UK or non-UK resident companies etc.) as a result of section 394(2) or 407(2) of that Act (distribution or dividend payment when dividend shares cease to be subject to plan).]

Textual Amendments

498No charge on shares ceasing to be subject to plan in certain circumstancesU.K.

(1)A participant is not liable to income tax on shares ceasing to be subject to the plan if—

(a)they cease to be so subject on the participant ceasing to be in relevant employment, and

(b)subsection (2) applies.

(2)This subsection applies if the participant ceases to be in relevant employment—

(a)because of injury or disability,

(b)on being dismissed by reason of redundancy,

(c)by reason of [F1233a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006],

(d)if the relevant employment is employment by an associated company (see paragraph 95(2) of Schedule 2), by reason of a change of control or other circumstances ending that company’s status as an associated company,

(e)by reason of the participant’s retirement F1234..., or

(f)on the participant’s death.

[F1235(3)A participant is not liable to income tax on shares (“the relevant shares”) in a company (“the relevant company”) being withdrawn from the plan if—

(a)the withdrawal of the relevant shares from the plan relates to—

(i)a transaction resulting from a compromise, arrangement or scheme falling within subsection (9),

(ii)an offer forming part of a general offer falling within subsection (10), or

(iii)the application of sections 979 to 982 or 983 to 985 of the Companies Act 2006 in the case of a takeover offer (as defined in section 974 of that Act) falling within subsection (13), and

(b)as a result of, as the case may be—

(i)the transaction,

(ii)the offer, or

(iii)the application of sections 979 to 982 or 983 to 985 of the Companies Act 2006,

the participant receives cash (and no other assets) in exchange for the relevant shares.

(4)For the purposes of subsection (3)(b) it does not matter if the participant receives other assets in exchange for shares other than the relevant shares.

(5)Subsection (3) does not apply to the relevant shares (or to a proportion of them) if in connection with, as the case may be—

(a)the compromise, arrangement or scheme,

(b)the general offer, or

(c)the takeover offer,

a course of action was open to the participant which, had it been followed, would have resulted in other assets being received in exchange for the relevant shares (or the proportion of them) instead of cash.

(6)Subsection (3) does not apply to the relevant shares (or to a proportion of them) if it is reasonable to suppose that the relevant shares (or the proportion of them) would not have been awarded to the participant—

(a)had, as the case may be—

(i)the compromise, arrangement or scheme,

(ii)the general offer, or

(iii)the takeover offer,

not been made, or

(b)had any arrangements for the making of—

(i)a compromise, arrangement or scheme which would fall within subsection (9),

(ii)a general offer which would fall within subsection (10), or

(iii)a takeover offer (as defined in section 974 of the Companies Act 2006) which would fall within subsection (13),

which were in place or under consideration at any time not been in place or under consideration.

(7)In subsection (6) the reference to shares being awarded to the participant is to be read, in the case of dividend shares, as a reference to the shares being acquired by the trustees on the participant's behalf.

(8)In subsection (6)(b) “arrangements” includes any plan, scheme, agreement or understanding, whether or not legally enforceable.

(9)A compromise, arrangement or scheme falls within this subsection if it is applicable to or affects—

(a)all the ordinary share capital of the relevant company or all the shares of the same class as the relevant shares, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in [F1236a Schedule 2] SIP.

(10)A general offer falls within this subsection if—

(a)it is made to holders of shares of the same class as the relevant shares or to holders of shares in the relevant company, and

(b)it is made in the first instance on a condition such that if it is satisfied the person making the offer will have control of the relevant company.

(11)For the purposes of subsection (10) it does not matter if the general offer is made to different shareholders by different means.

(12)In subsection (10)(b) “control” has the meaning given by sections 450 and 451 of CTA 2010.

(13)A takeover offer falls within this subsection if—

(a)it relates to the relevant company, and

(b)where there is more than one class of share in the relevant company, the class or classes to which it relates is or include the class of the relevant shares.]

Textual Amendments

F1234Words in s. 498(2)(e) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 2 (with Sch. 2 para. 17)

F1235S. 498(3)-(13) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 19

F1236Words in s. 498(9)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 5, 89 (with Sch. 8 paras. 90-96)

Tax advantages: supplementaryU.K.

499No charge in respect of incidental expenditureU.K.

An employee is not liable to income tax in respect of incidental expenditure of—

(a)the trustees,

(b)the company which established the plan, or

(c)(if different) the employer,

in operating the plan.

Scope of tax chargesU.K.

500Operation of tax charges in connection with [F1237Schedule 2] SIPU.K.

(1)Sections 501 to 508 apply for income tax purposes in connection with shares awarded under [F1238a Schedule 2] SIP.

(2)But those sections do not apply to an individual if, at the time of the award of shares in question, the earnings from the eligible employment are not (or would not be if there were any) general earnings to which any of the charging provisions of Chapter 4 or 5 of Part 2 apply.

(3)“The eligible employment” means the employment which results in the individual meeting the employment requirement in relation to the plan.

Textual Amendments

F1237Words in s. 500 heading substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 6(2), 89 (with Sch. 8 paras. 90-96)

Charges connected with holding of sharesU.K.

501Charge on capital receipts in respect of plan sharesU.K.

(1)This section applies if conditions A and B are met.

(2)Condition A is that a capital receipt is received by a participant in respect of, or by reference to, any of the participant’s plan shares.

(3)Condition B is that the plan shares in respect of, or by reference to, which the capital receipt is received are—

(a)free, matching or partnership shares that were awarded to the participant less than 5 years before the participant received the capital receipt, or

(b)dividend shares that were acquired on behalf of the participant less than 3 years before the participant received the capital receipt.

(4)If this section applies, the amount or value of the capital receipt counts as employment income of the participant for the relevant tax year.

(5)The “relevant tax year” is the tax year in which the participant receives the capital receipt.

(6)This section does not apply if the capital receipt is received by the participant’s personal representatives after the death of the participant.

(7)Section 502 explains what is meant by a “capital receipt”.

502Meaning of “capital receipt” in section 501U.K.

(1)This section applies for determining whether any money or money’s worth is a “capital receipt” for the purposes of section 501.

(2)The general rule is that any money or money’s worth is a “capital receipt” for the purposes of section 501.

(3)The general rule is subject to the following exceptions.

(4)Money or money’s worth is not a capital receipt for the purposes of section 501 to the extent that—

(a)it constitutes income in the hands of the recipient for the purposes of income tax or would do so but for sections 489 to 498 (SIPs: tax advantages) [F1239or section 770 of ITTOIA 2005 (exemption for amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment)],

(b)it consists of the proceeds of disposal of the plan shares mentioned in section 501, or

(c)it consists of new shares within the meaning of paragraph 87 of Schedule 2 (company reconstructions).

(5)If, as a result of a direction given by or on behalf of the participant for the purposes of paragraph 77 of Schedule 2 (power of trustees to raise funds to subscribe for rights issues), the trustees—

(a)dispose of some of the rights under a rights issue, and

(b)use the proceeds of that disposal to exercise other such rights,

the money or money’s worth constituting the proceeds of that disposal is not a capital receipt for the purposes of section 501.

Textual Amendments

503Charge on partnership share money paid over to employeeU.K.

(1)Any amount paid over to an individual under any of the provisions of Schedule 2 mentioned in subsection (2) counts as employment income of the individual for the relevant tax year.

(2)The provisions are—

  • paragraph 46(5) (deductions in excess of permitted maximum amount),

  • paragraph 50(5)(b) or paragraph 52(6)(b) (surplus partnership share money remaining after acquisition of shares),

  • paragraph 52(7) (partnership share money paid over on individual ceasing to be in relevant employment),

  • paragraph 52(8) (partnership share money paid over where accumulation period brought to an end by event specified in plan),

  • paragraph 55(3) (partnership share money paid over on withdrawal from partnership share agreement), or

  • paragraph 56 (partnership share money paid over on [F1240plan ceasing to be a Schedule 2 SIP] or termination of plan).

(3)The “relevant tax year” is the tax year in which the amount is paid over.

Textual Amendments

504Charge on cancellation payments in respect of partnership share agreementU.K.

(1)This section applies if an individual who has entered into a partnership share agreement receives any money or money’s worth in respect of the cancellation of the agreement.

(2)The amount of the money or the value of the money’s worth counts as employment income of the individual for the relevant tax year.

(3)The “relevant tax year” is the tax year in which the individual receives the money or money’s worth.

Charges connected with shares ceasing to be subject to planU.K.

505Charge on free or matching shares ceasing to be subject to planU.K.

(1)When free or matching shares cease to be subject to the plan, there may be an amount that counts as employment income of the participant depending on the period that has elapsed between—

(a)the date when the shares were awarded to the participant (“the award date”), and

(b)the date when they cease to be subject to the plan (“the exit date”).

(2)If the period is less than 3 years, the market value of the shares at the exit date counts as employment income of the participant for the relevant tax year (see subsection (5)).

(3)If the period is 3 years or more but less than 5 years, whichever is the lesser of—

(a)the market value of the shares at the award date, and

(b)the market value of the shares at the exit date,

counts as employment income of the participant for the relevant tax year (see subsection (5)).

(4)Where—

(a)subsection (3) applies, and

(b)the applicable amount is the market value of the shares at the award date,

the tax due is reduced by the amount or aggregate amount of any tax paid by virtue of section 501 (charge on capital receipts in respect of plan shares) on any capital receipts in respect of the shares.

[F1241(4A)Any tax due under subsection (2) or (3) is reduced by the amount or aggregate amount of any tax paid by virtue of Chapter 3B of this Part in relation to the shares.]

(5)The “relevant tax year” is the tax year in which the exit date falls.

(6)No liability to tax arises by virtue of this section—

(a)on the forfeiture of free or matching shares,

(b)if section 498 (no charge on shares ceasing to be subject to plan in certain circumstances) applies, or

(c)if section 507 (charge on disposal of beneficial interest in holding period) applies.

Textual Amendments

F1241S. 505(4A) inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(5)

506Charge on partnership shares ceasing to be subject to planU.K.

(1)When partnership shares cease to be subject to the plan, there may be an amount that counts as employment income of the participant depending on the period that has elapsed between—

(a)the acquisition date in respect of those shares (as defined by paragraph 50(4) or, as the case may be, paragraph 52(5) of Schedule 2), and

(b)the date when they cease to be subject to the plan (“the exit date”).

(2)If the period is less than 3 years, the [F1242relevant amount] counts as employment income of the participant for the relevant tax year (see subsection (5)).

[F1243(2A)Subject to subsection (2B), in subsection (2) “the relevant amount” means the market value of the shares at the exit date.

(2B)If the shares cease to be subject to the plan by virtue of a provision of the kind mentioned in paragraph 43(2B) of Schedule 2 (provision requiring partnership shares to be offered for sale), in subsection (2) “the relevant amount” means the lesser of—

(a)the amount of partnership share money used to acquire the shares, and

(b)the market value of the shares at the time they are offered for sale.

(2C)Paragraph 92(2) of Schedule 2 (market value of shares subject to a restriction) applies for the purposes of subsection (2B)(b).]

(3)If the period is 3 years or more but less than 5 years, whichever is the lesser of—

(a)the amount of partnership share money used to acquire the shares, and

(b)the market value of the shares at the exit date,

counts as employment income of the participant for the relevant tax year (see subsection (5)).

[F1244(3A)If the shares cease to be subject to the plan by virtue of a provision of the kind mentioned in paragraph 43(2B) of Schedule 2, in subsection (3)(b) the reference to the market value of the shares at the exit date is to be read as a reference to the market value of the shares at the time they are offered for sale (as determined in accordance with paragraph 92(2) of Schedule 2 if relevant).]

(4)Where—

(a)subsection (3) applies, and

(b)the applicable amount is the amount of partnership share money used to acquire the shares,

the tax due is reduced by the amount or aggregate amount of any tax paid by virtue of section 501 (charge on capital receipts in respect of plan shares) on any capital receipts in respect of the shares.

[F1245(4A)Any tax due under subsection (2) or (3) is reduced by the amount or aggregate amount of any tax paid by virtue of Chapter 3B of this Part in relation to the shares.]

(5)The “relevant tax year” is the tax year in which the exit date falls.

(6)No liability to income tax arises by virtue of this section if section 498 (no charge on shares ceasing to be subject to plan in certain circumstances) applies.

Textual Amendments

F1245S. 506(4A) inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(5)

507Charge on disposal of beneficial interest during holding periodU.K.

(1)This section applies if—

(a)free or matching shares cease to be subject to the plan at any time during the holding period for those shares, and

(b)this occurs as a result of the participant assigning, charging or otherwise disposing of the participant’s beneficial interest in the shares in breach of obligations under paragraph 36(1)(b) of Schedule 2 (restrictions relating to disposals within holding period).

(2)The market value of the shares at the date when they cease to be subject to the plan counts as employment income of the participant for the relevant tax year.

(3)The “relevant tax year” is the tax year in which that date falls.

508Identification of shares ceasing to be subject to planU.K.

(1)For the purpose of determining any liability to tax arising by virtue of the SIP code in respect of any of a participant’s shares ceasing to be subject to the plan—

(a)shares are to be taken as ceasing to be subject to the plan in the order in which they were awarded to the participant under the plan, and

(b)where shares are awarded to the participant on the same day, the shares are to be treated as ceasing to be subject to the plan in the order which gives rise to the lowest charge to income tax on the participant.

(2)For the purposes of subsection (1) dividend shares are “awarded” to a participant when the trustees acquire them on behalf of, or appropriate them to, the participant.

PAYEU.K.

509Modification of section 696 where charge on shares ceasing to be subject to planU.K.

(1)Where—

(a)as a result of shares ceasing to be subject to [F1246a Schedule 2] SIP, there is an amount that counts as employment income of a participant by virtue of the SIP code, and

(b)the shares are readily convertible assets,

section 696 (readily convertible assets) applies as follows.

(2)Section 696 applies as if the participant (“P”) were being provided with PAYE income in the form of those shares—

(a)at the time when the shares cease to be subject to the plan, and

(b)in respect of the relevant employment in which P is employed at that time (or, if P is not then employed in relevant employment, the relevant employment in which P was last employed before that time).

(3)In addition, subsection (2) of section 696 applies as if the reference in that subsection to the amount of income likely to be PAYE income in respect of the provision of the asset were a reference to the amount which is likely to count as employment income by virtue of the SIP code as a result of the shares ceasing to be subject to the plan.

(4)In this section “readily convertible asset” has the same meaning as in section 696 (see sections 701 and 702), but this is subject to [F1247subsections (5) and (6)].

(5)In determining for the purposes of this section (and of section 696 in its application in accordance with this section) whether the shares are readily convertible assets, any market for the shares which—

(a)is created by virtue of the trustees acquiring shares for the purposes of the plan, and

(b)exists solely for the purposes of the plan,

is to be disregarded.

[F1248(6)In determining for the purposes of this section (and of section 696 in its application in accordance with this section) whether the shares are readily convertible assets, section 702 has effect with the omission of subsections (5A) to (5D).]

Textual Amendments

F1247Words in s. 509(4) substituted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 11(2)

F1248S. 509(6) inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 11(3)

510Payments by trustees to employer company on shares ceasing to be subject to planU.K.

(1)This section applies if, as a result of any shares (“the relevant shares”) ceasing to be subject to [F1249a Schedule 2] SIP—

(a)there is an amount that counts as employment income of a participant by virtue of the SIP code, and

(b)an obligation to make a PAYE deduction arises in respect of that amount.

(2)The trustees must pay to the employer company a sum which is sufficient to enable the employer company to discharge that obligation.

(3)Subsection (2) is subject to—

(a)subsection (4), and

(b)section 511 (PAYE deductions to be made by trustees on shares ceasing to be subject to plan).

(4)Subsection (2) only applies if, or to the extent that, the plan does not require the participant to pay the employer company a sum which is sufficient to discharge the obligation mentioned in subsection (1)(b).

(5)Section 710(1) (notional payments: accounting for tax) has effect as if it required the deduction of income tax to be made from any sum or sums received by the employer company—

(a)from the trustees under subsection (2), or

(b)from the participant in accordance with a requirement of the plan, as mentioned in subsection (4).

(6)After making the necessary PAYE deduction from the sum or sums received as mentioned in subsection (5), the employer company must pay any remaining amount to the participant.

(7)In this section “the employer company” means—

(a)the company which employs the participant in relevant employment at the time when the relevant shares cease to be subject to the plan, or

(b)if the participant is not then employed in relevant employment, the company which last employed the participant in relevant employment before that time,

so long as that company is one to which PAYE regulations apply at that time.

Textual Amendments

511PAYE deductions to be made by trustees on shares ceasing to be subject to planU.K.

(1)This section applies if, as a result of any shares ceasing to be subject to [F1250a Schedule 2] SIP—

(a)there is an amount that counts as employment income of a participant by virtue of the SIP code, and

(b)condition A or B is met.

(2)Condition A is that [F165an officer of Revenue and Customs] —

(a)[F1251is] of the opinion that it is impracticable for the employer company (within the meaning of section 510) to make a PAYE deduction, and

(b)accordingly [F1252directs] that this section is to apply.

(3)Condition B is that there is no company that qualifies as the employer company (within the meaning of that section).

(4)If this section applies—

(a)section 510(2) does not apply, and

(b)the trustees must make a PAYE deduction in respect of the taxable equivalent as if the participant were a former employee of the trustees.

(5)The “taxable equivalent” means an amount equal to that mentioned in subsection (1).

(6)If this section applies, section 689 (employee of non-UK employer) does not apply.

Textual Amendments

512Disposal of beneficial interest by participantU.K.

(1)This section applies if—

(a)a participant (“P”) disposes of P’s beneficial interest in any of P’s plan shares to the trustees, and

(b)the trustees are, as a result of paragraph 6 of Schedule 7D to TCGA 1992 (deemed disposal by trustees on disposal of beneficial interest), treated as having disposed of the shares in question.

(2)If this section applies, sections 510 and 511 apply as if the consideration payable by the trustees to the participant on the disposal had been received by the trustees as the proceeds of disposal of plan shares.

513Capital receipts: payments by trustees to employer companyU.K.

(1)This section applies if the trustees receive a sum of money which constitutes (or forms part of) a capital receipt which, by virtue of the SIP code, counts as employment income of a participant when it is received by the participant.

(2)Out of that sum of money the trustees must pay to the employer company an amount equal to the amount of employment income.

(3)The employer company must then pay over that amount to the participant, but when doing so must make a PAYE deduction.

(4)This section is subject to section 514 (capital receipts: deductions to be made by trustees).

(5)In this section “the employer company” means—

(a)the company which employs the participant in relevant employment at the time when the trustees receive the sum mentioned in subsection (1), or

(b)if the participant is not then employed in relevant employment, the company which last employed the participant in relevant employment before that time,

so long as that company is one to which PAYE regulations apply at that time.

514Capital receipts: PAYE deductions to be made by trusteesU.K.

(1)This section applies if—

(a)the trustees receive a sum of money which constitutes (or forms part of) a capital receipt which, by virtue of the SIP code, counts as employment income of a participant when it is received by the participant, and

(b)either condition A or B is met.

(2)Condition A is that [F165an officer of Revenue and Customs —

(a)[F1253is] of the opinion that it is impracticable for the employer company (within the meaning of section 513) to make a PAYE deduction, and

(b)accordingly [F1254directs] that this section is to apply.

(3)Condition B is that there is no company that qualifies as the employer company (within the meaning of that section).

(4)If this section applies, the trustees must, when paying the capital receipt over to the participant, make a PAYE deduction in respect of the taxable equivalent as if the participant were a former employee of the trustees.

(5)The “taxable equivalent” means an amount equal to the amount which counts as employment income as mentioned in subsection (1)(a).

(6)If this section applies, section 689 (employee of non-UK employer) does not apply.

Textual Amendments

Other tax consequencesU.K.

515Tax advantages and charges under other ActsU.K.

F1255(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)SIPs are also dealt with in—

(a)Part 1 of Schedule 7D to TCGA 1992 (which provides for relief from capital gains tax for the trustees and for participants in relation to [F1256a Schedule 2] SIP in certain circumstances, including where shares cease to be subject to the plan), F1257...

(b)section 95 of FA 2001 (which contains relief from stamp duty and stamp duty reserve tax for transfers of partnership or dividend shares) [F1258, F1259...

(c)sections 392 to 395 and 405 to 408 of ITTOIA 2005 (SIPs: special rules for charges under Chapters 3 and 4 of Part 4 of that Act (dividends etc. from UK or non-UK resident companies etc.)) and section 770 of that Act (exemption for amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment)][F1260, F1261...

(d)Chapter 5 of Part 9 of ITA 2007 (which provides for section 479 of that Act not to apply to income of the trustees of [F1262a Schedule 2] SIP in certain circumstances)][F1263, and

(e)Chapter 1 of Part 11 of CTA 2009 (share incentive plans)]

F1264(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1255S. 515(1) repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 554(2), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F1259Word in s. 515(2)(b) repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 439(3)(a), Sch. 3 Pt. 1 (with Sch. 2)

F1260S. 515(2)(d) and word inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 439(3)(b) (with Sch. 2)

F1261Word in s. 515(2) repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 554(3)(a), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F1263S. 515(2)(e) and word inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 554(3)(b) (with Sch. 2 Pts. 1, 2)

Chapter 7U.K.F1265... SAYE option schemes

Textual Amendments

F1265Word in Pt. 7 Ch. 7 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 98, 146 (with Sch. 8 paras. 147-157)

IntroductionU.K.

516F1266... SAYE option schemesU.K.

(1)This Chapter provides—

F1267(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)for exemptions from income tax in connection with share options granted under [F1268SAYE option schemes which are Schedule 3 SAYE option] schemes.

F1269(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The provisions of—

(a)this and the following sections of this Chapter,

(b)Schedule 3, and

(c)Part 2 of Schedule 7D to TCGA 1992 ([F1270Schedule 3] SAYE option schemes: amount of consideration on exercise of option),

together constitute “the SAYE code”.

(4)In the SAYE code—

  • F1271...

  • “SAYE option scheme” means a scheme (commonly referred to as an SAYE share option scheme) which is established by a company and provides—

    (a)

    for share options to be granted to employees and directors, and

    (b)

    for the shares acquired by the exercise of the share options to be paid for in the way mentioned in paragraph 24 of Schedule 3 (payments for shares to be linked to [F1272approved savings arrangements]);

  • [F1273“Schedule 3 SAYE option scheme” is to be read in accordance with paragraph 1 and Part 8 of Schedule 3;]

  • “share option” means a right to acquire shares in a company;

  • “shares” includes stock.

(5)Other expressions used in the SAYE code and contained in the index at the end of Schedule 3 have the meaning indicated by the index.

Textual Amendments

F1266Word in s. 516 heading omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 99(2), 146 (with Sch. 8 paras. 147-157)

F1267S. 516(1)(a) and word omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 99(3)(a), 146 (with Sch. 8 paras. 147-157)

F1268Words in s. 516(1)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 99(3)(b), 146 (with Sch. 8 paras. 147-157)

F1269S. 516(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 99(4), 146 (with Sch. 8 paras. 147-157)

F1270Words in s. 516(3)(c) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 99(5), 146 (with Sch. 8 paras. 147-157)

F1271Words in s. 516(4) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 99(6)(a), 146 (with Sch. 8 paras. 147-157)

F1273Words in s. 516(4) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 99(6)(b), 146 (with Sch. 8 paras. 147-157)

517Share options to which this Chapter appliesU.K.

(1)This Chapter applies to a share option granted to an individual—

(a)in accordance with the provisions of [F1274a Schedule 3] SAYE option scheme, and

(b)by reason of the individual’s office or employment as a director or employee of a company.

(2)The individual may be a director or employee of the company whose shares are the subject of the share option, or of some other company.

Textual Amendments

Tax advantagesU.K.

F1275518No charge in respect of receipt of optionU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

519No charge in respect of exercise of optionU.K.

(1)No liability to income tax arises in respect of the exercise of the share option if—

(a)the individual exercises it in accordance with the provisions of the SAYE option scheme at a time when the scheme is [F1276a Schedule 3 SAYE option scheme], F1277...

(b)condition A or B is met [F1278and

(c)the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised.]

(2)Condition A is that the option is exercised on or after the third anniversary of the date on which it was granted.

(3)Condition B is that the option—

(a)is exercised before the third anniversary of the date on which it was granted, and

(b)is so exercised otherwise than by virtue of a provision included in the scheme under—

  • paragraph 34(5) of Schedule 3 (exercise of option where scheme-related employment ends), or

  • paragraph 37 of that Schedule (exercise of option where certain company events occur).

[F1279(3A)In relation to any shares acquired by the exercise of the share option, no liability to income tax arises in respect of its exercise if—

(a)the individual exercises the option before the third anniversary of the date on which the option was granted at a time when the SAYE option scheme is [F1280a Schedule 3 SAYE option scheme],

(b)the option is exercised by virtue of a provision included in the scheme—

(i)under paragraph 37(1) of Schedule 3 where the relevant date is the relevant date for the purposes of paragraph 37(2)[F1281, (4) or (4A)], or

(ii)under paragraph 37(6) of Schedule 3,

(c)as a result of, as the case may be—

(i)the general offer,

(ii)the compromise or arrangement, F1282...

[F1283(iia)the non-UK company reorganisation arrangement, or]

(iii)the takeover offer,

the individual receives cash (and no other assets) in exchange for the shares,

(d)when the decision to grant the option was taken—

(i)the general offer,

(ii)the compromise or arrangement, F1284...

[F1285(iia)the non-UK company reorganisation arrangement, or]

(iii)the takeover offer,

as the case may be, had not been made,

(e)when that decision was taken, no arrangements were in place or under consideration for—

(i)the making of a general offer which would fall within subsection (3D),

(ii)the making of any compromise or arrangement which would fall within subsection (3H), F1286...

[F1287(iia)the making of any non-UK company reorganisation arrangement which would fall within subsection (3H), or]

(iii)the making of a takeover offer (as defined in section 974 of the Companies Act 2006) which would fall within subsection (3I),

(f)if the scheme includes a provision under paragraph 38 of Schedule 3 (“the paragraph 38 provision”), in connection with—

(i)the general offer,

(ii)the compromise or arrangement, F1288...

[F1289(iia)the non-UK company reorganisation arrangement, or]

(iii)the takeover offer,

as the case may be, no course of action was open to the individual which, had it been followed, would have resulted in the individual making an agreement under the paragraph 38 provision which would have prevented the individual from acquiring the shares by the exercise of the option, and

(g)the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised.

(3B)In subsection (3A)(c)(iii), (d)(iii) and (f)(iii) “the takeover offer” means the takeover offer (as defined in section 974 of the Companies Act 2006) giving rise to the application of sections 979 to 982 or 983 to 985 of that Act.

(3C)In subsection (3A)(e) “arrangements” includes any plan, scheme, agreement or understanding, whether or not legally enforceable.

(3D)A general offer falls within this subsection if it is—

(a)a general offer to acquire the whole of the issued ordinary share capital of the relevant company which is made on a condition such that, if it is met, the person making the offer will have control of the relevant company, or

(b)a general offer to acquire all the shares in the relevant company which are of the same class as those acquired by the exercise of the option.

(3E)In subsection (3D)(a) the reference to the issued ordinary share capital of the relevant company does not include any capital already held by the person making the offer or a person connected with that person and in subsection (3D)(b) the reference to the shares in the relevant company does not include any shares already held by the person making the offer or a person connected with that person.

(3F)For the purposes of subsection (3D)(a) and (b) it does not matter if the general offer is made to different shareholders by different means.

(3G)For the purposes of subsection (3D)(a) a person is to be treated as obtaining control of a company if that person and others acting in concert together obtain control of it.

(3H)A compromise or arrangement [F1290or a non-UK company reorganisation arrangement] falls within this subsection if it is applicable to or affects—

(a)all the ordinary share capital of the relevant company or all the shares of the same class as those acquired by the exercise of the option, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in [F1291a Schedule 3] SAYE option scheme.

(3I)A takeover offer falls within this subsection if—

(a)it relates to the relevant company, and

(b)where there is more than one class of share in the relevant company, the class or classes to which it relates is or include the class of the shares acquired by the exercise of the option.

(3J)In subsections (3D), (3H) and (3I) “the relevant company” means the company whose shares are acquired by the exercise of the option.]

F1292(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)In Schedule 3—

(a)paragraph 32 provides for the exercise of an option where the holder has died, and

(b)[F1293paragraphs 40H(4) and 40I(9) provide] for an SAYE option scheme to be treated as [F1294a Schedule 3 SAYE option scheme] at the time when an option is exercised even though [F1295the scheme is not a Schedule 3 SAYE option scheme].

Textual Amendments

F1276Words in s. 519(1)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(2), 146 (with Sch. 8 paras. 147-157)

F1277Word in s. 519(1)(a) repealed (with effect in accordance with s. 88(11) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)

F1278S. 519(1)(c) and word inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(6)

F1279S. 519(3A)-(3J) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 21

F1280Words in s. 519(3A)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(a), 146 (with Sch. 8 paras. 147-157)

F1281Words in s. 519(3A)(b)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(b), 146 (with Sch. 8 paras. 147-157)

F1282Word in s. 519(3A)(c) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(c), 146 (with Sch. 8 paras. 147-157)

F1283Words in s. 519(3A)(c)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(c), 146 (with Sch. 8 paras. 147-157)

F1284Word in s. 519(3A)(d) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(c), 146 (with Sch. 8 paras. 147-157)

F1285 S. 519(3A)(d)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(c), 146 (with Sch. 8 paras. 147-157)

F1286Word in s. 519(3A)(e) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(d), 146 (with Sch. 8 paras. 147-157)

F1287S. 519(3A)(e)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(d), 146 (with Sch. 8 paras. 147-157)

F1288Word in s. 519(3A)(f) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(c), 146 (with Sch. 8 paras. 147-157)

F1289 S. 519(3A)(f)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(3)(c), 146 (with Sch. 8 paras. 147-157)

F1290Words in s. 519(3H) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(4)(a), 146 (with Sch. 8 paras. 147-157)

F1291Words in s. 519(3H)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(4)(b), 146 (with Sch. 8 paras. 147-157)

F1293Words in s. 519(5)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(5)(a), 146 (with Sch. 8 paras. 147-157)

F1294Words in s. 519(5)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(5)(b), 146 (with Sch. 8 paras. 147-157)

F1295Words in s. 519(5)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 101(5)(c), 146 (with Sch. 8 paras. 147-157)

F1296520No charge in respect of post-acquisition benefitsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1296S. 520 repealed (16.4.2003 with effect in accordance with Sch. 22 para. 31(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 31(1), Sch. 43 Pt. 3(4)

Chapter 8U.K.F1297... CSOP schemes

Textual Amendments

F1297Word in Pt. 7 Ch. 8 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 159, 204 (with Sch. 8 paras. 205-215)

IntroductionU.K.

521F1298... CSOP schemesU.K.

(1)This Chapter provides—

F1299(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)for exemptions from income tax in connection with share options granted under [F1300CSOP schemes which are Schedule 4 CSOP] schemes, and

(c)for amounts to count as employment income in certain circumstances in connection with such options.

F1301(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The provisions of—

(a)this and the following sections of this Chapter,

(b)Schedule 4, and

(c)Part 3 of Schedule 7D to TCGA 1992 ([F1302Schedule 4] CSOP schemes: amount of consideration on exercise of option),

together constitute “the CSOP code”.

(4)In the CSOP code—

  • F1303...

  • “CSOP scheme” means a scheme (commonly referred to as a company share option plan) which—

    (a)

    is established by a company,

    (b)

    provides for share options to be granted to employees and directors, and

    (c)

    is not an SAYE option scheme (within the meaning of the SAYE code: see section 516(4));

  • [F1304“Schedule 4 CSOP scheme” is to be read in accordance with paragraph 1 and Part 7 of Schedule 4;]

  • “share option” means a right to acquire shares in a company;

  • “shares” includes stock.

(5)Other expressions used in the CSOP code and contained in the index at the end of Schedule 4 have the meaning indicated by the index.

Textual Amendments

F1298Word in s. 521 heading omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 160(2), 204 (with Sch. 8 paras. 205-215)

F1299S. 521(1)(a) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 160(3)(a), 204 (with Sch. 8 paras. 205-215)

F1300Words in s. 521(1)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 160(3)(b), 204 (with Sch. 8 paras. 205-215)

F1301S. 521(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 160(4), 204 (with Sch. 8 paras. 205-215)

F1302Words in s. 521(3)(c) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 160(5), 204 (with Sch. 8 paras. 205-215)

F1303Words in s. 521(4) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 160(6)(a), 204 (with Sch. 8 paras. 205-215)

F1304Words in s. 521(4) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 160(6)(b), 204 (with Sch. 8 paras. 205-215)

522Share options to which this Chapter appliesU.K.

(1)This Chapter applies to a share option granted to an individual—

(a)in accordance with the provisions of [F1305a Schedule 4] CSOP scheme, and

(b)by reason of the individual’s office or employment as a director or employee of a company.

(2)The individual may be a director or employee of the company whose shares are the subject of the share option, or of some other company.

Textual Amendments

Tax advantagesU.K.

F1306523No charge in respect of receipt of optionU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

524No charge in respect of receipt of optionU.K.

(1)No liability to income tax arises in respect of the exercise of the share option if—

(a)the individual exercises it in accordance with the provisions of the CSOP scheme at a time when the scheme is [F1307a Schedule 4 CSOP scheme], F1308...

[F1309(b)Condition A or B is met] [F1310and

(c)the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised.]

[F1311(2)Condition A is that the option is exercised—

(a)on or after the third anniversary of the date on which it was granted, but

(b)not later than the tenth anniversary of that date.

(2A)Condition B is that the option—

(a)is exercised before the third anniversary of the date on which it was granted, and

(b)is so exercised by virtue of a provision included in the scheme under paragraph 24 of Schedule 4 (exercise of options after ceasing to be director or employee) in circumstances in which subsection (2B) applies.

(2B)This subsection applies if the individual exercising the option—

[F1312(a)has ceased to be in qualifying employment because of—

(i)injury, disability, redundancy or retirement,

(ii)a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or

(iii)in the case of a group scheme where the qualifying employment is as a director or employee of a constituent company, that company ceasing to be controlled by the scheme organiser, and]

(b)exercises the option within 6 months of the day on which he ceases to be such a director or employee.

[F1313(2BA)For the purposes of subsection (2B) an individual is in “qualifying employment” if the individual is a full-time director or qualifying employee (as defined in paragraph 8(2) of Schedule 4) of—

(a)the scheme organiser, or

(b)in the case of a group scheme, a constituent company.]

(2C)In subsection [F1314(2B)(a)(i)] —

“redundancy” means redundancy within the meaning of ERA 1996 or ER(NI)O 1996,

F1315...]

[F1316(2D)Subsection (2B)(a)(iii) does not cover a case where the constituent company was controlled by the scheme organiser by virtue of paragraph 34 of Schedule 4 (jointly owned companies).

(2E)In relation to any shares acquired by the exercise of the share option, no liability to income tax arises in respect of its exercise if—

(a)the individual exercises the option before the third anniversary of the date on which the option was granted at a time when the CSOP scheme is [F1317a Schedule 4 CSOP scheme],

(b)the option is exercised by virtue of a provision included in the scheme under paragraph 25A of Schedule 4,

(c)as a result of, as the case may be—

(i)the general offer,

(ii)the compromise or arrangement, F1318...

[F1319(iia)the non-UK company reorganisation arrangement, or]

(iii)the takeover offer,

the individual receives cash (and no other assets) in exchange for the shares,

(d)when the decision to grant the option was taken—

(i)the general offer,

(ii)the compromise or arrangement, F1320...

[F1321(iia)the non-UK company reorganisation arrangement, or]

(iii)the takeover offer,

as the case may be, had not been made,

(e)when that decision was taken, no arrangements were in place or under consideration for—

(i)the making of a general offer which would fall within subsection (2H),

(ii)the making of any compromise or arrangement which would fall within subsection (2L), F1322...

[F1323(iia)the making of any non-UK company reorganisation arrangement which would fall within subsection (2L), or]

(iii)the making of a takeover offer (as defined in section 974 of the Companies Act 2006) which would fall within subsection (2M),

(f)if the scheme includes a provision under paragraph 26 of Schedule 4 (“the paragraph 26 provision”), in connection with—

(i)the general offer,

(ii)the compromise or arrangement, F1324...

[F1325(iia)the non-UK company reorganisation arrangement, or]

(iii)the takeover offer,

as the case may be, no course of action was open to the individual which, had it been followed, would have resulted in the individual making an agreement under the paragraph 26 provision which would have prevented the individual from acquiring the shares by the exercise of the option, and

(g)the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised.

(2F)In subsection (2E)(c)(iii), (d)(iii) and (f)(iii) “the takeover offer” means the takeover offer (as defined in section 974 of the Companies Act 2006) giving rise to the application of sections 979 to 982 or 983 to 985 of that Act.

(2G)In subsection (2E)(e) “arrangements” includes any plan, scheme, agreement or understanding, whether or not legally enforceable.

(2H)A general offer falls within this subsection if it is—

(a)a general offer to acquire the whole of the issued ordinary share capital of the relevant company which is made on a condition such that, if it is met, the person making the offer will have control of the relevant company, or

(b)a general offer to acquire all the shares in the relevant company which are of the same class as those acquired by the exercise of the option.

(2I)In subsection (2H)(a) the reference to the issued ordinary share capital of the relevant company does not include any capital already held by the person making the offer or a person connected with that person and in subsection (2H)(b) the reference to the shares in the relevant company does not include any shares already held by the person making the offer or a person connected with that person.

(2J)For the purposes of subsection (2H)(a) and (b) it does not matter if the general offer is made to different shareholders by different means.

(2K)For the purposes of subsection (2H)(a) a person is to be treated as obtaining control of a company if that person and others acting in concert together obtain control of it.

(2L)A compromise or arrangement [F1326or a non-UK company reorganisation arrangement] falls within this subsection if it is applicable to or affects—

(a)all the ordinary share capital of the relevant company or all the shares of the same class as those acquired by the exercise of the option, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in [F1327a Schedule 4] CSOP scheme.

(2M)A takeover offer falls within this subsection if—

(a)it relates to the relevant company, and

(b)where there is more than one class of share in the relevant company, the class or classes to which it relates is or include the class of the shares acquired by the exercise of the option.

(2N)In subsections (2H), (2L) and (2M) “the relevant company” means the company whose shares are acquired by the exercise of the option.]

F1311(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1328(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Paragraph 25 of Schedule 4 provides for the exercise of an option where the holder has died.

Textual Amendments

F1307Words in s. 524(1)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(2), 204 (with Sch. 8 paras. 205-215)

F1308Word in s. 524(1)(a) repealed (with effect in accordance with s. 88(11) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(11)

F1309S. 524(1)(b) substituted (with effect in accordance with Sch. 21 para. 14(5) of the amending Act) by Finance Act 2003 (c. 14), Sch. 21 para. 14(2)

F1310S. 524(1)(c) and preceding word inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(7)

F1311S. 524(2)-(2C) substituted for s. 524(2)(3) (with effect in accordance with Sch. 21 para. 14(5) of the amending Act) by Finance Act 2003 (c. 14), Sch. 21 para. 14(3)

F1312S. 524(2B)(a) substituted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 26(2)

F1313S. 524(2BA) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 26(3)

F1314Word in s. 524(2C) substituted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 26(4)

F1315Words in s. 524(2C) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 14 (with Sch. 2 para. 17)

F1316S. 524(2D)-(2N) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 26(5)

F1317Words in s. 524(2E)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(a), 204 (with Sch. 8 paras. 205-215)

F1318Word in s. 524(2E)(c) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(b), 204 (with Sch. 8 paras. 205-215)

F1319S. 524(2E)(c)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(b), 204 (with Sch. 8 paras. 205-215)

F1320Word in s. 524(2E)(d) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(b), 204 (with Sch. 8 paras. 205-215)

F1321S. 524(2E)(d)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(b), 204 (with Sch. 8 paras. 205-215)

F1322Word in s. 524(2E)(e) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(c), 204 (with Sch. 8 paras. 205-215)

F1323S. 524(2E)(e)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(c), 204 (with Sch. 8 paras. 205-215)

F1324Word in s. 524(2E)(f) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(b), 204 (with Sch. 8 paras. 205-215)

F1325S. 524(2E)(f)(iia) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(3)(b), 204 (with Sch. 8 paras. 205-215)

F1326Words in s. 524(2L) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(4)(a), 204 (with Sch. 8 paras. 205-215)

F1327Words in s. 524(2L)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 162(4)(b), 204 (with Sch. 8 paras. 205-215)

F1329525No charge in respect of post-acquisition benefitsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1329S. 525 repealed (16.4.2003 with effect in accordance with Sch. 22 para. 34(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 34(1), Sch. 43 Pt. 3(4)

Tax chargeU.K.

526Charge where option granted at a discountU.K.

(1)This section applies if, at the time when the share option is granted to the individual, the aggregate of—

(a)the amount or value of any consideration given by the individual for the grant of the option, and

(b)the amount payable by the individual, on exercising the option, in order to acquire the maximum number of shares that may be acquired under it,

is less than the market value of the same quantity of issued shares of the same class.

(2)The amount of the difference counts as employment income of the individual for the relevant tax year.

(3)The “relevant tax year” is the tax year in which the option is granted to the individual.

(4)[F1330Section 480(4) (gain realised on acquisition of securities pursuant to option etc) provides for a deduction] to be made to take account of amounts that count as employment income under this section.

Textual Amendments

F1330Words in s. 526(4) substituted (with effect in accordance with Sch. 22 para. 35(2) of the amending Act, otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 35(1); S.I. 2003/1997, art. 2

Chapter 9U.K.Enterprise management incentives

IntroductionU.K.

527Enterprise management incentives: qualifying optionsU.K.

(1)This Chapter provides—

(a)for share options notified to [F165an officer of Revenue and Customs] to be qualifying options for the purposes of the EMI code, and

(b)for exemptions and reliefs from income tax in connection with qualifying options.

(2)Schedule 5 contains the requirements that have to be met for a share option to be a qualifying option, together with the notification procedure.

(3)The provisions of—

(a)this and the following sections of this Chapter, [F1331and]

(b)Schedule 5, F1332...

F1332(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

together constitute “the EMI code”.

(4)In the EMI code—

  • “qualifying option” means a share option—

    (a)

    in relation to which the requirements of Schedule 5 are met at the time when the option is granted, and

    (b)

    which is notified to [F165an officer of Revenue and Customs] in accordance with Part 7 of that Schedule;

  • “replacement option” means an option within paragraph 41(4) of that Schedule (grant of replacement option in connection with company reorganisations);

  • “share option” means a right to acquire shares in a company;

  • and any reference to the requirements of Schedule 5 is to the requirements set out in paragraph 1(3) of that Schedule.

(5)Other expressions used in the EMI code and contained in the index at the end of Schedule 5 have the meaning indicated by the index.

Textual Amendments

F1331Word in s. 527(3) inserted (with effect in accordance with Sch. 3 para. 9(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 9(3)(a)

F1332S. 527(3)(c) and word omitted (with effect in accordance with Sch. 3 para. 9(4) of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 3 para. 9(3)(b)

Tax advantages: receipt of optionU.K.

F1333528No charge on receipt of qualifying optionU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Tax advantages: exercise of optionU.K.

529Scope of tax advantages: option must be exercised within 10 yearsU.K.

(1)Sections 530 to 540 apply in connection with the exercise of a qualifying option.

(2)But those sections only apply in cases where the option is exercised on or before the tenth anniversary of—

(a)the date of the grant of the option, or

(b)if it is a replacement option, the date of the grant of the original option.

(3)In the EMI code “the original option” means—

(a)where there has been one replacement option, the option that that option replaced, or

(b)where there have been two or more replacement options, the option that the first of them replaced.

530No charge on exercise of option to acquire shares at market valueU.K.

(1)This section applies if the option is to acquire shares at not less than their market value—

(a)at the time when the option is granted, or

(b)if it is a replacement option, at the time when the original option was granted.

(2)If this section applies, no liability to income tax arises by virtue of section 476 (charge on exercise etc. of option by employee) in respect of the exercise of the option.

(3)This section has effect subject to section 532 (modified tax consequences following disqualifying events).

531Limitation of charge on exercise of option to acquire shares below market valueU.K.

(1)This section applies if the option is to acquire shares at less than their market value—

(a)at the time when the option is granted, or

(b)if it is a replacement option, at the time when the original option was granted,

or at nil cost.

(2)If this section applies, the section 476 gain is—

where—

CMV is the chargeable market value,

ACO is the amount or value of the consideration given for the grant of the option, and

ACS is the amount, if any, for which the shares are acquired.

(3)“The chargeable market value” means—

(a)the market value of the shares—

(i)at the time when the option was granted, or

(ii)if it is a replacement option, at the time when the original option was granted, or

(b)the market value of the shares at the time when the option is exercised,

whichever is lower.

F1334(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)In this section “the section 476 gain” means the amount [F1335under section 478 (amount of charge under section 476) is to be regarded as the taxable amount for the purposes of section 476 in respect of the acquisition of the shares pursuant to the option.]

(5)This section has effect subject to section 532 (modified tax consequences following disqualifying events).

Textual Amendments

F1334S. 531(3A) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(3)(b)

F1335Words in s. 531(4) substituted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 37(1)(2); S.I. 2003/1997, art. 2

Tax advantages where disqualifying eventsU.K.

532Modified tax consequences following disqualifying eventsU.K.

(1)This section applies where—

(a)a disqualifying event (see section 533) occurs in relation to a qualifying option before the option is exercised, and

(b)the option is exercised later than [F133690] days after the day on which the event occurred.

(2)If the option is within section 530(1) (option to acquire shares at market value), the section 476 gain is—

(see subsection (4)).

(3)If the option is within section 531(1) (option to acquire shares at less than market value), the section 476 gain is—

(see subsection (4)).

(4)For the purposes of subsections (2) and (3)—

  • ACO is the amount or value of the consideration given for the grant of the option,

  • ACS is the amount, if any, for which the shares are acquired,

  • CMV is the chargeable market value (as defined by section 531(3)), and

  • PEG is the post-event gain, that is the amount (if any) by which the market value of the shares at the time when the option is exercised exceeds their market value immediately before the disqualifying event.

F1337(4A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)In [F1338subsections (2) and (3)] “the section 476 gain” means the amount [F1339under section 478 (amount of charge under section 476) is to be regarded as the taxable amount for the purposes of section 476 in respect of the acquisition of the shares pursuant to the option.]

(6)Nothing in the following provisions—

(a)subsections (2) and (3) above, or

(b)sections 530 and 531,

applies if the amount that counts as employment income by virtue of section 476 in respect of the exercise of the option would, in the absence of those provisions, be less than the amount that counts as such income as a result of those provisions.

Textual Amendments

F1336Word in s. 532(1)(b) substituted (with effect in accordance with Sch. 2 para. 94(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 94(1)

F1337S. 532(4A) omitted (with effect in accordance with s. 12(5)-(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 12(3)(b)

F1338Words in s. 532(5) substituted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 14(3), 38; S.I. 2013/1755, art. 2

F1339Words in s. 532(5) substituted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 38(1)(2); S.I. 2003/1997, art. 2

533Disqualifying eventsU.K.

(1)The following provisions deal with the events that are (or are to be treated as) disqualifying events in relation to a qualifying option—

(a)section 534 (events relating to the relevant company),

(b)section 535 (events relating to the employee), and

(c)section 536 (other disqualifying events), read with sections 537 to 539 (which contain supplementary provisions).

(2)In the provisions mentioned in subsection (1) “the employee” means the person holding the qualifying option and “the relevant company” means the company whose shares are the subject of the option (see paragraph 1(3) of Schedule 5).

534Disqualifying events relating to relevant companyU.K.

(1)The following events relating to the relevant company are disqualifying events in relation to a qualifying option—

(a)when the relevant company becomes a 51% subsidiary of another company;

(b)when the relevant company comes under the control of—

(i)another company, or

(ii)another company and any other person connected with that other company,

without becoming a 51% subsidiary of that other company;

(c)when the relevant company ceases to meet the trading activities requirement (see paragraphs 13 to 23 of Schedule 5).

(2)But where a replacement option has been granted, an event within subsection (1)(a) or (b) is not a disqualifying event in relation to the old option (see paragraph 41(2) of Schedule 5) if the event occurs at any time during the period—

(a)beginning at the same time as the period within which the replacement option had to be granted (see paragraph 42 of Schedule 5), and

(b)ending with the release of the rights under the old option.

(3)A disqualifying event is to be treated as occurring in relation to a qualifying option if the circumstances mentioned in subsection (4) arise.

(4)The circumstances are that—

(a)the relevant company was a qualifying company at the time when the option was granted as a result only of preparations to carry on a qualifying trade; and

(b)either—

(i)the preparations cease to be carried on, or

(ii)the initial period comes to an end,

without the relevant company (or, if it is a parent company, any member of the group) beginning to carry on that qualifying trade.

(5)“The initial period” means the period of two years after the date when the option was granted.

(6)Paragraph 41(5)(b) of Schedule 5 has the effect that a replacement option is to be treated as granted on the date when the original option was granted.

[F1340(7)Subsection (1)(a) and (b) do not apply where the relevant company is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).]

Textual Amendments

F1340S. 534(7) inserted (retrospective to 1.10.2014) by Finance Act 2016 (c. 24), Sch. 3 para. 1

535Disqualifying events relating to employeeU.K.

(1)The following events relating to the employee are disqualifying events in relation to a qualifying option—

(a)when the employee ceases to be an eligible employee in relation to the relevant company as a result of ceasing to meet the requirement in paragraph 25 of Schedule 5 (the employment requirement);

(b)when the employee ceases to be such an employee as a result of ceasing to meet the requirement in paragraph 26 of that Schedule (the requirement as to commitment of working time).

(2)In addition, a disqualifying event is to be treated as occurring in relation to a qualifying option at the end of any tax year if, during that year, the average amount per week of the employee’s reckonable time in relevant employment was less than the statutory threshold.

(3)An employee’s “reckonable time in relevant employment” means the time which the employee in fact spent, as an employee in relevant employment—

(a)on the business of the relevant company, or

(b)if that company is a parent company, on the business of the group,

together with any time which the employee would, as such an employee, have spent on that business but for any of the reasons set out in paragraph 26(3)(a) to (d) of Schedule 5 (requirement as to commitment of working time).

(4)The “statutory threshold” means—

(a)25 hours, or

(b)if less, 75% of the employee’s working time.

(5)For the purpose of applying subsection (2) to the tax year in which the option was granted, any part of that year which preceded the date on which it was granted is to be disregarded in calculating the average amount mentioned in that subsection.

(6)In this section—

(a)“relevant employment” means employment—

(i)by the relevant company, or

(ii)if that company is a parent company, by any member of the group;

(b)“working time” has the meaning given by paragraph 27 of Schedule 5 (meaning of “working time”).

Modifications etc. (not altering text)

C48S. 535 modified (temp.) (with effect in accordance with s. 107(5) of the affecting Act) by 2020 c. 14, s. 107(1)(4) (as substituted by Finance Act 2021 (c. 26), s. 24)

536Other disqualifying eventsU.K.

(1)The following are also disqualifying events in relation to a qualifying option—

(a)any variation of the terms of the option whose effect is either—

(i)to increase the market value of the shares that are the subject of the option, or

(ii)that the requirements of Schedule 5 would no longer be met in relation to the option;

(b)any alteration to the share capital of the relevant company—

(i)to which subsection (2) (share values affected by alteration of rights or restrictions) of section 537 applies, and

(ii)whose effect is that the requirements of Schedule 5 would no longer be met in relation to the option;

(c)any alteration to the share capital of the relevant company to which—

(i)subsection (2) (share values affected by alteration of rights or restrictions), and

(ii)subsection (3) (alteration designed to increase share values),

of section 537 apply;

(d)a conversion of any of the shares to which the option relates into shares of a different class, except in a case within section 538(2); and

(e)the grant to the employee of a relevant CSOP option, if immediately after it is granted the employee holds unexercised employee options in respect of shares with a total value of more than [F1341£250,000] .

(2)In subsection (1)(e)—

  • “relevant CSOP option”, and

  • “employee option”,

  • have the meaning given by section 539 (CSOP and other options relevant for purposes of this section); and sub-paragraphs (6) to (8) of paragraph 5 of Schedule 5 (determination of value of shares) apply for the purposes of subsection (1)(e) as they apply for the purposes of paragraph 5.

Textual Amendments

537Alterations of share capital for purposes of section 536U.K.

(1)This section has effect for the purposes of section 536(1)(b) and (c) (other disqualifying events: alterations of share capital of relevant company).

(2)This subsection applies to an alteration of the share capital of the relevant company if—

(a)the alteration affects (or but for the occurrence of some other event would affect) the value of the shares to which the option relates; and

(b)it consists of or includes—

(i)the creation, variation or removal of a right relating to any shares in the relevant company,

(ii)the imposition of a restriction relating to any such shares, or

(iii)the variation or removal of a restriction to which any such shares are subject.

(3)This subsection applies to an alteration of the share capital of the relevant company if the effect of the alteration is to increase the market value of the shares to which the option relates and either—

(a)it is not made by the relevant company for commercial reasons, or

(b)the main purpose (or one of the main purposes) for making it is to increase the market value of those shares.

(4)In this section any reference to—

(a)a restriction relating to shares or to which shares are subject, or

(b)a right relating to shares,

is a reference to such a restriction imposed or right conferred by any contract or arrangement or in any other way.

538Share conversions excluded for purposes of section 536U.K.

(1)This section has effect for the purposes of section 536(1)(d) (other disqualifying events: share conversions).

(2)A conversion of shares is not a disqualifying event if—

(a)it is a conversion of shares of one class only (“the original class”) into shares of one other class only (“the new class”);

(b)all the shares of the original class are converted into shares of the new class; and

(c)one of the conditions in subsection (3) is met.

(3)The conditions are—

(a)that immediately before the conversion the majority of the relevant company’s shares of the original class are held otherwise than by or for the benefit of—

(i)directors or employees of the relevant company,

(ii)an associated company of the relevant company, or

(iii)directors or employees of such an associated company;

(b)that immediately before the conversion the relevant company is employee-controlled as a result of holdings of shares of the original class.

[F1342(4)“associated company” has the [F1343meaning given by section 449 of CTA 2010],

“director” has the same meaning as in the benefits code (see section 67) but also includes a person who is to be or has been a director,

“employee” includes a person who is to be or has been an employee, and

“employee-controlled” has the same meaning as in Chapters 1 to 4 of this Part (see section 421H(1)).]

Textual Amendments

F1343Words in s. 538(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 392 (with Sch. 2)

539CSOP and other options relevant for purposes of section 536U.K.

(1)This section has effect for the purposes of section 536(1)(e) (other disqualifying events: grant of CSOP option).

(2)A “relevant CSOP option” means a CSOP option granted to the employee by reason of the employee’s employment—

(a)with the employer company, or

(b)if it is a member of a group of companies, with any member of that group.

(3)A share option is an “employee option” if it is—

(a)the qualifying option mentioned in section 536(1), or

(b)another qualifying option granted to the employee by reason of the employee’s employment as mentioned in subsection (2)(a) or (b) above, or

(c)a relevant CSOP option.

(4)In this section a “CSOP option” means an option to acquire shares under a scheme [F1344which is a Schedule 4 CSOP scheme (see Schedule 4)].

Textual Amendments

F1344Words in s. 539(4) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 198, 204 (with Sch. 8 paras. 205-215)

Tax advantages: taxable benefitsU.K.

540No charge on acquisition of shares as taxable benefitU.K.

(1)F1345... [F1346Chapter 3C of this Part] (taxable benefits: notional loans in respect of acquisitions of shares) does not apply in relation to the acquisition of shares by the exercise of a qualifying option.

F1347(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1345Words in s. 540(1) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 16(2), 47

F1346Words in s. 540(1) substituted (with effect in accordance with Sch. 22 para. 40(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 40(1)

F1347S. 540(2) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 16(3), 47

Other income tax consequencesU.K.

541Effects on other income tax chargesU.K.

[F1348(1)Nothing in the EMI code affects—

(a)the operation of Chapters 2 to 4 of this Part in relation to shares acquired under a qualifying option, or

(b)the operation of Chapter 5 of this Part otherwise than in relation to the acquisition of shares under a qualifying option.

(2)But in calculating the taxable amount for the purposes of section 426 (post-acquisition charge on restricted securities) in respect of shares acquired under a qualifying option, the amount of relief on the exercise of the option is to be regarded as a deductible amount for the purposes of section 428 (amount of charge).]

(3)“The amount of relief on the exercise of the option” means the difference between—

(a)the amount that would have counted as employment income by virtue of section 476 in respect of the exercise of the option apart from the EMI code, and

(b)the amount (if any) that in fact counts as such income in accordance with the EMI code.

Textual Amendments

F1348S. 541(1)(2) substituted (1.9.2003 with effect in accordance with Sch. 22 para. 41(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 41(1); S.I. 2003/1997, art. 2

Chapter 10U.K.Priority share allocations

Exemption where offer made to both public and employeesU.K.

542Exemption: offer made to public and employeesU.K.

(1)This section applies if—

(a)there is a genuine offer to the public of shares in a company at a fixed price or by tender,

(b)a director or employee of the company, or of another company or person, is entitled by reason of the office or employment to an allocation of the shares in priority to members of the public, and

(c)conditions A to C are met.

(2)No liability to income tax in respect of earnings arises by virtue of any benefit derived by the director or employee from the entitlement.

(3)Condition A is that the aggregate number of shares subject to the offer that may be allocated as mentioned in subsection (1)(b) (“priority shares”) does not exceed—

(a)if the offer is part of arrangements which include one or more other offers to the public of shares of the same class, either of the limits in subsection (4), or

(b)in any other case, 10% of the shares subject to the offer (including the priority shares).

(4)The limits referred to in subsection (3)(a) are—

(a)40% of the shares subject to the offer (including the priority shares), and

(b)10% of all the shares of the class in question that are subject to any of the offers forming part of the arrangements (including the priority shares).

(5)Condition B is that all the persons entitled to an allocation of priority shares are entitled to it on similar terms (see section 546).

(6)Condition C is that those persons are not restricted wholly or mainly to directors or to those whose remuneration exceeds a particular level.

(7)This section has effect subject to section 543 (discount not covered by exemption in this section).

543Discount not covered by exemption in section 542U.K.

(1)This section applies if the total of—

(a)the price payable by the director or employee for the shares of the company allocated to the director or employee under the offer, and

(b)the amount or value of any registrant discount made to the director or employee in respect of the shares,

is less than the fixed price or the lowest price successfully tendered.

(2)Section 542(2) (exemption: offer made to public and employees) does not apply to the benefit (if any) represented by the difference.

Exemption where different offers made to public and employeesU.K.

544Exemption: different offers made to public and employeesU.K.

(1)This section applies if—

(a)there is a genuine offer to the public of a combination of shares in two or more companies at a fixed price or by tender (“the public offer”),

(b)there is at the same time an offer (“the employee offer”) of shares, or of a combination of shares, in one or more, but not all, of those companies—

(i)to directors or employees of any of those companies, or of any other company or person, or

(ii)to those directors or employees and to other persons,

(c)any of those directors or employees is entitled by reason of the office or employment to an allocation of shares under the employee offer in priority to any allocation to members of the public under the public offer, and

(d)conditions A to C are met.

(2)No liability to income tax in respect of earnings arises by virtue of any benefit derived by the director or employee from the entitlement.

(3)Condition A is that for each company whose shares are subject to the employee offer, the aggregate number of shares subject to that offer that may be allocated as mentioned in subsection (1)(c) (“priority shares”) does not exceed—

(a)if the public offer and the employee offer are part of arrangements which include one or more other offers to the public of shares in the company of the same class, either of the limits in subsection (4), or

(b)in any other case, 10% of the shares in the company that are subject to the public offer or the employee offer (including the priority shares).

(4)The limits referred to in subsection (3)(a) are—

(a)40% of the shares in the company that are subject to the public offer or the employee offer (including the priority shares), and

(b)10% of all the shares in the company of the class in question that are subject to any of the offers forming part of the arrangements (including the priority shares).

(5)Condition B is that all the persons entitled to an allocation of priority shares are entitled to it on similar terms (see section 546).

(6)Condition C is that those persons are not restricted wholly or mainly to directors or to those whose remuneration exceeds a particular level.

(7)This section has effect subject to section 545 (discount not covered by exemption in this section).

545Discount not covered by exemption in section 544U.K.

(1)This section applies if the total of—

(a)the price payable by the director or employee for the shares of a company allocated to the director or employee under the employee offer, and

(b)the amount or value of any registrant discount made to the director or employee in respect of the shares,

is not the same as, or as near as reasonably practicable to, the appropriate notional price for the shares of the company.

(2)Section 544(2) (exemption: different offers made to public and employees) does not apply to the benefit (if any) represented by the amount by which the appropriate notional price exceeds the total referred to in subsection (1).

(3)The “appropriate notional price” for the shares of a company is—

(a)if subsection (4) applies, the amount given by the formula in subsection (6), and

(b)in any other case, the notional price.

(4)This subsection applies if shares of the company are subject to the public offer and there is a difference between CP and AFP—

(a)CP being the price for the combination of shares subject to the public offer determined by aggregating the notional prices for each one of the shares comprised in the combination, and

(b)AFP being the actual fixed price or (as the case may be) the lowest successfully tendered price for that combination of shares.

(5)The “notional price” for the shares of a company is the price that might reasonably have been expected to be the fixed price for the shares of the company under a separate offer of those shares if—

(a)the shares of the company, and of each of the other companies had, instead of being subject to the public offer and the employee offer, been subject to separate offers to the public in respect of each company at fixed prices, and

(b)those separate offers had been made at the time at which the public offer was in fact made.

(6)The formula referred to in subsection (3)(a) is—

where—

NP is the notional price for the shares of the company, and

AFP and CP have the same meanings as in subsection (4).

Supplementary provisionsU.K.

546Meaning of being entitled “on similar terms”U.K.

(1)This section applies for the purposes of sections 542(5) and 544(5) (condition that entitlements to allocation of priority shares must be on similar terms).

(2)The fact that different provision is made for persons according to—

(a)the levels of their remuneration,

(b)the length of their service, or

(c)similar factors,

does not mean that they are not entitled to an allocation on similar terms.

(3)The fact that the allocations of shares in a company to which non-company employees are entitled are smaller than those to which company employees are entitled does not mean that they are not entitled on similar terms, if conditions A and B are met.

(4)Condition A is that each non-company employee is also entitled by reason of the office or employment and in priority to members of the public, to an allocation of shares in another company or companies which are offered to the public at a fixed price or by tender at the same time as the shares in the company.

(5)Condition B is that in the case of each non-company employee the aggregate value of all the shares included in the allocations to which the non-company employee is entitled is the same, or as nearly the same as is reasonably practicable, as that of the shares in the company included in the entitlement of a comparable company employee.

(6)For the purposes of subsection (5), the value of shares is to be measured by reference to the fixed price or the lowest price successfully tendered.

(7)In this section—

  • “company employee”, in relation to a company, means a director or employee of the company, and

  • “non-company employee”, in relation to a company, means a director or employee of another company or person.

547Meaning and amount or value of “registrant discount”U.K.

(1)For the purposes of this Chapter there is a “registrant discount” in respect of the shares of a company if conditions A to C are met.

(2)Condition A is that members of the public who comply with such requirements as may be imposed in connection with the offer or, if section 544 applies, the public offer are, or may become, entitled to a discount in respect of the whole or part of the shares of the company allocated to them.

(3)Condition B is that at least 40% of the shares of the company allocated to members of the public are allocated to individuals who are or become entitled to—

(a)the discount, or

(b)some other benefit of similar value for which they may elect as an alternative to the discount.

(4)Directors and employees who are entitled by reason of their office or employment to an allocation of the shares in priority to members of the public are not to be treated as members of the public for the purposes of subsection (3).

(5)Condition C is that subscribing employees are, or may become, entitled to the same discount in respect of the shares of the company as any other members of the public to whom shares of the company are allocated under the offer.

(6)In subsection (5) a “subscribing employee” means a director or employee who—

(a)subscribes for shares—

(i)if section 542 (offer made to public and employees) applies, under the offer as a member of the public, or

(ii)if section 544 (different offers made to public and employees) applies, under the public offer as a member of the public or under the employee offer as a director or employee, and

(b)complies (or, in the case of a requirement to register, is taken under the terms of the offer to comply) with the requirements mentioned in subsection (2).

(7)For the purposes of this Chapter, the “amount or value” of any registrant discount made to a director or employee means—

(a)the amount of any such discount made to the director or employee as is mentioned in subsection (5), or

(b)the value of any such other benefit as is mentioned in subsection (3)(b) which is conferred on the director or employee as an alternative to the discount.

548Minor definitionsU.K.

(1)In this Chapter—

  • “director” means—

    (a)

    in relation to a company whose affairs are managed by a board of directors or similar body, a member of that body,

    (b)

    in relation to a company whose affairs are managed by a single director or similar person, that director or person, and

    (c)

    in relation to a company whose affairs are managed by the members themselves, a member of the company, and

    includes any person in accordance with whose directions or instructions the directors of the company (as defined in paragraphs (a) to (c)) are accustomed to act and a person who is to be, or has ceased to be, a director (as so defined);

  • “employee” includes a person who is to be or has been an employee;

  • “shares” includes stock;

  • “the employee offer” and “the public offer” have the meanings given by section 544(1).

(2)For the purposes of subsection (1) a person is not to be regarded as a person in accordance with whose directions or instructions the directors of the company are accustomed to act merely because the directors act on advice given by that person in a professional capacity.

(3)References in this Chapter—

(a)to the employment, in relation to an employee, are to the employment of that employee, and

(b)to the office, in relation to a director, are to the office of that director.

Chapter 11U.K.Supplementary provisions about employee benefit trusts

IntroductionU.K.

549Application of this ChapterU.K.

(1)This Chapter applies for the purposes of any listed provision in circumstances where—

(a)an individual (“B”) is interested as a beneficiary of an employee benefit trust in shares or obligations of a particular company (“the company”), and

(b)the question arises under that provision whether the trustees of the trust are, as a result of B’s being so interested, to be regarded as associates of B’s for the relevant purposes.

The relevant purposes are those of the operation, in relation to the company, of the “no material interest” requirement contained in the Schedule to this Act in which the listed provision appears.

(2)In this Chapter “listed provision” means any of the following provisions (under which trustees of an employee benefit trust are not to be regarded as associates if specified limits relating to share ownership are not exceeded)—

(a)paragraph 23(2) of Schedule 2 (F1349... SIPs),

(b)paragraph 15(2) of Schedule 3 (F1350... SAYE option schemes),

(c)paragraph 13(2) of Schedule 4 (F1351... CSOP schemes), or

(d)paragraph 32(2) of Schedule 5 (enterprise management incentives).

(3)The general effect of this Chapter is that if the provisions of—

(a)sections 552 and 553 (attribution of interest in company to beneficiary or associate), or

(b)section 554 (attribution of further interest),

apply in relation to B or an associate of B's, B or the associate is to be treated for the purposes of the listed provision as having been the beneficial owner of a particular percentage of the company’s ordinary share capital on a particular date.

(4)In this Chapter, in relation to an individual, “associate”—

(a)has the [F1352meaning given by section 448 of CTA 2010 (close companies: meaning of “associate”)], but

(b)does not include the trustees of an employee benefit trust as a result only of the individual’s having (as mentioned in subsection (1)(a)) an interest in shares or obligations of the company which are subject to the trust.

(5)In this Chapter “employee” means the holder of a taxable employment under Part 2 (as defined in section 66(3)), and accordingly includes an office-holder whose office is within the scope of that definition as a result of section 5(1).

Textual Amendments

F1349Word in s. 549(2)(a) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 48, 89 (with Sch. 8 paras. 90-96)

F1352Words in s. 549(4)(a) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 393 (with Sch. 2)

Employee benefit trustsU.K.

550Meaning of “employee benefit trust”U.K.

(1)In this Chapter “employee benefit trust”, in relation to a company, means a trust where conditions A and B are met.

(2)Condition A is that all or most of the employees of the company are eligible to benefit under the trust.

(3)Condition B is that after 13th March 1989 either—

(a)there has been no disposal of any of the property subject to the trust, or

(b)any disposal of any of that property was a disposal within subsection (4).

(4)The disposals within this subsection are—

(a)disposals in the ordinary management of the trust, or

(b)qualifying disposals (within the meaning given by section 551).

(5)In this section and section 551 “disposal” means disposal by sale, loan or otherwise.

551“Qualifying disposals” for purposes of section 550U.K.

(1)For the purposes of section 550 (meaning of “employee benefit trust”) a “qualifying disposal” is a disposal of property consisting of—

(a)any of the ordinary share capital of the company, or

(b)money paid outright,

where any of conditions 1, 2 and 3 is met.

(2)Condition 1 is that the property has been applied for the benefit of—

(a)individual employees or former employees of the company,

(b)spouses [F1353or civil partners] , former spouses [F1353or civil partners] , widows or widowers [F1354or surviving civil partners] of employees or former employees of the company,

(c)dependants of persons within paragraph (a), or

(d)relatives, or spouses [F1355or civil partners] of relatives, of persons within paragraph (a) or (b).

(3)In subsection (2) each reference to the company includes a reference to a company controlled by the company.

(4)Condition 2 is that the property has been applied for charitable purposes.

(5)Condition 3 is that the property has been transferred to—

(a)the trustees of another employee benefit trust,

(b)the trustees of a qualifying employee share ownership trust (within the meaning of Schedule 5 to FA 1989), or

(c)the trustees of a profit sharing scheme approved under Schedule 9 to ICTA (approved share option schemes and profit sharing schemes).

(6)In this section “relative” means—

(a)parent, child or remoter relation in the direct line, or

(b)brother, sister, uncle, aunt, nephew or niece.

Textual Amendments

Attribution of interests in companyU.K.

552Attribution of interest in company to beneficiary or associateU.K.

(1)This section applies if—

(a)after 13th March 1989 B, or an associate of B's, has received a payment (“the relevant payment”) from the trustees of the employee benefit trust, and

(b)at any time during the period of 3 years ending with the day on which the relevant payment was received (“the payment date”), the property subject to the trust consisted of or included any part of the ordinary share capital of the company.

(2)In such a case B or the associate is to be treated for the purposes of the listed provision as having been the beneficial owner of the appropriate percentage of the ordinary share capital of the company on the payment date.

(3)This is in addition to any percentage of that share capital of which B or the associate was actually the beneficial owner on that date.

(4)Section 553 explains what is meant by “the appropriate percentage”.

Modifications etc. (not altering text)

553Meaning of “appropriate percentage” for purposes of section 552U.K.

(1)For the purposes of section 552 “the appropriate percentage” is—

where P and D have the meaning given by the following provisions.

(2)Unless subsection (3) applies, P is the aggregate of the relevant payment and any other payments received by B or associates of B’s from the trustees of the trust during the period of 12 months ending with the payment date.

(3)If—

(a)any distributions were made to the trustees of the trust by the company in respect of its ordinary share capital during the period of 3 years ending with the payment date, and

(b)the aggregate of those distributions is less than the aggregate mentioned in subsection (2),

P is the aggregate of those distributions.

(4)Unless subsection (5) applies, D is the amount determined as follows—

Step 1

Calculate the aggregate of—

(a)any distributions made by the company in respect of its ordinary share capital during the period of 12 months ending with the payment date,

(b)any distributions so made during the period of 12 months immediately preceding that mentioned in paragraph (a), and

(c)any distributions so made during the period of 12 months immediately preceding that mentioned in paragraph (b).

Step 2

Divide the aggregate so calculated by the number of the periods mentioned in paragraphs (a) to (c) in which distributions were so made.

(5)If no distributions were so made during any of those periods, D is 1.

(6)In this section “the payment date” and “the relevant payment” have the meaning indicated in section 552(1).

Modifications etc. (not altering text)

554Attribution of further interest in companyU.K.

(1)This section applies if—

(a)B or an associate of B’s is (apart from this section) to be treated by virtue of section 552(2) as having been the beneficial owner of a percentage of the ordinary share capital of the company as a result of receiving the relevant payment from the trustees of an [F1356employee] benefit trust, and

(b)B or an associate of B’s has, during the period of 12 months ending with the payment date, received one or more payments from the trustees of any other employee benefit trust or trusts connected with the company.

(2)In such a case section 552 applies to B or (as the case may be) the associate mentioned in subsection (1)(a) as if B or the associate had received—

(a)any payment from the trustees of a trust as mentioned in subsection (1)(b), or

(b)where more than one payment has been received from the trustees of a trust, the last of the payments,

on the payment date.

(3)B or the associate is accordingly to be treated for the purposes of the listed provision as having been the beneficial owner on the payment date of both—

(a)the percentage of the ordinary share capital of the company mentioned in subsection (1)(a), and

(b)the appropriate percentage of that share capital as determined in accordance with subsection (2).

(4)This is in addition to any percentage of that share capital of which B or the associate was actually the beneficial owner on that date.

(5)For the purposes of this section a trust is “connected with” the company if, at any time during the period of 3 years ending with the payment date, the property subject to the trust consisted of or included any part of the ordinary share capital of the company.

(6)In this section “the payment date” and “the relevant payment” have the meaning indicated in section 552(1).

Textual Amendments

F1356Word in s. 554(1)(a) substituted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 17 para. 9(3)

Modifications etc. (not altering text)

[F1357Part 7AU.K.Employment income provided through third parties

Textual Amendments

F1357Pt. 7A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 1

Modifications etc. (not altering text)

C50Pt. 7A modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 35(6)

C51Pt. 7A modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 1(8)

C52Pt. 7A modified (22.7.2020) by 2017 c. 32, Sch. 11 para. 1A(2)(6) (as inserted by Finance Act 2020 (c. 14), s. 16(3))

CHAPTER 1U.K.Application etc

Application[F1358: main case]U.K.

Textual Amendments

F1358Words in s. 554A cross-heading inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 5(2)

554AApplication of Chapter 2 [F1359: main case] U.K.

(1)Chapter 2 applies if—

(a)a person (“A”) is an employee, or a former or prospective employee, of another person (“B”),

(b)there is an arrangement (“the relevant arrangement”) to which A is a party or which otherwise (wholly or partly) covers or relates to A,

(c)it is reasonable to suppose that, in essence—

(i)the relevant arrangement, or

(ii)the relevant arrangement so far as it covers or relates to A,

is (wholly or partly) a means of providing, or is otherwise concerned (wholly or partly) with the provision of, rewards or recognition or loans in connection with A's employment, or former or prospective employment, with B,

(d)a relevant step is taken by a relevant third person, and

(e)it is reasonable to suppose that, in essence—

(i)the relevant step is taken (wholly or partly) in pursuance of the relevant arrangement, or

(ii)there is some other connection (direct or indirect) between the relevant step and the relevant arrangement.

(2)In this Part “relevant step” means a step within section 554B, 554C or 554D [F1360, or paragraph 1 [F1361or 1A] of Schedule 11 to F(No. 2)A 2017] [F1362 (including such a step where the taking of the step, or some aspect of the taking of the step, constitutes a breach of trust or is a constituent part of a breach of trust, and even if the step or aspect ] is void as a result of breach of trust)..

(3)Subsection (1) is subject to subsection (4) and sections 554E to 554Y.

[F1363(4)Chapter 2 does not apply by reason of—

(a)a relevant step taken on or after A's death if—

(i)the relevant step is within section 554B, or

(ii)the relevant step is within section 554C by virtue of subsection (1)(ab) of that section,

(b)a relevant step within paragraph 1 of Schedule 11 to F(No.2)A 2017 which is treated as being taken on or after A's death, or

(c)a relevant step within paragraph 1A of Schedule 11 to F(No.2)A 2017 in a case where the initial step (within the meaning given by sub-paragraph (1)(a) of that paragraph) is treated as being taken on or after A's death.]

(5)In subsection (1)(b) and (c)(ii) references to A include references to any person linked with A.

[F1364(5A)Subsections (5B) and (5C) apply where—

(a)a payment to a person other than A, or to A as a trustee, is of earnings from A's employment with B, and

(b)the earnings are, in whole or part, charged to tax under the employment income Parts otherwise than by virtue of this Part,

and for this purpose it does not matter whether all or some only or none of the tax is paid (but see sections 554Z5 and 554Z11B).

(5B)For the purposes of subsection (5C), an arrangement is a “redirected-earnings arrangement” if it (wholly or partly) covers or relates to redirected earnings; and for the purposes of this subsection and subsection (5C) “redirected earnings” means—

(a)the payment mentioned in subsection (5A)(a), or

(b)any sum or other property which (directly or indirectly)—

(i)represents, or

(ii)is derived from,

that payment.

(5C)The circumstances mentioned in subsection (5A)—

(a)do not prevent a redirected-earnings arrangement being within subsection (1)(b), and

(b)do not prevent rewards or recognition or loans being in connection with A's employment with B for the purposes of subsection (1)(c) where there is use of redirected earnings for the provision of the whole, or part, of the rewards or recognition or loans.]

(6)For the purposes of subsection (1)(c) it does not matter if the relevant arrangement does not include details of the steps which will or may be taken in connection with providing, in essence, rewards or recognition or loans as mentioned (for example, details of any sums of money or assets which will or may be involved or details of how or when or by whom or in whose favour any step will or may be taken).

(7)In subsection (1)(d) “relevant third person” means—

(a)A acting as a trustee,

(b)B acting as a trustee, or

(c)any person other than A and B.

(8)If B is a company and is a member of a group of companies at the time the relevant step is taken, in subsection (7) references to B are to be read as including references to any other company which is a member of that group at that time.

(9)If B is a limited liability partnership, in subsection (7) references to B are to be read as including references to any company which is a wholly-owned subsidiary (as defined in section 1159(2) of the Companies Act 2006) of B at the time the relevant step is taken.

(10)Neither subsection (8) nor subsection (9) applies if there is a connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(11)For the purposes of subsection (1)(e)—

(a)the relevant step is connected with the relevant arrangement if (for example) the relevant step is taken (wholly or partly) in pursuance of an arrangement at one end of a series of arrangements with the relevant arrangement being at the other end, and

(b)it does not matter if the person taking the relevant step is unaware of the relevant arrangement.

(12)For the purposes of subsection (1)(c) and (e) in particular, all relevant circumstances are to be taken into account in order to get to the essence of the matter.

Textual Amendments

F1359Words in s. 554A heading inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 5(3)

F1360Words in s. 554A(2) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 46(2)

F1362Words in s. 554A(2) inserted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 2

F1364S. 554A(5A)-(5C) inserted (retrospective and with effect in accordance with Sch. 1 para. 13(b)(c) of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 paras. 1, 13(a)

Modifications etc. (not altering text)

C53S. 554A(1)(e)(i)(ii) modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 1(3)

[F1365Application: close companiesU.K.

Textual Amendments

F1365Ss. 554AA-554AF and cross-heading inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 2

554AAApplication of Chapter 2: close companiesU.K.

(1)Chapter 2 applies if—

(a)there is an arrangement (“the relevant arrangement”) to which an individual (“A”) is a party or which otherwise (wholly or partly) covers or relates to A,

(b)it is reasonable to suppose that, in essence—

(i)the relevant arrangement, or

(ii)the relevant arrangement so far as it covers or relates to A,

is (wholly or partly) a means of providing, or is otherwise concerned (wholly or partly) with the provision of, A-linked payments or benefits or loans,

(c)a close company (“B”) enters into a relevant transaction (see section 554AB),

(d)it is reasonable to suppose that, in essence—

(i)the relevant transaction is entered into (wholly or partly) in pursuance of the relevant arrangement, or

(ii)there is some other connection (direct or indirect) between the relevant transaction and the relevant arrangement,

(e)at the time B enters into the relevant transaction, or at any earlier time in the 3 years ending with the date of the transaction, A is a director or an employee of B,

(f)at the time B enters into the relevant transaction, or at any earlier time in the 3 years ending with the date of the transaction, A has a material interest in B (see section 554AE),

(g)a relevant step is taken by a relevant third person,

(h)it is reasonable to suppose—

(i)that the sum of money or asset which is the subject of the relevant step represents (directly or indirectly), or has arisen or derives from, the sum of money or asset which is the subject of the relevant transaction, or

(ii)that the sum of money or asset which is the subject of the relevant transaction represents (directly or indirectly), or has arisen or derives from, the sum of money or asset which is the subject of the relevant step, and

(i)there is a time in the relevant period when the main purpose, or one of the main purposes, of operating, implementing, maintaining or terminating the relevant arrangement so far as it covers or relates to—

(i)the relevant transaction, and the relevant step so far as related to the relevant transaction, or

(ii)the relevant step, and the relevant transaction so far as related to the relevant step,

is the avoidance of? income tax, national insurance contributions, corporation tax or a charge to tax under section 455 of CTA 2010.

(2)In this section “close company” includes a company that would be a close company but for section 442(a) of CTA 2010 (exclusion of companies not resident in the United Kingdom).

(3)For the purposes of subsection (1)(b), a payment or benefit or loan is “A-linked” if—

(a)it is being provided to A, or a person chosen by A or within a class of persons chosen by A,

(b)it is being provided to a person on A's behalf, or at A's direction or request, or

(c)it is being provided to a person linked with A and it is reasonable to suppose that the main reason, or one of the main reasons, for it being provided is that the person is linked with A.

(4)For the purposes of subsection (1)(i), the “relevant period” consists of the time of the relevant transaction, the time of the relevant step, the times around each of those two times, and any other times between those two times.

(5)Subsections (6) and (7) apply where—

(a)a payment to a person other than A, or to A as a trustee, is of earnings from—

(i)A's employment with B, or

(ii)A's office as a director of B, and

(b)the earnings are, in whole or part, charged to tax under the employment income Parts otherwise than by virtue of this Part,

and for this purpose it does not matter whether all or some only or none of the tax is paid (but see sections 554Z5 and 554Z11B).

(6)For the purposes of subsection (7), an arrangement is a “redirected-earnings arrangement” if it (wholly or partly) covers or relates to redirected earnings; and for the purposes of this subsection and subsection (7) “redirected earnings” means—

(a)the payment mentioned in subsection (5)(a), or

(b)any sum or other property which (directly or indirectly)—

(i)represents, or

(ii)is derived from,

that payment.

(7)The circumstances mentioned in subsection (5)—

(a)do not prevent a redirected-earnings arrangement being within subsection (1)(a),

(b)do not prevent payments or benefits or loans being A-linked for the purposes of subsection (1)(b) where there is use of redirected earnings for the provision of the whole, or part, of the payments or benefits or loans, and

(c)do not prevent the making of the payment mentioned in subsection (5)(a) being entry into a relevant transaction.

(8)In this section and in section 554AB “relevant third person” means—

(a)A acting as a trustee,

(b)B acting as a trustee, or

(c)any person other than A or B.

(9)See also sections 554AD to 554AF (further interpretation and supplementary provision).

554ABMeaning of “relevant transaction”U.K.

(1)For the purposes of section 554AA(1), B enters into a relevant transaction if—

(a)B enters into a transaction within subsection (2), and

(b)the transaction is not an excluded transaction (see section 554AC).

(2)B enters into a transaction within this subsection if B—

(a)pays a sum of money to a relevant third person (see section 554AA(8)),

(b)acquires a right to a payment of a sum of money, or to a transfer of assets, where there is a connection (direct or indirect) between the acquisition of the right and—

(i)a payment made, by way of a loan or otherwise, to a relevant third person, or

(ii)a transfer of assets to a relevant third person,

(c)releases or writes off the whole or a part of—

(i)a loan made to a relevant third person, or

(ii)an acquired right of the kind mentioned in paragraph (b),

(d)transfers an asset to a relevant third person,

(e)takes a step by virtue of which a third person acquires an asset within subsection (4),

(f)makes available a sum of money or asset for use, or makes it available under an arrangement which permits its use—

(i)as security for a loan made or to be made to a relevant third person, or

(ii)otherwise as security for the meeting of any liability, or the performance of any undertaking, which a relevant third person has or will have, or

(g)grants to a relevant third person a lease of any premises the effective duration of which is likely to exceed 21 years.

(3)For the purposes of subsection (2) “loan” includes—

(a)any form of credit, and

(b)a payment that is purported to be made by way of a loan.

(4)The following assets are within this subsection—

(a)securities,

(b)interests in securities, and

(c)securities options,

as defined in section 420 for the purposes of Chapters 1 to 5 of Part 7; and in subsection (2)(e) “acquires” is to be read in accordance with section 421B(2)(a).

(5)For the purposes of subsection (2)(f)—

(a)references to making a sum of money or asset available are references to making it available in any way, however informal,

(b)it does not matter if the relevant third person has no legal right to have the sum of money or asset used as mentioned, and

(c)it does not matter if the sum of money or asset is not actually used as mentioned.

(6)Subsections (7) and (8) apply, for the purposes of subsection (2)(g), for the purpose of determining the likely effective duration of a lease of any premises granted to a relevant third person (“the original lease”).

(7)If there are circumstances which make it likely that the original lease will be extended for any period, the effective duration of the original lease is to be determined on the assumption that the original lease will be so extended.

(8)Further, if—

(a)the relevant third person, A or a person linked with A is, or is likely to become, entitled to a later lease, or the grant of a later lease, of the same premises, or

(b)it is otherwise likely that the relevant third person, A or a person linked with A will be granted a later lease of the same premises,

the original lease is to be treated as continuing until the end of the later lease (and subsection (7) also applies for the purpose of determining the duration of the later lease).

(9)In this section “lease” and “premises” have the same meaning as they have in Chapter 4 of Part 3 of ITTOIA 2005.

554ACMeaning of “excluded transaction”U.K.

(1)In section 554AB “excluded transaction” means—

(a)a distribution made by B,

(b)a transaction that—

(i)is entered into by B in the ordinary course of B's business, and

(ii)is on terms that would have been made between persons not connected with each other dealing at arm's length, or

(c)a transaction entered into in order to facilitate the disposal, on terms that would have been made between persons not connected with each other dealing at arm's length, of shares in B.

(2)But the distribution or transaction is not an “excluded transaction” if the avoidance of tax is the main purpose, or one of the main purposes, of (as the case may be)—

(a)making the distribution, or

(b)the transaction.

(3)Part 23 of CTA 2010 has effect for determining the meaning of “distribution” in this section as if—

(a)section 1000(1) of CTA 2010 included a paragraph specifying any distribution made in a winding up of the company, and

(b)sections 1030 to 1030B of that Act were omitted.

554ADSection 554AA: meaning of “director”U.K.

(1)For the purposes of section 554AA(1)(e) “director” means—

(a)in relation to a company whose affairs are managed by a board of directors or similar body, a member of that body,

(b)in relation to a company whose affairs are managed by a single director or similar person, that director or person, and

(c)in relation to a company whose affairs are managed by the members themselves, a member of the company,

and includes any person in accordance with whose directions or instructions the directors of the company (as defined in this subsection) are accustomed to act.

(2)For the purposes of subsection (1) a person is not to be regarded as a person in accordance with whose directions or instructions the directors of the company are accustomed to act merely because the directors act on advice given by that person in a professional capacity.

(3)For the purposes of section 5 as it applies to this Part, a person who is a director within the meaning of subsection (1) is to be treated (where it would not otherwise be the case) as holding an office.

554AESection 554AA: meaning of “material interest”U.K.

(1)Section 68 (meaning of “material interest” in a company) applies for the purposes of section 554AA and, subject to subsection (2), does so as it applies for the purposes of the benefits code.

(2)In section 68 as it applies for the purposes of section 554AA—

(a)each of the following is to be treated as “an associate” of A—

(i)a person (“the promoter”) who, for the purposes of Part 5 of FA 2014, is carrying on business as a promoter in relation to the relevant arrangement, and

(ii)where the promoter is a company, any company which is an associated company of the promoter;

(b)“participator”—

(i)in relation to a close company, means a person who is a participator in relation to the company for the purposes of section 455 of CTA 2010 (see sections 454 and 455(5) of that Act), and

(ii)in relation to a company which would be a close company if it were a UK resident company, means a person who would be such a participator if the company were a close company.

(3)In subsection (2)(a)(ii) “associated company” has the same meaning as it has for the purposes of Part 10 of CTA 2010 (see section 449 of that Act).

554AFSection 554AA: supplementaryU.K.

(1)Section 554AA(1) is subject to subsection (2) and sections 554E to 554Y.

(2)Chapter 2 does not apply by reason of section 554AA(1) in relation to a relevant step taken on or after A's death if—

(a)the relevant step is within section 554B, or

(b)the relevant step is within section 554C by virtue of subsection (1)(ab) of that section.

(3)In section 554AA(1)(a) and (b) references to A include references to a person linked with A.

(4)For the purposes of section 554AA(1)(b) it does not matter if the relevant arrangement does not include details of the steps which will or may be taken in connection with providing, in essence, payments or benefits or loans as mentioned (for example, details of any sums of money or assets which will or may be involved or details of how or when or by whom or in whose favour any step will or may be taken).

(5)For the purposes of section 554AA(1)(b) and (d) in particular, all relevant circumstances are to be taken into account in order to get to the essence of the matter.]

Relevant stepsU.K.

554BRelevant steps: earmarking etc of sum of money or assetU.K.

(1)A person (“P”) takes a step within this section if—

(a)a sum of money or asset held by or on behalf of P is earmarked (however informally) by P with a view to a later relevant step being taken by P or any other person (on or following the meeting of any condition or otherwise) in relation to—

(i)that sum of money or asset, or

(ii)any sum of money or asset which may arise or derive (directly or indirectly) from it, or

(b)a sum of money or asset otherwise starts being held by or on behalf of P, specifically with a view, so far as P is concerned, to a later relevant step being taken by P or any other person (on or following the meeting of any condition or otherwise) in relation to—

(i)that sum of money or asset, or

(ii)any sum of money or asset which may arise or derive (directly or indirectly) from it.

(2)For the purposes of subsection (1)(a) and (b) it does not matter—

(a)if details of the later relevant step have not been worked out (for example, details of the sum of money or asset which will or may be the subject of the step or details of how or when or by whom or in whose favour the step will or may be taken),

(b)if any condition which would have to be met before the later relevant step is taken might never be met, or

(c)if A, or any person linked with A, has no legal right to have a relevant step taken in relation to any sum of money or asset mentioned in subsection (1)(a)(i) or (ii) or (b)(i) or (ii) (as the case may be).

(3)For the purposes of subsection (1)(b) it does not matter whether or not the sum of money or asset in question has previously been held by or on behalf of P on a basis which is different to that mentioned in subsection (1)(b).

554CRelevant steps: payment of sum, transfer of asset etcU.K.

(1)A person (“P”) takes a step within this section if P—

(a)pays a sum of money to a relevant person,

[F1366(aa)acquires a right to a payment of a sum of money, or to a transfer of assets, where there is a connection (direct or indirect) between the acquisition of the right and—

(i)a payment made, by way of a loan or otherwise, to a relevant person, or

(ii)a transfer of assets to a relevant person,

(ab)releases or writes off the whole or a part of—

(i)a loan made to a relevant person, or

(ii)an acquired right of the kind mentioned in paragraph (aa),”.]

(b)transfers an asset to a relevant person,

(c)takes a step by virtue of which a relevant person acquires an asset within subsection (4),

(d)makes available a sum of money or asset for use, or makes it available under an arrangement which permits its use—

(i)as security for a loan made or to be made to a relevant person, or

(ii)otherwise as security for the meeting of any liability, or the performance of any undertaking, which a relevant person has or will have, or

(e)grants to a relevant person a lease of any premises the effective duration of which is likely to exceed 21 years.

(2)In subsection (1) “relevant person”—

(a)means A or a person chosen by A or within a class of person chosen by A, and

(b)includes, if P is taking a step on A's behalf or otherwise at A's direction or request, any other person.

(3)In subsection (2) references to A include references to any person linked with A.

[F1367(3A)For the purposes of subsection (1) “loan” includes—

(a)any form of credit, and

(b)a payment that is purported to be made by way of a loan.

(3B)Subsection (3C) applies where a person (“T”) acquires from another person (“L”) (whether or not for consideration)—

(a)a right to payment of the whole or part of a loan where T is the person liable (at the time of the acquisition of the right) to repay the loan, or

(b)a right to payment of a sum of money, or to a transfer of assets, where T is the person liable (at the time of the acquisition of the right) to pay the sum, or transfer the assets.

(3C)L is to be treated for the purposes of subsection (1)(ab) as releasing—

(a)in a case within subsection (3B)(a), the loan or the relevant part of it;

(b)in a case within subsection (3B)(b), the right or the relevant part of it.]

(4)The following assets are within this subsection—

(a)securities,

(b)interests in securities, and

(c)securities options,

as defined in section 420 for the purposes of Chapters 1 to 5 of Part 7; and in subsection (1)(c) “acquires” is to be read in accordance with section 421B(2)(a).

(5)For the purposes of subsection (1)(d)—

(a)references to making a sum of money or asset available are references to making it available in any way, however informal,

(b)it does not matter if the relevant person has no legal right to have the sum of money or asset used as mentioned, and

(c)it does not matter if the sum of money or asset is not actually used as mentioned.

(6)Subsections (7) and (8) apply for the purpose of determining the likely effective duration of a lease of any premises granted to a relevant person (“the original lease”) for the purposes of subsection (1)(e).

(7)If there are circumstances which make it likely that the original lease will be extended for any period, the effective duration of the original lease is to be determined on the assumption that the original lease will be so extended.

(8)Further, if—

(a)A is, or is likely to become, entitled to a later lease, or the grant of a later lease, of the same premises, or

(b)it is otherwise likely that A will be granted a later lease of the same premises,

the original lease is to be treated as continuing until the end of the later lease (and subsection (7) also applies for the purpose of determining the duration of the later lease).

(9)In subsection (8)—

(a)references to A include references to—

(i)any person linked with A, and

(ii)the person to whom the original lease was granted where the original lease was not granted to A or any person linked with A, and

(b)references to the same premises include references to any premises which include the whole or part of the same premises.

(10)In this section “lease” and “premises” have the same meaning as they have in Chapter 4 of Part 3 of ITTOIA 2005.

Textual Amendments

F1366S. 554C(1)(aa)(ab) inserted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 3(2)

F1367S. 554C(3A)-(3C) inserted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 3(3)

Modifications etc. (not altering text)

C54S. 554C(2)(3) applied (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 1(5)

554DRelevant steps: making asset availableU.K.

(1)A person (“P”) takes a step within this section if, without transferring the asset to the relevant person, P—

(a)at any time, makes an asset available for a relevant person to benefit from in a way which is substantially similar to the way in which the relevant person would have been able to benefit from the asset had the asset been transferred to the relevant person at that time, or

(b)at or after the end of the relevant period, makes an asset available for a relevant person to benefit from.

(2)If—

(a)before the end of the relevant period, P makes available an asset for a relevant person to benefit from, and

(b)at the end of the relevant period, P continues to make the asset available for the relevant person to benefit from,

P is treated as taking a step within this section by virtue of subsection (1)(b) at the end of the relevant period.

(3)For the purposes of subsections (1) and (2)—

(a)references to making an asset available are references to making it available in any way, however informal,

(b)it does not matter if the relevant person has no legal right to benefit from the asset, and

(c)it does not matter if the relevant person does not actually benefit from the asset.

(4)In subsections (1) and (2) “the relevant period” means the period of two years starting with the day on which A's employment with B ceases.

(5)In subsections (1) and (2) “relevant person”—

(a)means A or a person chosen by A or within a class of person chosen by A, and

(b)includes, if P is taking a step on A's behalf or otherwise at A's direction or request, any other person.

(6)In subsection (5) references to A include references to any person linked with A.

(7)The following factors (among others) may be taken into account in determining whether a step within this section is taken by virtue of subsection (1)(a)—

(a)any limitations on the way in which the relevant person may benefit from the asset,

(b)the period over which the asset is being made available and (if relevant) the extent to which that period covers the expected remaining useful life of the asset,

(c)the extent to which the relevant person has, or is to have, a say over the disposal of the asset, and

(d)the extent to which the relevant person may benefit from any proceeds arising from the disposal of the asset or otherwise have a say in the way the proceeds are used.

ExclusionsU.K.

554EExclusions: steps under certain schemes etcU.K.

(1)Chapter 2 does not apply by reason of a relevant step if the step is taken under any of the following—

(a)[F1368a Schedule 2] SIP (within the meaning of Chapter 6 of Part 7),

(b)[F1369a Schedule 3] SAYE option scheme (within the meaning of Chapter 7 of Part 7),

(c)[F1370a Schedule 4] CSOP scheme (within the meaning of Chapter 8 of Part 7),

(d)an arrangement the sole purpose of which is the provision of excluded benefits (as defined in section 393B(3)),

(e)an arrangement the sole purpose of which is the making of payments which are to be disregarded in the calculation mentioned in regulation 25 of the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) by virtue of paragraph 12 of Part 10 of Schedule 3 to those Regulations (as that paragraph has effect by virtue of regulation 2(3) of the Social Security (Contributions) (Amendment No. 9) Regulations 2007 (S.I. 2007/2905)),

(f)a pension scheme set up by a government outside the United Kingdom for the benefit of its employees or primarily for their benefit,

(g)a registered pension scheme, or

(h)an arrangement the sole purpose of which is the making of payments (within the meaning of Chapter 3 of Part 4 of FA 2004 (see section 161(2) of that Act))—

(i)to which section 161(4) of FA 2004 applies in relation to a registered pension scheme (or a registered pension scheme which has been wound up), and

(ii)which are authorised in relation to that scheme by section 160(1) of FA 2004.

(2)Subject to subsection (4), subsection (3) applies to a relevant step taken by a person (“P”) if—

(a)the relevant step is not taken under an arrangement mentioned in subsection (1)(a) to (c), and

(b)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(3)Chapter 2 does not apply by reason of the relevant step if the step is taken solely for the purpose of—

(a)acquiring or holding shares—

(i)to be awarded under [F1371a Schedule 2] SIP, or

(ii)to be provided pursuant to options granted under [F1372a Schedule 3] SAYE option scheme or [F1373a Schedule 4] CSOP scheme, or

(b)providing shares pursuant to—

(i)an award of shares under [F1374a Schedule 2] SIP, or

(ii)an option granted under [F1375a Schedule 3] SAYE option scheme or [F1376a Schedule 4] CSOP scheme.

(4)Subsection (3) does not apply to the relevant step if, immediately before or after the step is taken—

(a)the total number of shares of any type held, in relation to the [F1377Schedule 2] SIP, the [F1378Schedule 3] SAYE option scheme or the [F1379Schedule 4] CSOP scheme, by P and any other persons for purposes within subsection (3)(a) and (b), exceeds

(b)the maximum number of shares of that type which might reasonably be expected to be required, in relation to the [F1377Schedule 2] SIP, the [F1378Schedule 3] SAYE option scheme or the [F1379Schedule 4] CSOP scheme, for those purposes over the period of ten years starting with the day on which the relevant step is taken.

(5)Terms used in subsections (2) to (4) have the same meaning as they have in Chapter 6, 7 or 8 of Part 7 (as the case may be).

(6)Chapter 2 does not apply by reason of a relevant step taken by a person (“P”) if—

(a)the relevant step is taken for the sole purpose of—

(i)granting qualifying options under an EMI arrangement,

(ii)acquiring or holding shares to be provided pursuant to qualifying options granted under an EMI arrangement, or

(iii)providing shares pursuant to qualifying options granted under an EMI arrangement, and

(b)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(7)But subsection (6) does not apply to the relevant step if, immediately before or after the step is taken—

(a)the total number of shares of any type held, in relation to the EMI arrangement, by P and any other persons for purposes within subsection (6)(a)(i) to (iii), exceeds

(b)the maximum number of shares of that type which might reasonably be expected to be required, in relation to the EMI arrangement, for those purposes over the period of ten years starting with the day on which the relevant step is taken.

(8)In subsections (6) and (7) “EMI arrangement” means an arrangement under which qualifying options are granted.

(9)Terms used in subsections (6) to (8) have the same meaning as in Chapter 9 of Part 7.

(10)Subsection (11) applies if—

(a)a person (“P”) takes a relevant step within section 554B by reason of which Chapter 2 would apply apart from subsection (3) or (6), and

(b)at any time (“the relevant time”) the sum of money or asset (or any part of it) which is the subject of the relevant step—

(i)ceases to be held by or on behalf of P solely for purposes within subsection (3)(a) and (b) or (6)(a)(i) to (iii), but

(ii)continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

(11)This Part has effect as if a relevant step within section 554B were taken at the relevant time—

(a)the subject of which is the sum of money or asset (or the part of it) mentioned in subsection (10)(b), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(12)Chapter 2 does not apply by reason of a relevant step taken by the Independent Parliamentary Standards Authority in relation to a member of the House of Commons.

Textual Amendments

F1368Words in s. 554E(1)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(2), 89 (with Sch. 8 paras. 90-96)

F1369Words in s. 554E(1)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(2), 146 (with Sch. 8 paras. 147-157)

F1370Words in s. 554E(1)(c) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(2), 204 (with Sch. 8 paras. 205-215)

F1371Words in s. 554E(3)(a)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(2), 89 (with Sch. 8 paras. 90-96)

F1372Words in s. 554E(3)(a)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(3), 146 (with Sch. 8 paras. 147-157)

F1373Words in s. 554E(3)(a)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(3), 204 (with Sch. 8 paras. 205-215)

F1374Words in s. 554E(3)(b)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(2), 89 (with Sch. 8 paras. 90-96)

F1375Words in s. 554E(3)(b)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(3), 146 (with Sch. 8 paras. 147-157)

F1376Words in s. 554E(3)(b)(ii) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(3), 204 (with Sch. 8 paras. 205-215)

F1377Words in s. 554E(4)(a)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 49(3), 89 (with Sch. 8 paras. 90-96)

F1378Words in s. 554E(4)(a)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 136(4), 146 (with Sch. 8 paras. 147-157)

F1379Words in s. 554E(4)(a)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 200(4), 204 (with Sch. 8 paras. 205-215)

554FExclusions: commercial transactionsU.K.

(1)Chapter 2 does not apply by reason of a relevant step which is the payment of a sum of money by way of a loan if—

(a)the loan is a loan on ordinary commercial terms within the meaning of section 176, ignoring conditions B and C in that section, and

(b)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(2)Chapter 2 does not apply by reason of a relevant step taken by a person (“P”), which is not the payment of a sum of money by way of a loan, if—

(a)the step is taken for the sole purpose of a transaction which P has with A and which P entered into in the ordinary course of P's business,

(b)a substantial proportion of P's business involves similar transactions with members of the public,

(c)the terms on which P entered into the transaction with A are substantially the same as the terms on which P normally enters into similar transactions with members of the public, and

(d)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(3)For the purposes of subsection (2)(b) and (c) a transaction is “similar” if it is of the same or a similar type to the transaction which P has with A.

(4)In subsection (2)(b) and (c) “members of the public” means members of the public at large with whom P deals at arm's length.

(5)In this section references to A include references to any person linked with A.

[F1380(6)See paragraph 25 of Schedule 11 to F(No. 2)A 2017 for provision about exclusions where a loan is made on ordinary commercial terms and the relevant step is within paragraph 1 of that Schedule.]

Textual Amendments

F1380S. 554F(6) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 26

554GExclusions: transactions under employee benefit packagesU.K.

(1)Chapter 2 does not apply by reason of a relevant step taken by a person (“P”) if—

(a)the step is not taken under a pension scheme,

(b)the step is taken for the sole purpose of a transaction which P has with A and which P entered into in the ordinary course of P's business,

(c)if the step is the payment of a sum of money by way of a loan—

(i)a substantial proportion of P's business involves making similar loans to members of the public,

(ii)the transaction with A is part of a package of benefits which is available to a substantial proportion of B's employees, and

(iii)subsection (3) does not apply,

(d)if the step is not the payment of a sum of money by way of a loan, the transaction with A is part of a package of benefits which is available—

(i)to a substantial proportion of B's employees, or

(ii)to a substantial proportion of those employees of B whose status as employees of B is comparable with A's status as an employee of B (taking into account (for example) levels of seniority, types of duties and levels of remuneration),

(e)the terms on which similar transactions are offered by P under the package of benefits mentioned in paragraph (c)(ii) or (d) (as the case may be) are generous enough to enable substantially all of the employees of B to whom the package is available to take advantage of what is offered (if they want to),

(f)the terms on which P entered into the transaction with A are substantially the same as the terms on which P normally enters into similar transactions with employees of B under the package of benefits,

(g)if B is a company, a majority of B's employees to whom the package of benefits is available do not have a material interest (as defined in section 68) in B, and

(h)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(2)For the purposes of subsection (1)(c)(i)—

(a)a loan is “similar” if it is made for the same or similar purposes as the loan which is the subject of the relevant step, and

(b)“members of the public” means members of the public at large with whom P deals at arm's length.

(3)This subsection applies if any feature of the package of benefits mentioned in subsection (1)(c)(ii) has or is likely to have the effect that, of the employees of B to whom the package is available, it is employees within subsection (4) on whom benefits under the package will be wholly or mainly conferred.

(4)The employees within this subsection are—

(a)directors,

(b)senior employees,

(c)employees who receive, or as a result of the package of benefits are likely to receive, the higher or highest levels of remuneration, and

(d)if B is a company and is a member of a group of companies, any employees not within paragraph (b) or (c) who—

(i)are senior employees in the group, or

(ii)receive, or as a result of the package of benefits are likely to receive, the higher or highest levels of remuneration in the group.

(5)For the purposes of subsection (1)(e) and (f) a transaction is “similar” if it is of the same or a similar type to the transaction which P has with A.

(6)If the relevant step is not the payment of a sum of money by way of a loan, in this section references to employees of B are references to those employees of B whose duties of employment are performed in the United Kingdom; and for this purpose duties performed outside the United Kingdom the performance of which is merely incidental to the performance of duties in the United Kingdom are to be treated as performed in the United Kingdom.

(7)In this section (apart from subsection (1)(d)(ii)) references to A include references to any person linked with A.

[F1381(8)See paragraph 29 of Schedule 11 to F(No. 2)A 2017 for provision about exclusions for transactions under employee benefit packages in a case in which the relevant step is within paragraph 1 of that Schedule.]

Textual Amendments

F1381S. 554G(8) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 30

554HExclusions: earmarking of deferred remunerationU.K.

(1)This section applies if—

(a)on a date (“the award date”) A is awarded remuneration (“the deferred remuneration”) in respect of A's employment with B,

(b)the main purpose of the award is not the provision of relevant benefits (within the meaning of Chapter 2 of Part 6, but ignoring section 393B(2)(a)),

(c)the deferred remuneration is awarded on terms (“the deferred remuneration terms”) the main purpose of which is to defer the provision to A of the deferred remuneration to a specified date (“the vesting date”) which is after the award date, while providing that the award of the deferred remuneration is revoked if specified conditions are not met on or before the vesting date,

(d)the vesting date is not more than five years after the award date,

(e)as at the award date, there is a reasonable chance that the award of the deferred remuneration will be revoked because not all the specified conditions will be met on or before the vesting date,

(f)if the deferred remuneration were to be provided to A by any person on the award date, that action would, for the purposes of Part 11, be a payment of PAYE employment income of A in respect of A's employment with B,

(g)before the end of the vesting date, a person (“P”) takes a relevant step within section 554B by reason of which Chapter 2 would apply apart from this section,

(h)on the taking of the relevant step, the sum of money or asset which is the subject of the step represents the deferred remuneration or any part of it (and nothing else), and

(i)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(2)In addition to the provision relating to revocation required by subsection (1)(c) (which must be included), the deferred remuneration terms may also provide that the award of the deferred remuneration is partly revoked if specified conditions are not met on or before the vesting date.

(3)Chapter 2 does not apply by reason of the relevant step mentioned in subsection (1)(g).

(4)In the following subsections “the earmarked deferred remuneration” means the deferred remuneration so far as, on the taking of the relevant step mentioned in subsection (1)(g), it is represented by the sum of money or asset which is the subject of the step as mentioned in subsection (1)(h).

(5)Subsection (6) applies if, at any time (“the relevant time”)—

(a)any sum of money or asset held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b) which represents any of the earmarked deferred remuneration ceases to represent that earmarked deferred remuneration or a part of it (because the remuneration is to be provided to A in another way or its award has been revoked or for any other reason), but

(b)the sum of money or asset continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

(6)This Part has effect as if a relevant step within section 554B were taken at the relevant time—

(a)the subject of which is—

(i)the sum of money or asset mentioned in subsection (5), and

(ii)a just and reasonable proportion of any relevant income (see subsection (12)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(7)Subsection (8) applies if neither subsection (10) nor subsection (11) applies to the earmarked deferred remuneration or to a part of it.

(8)This Part has effect as if a relevant step within section 554B were taken at the end of the vesting date—

(a)the subject of which is—

(i)a sum of money of the notional PAYE amount, and

(ii)a just and reasonable proportion of any relevant income (see subsection (12)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(9)In subsection (8)(a) “the notional PAYE amount” means the amount which the payment of PAYE employment income would have been had, as the case may be—

(a)the earmarked deferred remuneration, or

(b)the part of it to which neither subsection (10) nor subsection (11) applies,

been provided to A at the end of the vesting date in a way which is, for the purposes of Part 11, a payment of PAYE employment income of A in respect of A's employment with B.

(10)This subsection applies to the earmarked deferred remuneration so far as it is provided to A before the end of the vesting date in a way which is, for the purposes of Part 11, a payment of PAYE employment income of A in respect of A's employment with B.

(11)This subsection applies to the earmarked deferred remuneration so far as, before the end of the vesting date, the award of the earmarked deferred remuneration is revoked in accordance with the deferred remuneration terms.

(12)In subsections (6)(a)(ii) and (8)(a)(ii) “relevant income” means any income—

(a)which, before the relevant time or the end of the vesting date (as the case may be)—

(i)arises (directly or indirectly) from a sum of money or asset held by or on behalf of P representing any of the earmarked deferred remuneration, and

(ii)is the subject of a relevant step within section 554B taken by P by reason of which Chapter 2 would apply apart from section 554Q, and

(b)which, at the relevant time or the end of the vesting date (as the case may be), continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

554IExclusions: introduction to sections 554J to 554MU.K.

(1)Sections 554J and 554K are about steps within section 554B taken in relation to awards of certain shares or securities or of sums of money determined by reference to the market value of certain shares or securities.

(2)Sections 554L and 554M are about steps within section 554B taken in relation to grants of rights to acquire certain shares or securities or to receive sums of money determined by reference to the market value of certain shares or securities.

(3)Sections 554J to 554M apply only if B is a company.

(4)In those sections—

  • “relevant benefits” has the same meaning as in Chapter 2 of Part 6, but ignoring section 393B(2)(a),

  • “relevant shares” means—

    (a)

    shares (including stock) in B,

    (b)

    instruments issued by B which are securities for the purposes of Chapters 1 to 5 of Part 7 within section 420(1)(b), or

    (c)

    units in a collective investment scheme (as defined in section 420(2)) managed by B which are securities for the purposes of Chapters 1 to 5 of Part 7 within section 420(1)(e), and

  • “trading company” means a company the business of which consists wholly or mainly in the carrying on of a trade.

(5)If B is a member of a group of companies, in the definition of “relevant shares” in subsection (4) references to B are to be read as including references to any other company which is a member of that group.

(6)For the purposes of sections 554K and 554M an exit event occurs if—

(a)shares in the relevant company are admitted to trading on a stock exchange,

(b)all the shares in the relevant company, or a substantial proportion of them, are disposed of to persons none of whom is connected with any of the persons making any disposal,

(c)if the relevant company is a trading company (as defined in subsection (4)), the company's trade, or a substantial proportion of it, is transferred to a person who is not a relevant connected person,

(d)the relevant company's assets, or a substantial proportion of them, are disposed of to a person who is not a relevant connected person,

(e)the winding up of the relevant company starts, or

(f)a person (“P”) who controls the relevant company ceases to control it, so long as no person connected with P starts to control it.

(7)For the purposes of subsection (6)—

(a)“the relevant company” means—

(i)if the relevant shares mentioned in section 554K(1)(a)(i) or (ii) or 554M(1)(a)(i) or (ii) are shares (including stock), the company in which they are shares, or

(ii)if the relevant shares so mentioned are instruments within paragraph (b) of the definition of “relevant shares” in subsection (4), the company by which those instruments are issued,

(b)“relevant connected person” means a person who—

(i)is connected with the relevant company, or

(ii)is a shareholder in the relevant company or is connected with a shareholder in the relevant company,

(c)the relevant company's trade, or a substantial proportion of it, is transferred to another person if—

(i)the relevant company ceases to carry on the trade or the proportion of it, and

(ii)on that occurring, the other person starts to carry on the trade or the proportion of it, and

(d)section 12(7) of CTA 2009 applies for the purpose of determining when the winding up of the relevant company starts.

554JExclusions: earmarking for employee share schemes (1)U.K.

(1)This section applies if—

(a)there is an arrangement (“B's employee share scheme”) under which, in respect of A's employment with B, an award may be made to A of—

(i)relevant shares, or

(ii)a sum of money the amount of which is to be determined by reference to the market value of any relevant shares at the time the sum is to be paid,

(b)the main purpose of the award of the relevant shares or sum of money would not be the provision of relevant benefits,

(c)the award of the relevant shares or sum of money would be on terms (“the deferred award terms”) the main purpose of which is to defer the receipt of the shares by A, or the payment of the sum of money to A, to a specified date (“the vesting date”) which is after the date (“the award date”) on which the award is made, while providing that the award is revoked if specified conditions are not met on or before the vesting date,

(d)the vesting date would not be more than ten years after the award date, and

(e)as at the award date, there would be a reasonable chance that the award of the relevant shares or sum of money will be revoked because not all the specified conditions will be met on or before the vesting date.

(2)In addition to the provision relating to revocation required by subsection (1)(c) (which must be included), the deferred award terms may also provide that the award of the relevant shares or sum of money is partly revoked if specified conditions are not met on or before the vesting date.

(3)Chapter 2 does not apply by reason of a relevant step within section 554B (by reason of which it would otherwise apply) taken by a person (“P”) if—

(a)the subject of the relevant step is relevant shares (“earmarked shares”) which are earmarked, or otherwise start being held, solely with a view to the meeting of—

(i)an award of relevant shares or a sum of money made to A under B's employee share scheme as mentioned in subsection (1)(a) in relation to which the requirements of subsection (1)(b) to (e) are met, or

(ii)an award of relevant shares or a sum of money which is expected to be made to A under B's employee share scheme as mentioned in subsection (1)(a) and in relation to which the requirements of subsection (1)(b) to (e) would be met,

(b)the number of relevant shares of any type which are earmarked shares does not exceed the maximum number of relevant shares of that type which might reasonably be expected to be needed for meeting the award or expected award, and

(c)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(4)If the relevant step mentioned in subsection (3) is taken in relation to an expected award as mentioned in subsection (3)(a)(ii), subsection (5) applies if—

(a)the award is not made before the end of the date (“the final award date”) falling immediately after the period of three months starting with the date on which P takes the relevant step, and

(b)as at the end of the final award date, any of the earmarked shares continue to be held by or on behalf of P solely on the basis mentioned in subsection (3)(a).

(5)This Part has effect as if a relevant step within section 554B were taken at the end of the final award date—

(a)the subject of which is—

(i)the shares which continue to be held as mentioned in subsection (4)(b), and

(ii)any relevant income in relation to those shares (see subsection (13)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(6)Subsection (7) applies if, at any time (“the relevant time”)—

(a)any of the earmarked shares cease to be held by or on behalf of P solely on the basis mentioned in subsection (3)(a), but

(b)the shares continue to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

(7)This Part has effect as if a relevant step within section 554B were taken at the relevant time—

(a)the subject of which is—

(i)the shares mentioned in subsection (6), and

(ii)any relevant income in relation to those shares (see subsection (13)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(8)Subsection (9) applies if—

(a)the relevant step mentioned in subsection (3) is taken in relation to an award which has been made as mentioned in subsection (3)(a)(i), or

(b)the relevant step mentioned in subsection (3) is taken in relation to an expected award as mentioned in subsection (3)(a)(ii) and the award is made before the end of the final award date.

(9)This Part has effect as if a relevant step within section 554B were taken at the end of the vesting date—

(a)the subject of which is—

(i)any of the earmarked shares to which none of subsections (10) to (12) applies, and

(ii)any relevant income in relation to any of the earmarked shares mentioned in sub-paragraph (i) (see subsection (13)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(10)This subsection applies to any earmarked shares if—

(a)A receives the shares before the end of the vesting date, and

(b)the receipt of the shares by A gives rise to employment income of A which is chargeable to income tax or which is exempt income.

(11)This subsection applies to any earmarked shares if—

(a)the sum of money mentioned in subsection (1)(a)(ii) (or a part of it) is paid to A before the end of the vesting date,

(b)the payment of the sum to A gives rise to employment income of A which is chargeable to income tax or which is exempt income, and

(c)the payment represents the proceeds of the disposal of the shares, or the payment is made from another source and, correspondingly, the shares are no longer held by any person in relation to the award.

(12)This subsection applies to any earmarked shares if—

(a)before the end of the vesting date, the award (or any part of it) is revoked in accordance with the deferred award terms, and

(b)correspondingly, the shares are no longer held by any person in relation to the award.

(13)In subsections (5)(a)(ii), (7)(a)(ii) and (9)(a)(ii) “relevant income”, in relation to any earmarked shares, means any income—

(a)which, before the relevant step is treated as being taken by subsection (5), (7) or (9) (as the case may be)—

(i)arises (directly or indirectly) from the shares, and

(ii)is the subject of a relevant step within section 554B taken by P by reason of which Chapter 2 would apply apart from section 554Q, and

(b)which, at the time the relevant step is treated as being taken, continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

554KExclusions: earmarking for employee share schemes (2)U.K.

(1)This section applies if—

(a)there is an arrangement (“B's employee share scheme”) under which, in respect of A's employment with B, an award may be made to A of—

(i)relevant shares, or

(ii)a sum of money the amount of which is to be determined by reference to the market value of any relevant shares at the time the sum is to be paid,

(b)the main purpose of the award would not be the provision of relevant benefits,

(c)the relevant shares would be—

(i)shares (including stock) in, or

(ii)instruments within paragraph (b) of the definition of “relevant shares” in section 554I(4) issued by,

a trading company or a company which controls a trading company,

(d)the award would be on terms the main purpose of which is to ensure—

(i)that the relevant shares are received, or

(ii)that the sum of money is paid,

only if a specified exit event, or an exit event within a specified description, occurs, and

(e)as at the time the award is made, there would be a reasonable chance that the specified exit event, or an exit event within the specified description, will occur.

(2)Chapter 2 does not apply by reason of a relevant step within section 554B (by reason of which it would otherwise apply) taken by a person (“P”) if—

(a)the subject of the relevant step is relevant shares (“earmarked shares”) which are earmarked, or otherwise start being held, solely with a view to the meeting of—

(i)an award of relevant shares or a sum of money made to A under B's employee share scheme as mentioned in subsection (1)(a) in relation to which the requirements of subsection (1)(b) to (e) are met, or

(ii)an award of relevant shares or a sum of money which is expected to be made to A under B's employee share scheme as mentioned in subsection (1)(a) and in relation to which the requirements of subsection (1)(b) to (e) would be met,

(b)the number of relevant shares of any type which are earmarked shares does not exceed the maximum number of relevant shares of that type which might reasonably be expected to be needed for meeting the award or expected award, and

(c)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(3)If the relevant step mentioned in subsection (2) is taken in relation to an expected award as mentioned in subsection (2)(a)(ii), subsection (4) applies if—

(a)the award is not made before the end of the date (“the final award date”) falling immediately after the period of three months starting with the date on which P takes the relevant step, and

(b)as at the end of the final award date, any of the earmarked shares continue to be held by or on behalf of P solely on the basis mentioned in subsection (2)(a).

(4)This Part has effect as if a relevant step within section 554B were taken at the end of the final award date—

(a)the subject of which is—

(i)the shares which continue to be held as mentioned in subsection (3)(b), and

(ii)any relevant income in relation to those shares (see subsection (12)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(5)Subsection (6) applies if, at any time (“the relevant time”)—

(a)any of the earmarked shares cease to be held by or on behalf of P solely on the basis mentioned in subsection (2)(a), but

(b)the shares continue to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

(6)This Part has effect as if a relevant step within section 554B were taken at the relevant time—

(a)the subject of which is—

(i)the shares mentioned in subsection (5), and

(ii)any relevant income in relation to those shares (see subsection (12)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(7)Subsection (8) applies if—

(a)the relevant step mentioned in subsection (2) is taken in relation to an award which has been made as mentioned in subsection (2)(a)(i), or

(b)the relevant step mentioned in subsection (2) is taken in relation to an expected award as mentioned in subsection (2)(a)(ii) and the award is made before the end of the final award date,

and the specified exit event, or an exit event within the specified description, occurs.

(8)This Part has effect as if a relevant step within section 554B were taken at the end of the exit period—

(a)the subject of which is—

(i)any of the earmarked shares to which neither subsection (9) nor subsection (10) applies, and

(ii)any relevant income in relation to any of the earmarked shares mentioned in sub-paragraph (i) (see subsection (12)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(9)This subsection applies to any earmarked shares if—

(a)A receives the shares before the end of the exit period, and

(b)the receipt of the shares by A gives rise to employment income of A which is chargeable to income tax or which is exempt income.

(10)This subsection applies to any earmarked shares if—

(a)the sum of money mentioned in subsection (1)(a)(ii) (or a part of it) is paid to A before the end of the exit period,

(b)the payment of the sum to A gives rise to employment income of A which is chargeable to income tax or which is exempt income, and

(c)the payment represents the proceeds of the disposal of the shares, or the payment is made from another source and, correspondingly, the shares are no longer held by any person in relation to the award.

(11)In subsections (8), (9)(a) and (10)(a) “the exit period” means the period of six months starting with the date on which the exit event occurs.

(12)In subsections (4)(a)(ii), (6)(a)(ii) and (8)(a)(ii) “relevant income”, in relation to any earmarked shares, means any income—

(a)which, before the relevant step is treated as being taken by subsection (4), (6) or (8) (as the case may be)—

(i)arises (directly or indirectly) from the shares, and

(ii)is the subject of a relevant step within section 554B taken by P by reason of which Chapter 2 would apply apart from section 554Q, and

(b)which, at the time the relevant step is treated as being taken, continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

554LExclusions: earmarking for employee share schemes (3)U.K.

(1)This section applies if—

(a)there is an arrangement (“B's employee share scheme”) under which, in respect of A's employment with B, a right (“a relevant share option”) may be granted to A—

(i)to acquire relevant shares, or

(ii)to receive a sum of money the amount of which is to be determined by reference to the market value of any relevant shares at the time the sum is to be paid,

(b)the main purpose of the grant of the relevant share option would not be the provision of relevant benefits,

(c)the grant would be made on terms (“the deferred grant terms”) the main purpose of which is to ensure that the relevant share option is not exercisable by A before a specified date (“the vesting date”) which is after the date (“the grant date”) on which the grant is made, while providing that the relevant share option is not to be exercisable at all by A if specified conditions are not met on or before the vesting date,

(d)the vesting date would not be more than ten years after the grant date, and

(e)as at the grant date, there would be a reasonable chance that the relevant share option will not be exercisable at all by A because not all the specified conditions will be met on or before the vesting date.

(2)In addition to the provision relating to revocation required by subsection (1)(c) (which must be included), the deferred grant terms may also provide that the relevant share option may be exercised by A only in part if specified conditions are not met on or before the vesting date.

(3)Chapter 2 does not apply by reason of a relevant step within section 554B (by reason of which it would otherwise apply) taken by a person (“P”) if—

(a)the subject of the relevant step is relevant shares (“earmarked shares”) which are earmarked, or otherwise start being held, solely with a view to providing relevant shares, or paying a sum of money, pursuant to—

(i)a relevant share option granted to A under B's employee share scheme as mentioned in subsection (1)(a) in relation to which the requirements of subsection (1)(b) to (e) are met, or

(ii)a relevant share option which is expected to be granted to A under B's employee share scheme as mentioned in subsection (1)(a) and in relation to which the requirements of subsection (1)(b) to (e) would be met,

(b)the number of relevant shares of any type which are earmarked shares does not exceed the maximum number of relevant shares of that type which might reasonably be expected to be needed for providing shares, or paying a sum of money, pursuant to the relevant share option which is granted or expected to be granted, and

(c)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(4)If the relevant step mentioned in subsection (3) is taken in relation to an expected grant of a relevant share option as mentioned in subsection (3)(a)(ii), subsection (5) applies if—

(a)the grant is not made before the end of the date (“the final grant date”) falling immediately after the period of three months starting with the date on which P takes the relevant step, and

(b)as at the end of the final grant date, any of the earmarked shares continue to be held by or on behalf of P solely on the basis mentioned in subsection (3)(a).

(5)This Part has effect as if a relevant step within section 554B were taken at the end of the final grant date—

(a)the subject of which is—

(i)the shares which continue to be held as mentioned in subsection (4)(b), and

(ii)any relevant income in relation to those shares (see subsection (15)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(6)Subsection (7) applies if, at any time (“the relevant time”)—

(a)any of the earmarked shares cease to be held by or on behalf of P solely on the basis mentioned in subsection (3)(a), but

(b)the shares continue to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

(7)This Part has effect as if a relevant step within section 554B were taken at the relevant time—

(a)the subject of which is—

(i)the shares mentioned in subsection (6), and

(ii)any relevant income in relation to those shares (see subsection (15)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(8)Subsection (9) applies if—

(a)the relevant step mentioned in subsection (3) is taken in relation to a grant of a relevant share option made as mentioned in subsection (3)(a)(i), or

(b)the relevant step mentioned in subsection (3) is taken in relation to an expected grant of a relevant share option as mentioned in subsection (3)(a)(ii) and the grant is made before the end of the final grant date.

(9)This Part has effect as if a relevant step within section 554B were taken at the end of the final exercise date—

(a)the subject of which is—

(i)any of the earmarked shares to which none of subsections (10) to (13) applies, and

(ii)any relevant income in relation to any of the earmarked shares mentioned in sub-paragraph (i) (see subsection (15)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(10)This subsection applies to any earmarked shares if—

(a)the relevant share option becomes exercisable (in whole or in part) by A before the end of the vesting date,

(b)A exercises the option (wholly or partly) before the end of the final exercise date and, as a result, receives the shares, and

(c)the receipt of the shares gives rise to employment income of A—

(i)which is chargeable to income tax or would be chargeable apart from [F1382Chapter 5B of Part 2], or

(ii)which is exempt income.

(11)This subsection applies to any earmarked shares if—

(a)the relevant share option becomes exercisable (in whole or in part) by A before the end of the vesting date,

(b)A exercises the option (wholly or partly) before the end of the final exercise date and, as a result, a sum of money is paid to A as mentioned in subsection (1)(a)(ii),

(c)the payment of the sum gives rise to employment income of A—

(i)which is chargeable to income tax or would be chargeable apart from section 474, or

(ii)which is exempt income, and

(d)the payment represents the proceeds of the disposal of the shares, or the payment is made from another source and, correspondingly, the shares are no longer held by any person in relation to the relevant share option.

(12)This subsection applies to any earmarked shares if—

(a)in accordance with the deferred grant terms, before the end of the vesting date, the relevant share option ceases to be exercisable by A (in whole or in part), and

(b)correspondingly, the shares are no longer held by any person in relation to the relevant share option.

(13)This subsection applies to any earmarked shares if—

(a)the relevant share option becomes exercisable by A (in whole or in part) before the end of the vesting date but the option lapses (in whole or in part) before the end of the final exercise date, and

(b)correspondingly, the shares are no longer held by any person in relation to the relevant share option.

(14)In subsections (9) to (13) “the final exercise date” means the date which is ten years after the grant date.

(15)In subsections (5)(a)(ii), (7)(a)(ii) and (9)(a)(ii) “relevant income”, in relation to any earmarked shares, means any income—

(a)which, before the relevant step is treated as being taken by subsection (5), (7) or (9) (as the case may be)—

(i)arises (directly or indirectly) from the shares, and

(ii)is the subject of a relevant step within section 554B taken by P by reason of which Chapter 2 would apply apart from section 554Q, and

(b)which, at the time the relevant step is treated as being taken, continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

Textual Amendments

F1382Words in s. 554L(10)(c)(i) substituted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 18, 47

554MExclusions: earmarking for employee share schemes (4)U.K.

(1)This section applies if—

(a)there is an arrangement (“B's employee share scheme”) under which, in respect of A's employment with B, a right (“a relevant share option”) may be granted to A—

(i)to acquire relevant shares, or

(ii)to receive a sum of money the amount of which is to be determined by reference to the market value of any relevant shares at the time the sum is to be paid,

(b)the main purpose of the grant of the relevant share option would not be the provision of relevant benefits,

(c)the relevant shares would be—

(i)shares (including stock) in, or

(ii)instruments within paragraph (b) of the definition of “relevant shares” in section 554I(4) issued by,

a trading company or a company which controls a trading company,

(d)the grant would be made on terms (“the deferred grant terms”) the main purpose of which is to ensure that the relevant share option is exercisable by A only if a specified exit event, or an exit event within a specified description, occurs, and

(e)as at the time the grant is made, there would be a reasonable chance that the specified exit event, or an exit event within the specified description, will occur.

(2)Chapter 2 does not apply by reason of a relevant step within section 554B (by reason of which it would otherwise apply) taken by a person (“P”) if—

(a)the subject of the relevant step is relevant shares (“earmarked shares”) which are earmarked, or otherwise start being held, solely with a view to providing relevant shares, or paying a sum of money, pursuant to—

(i)a relevant share option granted to A under B's employee share scheme as mentioned in subsection (1)(a) in relation to which the requirements of subsection (1)(b) to (e) are met, or

(ii)a relevant share option which is expected to be granted to A under B's employee share scheme as mentioned in subsection (1)(a) and in relation to which the requirements of subsection (1)(b) to (e) would be met,

(b)the number of relevant shares of any type which are earmarked shares does not exceed the maximum number of relevant shares of that type which might reasonably be expected to be needed for providing shares, or paying a sum of money, pursuant to the relevant share option which is granted or expected to be granted, and

(c)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(3)If the relevant step mentioned in subsection (2) is taken in relation to an expected grant of a relevant share option as mentioned in subsection (2)(a)(ii), subsection (4) applies if—

(a)the grant is not made before the end of the date (“the final grant date”) falling immediately after the period of three months starting with the date on which P takes the relevant step, and

(b)as at the end of the final grant date, any of the earmarked shares continue to be held by or on behalf of P solely on the basis mentioned in subsection (2)(a).

(4)This Part has effect as if a relevant step within section 554B were taken at the end of the final grant date—

(a)the subject of which is—

(i)the shares which continue to be held as mentioned in subsection (3)(b), and

(ii)any relevant income in relation to those shares (see subsection (14)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(5)Subsection (6) applies if, at any time (“the relevant time”)—

(a)any of the earmarked shares cease to be held by or on behalf of P solely on the basis mentioned in subsection (2)(a), but

(b)the shares continue to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

(6)This Part has effect as if a relevant step within section 554B were taken at the relevant time—

(a)the subject of which is—

(i)the shares mentioned in subsection (5), and

(ii)any relevant income in relation to those shares (see subsection (14)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(7)Subsection (8) applies if—

(a)the relevant step mentioned in subsection (2) is taken in relation to a grant of a relevant share option made as mentioned in subsection (2)(a)(i), or

(b)the relevant step mentioned in subsection (2) is taken in relation to an expected grant of a relevant share option as mentioned in subsection (2)(a)(ii) and the grant is made before the end of the final grant date,

and the specified exit event, or an exit event within the specified description, occurs.

(8)This Part has effect as if a relevant step within section 554B were taken at the end of the exit period—

(a)the subject of which is—

(i)any of the earmarked shares to which none of subsections (9) to (11) applies, and

(ii)any relevant income in relation to any of the earmarked shares mentioned in sub-paragraph (i) (see subsection (14)), and

(b)by reason of which Chapter 2 is to apply (subject only to section 554A(4)).

(9)This subsection applies to any earmarked shares if—

(a)A exercises the relevant share option (wholly or partly) before the end of the exit period and, as a result, receives the shares, and

(b)the receipt of the shares gives rise to employment income of A—

(i)which is chargeable to income tax or would be chargeable apart from [F1383Chapter 5B of Part 2], or

(ii)which is exempt income.

(10)This subsection applies to any earmarked shares if—

(a)A exercises the relevant share option (wholly or partly) before the end of the exit period and, as a result, a sum of money is paid to A as mentioned in subsection (1)(a)(ii),

(b)the payment of the sum gives rise to employment income of A—

(i)which is chargeable to income tax or would be chargeable apart from [F1384Chapter 5B of Part 2], or

(ii)which is exempt income, and

(c)the payment represents the proceeds of the disposal of the shares, or the payment is made from another source and, correspondingly, the shares are no longer held by any person in relation to the relevant share option.

(11)This subsection applies to any earmarked shares if—

(a)the relevant share option becomes exercisable by A before the end of the exit period but the option lapses (in whole or in part) at or before the end of that period, and

(b)correspondingly, the shares are no longer held by any person in relation to the relevant share option.

(12)In subsections (8), (9)(a), (10)(a) and (11)(a) “the exit period” means—

(a)the period of six months starting with the date on which the exit event occurs, or

(b)if it ends earlier, the period during which the relevant share option is exercisable by A in accordance with the deferred grant terms.

(13)If the exit event is an event within section 554I(6)(a), in subsection (12)(a) the reference to six months is to be read as a reference to five years.

(14)In subsections (4)(a)(ii), (6)(a)(ii) and (8)(a)(ii) “relevant income”, in relation to any earmarked shares, means any income—

(a)which, before the relevant step is treated as being taken by subsection (4), (6) or (8) (as the case may be)—

(i)arises (directly or indirectly) from the shares, and

(ii)is the subject of a relevant step within section 554B taken by P by reason of which Chapter 2 would apply apart from section 554Q, and

(b)which, at the time the relevant step is treated as being taken, continues to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

Textual Amendments

F1383Words in s. 554M(9)(b)(i) substituted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 19(2), 47

F1384Words in s. 554M(10)(b)(i) substituted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 19(3), 47

554NExclusions: other cases involving employment-related securities etcU.K.

(1)Chapter 2 does not apply by reason of a relevant step the subject of which is employment-related securities if—

(a)by virtue of the step, the securities are acquired by a person, and

(b)section 425(2) appliesF1385... to the acquisition.

(2)Chapter 2 does not apply by reason of a relevant step the subject of which is an employment-related securities option if—

(a)by virtue of the step, the option is acquired by a person, and

(b)section 475(1) appliesF1386... to the acquisition.

(3)Terms used in subsection (1) or (2) have the same meaning as they have in Chapter 2 or 5 of Part 7 (as the case may be).

(4)Chapter 2 does not apply by reason of an event within subsection (5) if by virtue of the event an amount counts as employment income of A in respect of A's employment with B.

(5)The events within this subsection are—

(a)a chargeable event for the purposes of section 426, 438 or 476,

(b)an event which gives rise to the discharge of a notional loan for the purposes of section 446U, or

(c)a disposal to which Chapter 3D of Part 7 applies.

(6)Chapter 2 does not apply by reason of an event to which subsection (4) would apply apart from section 421B(6), F1387... 429, [F1388430A(5)(b),] 443F1389... or 477(2) or apart from an election under section 430 or 431.

(7)Subsection (11) applies if there is an acquisition of an asset within section 554C(4)(a) or (b) (“the relevant asset”) and—

(a)relevant consideration is given by A for the relevant asset of an amount equal to or greater than the market value of the relevant asset at the time of the acquisition, or

(b)ignoring any relevant consideration given for the relevant asset, the acquisition gives rise (or would give rise) to earnings of A within Chapter 1 of Part 3 [F1390, or an amount treated under section 226A as earnings of A,] from A's employment with B—

(i)the amount of which is equal to or greater than the market value of the relevant asset at the time of the acquisition, and

(ii)which are not exempt income.

(8)In subsection (7) “relevant consideration”—

(a)means consideration—

(i)which is given before, or at or about, the time of the acquisition, and

(ii)which is money or money's worth, but

(b)does not include—

(i)a promise to do anything, or

(ii)the performance of any duties of, or in connection with, an employment.

(9)If section 437(1) or 452(1) applies in relation to the acquisition, or would apply if Chapter 3 or 4A of Part 7 (as the case may be) applied in relation to the acquisition, in subsection (7) references to the market value of the relevant asset are to be read as references to that value determined on the basis mentioned in section 437(1) or 452(1) (as the case may be).

(10)Subsection (11) also applies if—

(a)there is an acquisition of an asset within section 554C(4)(a) or (b) (“the relevant asset”),

(b)the acquisition is pursuant to an employment-related securities option (within the meaning of Chapter 5 of Part 7F1391...) acquired by reason of A's employment, or former or prospective employment, with B, and

(c)the acquisition is a chargeable event for the purposes of section 476 F1392....

(11)Chapter 2 does not apply by reason of a relevant step taken after the acquisition if—

(a)the subject of the relevant step is the relevant asset, and

(b)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(12)In subsections (7) to (11) “acquisition” is to be read in accordance with section 421B(2)(a).

(13)Chapter 2 does not apply by reason of a relevant step within section 554C(1)(a) taken by a person if—

(a)the payment of the sum of money is by way of a loan (“the relevant loan”),

(b)the relevant loan is made and used solely for the purpose of enabling A to exercise an employment-related securities option (within the meaning of Chapter 5 of Part 7),

(c)the exercise of the option by A gives rise to employment income of A in respect of A's employment with B—

(i)which is chargeable to income tax or would be chargeable apart from [F1393Chapter 5B of Part 2], or

(ii)which is exempt income, and

(d)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(14)Subsection (15) applies if—

(a)apart from subsection (13), Chapter 2 would apply by reason of the relevant step mentioned in that subsection, and

(b)by the end of the relevant period, the relevant loan has not been fully repaid.

(15)This Part has effect as if a relevant step within section 554C(1)(a) were taken at the end of the relevant period—

(a)the subject of which is a sum of money of an amount equal to the outstanding amount of the relevant loan as at the end of the relevant period,

(b)in relation to which the relevant person (within the meaning of section 554C(1)) is the person to whom the relevant loan is made, and

(c)by reason of which Chapter 2 is to apply.

(16)In subsections (14) and (15) “the relevant period” means the period of 40 days starting with the day on which the relevant step mentioned in subsection (13) is taken.

[F1394(17)See paragraph 31 of Schedule 11 to F(No. 2)A 2017 for provision about exclusions where a loan is made for the purpose of enabling the exercise of an employment-related securities option and the relevant step is within paragraph 1 of that Schedule.]

Textual Amendments

F1385Words in s. 554N(1)(b) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 20(2), 47

F1386Words in s. 554N(2)(b) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 20(3), 47

F1387Word in s. 554N(6) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 20(4)(a), 47

F1388Word in s. 554N(6) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 9 para. 38

F1389Word in s. 554N(6) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 20(4)(b), 47

F1390Words in s. 554N(7)(b) inserted (1.9.2013) by Finance Act 2013 (c. 29), Sch. 23 paras. 15, 38; S.I. 2013/1755, art. 2

F1391Words in s. 554N(10)(b) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 20(5)(a), 47

F1392Words in s. 554N(10)(c) omitted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 9 paras. 20(5)(b), 47

F1393Words in s. 554N(13)(c)(i) substituted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 20(6), 47

F1394S. 554N(17) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 32

554OExclusions: employee car ownership schemesU.K.

(1)This section applies if—

(a)there is an arrangement (“the car ownership arrangement”) which—

(i)provides for A to purchase a new car from another person (“P”) using a loan (“the car loan”) to be made to A by [F1395an authorised lender] ,

(ii)specifies the date (“the repayment date”) by which the car loan must be fully repaid which must be no later than four years after the date on which the car loan is made, and

(iii)permits A, in order to obtain funds to repay the car loan, to sell the car back to P on a specified date at a specified price based on an estimate (made at the time the car ownership arrangement is made) of the likely outstanding amount of the car loan on the specified date, and

(b)as provided for by the car ownership arrangement, A purchases the car using the car loan.

(2)Chapter 2 does not apply by reason of a relevant step taken for the sole purpose of—

(a)the purchase of the car or its sale-back as provided for by the car ownership arrangement, or

(b)the making of the car loan as so provided,

so long as the car ownership arrangement is not a tax avoidance arrangement and there is no other connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(3)Subsection (4) applies if—

(a)apart from subsection (2), Chapter 2 would apply by reason of the making of the car loan, and

(b)by the end of the repayment date, the car loan has not been fully repaid.

(4)This Part has effect as if a relevant step within section 554C(1)(a) were taken at the end of the repayment date—

(a)the subject of which is a sum of money of an amount equal to the outstanding amount of the car loan as at the end of the repayment date,

(b)in relation to which the relevant person (within the meaning of section 554C(1)) is A, and

(c)by reason of which Chapter 2 is to apply.

(5)In this section—

  • “car” has the meaning given by section 235(2), and

  • [F1396“authorised lender” means a person who—

    (a)

    has permission under Part 4A of the Financial Services and Markets Act 2000 to enter into, or to exercise or have the right to exercise rights and duties under, a contract of the kind mentioned in paragraph 23 of Schedule 2 to that Act, and

    (b)

    is not acting as a trustee.]

[F1397(6)The definition of “authorised lender” must be read with—

(a)section 22 of the 2000 Act,

(b)any relevant order under that section, and

(c)Schedule 2 to that Act.]

[F1398(7)See paragraph 33 of Schedule 11 to F(No. 2)A 2017 for provision about exclusions for car loans in a case in which the relevant step is within paragraph 1 of that Schedule.]

Textual Amendments

F1395Words in s. 554O(1)(a)(i) substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 9(a)

F1396Words in s. 554O(5) substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 9(b)

F1397S. 554O(6) inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 9(c)

F1398S. 554O(7) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 34

[F1399554OAExclusions: transfer of employment-related loansU.K.

(1)Chapter 2 does not apply by reason of a relevant step taken by a person (“P”) if—

(a)the step is acquiring a right to payment of an amount equal to the whole or part of a payment made by way of a loan to a relevant person (the “borrower”),

(b)the loan, at the time it was made, was an employment-related loan,

(c)at the time the relevant step is taken, the section 180 threshold is not exceeded in relation to the loan,

(d)at the time the relevant step is taken, the borrower is an employee, or a prospective employee, of P, and

(e)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(2)For the purposes of this section, the section 180 threshold is not exceeded in relation to a loan if, at all times in the relevant tax year—

(a)the amount outstanding on the loan, or

(b)if two or more employment-related loans are made by the same employer, the aggregate of the amount outstanding on them,

does not exceed the amount specified at the end of section 180(2) (normal threshold for benefit of a loan to be treated as earnings).

(3)Subsection (4) applies if—

(a)two or more employment-related loans are made by the same employer, and

(b)during the relevant tax year, a person acquires a right to payment of an amount (the “transfer amount”) equal to the whole or part of the payment made by way of any of the loans.

(4)The transfer amount is to be treated as an “amount outstanding” on that loan for the purposes of subsection (2)(b).

(5)In this section—

(a)“employment-related loan” has the same meaning as it has for the purposes of Chapter 7 of Part 3;

(b)“relevant tax year” means the tax year in which the relevant step is taken.]

[F1400(6)See paragraph 27 of Schedule 11 to F(No. 2)A 2017 for provision about exclusions where a loan is an employment-related loan and the relevant step is within paragraph 1 of that Schedule.]

Textual Amendments

F1399S. 554OA inserted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 5

F1400S. 554OA(6) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 28

Modifications etc. (not altering text)

C55Ss. 554OA(2)-(5) applied (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 27(2)

554PExclusions: employment income exemptions under Part 4U.K.

(1)Chapter 2 does not apply by reason of a relevant step if an employment income exemption under Part 4 applies to the subject of the relevant step.

(2)If the employment income exemption applies to the subject of the relevant step in part only, the relevant step is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the subject of the step so far as the exemption applies to it, and

(b)one in relation to the subject of the step so far as the exemption does not apply to it,

with subsection (1) applying only in relation to the separate relevant step mentioned in paragraph (a).

(3)In order to give effect to subsection (2), the sum of money or asset which is the subject of the relevant step is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(4)In this section “employment income exemption” includes the exemption under section 271.

554QExclusions: income arising from earmarked sum or assetU.K.

(1)This section applies if—

(a)a sum of money or asset (“sum or asset R”) is held by or on behalf of a person (“P”),

(b)income arises from sum or asset R, and

(c)when the income arises, it—

(i)is received by or on behalf of P, and

(ii)is the subject of a relevant step within section 554B taken by P.

(2)Chapter 2 does not apply by reason of the relevant step mentioned in subsection (1)(c)(ii) if—

(a)before the income arises, sum or asset R was the subject of a relevant step within section 554B taken by P,

(b)Chapter 2 applied by reason of the relevant step mentioned in paragraph (a) in respect of A's employment with B or would have so applied apart from this section or section 554R or any of sections 554H to 554M or section 554T,

(c)immediately before the income arises, sum or asset R is still earmarked or otherwise held on the basis mentioned in section 554B(1)(a) or (b), and

(d)subsection (3) does not apply.

(3)This subsection applies if it is reasonable to suppose that, taking into account the type of investments from which the income derives (directly or indirectly), in essence, the income represents a return from sum or asset R which exceeds the return which might be expected applying the assumption that all relevant connected persons are acting at arm's length of each other.

(4)In subsection (3) “relevant connected person” means a person with a connection (direct or indirect) to the arrangement under which the income arises.

554RExclusions: acquisitions out of sums or assetsU.K.

(1)This section applies if—

(a)a sum of money or asset (“sum or asset S”) is held by or on behalf of a person (“P”),

(b)a sum of money or asset (“sum or asset T”) is acquired by or on behalf of P wholly out of sum or asset S,

(c)sum or asset T is not acquired (directly or indirectly) from A or any person linked with A, and

(d)subsection (2) does not apply.

(2)This subsection applies if it is reasonable to suppose that, in essence—

(a)at the time of the acquisition of sum or asset T, the value of sum or asset T is greater or less than the value of sum or asset S, and

(b)the difference (or any part of the difference) in the values might not have been expected applying the assumption that all relevant connected persons are acting at arm's length of each other.

(3)In subsection (2)—

(a)the reference to sum or asset S is to sum or asset S so far as sum or asset T is acquired out of it, and

(b)“relevant connected person” means a person with a connection (direct or indirect) to the arrangement under which sum or asset T is acquired.

(4)The cases covered by subsection (1)(b) include (in particular) cases in which sum or asset T represents the proceeds of the disposal of sum or asset S.

(5)Subsection (6) applies if, on its acquisition, sum or asset T is the subject of a relevant step within section 554B taken by P.

(6)Chapter 2 does not apply by reason of the relevant step if—

(a)before the acquisition, sum or asset S was the subject of a relevant step within section 554B taken by P,

(b)Chapter 2 applied by reason of the relevant step mentioned in paragraph (a) in respect of A's employment with B or would have applied apart from this section or section 554Q or 554T, and

(c)immediately before the acquisition, sum or asset S is still earmarked or otherwise held on the basis mentioned in section 554B(1)(a) or (b).

(7)Subsection (8) applies if—

(a)on its acquisition, sum or asset T—

(i)is the subject of a relevant step within section 554B taken by P by reason of which Chapter 2 applies or would apply apart from subsection (6) above or any of sections 554H to 554M, 554Q or 554T, or

(ii)if sub-paragraph (i) does not apply, is held by or on behalf of P on the same basis as that on which sum or asset S was held by or on behalf of P immediately before the acquisition, and

(b)for the sole purpose of the acquisition, sum or asset S or sum or asset T is the subject of a relevant step within section 554C(1)(a) to (c).

(8)Chapter 2 does not apply by reason of the relevant step mentioned in subsection (7)(b).

[F1401554RAExclusions: relevant repaymentsU.K.

(1)This section applies (subject to subsection (5)) if—

(a)a right to repayment of principal under a relevant loan (the “repayment right”) is held by or on behalf of a person (“P”), and

(b)on or after 9 December 2010, a sum of money (the “repayment sum”) is acquired by or on behalf of P by way of repayment of principal under the relevant loan.

(2)In this section “relevant loan” means a loan made on or after 6 April 1999.

(3)Subsection (4) applies if—

(a)on its acquisition, the repayment sum is the subject of a relevant step within section 554B taken by P, or

(b)for the sole purpose of the acquisition, the making of the payment of the repayment sum is a relevant step within section 554C(1)(a).

(4)Chapter 2 does not apply by reason of the relevant step if, on its acquisition, the repayment sum is held by or on behalf of P on the same basis as that on which the repayment right was held by or on behalf of P immediately before the acquisition.

(5)This section does not apply where there is any connection (direct or indirect) between the acquisition by or on behalf of P of the repayment sum and a tax avoidance arrangement (other than the arrangement under which the relevant loan was made).]

Textual Amendments

F1401S. 554RA inserted (with effect in accordance with Sch. 6 para. 14 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 8

554SExclusions: pension income chargeable under Part 9 etcU.K.

(1)Chapter 2 does not apply by reason of a relevant step within section 554C or 554D if the step is the provision of pension income which is chargeable to income tax under Part 9 or is exempt income (within the meaning of that Part).

(2)Sections 554T, 554U, 554V, 554W and 554X contain further provision relating to retirement benefits etc and are to be applied, so far as applicable, in that order.

Modifications etc. (not altering text)

C56S. 554S(2) modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Employment Income Provided Through Third Parties (Excluded Relevant Steps) Regulations 2011 (S.I. 2011/2696), regs. 1(1), 5

554TExclusions: employee pension contributionsU.K.

(1)Chapter 2 does not apply by reason of a relevant step within section 554B if the sum of money or asset which is the subject of the step arises or derives (whether wholly or partly or directly or indirectly) from an excluded pension contribution paid by A on or after 6 April 2011.

(2)If the sum of money or asset arises or derives from the excluded pension contribution only partly, the relevant step is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the sum of money or asset so far as it arises or derives from the excluded pension contribution, and

(b)one in relation to the sum of money or asset so far as it does not arise or derive from the excluded pension contribution,

with subsection (1) applying only in relation to the separate relevant step mentioned in paragraph (a).

(3)Chapter 2 does not apply by reason of a relevant step within section 554C or 554D if the sum of money or asset which is the subject of the step—

(a)represents relevant benefits, and

(b)arises or derives (whether wholly or partly or directly or indirectly) from an excluded pension contribution paid by A.

(4)If the sum of money or asset arises or derives from the excluded pension contribution only partly, the relevant step is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the sum of money or asset so far as it arises or derives from the excluded pension contribution, and

(b)one in relation to the sum of money or asset so far as it does not arise or derive from the excluded pension contribution,

with subsection (3) applying only in relation to the separate relevant step mentioned in paragraph (a).

(5)In order to give effect to subsection (2) or (4), the sum of money or asset which is the subject of the relevant step is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(6)For the purposes of this section an excluded pension contribution is a contribution—

(a)which is made to an arrangement by A by way of a payment of a sum of money,

(b)by virtue of which A acquires rights to receive relevant benefits under the arrangement (and nothing else),

(c)which is neither a relievable pension contribution nor a tax-relieved contribution, and

(d)which is not a repayment of any loan and otherwise has nothing to do with any loan and has nothing to do with a sum of money or asset which has been the subject of a relevant step within section 554C(1)(d).

(7)In this section—

  • “relevant benefits” has the same meaning as in Chapter 2 of Part 6, but ignoring section 393B(2)(a),

  • “relievable pension contribution” means a contribution in respect of which an individual is entitled to relief under section 188 of FA 2004, and

  • “tax-relieved contribution” has the meaning given by paragraph 3(3) of Schedule 34 to FA 2004.

554UExclusions: pre-6 April 2006 contributions to employer-financed retirement benefit schemesU.K.

(1)This section applies if the subject of a relevant step is a sum of money or asset which has (wholly or partly) arisen or derived (directly or indirectly) from a sum of money (“the taxed sum”)—

(a)which was paid by B in accordance with an employer-financed retirement benefits scheme (within the meaning of Chapter 2 of Part 6) with a view to the provision of benefits under the scheme, and

(b)in respect of which A is taxed.

(2)For the purpose of determining whether A is taxed in respect of a sum of money, paragraph 53(3) of Schedule 36 to FA 2004 applies as it applies for the purpose of determining whether an employee is taxed for the purposes of paragraph 53(1)(b) of that Schedule.

(3)Chapter 2 does not apply by reason of the relevant step.

(4)Subsection (5) applies if the sum of money or asset which is the subject of the relevant step only partly arises or derives from the taxed sum.

(5)The relevant step is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the sum of money or asset so far as it arises or derives from the taxed sum, and

(b)one in relation to the sum of money or asset so far as it does not arise or derive from the taxed sum,

with subsection (3) applying only in relation to the separate relevant step mentioned in paragraph (a).

(6)In order to give effect to subsection (5), the sum of money or asset which is the subject of the relevant step is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(7)If B is a company and is a member of a group of companies at any time (“the relevant time”), in subsection (1)(a), in relation to any sum of money paid at the relevant time, the reference to B is to be read as including a reference to any other company which is a member of that group at the relevant time.

554VExclusions: purchases of annuities out of pension scheme rightsU.K.

(1)This section applies if—

(a)an annuity contract is purchased from an insurance company wholly out of rights which A has under a pension scheme, and

(b)A's rights out of which the annuity contract is purchased are, wholly or partly, pre-6 April 2011 annuity rights.

(2)If the purchaser—

(a)takes a relevant step for the sole purpose of purchasing the annuity contract or transferring the beneficiary's rights under the annuity contract to A or a person linked with A, or

(b)on the purchase of the annuity contract, otherwise takes a relevant step within section 554B the subject of which is the beneficiary's rights under the annuity contract,

Chapter 2 does not apply by reason of the relevant step.

(3)If the insurance company—

(a)takes a relevant step for the sole purpose of selling the annuity contract, or

(b)on the sale of the annuity contract, otherwise takes a relevant step within section 554B the subject of which is a sum of money or asset representing the purchase price received for the annuity contract,

Chapter 2 does not apply by reason of the relevant step.

(4)If A's rights out of which the annuity contract is purchased are only partly pre-6 April 2011 annuity rights, any relevant step mentioned in subsection (2)(a) or (b) or (3)(a) or (b) is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the annuity contract so far as it is purchased out of rights which are pre-6 April 2011 annuity rights, and

(b)one in relation to the annuity contract so far as it is purchased out of rights which are not pre-6 April 2011 annuity rights,

with subsection (2) or (3) (as the case may be) applying only in relation to the separate relevant step mentioned in paragraph (a) of this subsection.

(5)In order to give effect to subsection (4), the sum of money or asset which is the subject of the relevant step mentioned in subsection (2)(a) or (b) or (3)(a) or (b) is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(6)In this section—

  • “annuity contract” means a contract for the provision of an annuity—

    (a)

    granted for consideration in money or money's worth in the ordinary course of a business of granting annuities on human life, and

    (b)

    payable for a term ending at a time ascertainable only by reference to the end of a human life,

    although for this purpose it does not matter that the annuity may in some circumstances end before or after the life,

  • “insurance company” means—

    (a)

    a person or EEA firm within section 275(1)(a) or (b) of FA 2004, or

    (b)

    a person resident in a territory outside the European Economic Area—

    (i)

    whose normal business includes the provision of annuities, and

    (ii)

    who is regulated in the conduct of that business by the government of that territory or by a body established under the law of that territory for the purpose of regulating such business, and

  • “pre-6 April 2011 annuity rights” means rights, which accrued before 6 April 2011, specifically to receive an annuity.

554WExclusions: certain retirement benefits etcU.K.

(1)This section applies if—

(a)a relevant benefit is provided under a relevant scheme by way of a payment of a lump sum wholly out of rights which A has under the scheme,

(b)A's rights out of which the lump sum is paid are, wholly or partly, pre-6 April 2011 lump sum rights, and

(c)the payment of the lump sum is a relevant step within section 554C.

(2)Chapter 2 does not apply by reason of the relevant step.

(3)If A's rights out of which the lump sum is paid are only partly pre-6 April 2011 lump sum rights, the relevant step is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the lump sum so far as it is paid out of rights which are pre-6 April 2011 lump sum rights, and

(b)one in relation to the lump sum so far as it is paid out of rights which are not pre-6 April 2011 lump sum rights,

with subsection (2) applying only in relation to the separate relevant step mentioned in paragraph (a).

(4)In order to give effect to subsection (3), the lump sum is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(5)In this section—

  • “pre-6 April 2011 lump sum rights” means rights, which accrued before 6 April 2011, specifically to receive relevant benefits by way of lump sum payments,

  • “relevant benefit” has the same meaning as in Chapter 2 of Part 6, and

  • “relevant scheme” means an employer-financed retirement benefits scheme (within the meaning of that Chapter) or a superannuation fund to which section 615(3) of ICTA applies.

554XExclusions: transfers between certain foreign pension schemesU.K.

(1)This section applies if rights which A has under a section 390 scheme are transferred to another section 390 scheme or to an overseas pension scheme.

(2)This section also applies if—

(a)rights which A has under an overseas pension scheme are transferred to another overseas pension scheme, and

(b)some or all of the rights transferred are section 390 scheme rights.

(3)Chapter 2 does not apply by reason of—

(a)a relevant step within section 554C taken for the sole purpose of transferring the rights, or

(b)a relevant step within section 554B taken by the transferee in relation to the transferred rights on their transfer.

(4)Subsection (5) applies in relation to a transfer within subsection (2) if not all the transferred rights are section 390 scheme rights.

(5)Any relevant step mentioned in subsection (3) is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the section 390 scheme rights, and

(b)one in relation to the rest of the transferred rights,

with subsection (3) applying only in relation to the separate relevant step mentioned in paragraph (a) of this subsection.

(6)In order to give effect to subsection (5), the sum of money or asset which is the subject of the relevant step mentioned in subsection (3) is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(7)Subsection (8) applies if any of the transferred rights arise or derive (directly or indirectly) from contributions to any scheme which—

(a)are paid by B on or after 6 April 2006, and

(b)are neither tax-relieved contributions nor tax-exempt provision.

(8)Any relevant step mentioned in subsection (3) is to be treated for the purposes of this Part as being two separate relevant steps—

(a)one in relation to the rights mentioned in subsection (7), and

(b)one in relation to the rest of the transferred rights,

with subsection (3) applying only in relation to the separate relevant step mentioned in paragraph (b) of this subsection.

(9)In order to give effect to subsection (8), the sum of money or asset which is the subject of the relevant step mentioned in subsection (3) is to be apportioned between the two separate relevant steps on a just and reasonable basis.

(10)If subsection (5) applies in relation to a transfer—

(a)in subsection (7) the reference to the transferred rights is to be read as a reference to the transferred section 390 scheme rights only, and

(b)in subsections (8) and (9) references to any relevant step mentioned in subsection (3) are to be read as references to the separate relevant step mentioned in subsection (5)(a).

(11)If B is a company and is a member of a group of companies at any time (“the relevant time”), in subsection (7)(a), in relation to any contribution paid at the relevant time, the reference to B is to be read as including a reference to any other company which is a member of that group at the relevant time.

(12)In this section—

  • “overseas pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(7) of that Act),

  • “section 390 scheme” means a scheme in relation to which a claim was accepted under section 390,

  • “section 390 scheme rights” means rights which A has under an overseas pension scheme and which—

    (a)

    have been transferred to the scheme (directly or indirectly) from a section 390 scheme, or

    (b)

    have arisen or derived (directly or indirectly) from rights that have been so transferred, and

  • “tax-exempt provision” and “tax-relieved contribution” have the meaning given by paragraph 3(3) and (4) of Schedule 34 to FA 2004.

[F1402554XAExclusions: payments in respect of a tax liabilityU.K.

(1)Chapter 2 does not apply by reason of a relevant step which is the payment of a sum of money if—

(a)the payment is a relevant tax payment, or

(b)where the payment is not a relevant tax payment—

(i)the payment is made to a person for the purpose of the person making a relevant tax payment,

(ii)the person makes a relevant tax payment of an amount equal to the amount of the first payment, and

(iii)the relevant tax payment is made before the end of the period of 60 days beginning with the day on which the first payment is made.

(2)“Relevant tax payment” means a payment made to Her Majesty's Revenue and Customs in respect of a relevant liability for—

F1403(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1403(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)inheritance tax, or

(d)corporation tax.

(3)But a provisional payment of tax (see section 554Z11D) is not a relevant tax payment.

(4)A liability is a “relevant liability” if—

(a)under the terms of an agreement for the discharge of the liability, or

(b)by way of a decision on an application under this section,

an officer of Revenue and Customs agrees that the liability is to be treated as arising in respect of the relevant arrangement concerned.

(5)A person may make an application to Her Majesty's Revenue and Customs for a liability to be treated, for the purposes of this section, as arising in respect of the relevant arrangement concerned.

(6)An application under this section must be made in such form and manner, and contain such information, as may be specified by, or on behalf of, the Commissioners for Her Majesty's Revenue and Customs.

(7)An officer of Revenue and Customs must notify the applicant of the decision on an application under this section.]

Textual Amendments

F1402S. 554XA inserted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 9

F1403S. 554XA(2)(a)(b) omitted (with effect in accordance with s. 34(2) of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 34(1)

554YPower to exclude other relevant stepsU.K.

(1)The Commissioners for Her Majesty's Revenue and Customs may by regulations provide for Chapter 2 not to apply—

(a)by reason of a relevant step falling within a specified description, or

(b)in the cases otherwise specified in the regulations.

(2)Regulations under this section may, in consequence of provision within subsection (1)—

(a)provide—

(i)for a relevant step to be treated for the purposes of this Part as if it were two or more separate relevant steps,

(ii)for the provision within subsection (1) to apply only to one or some of the separate relevant steps, and

(iii)for the sum of money or asset which is the subject of the relevant step to be apportioned between the separate relevant steps on a just and reasonable basis,

(b)make provision, in relation to cases in which Chapter 2 does not apply by reason of a relevant step by virtue of the provision within subsection (1)—

(i)for a relevant step to be treated as taking place if, subsequently, specified conditions are met or not met, and

(ii)for Chapter 2 to apply by reason of the relevant step treated as taking place, and

(c)make other provision modifying the application of any provision of this Part.

(3)Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings.

(4)Regulations under this section may have retrospective effect.

InterpretationU.K.

554ZInterpretation: generalU.K.

(1)This section applies for the purposes of this Part.

(2)“A” and “B” are defined in section 554A(1)(a) [F1404or, as the case may be, section 554AA(1)].

(3)“Arrangement” includes any agreement, scheme, settlement, transaction, trust or understanding (whether or not it is legally enforceable).

(4)“Market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act.

(5)Section 170(2) to (11) of TCGA 1992 applies for the purpose of determining whether a company is a member of a group of companies.

(6)And for that purpose, section 170(2) to (11) is to be read as if for “75 per cent” (wherever occurring) there were substituted “ 51 per cent ” (with section 1154(2) of CTA 2010 applying accordingly).

(7)References to the payment of a sum of money include (in particular) references to the payment of a sum of money by way of a loan.

(8)“Pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(1) of that Act).

(9)“Relevant step” is defined in section 554A(2) [F1405, but see also Schedule 11 to F(No. 2)A 2017].

(10)References to a relevant step which involves a sum of money are references to—

(a)a step within section 554B where the subject of the relevant step is a sum of money,

(b)a step within section 554C(1)(a) [F1406to (ab)] , F1407...

(c)a step within section 554C(1)(d) where the subject of the relevant step is a sum of money[F1408, or

(d)a step within paragraph 1 [F1409or 1A] of Schedule 11 to F(No. 2)A 2017.]

(11)References to the asset which is the subject of a relevant step are, in the case of a step within section 554C(1)(e), references to the lease granted.

(12)For this purpose, the lease granted is to be treated as including any extensions of the lease, or any later lease, which by virtue of section 554C(7) or (8) is taken into account in determining the likely effective duration of the lease for the purposes of section 554C(1)(e).

(13)“Tax avoidance arrangement” means an arrangement which has a tax avoidance purpose.

(14)For the purposes of subsection (13) an arrangement has a tax avoidance purpose if subsection (15) applies to a person who is a party to the arrangement.

(15)This subsection applies to a person if the main purpose, or one of the main purposes, of the person in entering into the arrangement is the avoidance of tax or national insurance contributions.

(16)The following paragraphs apply for the purpose of determining whether any relevant step or any other step is connected with a tax avoidance arrangement—

(a)the step is connected with a tax avoidance arrangement if (for example) the step is taken (wholly or partly) in pursuance of—

(i)the tax avoidance arrangement, or

(ii)an arrangement at one end of a series of arrangements with the tax avoidance arrangement being at the other end, and

(b)it does not matter if the person taking the step is unaware of the tax avoidance arrangement.

Textual Amendments

F1404Words in s. 554Z(2) inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 5(4)

F1405Words in s. 554Z(9) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 46(4)

F1406Words in s. 554Z(10)(b) inserted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 6

F1407Word in s. 554Z(10)(b) omitted (16.11.2017) by virtue of Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 46(5)

F1408S. 554Z(10)(d) and word inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 46(5)

Modifications etc. (not altering text)

C57S. 554Z(16) applied (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 44(2)

554Z1Interpretation: persons linked with AU.K.

(1)In this Part references to any person linked with A are references to—

(a)any person who is or has been connected with A,

(b)a close company in which A or a person within any other paragraph of this subsection is or has been a participator,

(c)a company in which A or a person within any other paragraph of this subsection is or has been a participator and which would be a close company if it were a UK resident company, or

(d)a company which is a 51% subsidiary of a company within paragraph (b) or (c).

[F1410(2)In applying section 993 of ITA 2007 for the purposes of subsection (1), two people living together as if they were a married couple or civil partners are treated as if they were spouses or civil partners of each other.]

(3)In subsection (1) “participator”—

(a)in relation to a close company, means a person who is a participator in relation to the company for the purposes of section 455 of CTA 2010 (see sections 454 and 455(5) of that Act), and

(b)in relation to a company which would be a close company if it were a UK resident company, means a person who would be such a participator if the company were a close company.

Textual Amendments

Modifications etc. (not altering text)

C58S. 554Z1 applied (with modifications) (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 36(3)

CHAPTER 2U.K.Treatment of relevant step for income tax purposes

Modifications etc. (not altering text)

C59Pt. 7A Ch. 2 disapplied (with effect in accordance with reg. 1(2) of the amending S.I.) by The Employment Income Provided Through Third Parties (Excluded Relevant Steps) Regulations 2011 (S.I. 2011/2696), regs. 1(1), 3, 4

C61Pt. 7A Ch. 2 excluded (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 29(1)

C62Pt. 7A Ch. 2 excluded (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 27(1)

C63Pt. 7A Ch. 2 excluded (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 35(1)

C64Pt. 7A Ch. 2 excluded (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 25

C65Pt. 7A Ch. 2 excluded (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 31

C66Pt. 7A Ch. 2 excluded (22.7.2020) by 2017 c. 32, Sch. 11 para. 35ZA (as inserted by Finance Act 2020 (c. 14), Sch. 2 para. 38)

Employment incomeU.K.

554Z2Value of relevant step to count as employment incomeU.K.

(1)If this Chapter applies by reason of a relevant step, the value of the relevant step (see section 554Z3) counts as employment income of A in respect of A's employment with B—

(a)if the relevant step is taken before A's employment with B starts, for the tax year in which the employment starts, or

(b)otherwise, for the tax year in which the relevant step is taken.

[F1411(1AA)But subsection (1) is subject to section 554Z2A (close companies).]

[F1412(1A)Where the value of a relevant step would (apart from this subsection) count as employment income of more than one person—

(a)the value of the relevant step is to be apportioned between each of those persons on a just and reasonable basis, and

(b)subsection (1) applies as if the reference to the value of the relevant step in relation to A were a reference to so much of the value of the relevant step that is apportioned to A.]

(2)If the relevant step gives rise to—

(a)an amount which (apart from this subsection) would be treated as earnings of A under a provision of the benefits code, or

(b)any income of A which (apart from this subsection) would be dealt with under Chapter 3 of Part 4 of ITTOIA 2005,

subsection (1) applies instead of that provision of the benefits code or Chapter 3 of Part 4 of ITTOIA 2005 (as the case may be).

(3)In particular, in a case in which the relevant step is the making of an employment-related loan (within the meaning of Chapter 7 of Part 3), the effect of subsection (2)(a) is that the loan is not to be treated for any tax year as a taxable cheap loan for the purposes of that Chapter.

[F1413(4)See paragraph 37 of Schedule 11 to F(No. 2)A 2017 for provision about the effect of subsection (2)(a) in a case in which the relevant step is within paragraph 1 of that Schedule.]

Textual Amendments

F1411S. 554Z2(1AA) inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 3(1)

F1412S. 554Z2(1A) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 18(2)

F1413S. 554Z2(4) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 38

Modifications etc. (not altering text)

C67S. 554Z2(2)(a) modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 37(2)

[F1414554Z2AException to section 554Z2(1): close companiesU.K.

(1)Section 554Z2(1) does not apply in the case of a relevant step if—

(a)this Chapter applies in the case of the relevant step only by reason of section 554AA (close companies),

(b)the relevant step is a step within section 554B, 554C or 554D,

(c)the relevant step gives rise to a charge to tax under either—

(i)section 455 of CTA 2010 by virtue of section 459 of that Act (loans treated as made to participator), or

(ii)section 415 of ITTOIA 2005 (release of loan to participator in a close company), and

(d)in a case within paragraph (c)(i), either the payment condition or the consent condition is met in relation to the charge under section 455 of CTA 2010.

(2)The payment condition is met in relation to a charge to tax under section 455 of CTA 2010 if—

(a)the net section 455 charge is paid in full on or before the due date, or

(b)the net section 455 charge is nil.

(3)The “net section 455 charge” means the amount of the charge to tax under section 455 of CTA 2010 less the amount of section 458 relief from that charge.

(4)In subsection (3) “section 458 relief” means relief given under section 458 of that Act—

(a)in respect of a repayment made, or a release or writing-off occurring, on or before the due date, and

(b)on a claim made on or before the due date.

(5)The consent condition is met in relation to a charge to tax under section 455 of CTA 2010 if—

(a)the charge to tax is reported, in a company tax return of B's, as required under Schedule 18 to FA 1998 (company tax returns etc),

(b)the payment condition is not met in relation to that charge, and

(c)an officer of Revenue and Customs considers that section 554Z2(1) should not apply in the case of the relevant step concerned.

(6)In this section, references to the “due date” in relation to a charge to tax under section 455 of CTA 2010 are references to the day on which the tax is due and payable (see section 455(3) of CTA 2010).]

Textual Amendments

F1414S. 554Z2A inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 3(2)

554Z3Value of relevant stepU.K.

(1)If the relevant step involves a sum of money, its value is the amount of the sum.

(2)In any other case, the value of the relevant step is—

(a)the market value when the relevant step is taken of the asset which is the subject of the step, or

(b)if higher, the cost of the relevant step.

(3)Subsection (2)(a) is subject to sections 437 and 452.

(4)Subsection (2)(b) is to be ignored if—

(a)the relevant step is within section 554C(1)(c), and

(b)any of Chapters 2 to 4A of Part 7 apply by virtue of the acquisition.

(5)Subsection (2)(b) is also to be ignored if section 554Z7 applies.

(6)In subsection (2)(b) the reference to the cost of the relevant step is to the expense incurred in connection with the relevant step (including a proper proportion of any expense relating partly to the relevant step and partly to other matters) by the person or persons at whose cost the relevant step is taken.

(7)Subsections (1) and (2) are subject to sections 554Z4, 554Z5, 554Z6, 554Z7 and 554Z8, which, so far as applicable, are to be applied in that order.

Modifications etc. (not altering text)

C68S. 554Z3(1) modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 13(2)(b)

554Z4Residence issuesU.K.

(1)After the value of the relevant step is determined under section 554Z3, the particular tax year or years which the value of the relevant step is “for” are to be determined.

(2)For this purpose, apply sections 16(1) to (4) and 17(1) to (3) as if the value of the relevant step were general earnings.

[F1415(3)Subsection (4) applies if the value of the relevant step, or a part of it, is “for”—

(a)a tax year for which A is non-UK resident, or

(b)a tax year that is a split year as respects A.

(4)The value, or the part of it, is to be reduced—

(a)in a case within subsection (3)(a), by so much of the value, or the part of it, as is not in respect of UK duties, and

(b)in a case within subsection (3)(b), by so much of the value, or the part of it, as is both—

(i)attributable to the overseas part of the tax year, and

(ii)not in respect of UK duties.

(5)The extent to which—

(a)the value, or the part of it, is not in respect of UK duties, or

(b)so much of the value, or the part of it, as is attributable to the overseas part of the tax year is not in respect of UK duties,

is to be determined on a just and reasonable basis.]

[F1416(5A)Any attribution required for the purposes of subsection (4)(b)(i) is to be done on a just and reasonable basis.

(5B)“UK duties” means duties performed in the United Kingdom.]

(6)This section does not change the tax year for which the value of the relevant step counts as employment income under section 554Z2(1).

[F1417(7)Subsections (8) and (9) apply if—

(a)the relevant step is the payment of a lump sum,

(b)the payment of the lump sum is the provision of a relevant benefit under an employer-financed retirement benefits scheme, and

(c)the person by whom the lump sum is received is resident in the United Kingdom in the tax year in which the lump sum is received.

(8)If the lump sum is wholly in respect of rights which have accrued on or after 6 April 2017, there is no reduction under subsection (4).

(9)If the lump sum is wholly or partly in respect of rights which accrued before 6 April 2017, the amount of any reduction under subsection (4) is given by—

where—

A is so much of the lump sum as is in respect of rights which accrued before 6 April 2017,

LS is the amount of the lump sum, and

R is the amount which (ignoring this subsection) is given by subsection (4) as the amount of the reduction.

(10)In subsection (7)—

  • “employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 (see section 393A), and

  • “relevant benefit” has the same meaning as in that Chapter (see section 393B).]

Textual Amendments

F1415S. 554Z4(3)-(5) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 68(2)

F1416S. 554Z4(5A)(5B) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 68(3)

F1417S. 554Z4(7)-(10) inserted (27.4.2017) by Finance Act 2017 (c. 10), Sch. 3 para. 7

[F1418554Z4ATemporary non-residentsU.K.

(1)This section applies if A is temporarily non-resident.

(2)Any relevant step within subsection (3) is to be treated for the purposes of section 554Z2 as if it were taken in the period of return.

(3)A relevant step is within this subsection if—

(a)it is the payment of a lump sum to a relevant person (see section 554C(2)),

(b)the lump sum is a relevant benefit provided under a relevant scheme,

(c)the step is taken in the temporary period of non-residence, and

(d)ignoring this section—

(i)no charge to tax arises by virtue of section 554Z2 by reason of the step, but

(ii)such a charge would arise if the existence of any double taxation relief arrangements were disregarded.

(4)Subsection (3)(d)(i) includes a case where the charge could be prevented by making a DTR claim, even if no claim is in fact made.

(5)Nothing in any double taxation relief arrangements is to be read as preventing A from being chargeable to income tax in respect of any relevant step treated by virtue of this section as taken in the period of return (or as preventing a charge to that tax from arising as a result).

(6)Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains—

(a)when an individual is to be regarded as “temporarily non-resident”, and

(b)what “the temporary period of non-residence” and “the period of return” mean.

(7)In this section—

  • “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

  • “DTR claim” means a claim for relief under section 6 of that Act;

  • “relevant benefit” has the same meaning as in Chapter 2 of Part 6;

  • “relevant scheme” means an employer-financed retirement benefits scheme (within the meaning of that Chapter) or a superannuation fund to which section 615(3) of ICTA applies.]

Textual Amendments

F1418S. 554Z4A inserted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 126

[F1419554Z5Overlap with money or asset subject to earlier tax liabilityU.K.

(1)This section applies if there is overlap between—

(a)the sum of money or asset (“sum or asset P”) which is the subject of the relevant step, and

(b)a sum of money or asset (“sum or asset Q”) by reference to which, on an occasion that occurred before the relevant step is taken, A became subject to a liability for income tax (“the earlier tax liability”).

(2)But this section does not apply where—

(a)the earlier tax liability arose by reason of a step within section 554B taken in a tax year before 6 April 2011, and

(b)the value of the relevant step is (or if large enough would be) reduced under paragraph 59 of Schedule 2 to FA 2011.

(3)Where either the payment condition or the liability condition is met, the value of the relevant step is reduced (but not below nil) by an amount equal to so much of the sum of money, or (as the case may be) the value of so much of the asset, as is within the overlap.

(4)The payment condition is that, at the time the relevant step is taken—

(a)the earlier tax liability has become due and payable, and

(b)either—

(i)it has been paid in full, or

(ii)the person liable for the earlier tax liability has agreed terms with an officer of Revenue and Customs for the discharge of that liability.

(5)The liability condition is that, at the time the relevant step is taken, the earlier tax liability is not yet due and payable.

(6)For the purposes of this section there is overlap between sum or asset P and sum or asset Q so far as it is just and reasonable to conclude that—

(a)they are the same sum of money or asset, or

(b)sum or asset P directly, or indirectly, represents sum or asset Q.

(7)Subsection (8) applies where—

(a)the earlier tax liability arose by virtue of the application of this Chapter by reason of an earlier relevant step (the “earlier relevant step”), and

(b)reductions were made under this section to the value of the earlier relevant step.

(8)Where this subsection applies, sum or asset P is treated as overlapping with any other sum of money or asset so far as the other sum of money or asset was treated as overlapping with sum or asset Q for the purposes of this section.

(9)In subsection (1)(b)—

(a)the reference to A includes a reference to any person linked with A, and

(b)the reference to a liability for income tax does not include a reference to a liability for income tax arising by reason of section 175 (benefit of taxable cheap loan treated as earnings).

(10)In subsection (3) the reference to the value of the relevant step is a reference to that value—

(a)after any reductions made to it under section 554Z4, this section or 554Z7, but

(b)before any reductions made to it under section 554Z6 or 554Z8.

(11)For the purposes of subsection (4)(b)(i) a person is not to be regarded as having paid any tax by reason only of making—

(a)a payment on account of income tax,

(b)a payment that is treated as a payment on account under section 223(3) of FA 2014 (accelerated payments), or

(c)a payment pending determination of an appeal made in accordance with section 55 of TMA 1970.]

[F1420(12)See paragraphs 4(5) and (6) and 12(4) and (5) of Schedule 11 of F(No. 2)A 2017) for provision about the effect of subsection (3) in certain cases where the relevant step is within paragraph 1 of that Schedule.]

Textual Amendments

F1419S. 554Z5 substituted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 10

F1420S. 554Z5(12) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 46(6)

Modifications etc. (not altering text)

C69S. 554Z5(3) excluded (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 12(5)

554Z6Overlap with certain earningsU.K.

(1)This section applies if the relevant step gives rise to relevant earnings of A from A's employment with B—

(a)which are, in accordance with section 16 and (if applicable) section 17, “for” a tax year in which A is UK resident [F1421(and, in the case of a tax year that is a split year as respects A, are not “excluded” by virtue of section 15(1A)(a) and (b)(i))], or

(b)which are, in accordance with section 29 and (if applicable) section 30, “for” a tax year in which A is non-UK resident but which are in respect of duties performed in the United Kingdom for the purposes of section 27(1)(a).

(2)The value of the relevant step (after any reductions under section 554Z4 or 554Z5) is reduced (but not below nil) by the amount of the relevant earnings.

(3)For the purposes of this section the following are “relevant” earnings—

(a)earnings within Chapter 1 of Part 3,

(b)amounts treated as earnings under Chapter 12 of Part 3, and

(c)a deemed employment payment under section 50 or any part of such a payment.

(4)But anything which is exempt income, or which falls within Chapter 3 of Part 4 of ITTOIA 2005, is not “relevant”.

Textual Amendments

F1421Words in s. 554Z6(1)(a) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 69

554Z7Exercise price of share optionsU.K.

(1)Subsection (3) applies if—

(a)the relevant step is a step within section 554B (other than one treated as being taken by section 554L(5), (7) or (9) or 554M(4), (6) or (8)),

(b)B is a company,

(c)there is an arrangement (“B's employee share scheme”) under which, in respect of A's employment with B, a right (“a relevant share option”) may be granted to A—

(i)to acquire relevant shares, or

(ii)to receive a sum of money the amount of which is to be determined by reference to the market value of any relevant shares at the time the sum is to be paid,

(d)in order to exercise the relevant share option so as—

(i)to acquire the relevant shares, or

(ii)to receive the sum of money,

A would, under the terms of the option, have to pay a sum of money the amount of which can be determined at the time of the grant of the option,

(e)the subject of the relevant step is relevant shares (“earmarked shares”) which are earmarked, or otherwise start being held, solely with a view to providing shares, or paying a sum of money, pursuant to—

(i)a relevant share option granted to A under B's employee share scheme as mentioned in paragraph (c) in relation to which the requirements of paragraph (d) are met, or

(ii)a relevant share option which is expected to be granted to A under B's employee share scheme as mentioned in paragraph (c) and in relation to which the requirements of paragraph (d) would be met,

(f)the number of relevant shares of any type which are earmarked shares does not exceed the maximum number of relevant shares of that type which might reasonably be expected to be needed for providing shares, or paying a sum of money, pursuant to the relevant share option which is granted or expected to be granted, and

(g)there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.

(2)Subsection (3) also applies if—

(a)the relevant step is a step treated as being taken by section 554L(9) or 554M(8), and

(b)in order to exercise the relevant share option to which the step relates so as—

(i)to acquire the shares which are the subject of the relevant step, or

(ii)to receive the sum of money determined by reference to the market value of those shares,

A would, under the terms of the option, have to pay a sum of money the amount of which can be determined at the time the option is granted.

(3)The value of the relevant step (after any reductions under sections 554Z4 to 554Z6) is to be reduced (but not below nil) by—

(a)the amount of the sum of money which A would have to pay as mentioned in subsection (1)(d) or (2)(b), or

(b)if the value of the relevant step was reduced under section 554Z4, X% of the amount of that sum of money.

(4)In subsection (3)(b) “X%” means the proportion of the value of the relevant step (as determined under section 554Z3) left after the reduction under section 554Z4.

(5)If subsection (3) applies by virtue of subsection (1) and the relevant step is taken in relation to an expected grant of a relevant share option as mentioned in subsection (1)(e)(ii), subsection (7) applies if—

(a)the grant is not made before the end of the date (“the final grant date”) falling immediately after the period of three months starting with the date on which the relevant step is taken, and

(b)as at the end of the final grant date, any of the earmarked shares continue to be held by or on behalf of P solely on the basis mentioned in subsection (1)(e).

(6)If subsection (3) applies by virtue of subsection (1), subsection (7) also applies if at any time after the taking of the relevant step—

(a)any of the earmarked shares cease to be held by or on behalf of P solely on the basis mentioned in subsection (1)(e), but

(b)the shares continue to be held by or on behalf of P on the basis mentioned in section 554B(1)(a) or (b).

(7)This Part has effect as if a relevant step within section 554B were taken at the end of the final grant date or when the shares cease to be held as mentioned in subsection (6)—

(a)the subject of which is the earmarked shares mentioned in subsection (5)(b) or (6), and

(b)by reason of which this Chapter is to apply (subject only to section 554A(4)).

(8)In this section “relevant shares” has the meaning given by section 554I(4).

554Z8Cases where consideration given for relevant stepU.K.

(1)Subsection (2) applies if—

(a)the relevant step is a step within section 554C(1)(a) to (c),

(b)the relevant step is for consideration given by A in the form of the transfer of an asset to P from A,

(c)the transfer by A of the asset is made before, or at or about, the time the relevant step is taken and is not by way of a loan, and

(d)there is no connection (direct or indirect) between the transfer by A of the asset and a tax avoidance arrangement.

(2)The value of the relevant step (after any reductions under sections 554Z4 to 554Z6) is reduced (but not below nil) by—

(a)the market value of the asset transferred by A at the time of its transfer, or

(b)if the value of the relevant step was reduced under section 554Z4, X% of that market value.

(3)For the purposes of subsection (1)(d) it is (in particular) to be assumed that the transfer by A of the asset is connected with a tax avoidance arrangement if—

(a)before the transfer, the asset was transferred to A by another person by way of a loan, or

(b)the asset is, or carries with it, any rights or interests under the relevant arrangement or any arrangement which is connected (directly or indirectly) with the relevant arrangement.

(4)In subsection (3)(b) “the relevant arrangement” has the meaning given by section 554A(1)(b).

(5)Subsection (6) applies if—

(a)the relevant step is a step within section 554C(1)(b) or (c) or (e) or 554D and does not also involve a sum of money,

(b)the relevant step is for consideration given by A in the form of the payment of a sum of money to P by A, F1422...

(c)the payment is made before, or at or about, the time the relevant step is taken[F1423, and

(d)there is no connection (direct or indirect) between the payment and a tax avoidance arrangement.]

(6)The value of the relevant step (after any reductions under sections 554Z4 to 554Z6) is reduced (but not below nil) by—

(a)the amount of the consideration given, or

(b)if the value of the relevant step was reduced under section 554Z4, X% of the amount of that consideration.

(7)In subsections (2)(b) and (6)(b) “X%” means the proportion of the value of the relevant step (as determined under section 554Z3) left after the reduction under section 554Z4.

(8)In this section references to A include references to any person linked with A.

Textual Amendments

F1422Word in s. 554Z8(5)(b) omitted (with effect in accordance with s. 18(9) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 18(3)

F1423S. 554Z8(5)(d) and word inserted (with effect in accordance with s. 18(9) of the amending Act) by Finance Act 2016 (c. 24), s. 18(3)

Remittance basisU.K.

554Z9Remittance basis: [F1424A [F1425did not] meet section 26A requirement]U.K.

(1)[F1426Subsections (2) and (2A) apply] if—

(a)the value of the relevant step, or a part of it, is “for” a tax year (“the relevant tax year”) as determined under section 554Z4,

(b)section 809B, 809D or 809E of ITA 2007 (remittance basis) [F1427applied] to A for the relevant tax year,

[F1428(c)A [F1429did not] meet the requirement of section 26A for the relevant tax year (reading references there to the employee as references to A),]

(d)A's employment with B in the relevant tax year [F1430was] employment with a foreign employer, and

(e)the duties of A's employment with B in the relevant tax year [F1431were] performed wholly outside the United Kingdom.

[F1432(1A)But [F1433subsections (2) and (2A) do not apply] if section 24A applies in relation to A's employment with B for the relevant tax year.]

(2)[F1434Except in a case within subsection (2A),] A's employment income by virtue of section 554Z2(1), or the relevant part of it, is “taxable specific income” in a tax year so far as it is remitted to the United Kingdom in that year.

[F1435(2A)Where the relevant step is within paragraph 1 of Schedule 11 to F(No. 2)A 2017, A's employment income by virtue of section 554Z2(1), or the relevant part of it, is “taxable specific income” in the tax year in which the relevant step is treated as being taken so far as the income is remitted to the United Kingdom in that tax year or in any previous tax year.]

(3)For [F1436the purposes of subsections (2) and (2A)], any income which is remitted before A's employment with B starts is treated as being remitted in the tax year in which the employment starts.

(4)Subsection (5) applies if in the relevant tax year—

(a)A has associated employments, and

(b)the duties of the associated employments are not performed wholly outside the United Kingdom.

(5)The amount of A's employment income to which [F1437subsection (2) or (2A)] applies is limited to such amount as is just and reasonable, having regard to—

(a)A's employment income for the relevant tax year from all associated employments, together with A's employment with B,

(b)the proportion of that income [F1438(or of so much of it as is attributable to the UK part of the relevant tax year, if it was a split year as respects A)] which is general earnings to which section 22 applies or is employment income to which section 41A applies,

(c)the nature of and time devoted to the duties performed outside the United Kingdom, and those performed in the United Kingdom, in the relevant tax year [F1439(or the UK part of it)], and

(d)all other relevant circumstances,

and, if the amount of A's employment income to which [F1440subsection (2) or (2A)] would otherwise apply exceeds that limit, the amount of A's employment income to which [F1441subsection (2) or (2A) (as the case may be)] applies is instead to be such amount as is just and reasonable.

(6)In this section “associated employments” means employments with B or with employers associated with B; and section 24(5) and (6) applies for the purposes of this subsection.

Textual Amendments

F1424Words in s. 554Z9 heading substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 13(2) (with Sch. 46 para. 26)

F1425Words in s. 554Z9 heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(11)(a)

F1426Words in s. 554Z9(1) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(2)

F1427Word in s. 554Z9(1)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(11)(b)(i)

F1428S. 554Z9(1)(c) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 13(1) (with Sch. 46 para. 26)

F1429Words in s. 554Z9(1)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(11)(b)(ii)

F1430Word in s. 554Z9(1)(d) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(11)(b)(iii)

F1431Word in s. 554Z9(1)(e) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(11)(b)(iv)

F1432S. 554Z9(1A) inserted (with effect in accordance with Sch. 3 para. 7(4) of the amending Act) by Finance Act 2014 (c. 26), Sch. 3 para. 5

F1433Words in s. 554Z9(1A) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(3)

F1434Words in s. 554Z9(2) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(4)

F1435S. 554Z9(2A) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(5)

F1436Words in s. 554Z9(3) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(6)

F1437Words in s. 554Z9(5) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(7)(a)

F1438Words in s. 554Z9(5)(b) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 70(a)

F1439Words in s. 554Z9(5)(c) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 70(b)

F1440Words in s. 554Z9(5) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(7)(b)(i)

F1441Words in s. 554Z9(5) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 40(7)(b)(ii)

Modifications etc. (not altering text)

C70S. 554Z9 applied (20.3.2025) by Finance Act 2025 (c. 8), Sch. 10 para. 2(3)

554Z10Remittance basis: [F1442A [F1443met] section 26A requirement]U.K.

(1)[F1444Subsections (2) and (2A) apply] if—

[F1445(a)the value of the relevant step, or a part of it, is “for” a tax year (“the relevant tax year”) as determined under section 554Z4,]

(b)section 809B, 809D or 809E of ITA 2007 (remittance basis) [F1446applied] to A for the relevant tax year, and

[F1447(c)A [F1448met] the requirement of section 26A for the relevant tax year (reading references there to the employee as references to A).]

[F1449(2)[F1450Except in a case within subsection (2AA),] The overseas portion of (as the case may be)—

(a)A's employment income by virtue of section 554Z2(1), or

(b)the relevant part of A's employment income by virtue of that section,

is “taxable specific income” in a tax year so far as the overseas portion is remitted to the United Kingdom in that year.]

[F1451(2AA)Where the relevant step is within paragraph 1 of Schedule 11 to F(No. 2)A 2017, the overseas portion of (as the case may be)—

(a)A's employment income by virtue of section 554Z2(1), or

(b)the relevant part of A's employment income by virtue of that section,

is “taxable specific income” in the tax year in which the relevant step is treated as being taken so far as the overseas portion is remitted to the United Kingdom in that tax year or in any previous tax year.]

[F1452(2A)The overseas portion” of A's employment income by virtue of section 554Z2(1), or of the relevant part of that income, is so much of that income, or of the relevant part of it, as is not in respect of UK duties.

(2B)“UK duties” means duties performed in the United Kingdom.]

(3)For [F1453the purposes of this section], any income which is remitted before A's employment with B starts is treated as being remitted in the tax year in which the employment starts.

[F1454(4)The extent to which—

(a)the employment income, or the relevant part of it, is not in respect of UK duties, or

(b)so much of the employment income, or of the relevant part of it, as is attributable to the UK part of the relevant tax year is not in respect of UK duties,

is to be determined on a just and reasonable basis.]

Textual Amendments

F1442Words in s. 554Z10 heading substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 14(2) (with Sch. 46 para. 26)

F1443Word in s. 554Z10 heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(12)(a)

F1444Words in s. 554Z10(1) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 41(2)

F1445S. 554Z10(1)(a) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 71(2)

F1446Word in s. 554Z10(1)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(12)(b)

F1447S. 554Z10(1)(c) substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 14(1)(c) (with Sch. 46 para. 26)

F1448Word in s. 554Z10(1)(c) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(12)(c)

F1449S. 554Z10(2) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 71(3)

F1450Words in s. 554Z10(2) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 41(3)

F1451S. 554Z10(2AA) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 41(4)

F1452S. 554Z10(2A)(2B) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 71(4)

F1453Words in s. 554Z10(3) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 71(5)

F1454S. 554Z10(4) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 71(6)

Modifications etc. (not altering text)

C71S. 554Z10 applied (20.3.2025) by Finance Act 2025 (c. 8), Sch. 10 para. 2(3)

554Z11Remittance basis: supplementaryU.K.

(1)Subsection (2) applies if section 554Z9(1)(a) or 554Z10(1)(a) applies to a part (“the relevant part”) of the value of the relevant step.

(2)Any reduction to the value of the relevant step to be made under any of sections 554Z5 to 554Z8 is to be made so that X% of the reduction is made by way of reducing the relevant part.

(3)In subsection (2) “X%” means the proportion of the value of the relevant step represented by the relevant part before any reductions under any of sections 554Z5 to 554Z8.

(4)For the purpose of applying section [F1455554Z9(2) or (2A) or 554Z10(2) or (2AA)] , see Chapter A1 of Part 14 of ITA 2007 for the meaning of “remitted to the United Kingdom” etc.

(5)If the relevant step involves a sum of money, for the purposes of that Chapter the sum of money is treated as deriving from A's employment income (or the relevant part of it) to which section [F1456554Z9(2) or (2A) or 554Z10(2) or (2AA)] applies.

(6)In any other case, for the purposes of that Chapter the asset which is the subject of the relevant step is treated as deriving from A's employment income (or the relevant part of it) to which section [F1457554Z9(2) or (2A) or 554Z10(2) or (2AA)] applies.

(7)Subsection (8) applies if—

(a)after the relevant step is taken, there is another relevant step (“the later relevant step”) by reason of which this Chapter applies in respect of A's employment with B, and

(b)within the meaning of section 554Z5, there is overlap between the sum of money or asset (“sum or asset R”) which is the subject of the relevant step and the sum of money or asset (“sum or asset S”) which is the subject of the later relevant step.

(8)Except so far as, in any event—

(a)sum or asset S and sum or asset R are the same sum of money or asset, or

(b)sum or asset S derives from sum or asset R,

for the purposes of Chapter A1 of Part 14 of ITA 2007 sum or asset S is treated, to the extent of the overlap, as deriving from sum or asset R.

(9)Subsections (10) and (11) apply if—

(a)the relevant tax year within the meaning of section 554Z9 or 554Z10 is the tax year 2007-08 or any earlier tax year, and

(b)A—

(i)was UK resident in that year, but

(ii)was not domiciled in the United Kingdom, or was not ordinarily UK resident, in that year.

(10)Section 554Z9 or 554Z10 (as the case may be) applies as if section 809B of ITA 2007 applied to A for the relevant tax year.

(11)In section 554Z9(1)(d) the reference to a foreign employer is to be read as not including a person resident in the Republic of Ireland.

Textual Amendments

[F1458554Z11ATemporary non-residentsU.K.

(1)This section applies if A is temporarily non-resident.

(2)Any amount within subsection (3) is to be treated for the purposes of section 554Z9(2) [F1459or (2A)] or (as the case may be) 554Z10(2) [F1460or (2AA)] as if it were remitted to the United Kingdom in the period of return.

(3)An amount is within this subsection if—

(a)it is all or part of a relevant benefit provided to a relevant person (see section 554C(2)) under a relevant scheme,

(b)it is provided in the form of the lump sum,

(c)it is remitted to the United Kingdom in the temporary period of non-residence, and

(d)ignoring this section—

(i)no charge to tax arises by virtue of section 554Z9(2) or 554Z10(2) in respect of it, but

(ii)such a charge would arise by virtue of one of those sections if the existence of any double taxation relief arrangements were disregarded.

(4)Subsection (3)(d)(i) includes a case where the charge could be prevented by making a DTR claim, even if no claim is in fact made.

(5)Nothing in any double taxation relief arrangements is to be read as preventing A from being chargeable to income tax in respect of any income treated by virtue of this section as remitted to the United Kingdom in the period of return (or as preventing a charge to that tax from arising as a result).

(6)Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains—

(a)when an individual is to be regarded as “temporarily non-resident”, and

(b)what “the temporary period of non-residence” and “the period of return” mean.

(7)In this section—

  • “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

  • “DTR claim” means a claim for relief under section 6 of that Act;

  • “relevant benefit” has the same meaning as in Chapter 2 of Part 6;

  • “relevant scheme” means an employer-financed retirement benefits scheme (within the meaning of that Chapter) or a superannuation fund to which section 615(3) of ICTA applies;

  • “remitted to the United Kingdom” has the same meaning as in Chapter A1 of Part 14 of ITA 2007.]

Textual Amendments

F1458S. 554Z11A inserted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 127

[F1461Double taxation: earlier income tax liabilityU.K.

Textual Amendments

F1461Ss. 554Z11B-554Z11G and cross-heading inserted (with effect in accordance with Sch. 6 para. 15(2)(3) of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 11

554Z11BEarlier income tax liability: application of section 554Z11CU.K.

(1)Section 554Z11C applies if the conditions in subsections (2) and (3) are met.

(2)The first condition is that there is overlap between—

(a)the sum of money or asset (“sum or asset P”) which is the subject of the relevant step, and

(b)a sum of money or asset (“sum or asset Q”) by reference to which, on an occasion that occurred before the relevant step is taken, A became subject to a liability for income tax (“the earlier tax liability”).

(3)The second condition is that at the time the relevant step is taken—

(a)an amount is payable by a person (the “liable person”) in respect of the earlier tax liability, but the whole or part of that amount is unpaid and not otherwise accounted for, and

(b)the liable person has not agreed any terms with an officer of Revenue and Customs for the discharge of the earlier tax liability.

(4)For the purposes of this section there is overlap between sum or asset P and sum or asset Q so far as it is just and reasonable to conclude that—

(a)they are the same sum of money or asset, or

(b)sum or asset P directly, or indirectly, represents sum or asset Q.

(5)In subsection (2)(b)—

(a)the reference to A includes a reference to any person linked with A, and

(b)the reference to a liability for income tax does not include a reference to a liability for income tax arising by reason of section 175 (benefit of taxable cheap loan treated as earnings).

554Z11CEarlier income tax liability: treatment of paymentsU.K.

(1)In this section—

(a)“the earlier charge” means so much of the earlier tax liability as relates to the overlap between sum or asset P and sum or asset Q, and

(b)“the Chapter 2 overlap charge” means so much of the Chapter 2 tax liability as relates to the overlap between sum or asset P and sum or asset Q.

(2)The amount of a tax liability that relates to the overlap between sum or asset P and sum or asset Q is to be determined on a just and reasonable basis.

(3)Subsection (4) applies where, after the relevant step is taken, an amount (the “earlier charge paid amount”) is paid in respect of all or part of—

(a)the earlier charge, or

(b)any late payment interest in respect of the charge.

(4)An amount equal to the earlier charge paid amount is treated as a payment on account of—

(a)the Chapter 2 overlap charge, or

(b)if that charge has been paid in full, any late payment interest payable in respect of the charge.

(5)Except where subsection (10) applies, subsection (6) applies where an amount (the “Chapter 2 paid amount”) is paid in respect of all or part of—

(a)the Chapter 2 overlap charge, or

(b)any late payment interest in respect of the charge.

(6)An amount equal to the Chapter 2 paid amount is treated as a payment on account of—

(a)the earlier charge, or

(b)if the earlier charge has been paid in full, any late payment interest payable in respect of the charge.

(7)Subsection (10) applies where—

(a)the condition in 554Z11B(2) is met because there is overlap between sum or asset P and each of two or more items within section 554Z11B(2)(b), and

(b)an amount (the “Chapter 2 aggregate paid amount”) is paid in respect of all or part of—

(i)two or more relevant Chapter 2 overlap charges, or

(ii)any late payment interest in respect of any of those charges.

(8)In subsection (7)(b), “relevant Chapter 2 overlap charge” means so much of the Chapter 2 tax liability as relates to the overlap between sum or asset P and one of those items within section 554Z11B(2)(b).

(9)For the purposes of subsection (10)—

(a)in the case of each of those items, the “earlier charge” in respect of the overlap between sum or asset P and the item is so much of the liability mentioned in section 554Z11B(2)(b) in the case of the item as relates to the overlap, and

(b)the Chapter 2 aggregate paid amount is to be allocated, in such proportions as are just and reasonable in all the circumstances, between the earlier charges given by paragraph (a).

(10)The amount allocated to an earlier charge under subsection (9) is treated as a payment on account of—

(a)the earlier charge to which it is allocated, and

(b)if the earlier charge has been paid in full, any late payment interest payable in respect of the charge.

(11)In this section—

  • “late payment interest” means interest payable under—

    (a)

    section 86 of TMA 1970,

    (b)

    section 101 of FA 2009, or

    (c)

    regulation 82 of the Income Tax (Pay As You Earn) Regulations 2003 (S.I. 2003/2682);

  • “Chapter 2 tax liability” means the liability for income tax arising by virtue of the application of Chapter 2 by reason of the relevant step.

554Z11DEarlier income tax liability: provisional payments of taxU.K.

(1)Subsection (2) applies for the purposes of—

(a)section 554Z11B(3)(a), and

(b)section 554Z11C(3), (4)(b), (7)(b) and (10)(b).

(2)A person is not to be regarded as having paid, or otherwise accounted for, any tax by reason only of making a provisional payment of tax, except in accordance with an application granted under section 554Z11E.

(3)In this Part, “provisional payment of tax” means—

(a)a payment on account of income tax,

(b)a payment that is treated as a payment on account under section 223(3) of FA 2014 (accelerated payments), or

(c)a payment pending determination of an appeal made in accordance with section 55 of TMA 1970.

(4)The reference in subsection (3)(a) to a payment on account of income tax does not include a reference to a payment treated under section 554Z11C as a payment on account of a tax liability.

554Z11EApplication for provisional payments to be treated as payment of taxU.K.

(1)A person may make an application to Her Majesty's Revenue and Customs for a provisional payment of tax to be treated for the purposes of section 554Z11C as—

(a)an earlier charge paid amount,

(b)a Chapter 2 paid amount, or

(c)a Chapter 2 aggregate paid amount.

(2)Where an application under subsection (1) is granted, the provisional payment of tax to which it relates may not be repaid.

(3)An application for approval must be made in such form and manner, and contain such information, as may be specified by, or on behalf of, the Commissioners for Her Majesty's Revenue and Customs.

(4)An officer of Revenue and Customs must notify the applicant of the decision on an application.

554Z11FProvisional payments of tax: further provisionU.K.

(1)This section applies in a case to which section 554Z11C applies (see section 554Z11B(1)).

(2)If a provisional payment of tax is made in respect of an earlier charge in relation to an overlap, it is to be treated as also being made in respect of the Chapter 2 overlap charge in relation to the overlap.

(3)If a provisional payment of tax is made in respect of a Chapter 2 overlap charge in relation to an overlap, it is to be treated as also being made in respect of the earlier charge in relation to the overlap.

(4)If section 554Z11C(10) applies in a case (see section 554Z11C(7)) and a provisional payment of tax is made in respect of two or more relevant Chapter 2 overlap charges—

(a)the amount of the provisional payment of tax is to be allocated, in such proportions as are just and reasonable in all the circumstances, between those relevant Chapter 2 overlap charges, and

(b)a provisional payment of tax, equal to the amount allocated to the relevant Chapter 2 overlap charge relating to any particular overlap, is to be treated as also being made in respect of the earlier charge given by section 554Z11C(9) in respect of that overlap.

(5)Subsection (6) applies if—

(a)the provisional payment of tax is repaid, and

(b)late payment interest on the earlier charge or the Chapter 2 overlap charge would have accrued during the relevant period if the provisional payment of tax had not been made.

(6)The late payment interest mentioned in subsection (5) is treated as having accrued as if the provisional payment of tax had not been made.

(7)For the purposes of subsection (5), the “relevant period” is the period beginning on the day on which the provisional payment of tax is made and ending with the day on which the repayment is made.

554Z11GEarlier income tax liability: supplementary provisionU.K.

(1)This section applies in a case to which section 554Z11C applies (see section 554Z11B(1)).

(2)Subsection (3) applies where an employer is treated by virtue of section 687A or 695A as making a payment of income (“the notional payment”) by reason of the value of the relevant step, of which sum or asset P is the subject, counting as employment income.

(3)The reference in section 222 (payments by employer on account of tax where deduction not possible) to the notional payment is to be treated as a reference to that payment reduced by an amount equal to so much of the sum of money or (as the case may be) the value of so much of the asset—

(a)as is within the overlap, and

(b)in relation to which an amount is treated under section 554Z11C as a payment on account of either the earlier charge or the Chapter 2 overlap charge.

(3)Subsection (4) applies for the purposes of sections 65(5)(b) and 70(3)(b) of the Inheritance Tax Act 1984 (tax relief for payments which are income of a person for income tax purposes etc).

(4)The value of the relevant step of which sum or asset P is the subject is to be treated as reduced by an amount equal to so much of the sum of money or (as the case may be) the value of so much of the asset —

(a)as is within the overlap, and

(b)in relation to which an amount is treated under section 554Z11C as a payment on account of either the earlier charge or the Chapter 2 overlap charge.]

SupplementaryU.K.

554Z12Relevant step taken after A's death etcU.K.

(1)Subsection (3), (4) or (5) (as the case may be) applies if the relevant step is a step within section 554C [F1462, by virtue of subsection (1)(a) or (b) to (e) of that section,] or 554D and—

(a)the relevant step is taken on or after A's death, or

(b)if relevant, any of A's employment income by virtue of section 554Z2(1) is remitted to the United Kingdom on or after A's death.

But none of those subsections applies if A's employment with B never started before A's death.

(2)In subsections (3) to (5) “the relevant person” means the relevant person (within the meaning of section 554C(1) or 554D(1) or (2)) in relation to the relevant step.

(3)If the relevant person is A, A's personal representatives are liable for, as the case may be, the income tax on—

(a)A's employment income by virtue of section 554Z2(1), or

(b)so much of that income as is remitted.

(4)If the relevant person is an individual other than A, the amount which, as the case may be—

(a)counts as employment income of A, or

(b)is remitted,

is to count as an amount of employment income of the relevant person for the tax year in which the relevant step is taken or the income is remitted.

(5)If the relevant person is not an individual, the relevant taxable person is chargeable to income tax on the amount which, as the case may be—

(a)counts as employment income of A, or

(b)is remitted.

(6)In subsection (5) “the relevant taxable person” is to be read as follows—

(a)if the person (or any of the persons) who took the relevant step is UK resident, “the relevant taxable person” is the person (or each of the UK resident persons) who took the relevant step,

(b)if paragraph (a) does not apply and B is still alive or in existence when the relevant step is taken, “the relevant taxable person” is B, or

(c)if neither paragraph (a) nor paragraph (b) applies, “the relevant taxable person” is the non-UK resident person (or each of the non-UK resident persons) who took the relevant step.

(7)For the purposes of subsection (5)—

(a)the rate of tax is the rate applying for the purposes of section 394(2) (see section 394(4)) at the time of the relevant step or remittance of income, and

(b)the tax is charged for the tax year in which the relevant step is taken or the income is remitted.

(8)If there is more than one relevant person in relation to the relevant step, the amount which, as the case may be—

(a)counts as employment income of A, or

(b)is remitted,

is to be apportioned between the relevant persons on a just and reasonable basis with subsections (3) to (5) applying accordingly.

[F1463(9)Section 554Z4A and section 554Z11A apply for the purposes of subsection (4) as for the purposes of section 554Z2 and section 554Z9(2) or 554Z10(2) respectively (reading references in sections 554Z4A and 554Z11A to “A” as references to “the relevant person”).

(10)But those sections do not apply for the purposes of subsection (4) if the relevant person's temporary period of non-residence began before A died.]

Textual Amendments

F1462Words in s. 554Z12(1) inserted (with effect in accordance with Sch. 6 para. 13 of the amending Act) by Finance Act 2017 (c. 10), Sch. 6 para. 7

F1463S. 554Z12(9)(10) inserted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 128

554Z13Subsequent income tax liabilityU.K.

(1)This section applies if—

(a)after the relevant step is taken, another event (“the later event”) occurs,

(b)other than by virtue of—

(i)this Chapter,

(ii)Chapters 2 to 5 of Part 7, or

(iii)Part 9,

the later event would (apart from this section) give rise to a liability for income tax of A or any other person on an amount (“the later amount”), and

(c)it is just and reasonable for this section to apply in order to avoid a double charge to income tax in respect of the sum of money or asset which is the subject of the relevant step.

(2)So far as it is just and reasonable in order to avoid a double charge to income tax as mentioned in subsection (1)(c), there is to be no liability to income tax on the later amount by virtue of the later event.

554Z14Relief where earmarking not followed by further relevant stepU.K.

(1)An application for relief may be made by A (or, if A has died, A's personal representatives) to an officer of Revenue and Customs if—

(a)this Chapter has applied by reason of a relevant step (“the original relevant step”) within section 554B taken by a person (“P”),

(b)there occurs an event (“the relevant event”) which is not a relevant step in relation to a relevant sum or asset,

(c)by reason of the relevant event no further relevant step is or will be taken by P or any other person in relation to any relevant sum or asset, and

(d)there is no connection (direct or indirect) between the relevant event and a tax avoidance arrangement.

(2)In section 554Z(15) the reference to the avoidance of tax includes (in particular) a reference to the avoidance of tax by way of obtaining relief under this section.

(3)In subsection (1) “relevant sum or asset” means—

(a)the sum of money or asset which is the subject of the original relevant step, or

(b)a sum of money or asset which (directly or indirectly) has arisen or derived, or may arise or derive, from the sum of money or asset mentioned in paragraph (a).

(4)The application for relief must be made within four years from the time when the relevant event occurs.

(5)If an officer of Revenue and Customs is satisfied that the requirements in subsection (1) are met, the officer must give such relief as the officer considers just and reasonable (if any) in respect of income tax paid on any previously charged amount.

(6)In subsection (5) “previously charged amount” means—

(a)the amount which counted as employment income of A under this Chapter as a result of this Chapter applying by reason of the original relevant step, or

(b)any amount treated by section 222 as earnings of A in relation to the notional payment (within the meaning of that section) which B is treated as having made by virtue of the original relevant step.

(7)Subsection (8) applies if, by virtue of this Chapter having applied by reason of the original relevant step, any tax liability of A or any other person arising from another event is reduced (including to nil) by virtue of section 554Z5 or 554Z13 or otherwise.

(8)In determining what is a just and reasonable amount of relief, the officer of Revenue and Customs must have regard (in particular) to the reduction in the tax liability and reduce the amount of relief which would otherwise have been given accordingly (including to nil).

(9)The relief is to be given by repayment or otherwise as appropriate.

(10)In relation to times after the relief is given, the Tax Acts have effect as if this Chapter had never applied by reason of the original relevant step.

554Z15Location of employment dutiesU.K.

The following provisions apply for the purposes of this Chapter—

(a)section 38 (but as if references to general earnings were to the value of the relevant step or a part of it),

(b)section 39(1) and (2),

(c)section 40 (but as if in subsections (3) and (4) references to section 24(1)(b) were to section 554Z9(4)(b)), and

(d)section 41 (but as if references to general earnings were to the value of the relevant step or a part of it).

CHAPTER 3U.K.Undertakings given by employers etc in relation to retirement benefits etc

554Z16Application etcU.K.

(1)This Chapter applies if there is an undertaking (“the relevant undertaking”) that a contribution to which subsection (2) would apply will be paid.

(2)This subsection applies to a contribution if—

(a)the contribution is paid to an arrangement which is not a registered pension scheme,

(b)in connection with that arrangement (directly or indirectly), relevant benefits are to be provided (directly or indirectly) out of the contribution by a relevant third person,

(c)the provision of the relevant benefits would be a relevant step, and

(d)the contribution is neither a tax-relieved contribution nor tax-exempt provision.

(3)In subsection (2)—

  • “relevant benefits” has the same meaning as in Chapter 2 of Part 6, but ignoring section 393B(2)(a),

  • “relevant third person” means a person within section 554A(7)(a) to (c) (ignoring this Chapter), and

  • “tax-exempt provision” and “tax-relieved contribution” have the meaning given by paragraph 3(3) and (4) of Schedule 34 to FA 2004.

(4)In this Chapter references to an undertaking include references to—

(a)an undertaking which is not legally enforceable, and

(b)an undertaking which is to be performed only on or following the meeting of a condition (including a condition which might never be met).

554Z17Employer etc to be treated as relevant third person etcU.K.

(1)If B takes a step within section 554Z18 or 554Z19, Chapters 1 and 2 have effect in relation to the step—

(a)as if B were a relevant third person for the purposes of section 554A(1)(d), and

(b)as if the step were a relevant step within section 554B (if it would not otherwise be).

(2)For the purpose of determining whether Chapter 2 applies by reason of the step, Chapter 1 has effect—

(a)as if sections 554F to 554O, 554S to 554U, 554W and 554X were omitted,

(b)if the step is within section 554Z18, as if sections 554Q(2)(d), (3) and (4) and 554R(1)(c) and (d), (2) and (3) were omitted, and

(c)if the step is within section 554Z19, as if sections 554Q and 554R were omitted.

(3)If Chapter 2 applies by reason of the step, Chapter 2 has effect as if sections 554Z7 to 554Z12 were omitted.

(4)If Chapter 2 does not apply by reason of the step by virtue of section 554E(3) or (6), section 554E(10) and (11) does not apply in relation to the step.

(5)For further modifications of Chapters 1 and 2, see sections 554Z18(3) and (4), 554Z19(5) and (6), 554Z20 and 554Z21.

(6)Regulations under section 554Y may (in particular) make provision covering cases in which Chapters 1 and 2 have effect as provided for by this section.

(7)In this Chapter—

(a)references to B do not include references to B acting as a trustee,

(b)if B is a company and is a member of a group of companies, references to B are to be read as including references to any other company which is a member of that group, and

(c)if B is a limited liability partnership, references to B are to be read as including references to any company which is a wholly-owned subsidiary (as defined in section 1159(2) of the Companies Act 2006) of B.

554Z18Earmarking etcU.K.

(1)B takes a step within this section if—

(a)a sum of money or asset held by or on behalf of B is earmarked (however informally) by B with a view to the relevant undertaking being performed at a later time (wholly or partly) out of—

(i)that sum of money or asset, or

(ii)any sum of money or asset which may arise or derive (directly or indirectly) from it, or

(b)a sum of money or asset otherwise starts being held by or on behalf of B, specifically with a view, so far as B is concerned, to the relevant undertaking being performed at a later time (wholly or partly) out of—

(i)that sum of money or asset, or

(ii)any sum of money or asset which may arise or derive (directly or indirectly) from it.

(2)For the purposes of subsection (1)(b) it does not matter whether or not the sum of money or asset in question has previously been held by or on behalf of B on a basis which is different to that mentioned in subsection (1)(b).

(3)Subsection (4) applies if, in the application of section 554Q or 554R in any case, the relevant step mentioned in section 554Q(2)(a) or 554R(6)(a) is a step within this section taken by B.

(4)In section 554Q(2)(c) or 554R(6)(c) (as the case may be) the reference to section 554B(1)(a) or (b) is to be read as a reference to subsection (1)(a) or (b) above.

554Z19Provision of securityU.K.

(1)B takes a step within this section if B provides security for the performance of the relevant undertaking.

(2)For the purposes of this Part, the sum of money or asset which is the subject of the step is to be taken to be—

(a)any sums of money which, as at the time the step is taken, are the subject of the security, and

(b)any assets which, as at that time, are the subject of the security,

and references to the sum of money or asset which is the subject of a relevant step are to be read accordingly.

(3)If, when the step is taken, the security covers other undertakings as well as the relevant undertaking, the sums of money and assets within subsection (2)(a) and (b) are to be apportioned between the relevant undertaking and the other undertakings on a just and reasonable basis.

(4)Subsections (2) and (3) are subject to section 554Z20(7).

(5)Section 554Q does not apply in any case in which the relevant step mentioned in section 554Q(2)(a) would be a step within this section taken by B.

(6)Section 554R(6) does not apply in any case in which the relevant step mentioned in section 554R(6)(a) would be a step within this section taken by B.

(7)In this Chapter references to providing security for the performance of an undertaking are references to providing such security in any way, however informal.

554Z20Valuation of step within section 554Z19U.K.

(1)This section applies if, by virtue of section 554Z17, Chapter 2 applies by reason of a step taken by B within section 554Z19.

(2)Section 554Z3 has effect as if subsections (3) and (4) below were substituted for subsections (1) to (6) of that section.

(3)The value of the relevant step is—

(a)the amount to be paid as a contribution under the relevant undertaking determined, as at the time the step is taken, on a just and reasonable basis assuming that any condition to be met before any payment is made will be met, or

(b)if lower, the value of the security.

(4)For the purposes of subsection (3)(b) the value of the security—

(a)consists of—

(i)the total amount of the sums of money included in the subject of the step (see section 554Z19(2)(a)), and

(ii)the total market value, as at the time the step is taken, of the assets included in the subject of the step (see section 554Z19(2)(b)), but

(b)is to be subject to a just and reasonable reduction to take account of any term of the security which limits the total amount which may be made available under the security for the performance of the relevant undertaking to an amount which is lower than the amount determined under paragraph (a).

(5)The following subsections apply if, as at the end of the day of an anniversary of the taking of the step (“the anniversary day”), B continues to provide the security for the performance of the relevant undertaking.

(6)This Part has effect as if B's continuing to provide the security were a new step (“the anniversary step”) within section 554Z19—

(a)which is taken by B at the end of the anniversary day, and

(b)by reason of which Chapter 2 is to apply by virtue of section 554Z17 (subject only to section 554A(4)).

(7)If the total amount of the sums of money which are the subject of the security (“the security sums”) varies from time to time, for the purpose of determining the sums of money included in the subject of the anniversary step, in section 554Z19(2)(a) the reference to the time the step is taken is to be read as a reference to the time during the preceding year at which the total amount of the security sums is at its highest.

(8)For the purposes of subsection (4)(a)(ii) the market value of any asset included in the subject of the anniversary step may be determined as at any time during the preceding year (so long as the asset is the subject of the security, or one of the assets which is the subject of the security, as at that time).

(9)In subsections (7) and (8) “the preceding year” means the year ending with the anniversary day.

554Z21Relief for earmarking or security not followed by contribution or relevant benefitU.K.

(1)This section applies if, by virtue of section 554Z17, Chapter 2 applies by reason of a step taken by B within section 554Z18 or 554Z19.

(2)Section 554Z14 has effect in relation to the step with the following modifications.

(3)Subsection (1)(b) has effect as if for “not a relevant step in relation to a relevant sum or asset” there were substituted “ neither the payment of the relevant contribution (or any part of it) nor the provision of any relevant benefit ”.

(4)Subsection (1)(c) has effect as if for the words from “no further relevant step” to “any relevant sum or asset” there were substituted “ the relevant contribution (or any part of it) will not be paid or a relevant benefit will not be provided ”.

(5)Subsection (1) has effect as if subsection (6) below were substituted for subsection (3).

(6)In subsection (1)—

(a)“the relevant contribution” means the contribution to be paid under the relevant undertaking (within the meaning of Chapter 3), and

(b)“relevant benefit” means a relevant benefit to be provided out of the relevant contribution as mentioned in section 554Z16(2)(b) and (c).]

Part 8U.K.Former employees: deductions for liabilities

Deductions [F1464in calculating net income] U.K.

Textual Amendments

F1464Words in s. 555 cross-heading substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 440(5) (with Sch. 2)

555Former employee entitled to deduction [F1465in calculating net income] U.K.

(1)This Part applies if—

(a)a former employee makes a deductible payment, or

(b)a former employer makes a deductible payment on behalf of a former employee and the payment is treated—

(i)as a relevant retirement benefit, or

(ii)as post-employment earnings,

of the former employee.

(2)A deduction of the amount of the deductible payment may be made [F1466in calculating the former employee's net income] for the tax year in which the payment is made [F1467(see Step 2 of the calculation in section 23 of ITA 2007)].

(3)Subsection (2) applies only if the former employee makes a claim to the deduction.

(4)The entitlement to a deduction under this section is subject to sections 556 and 557.

(5)For the application of this Part in relation to former office-holders, see section 564.

[F1468(6)See section 263ZA of TCGA 1992 for relief from capital gains tax where the amount of the deduction allowed under this section exceeds the remaining total income (as defined in that section).]

Textual Amendments

F1465Words in s. 555 sidenote substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 440(4) (with Sch. 2)

F1466Words in s. 555(2) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 440(2)(a) (with Sch. 2)

F1467Words in s. 555(2) inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 440(2)(b) (with Sch. 2)

F1468S. 555(6) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 440(3) (with Sch. 2)

556Deductible payments made outside the time limits allowedU.K.

(1)No deduction may be made under section 555 if the deductible payment is made—

(a)on or before the day on which the former employee ceased to hold the former employment, or

(b)after the end of the sixth tax year following the tax year in which the former employee ceased to hold the former employment.

(2)If subsection (1)(a) applies, see section 346 (deduction for employee liabilities).

[F1469556ADeductible payments made pursuant to tax avoidance arrangementsU.K.

No deduction may be made under section 555 if the deductible payment is made in pursuance of arrangements the main purpose, or one of the main purposes, of which is the avoidance of tax.]

Textual Amendments

F1469S. 556A inserted (with effect in accordance with s. 67(4) of the amending Act) by Finance Act 2009 (c. 10), s. 67(3)

557Deductible payments wholly or partly borne by the former employer etc.U.K.

(1)This section applies if—

(a)a deductible payment is made by the former employee (and not by the former employer on behalf of the former employee), but

(b)the whole or a part of the cost of making the payment is borne—

(i)by the former employer, or

(ii)out of the proceeds of a contract of insurance.

(2)No deduction of the amount of the cost borne as mentioned in subsection (1)(b) (the “relevant amount”) may be made under section 555.

(3)But this is subject to subsection (4) if the whole or a part of the relevant amount is treated—

(a)as a relevant retirement benefit of the former employee, or

(b)as post-employment earnings of the former employee.

(4)In such a case, a deduction of so much of the relevant amount as is treated in that way may be made under section 555.

InterpretationU.K.

558Meaning of “deductible payment”U.K.

(1)For the purposes of this Part each of the following is a deductible payment—

A. Payment in or towards the discharge of a liability related to the former employment.

B. Payment of any costs or expenses incurred in connection with—

(a)a claim that the former employee is subject to a liability related to the former employment, or

(b)proceedings relating to or arising out of a claim that the former employee is subject to a liability related to the former employment.

[F1470BA Payment of any costs or expenses not falling within paragraph B which are incurred in connection with the former employee giving evidence about matters related to the former employment in, or for the purposes of—

(a)a proceeding or other process (whether or not involving the former employee), or

(b)an investigation (whether or not likely to lead to any proceeding or other process involving the former employee).

BB Payment of any costs or expenses not falling within paragraph B or BA which are incurred in connection with a proceeding or other process, or an investigation, in which—

(a)acts of the former employee related to the former employment, or

(b)any other matters related to the former employment,

are being or are likely to be considered.]

C. Payment of a premium under a qualifying insurance contract, but only to the extent that the premium relates to—

(a)provision in the contract for the former employee to be indemnified against a payment falling within paragraph A, or

(b)provision in the contract for the payment of any costs or expenses falling within paragraph B [F1471, BA or BB] .

(2)But a payment which falls within paragraph A [F1472B, BA or BB] is not a deductible payment if it would have been unlawful for the former employer to enter into a contract of insurance in respect of the liability, or costs or expenses, in question.

(3)In this Part—

(a)“premium”, in relation to a qualifying insurance contract, means an amount payable to the insurer under the contract, and

(b)where a qualifying insurance contract relates to more than one person, employment or risk, the part of the premium to be treated as relating to each of them is to be determined by apportionment on a just and reasonable basis.

[F1473(4)In this section and section 560—

(a)“acts” includes failures to act and acts are “related to the former employment” if the former employee was acting—

(i)in the employee's capacity as holder of the former employment, or

(ii)in any other capacity in which the former employee was acting in the performance of the duties of that employment,

(b)“giving evidence” includes making a formal or informal statement or answering questions,

(c)“proceeding or other process” includes any civil, criminal or arbitration proceedings, any disciplinary or regulatory proceedings of any kind and any process operated for resolving disputes or adjudicating on complaints, and

(d)references to a proceeding or other process or an investigation include a reference to a proceeding or other process or an investigation that is likely to take place.]

Textual Amendments

F1470Words in s. 558(1) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(6)(a)

F1471Words in s. 558(1) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(6)(b)

F1472Words in s. 558(2) substituted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(6)(c)

F1473S. 558(4) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(6)(d)

559Liabilities related to the former employmentU.K.

For the purposes of this Part each of the following kinds of liability is related to the former employment— A. Liability imposed upon the former employee because he did an act, or failed to do an act—

(a)in his capacity as holder of the former employment, or

(b)in any other capacity in which he acted in the performance of the duties of the former employment.

B. Liability imposed upon the former employee in connection with any proceedings relating to, or arising from, a claim that he is subject to a liability because he did an act, or failed to do an act—

(a)in his capacity as holder of the former employment, or

(b)in any other capacity in which he acted in the performance of the duties of the former employment.

560Meaning of “qualifying insurance contract”U.K.

(1)In section 558 “qualifying insurance contract” means a contract of insurance which meets conditions A, B, C and D.

(2)Condition A is that, so far as the risks insured against are concerned, the contract only relates to one or more of the following—

(a)the indemnification of a former employee against a liability related to the former employment,

(b)the indemnification of a person against vicarious liability in respect of a liability related to another person’s employment,

(c)the payment of costs or expenses incurred—

(i)in connection with a claim that a person is subject to a liability to which the insurance relates, or

(ii)in connection with any proceedings relating to or arising out of a claim that a person is subject to a liability to which the insurance relates,

[F1474(ca)the payment of costs or expenses incurred in connection with a former employee giving evidence about matters related to the former employment in, or for the purposes of—

(i)a proceeding or other process (whether or not involving the former employee), or

(ii)an investigation (whether or not likely to lead to any proceeding or other process involving the former employee).

(cb)the payment of any costs or expenses incurred in connection with a proceeding or other process, or an investigation, in which—

(i)acts of a former employee related to the employment, or

(ii)any other matters related to the former employment of a former employee,

are being or are likely to be considered,]

(d)the indemnification of an employer against loss from a payment made by the employer to a former employee in respect of—

(i)a liability related to the former employment, or

(ii)any costs or expenses incurred as mentioned in paragraph (c) [F1475, (ca) or (cb)] .

(3)Condition B is that—

(a)the period of insurance under the contract does not exceed 2 years or, if it does, it does so only because of one or more renewals, each for a period of 2 years or less, and

(b)the insured is not required to renew the contract for any period.

(4)Condition C is—

(a)that the insured is not entitled under the contract to receive any payment or other benefit in addition to—

(i)cover for the risks insured against, and

(ii)any right to renew the contract, or

(b)if the insured is so entitled, that the part of the premium reasonably attributable to the entitlement is not a significant part of the whole premium.

(5)Condition D is that the contract is not connected with another contract.

Textual Amendments

F1474S. 560(2)(ca)(cb) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(7)(a)

F1475Words in s. 560(2)(d) inserted (with effect in accordance with s. 4(8) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 4(7)(b)

561Connected contractsU.K.

(1)An insurance contract is connected with another contract for the purposes of section 560 if conditions E and F are met—

(a)at the time when both contracts are first in force, or

(b)at any time after that time.

(2)Condition E is that one of the contracts was entered into—

(a)by reference to the other, or

(b)with a view to enabling or facilitating entry into the other on particular terms.

(3)Condition F is that the terms on which one of the contracts was entered into are significantly different from what they would have been if—

(a)it had not been entered into in anticipation of the other being entered into, or

(b)the other had not also been entered into.

(4)If—

(a)there is only one such significant difference in terms, and

(b)the contracts meet conditions A, B and C specified in section 560,

the difference may be disregarded in the following cases.

(5)The first case is where the difference is a reduction in premiums under the contract that is reasonably attributable only to the contract—

(a)containing a right to renew, or

(b)being entered into by way of renewal.

(6)The second case is where—

(a)two or more contracts have been entered into as part of a single transaction, and

(b)the difference is reductions in their premiums that are reasonably attributable only to the premium under each of them having been fixed by reference to the appropriate proportion of the combined premium.

(7)In subsection (6) “the combined premium” means the amount that would have been the total premium under a single contract relating to all the risks covered by the contracts.

562Meaning of “former employee” and “employment”U.K.

(1)In this Part “former employee” means an individual who has ceased to hold an employment.

(2)In this Part “employment” includes in particular—

(a)any employment under a contract of service,

(b)any employment under a contract of apprenticeship, and

(c)any employment in the service of the Crown.

“Employee” and “employer” have corresponding meanings.

563Other interpretationU.K.

In this Part each of the following expressions, when used in relation to a former employee, has the meaning given—

  • “former employment” means the employment which the former employee has ceased to hold;

  • “former employer” means—

    (a)

    the person under whom the former employee held the former employment,

    (b)

    a person for the time being carrying on the whole or any part of the business or other undertaking for the purposes of which the former employee held the former employment,

    (c)

    a person who is for the time being subject to any of the liabilities with respect to that business or other undertaking of the person mentioned in paragraph (a), and

    (d)

    a person who is connected with a person falling within paragraph (a), (b) or (c);

  • “post-employment earnings” means so much of any amount received after the former employee has ceased to hold the former employment as constitutes general earnings for the purposes of the employment income Parts;

  • “relevant retirement benefit” means a benefit—

    (a)

    [F1476which is received by the former employee under an employer-financed retirement benefits scheme, and

    (b)

    which, under Chapter 2 of Part 6, counts as employment income of the former employee.]

Textual Amendments

F1476Words in s. 563 substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 64 (with Sch. 36)

564Application of this Part to office-holdersU.K.

(1)The provisions of this Part are expressed to apply to former employees but they apply equally to former office-holders.

(2)In those provisions as they apply to a former office-holder—

(a)references to holding a former employment are to holding the office;

(b)“former employment” means the office held;

(c)“former employer” means the person under whom the person held the office.

(3)In this Part “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

Part 9U.K.Pension income

Modifications etc. (not altering text)

C72Pt. 9: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)

C73Pt. 9 excluded by 2004 c. 12, Sch. 36 para. 45A(1) (as inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 19)

C77Pt. 9 modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2009/1171, reg. 5ZA (as inserted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 5(3) (with reg. 6))

C78Pt. 9 modified (13.2.2025 with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 4, 6, 7

Chapter 1U.K.Introduction

565Structure of Part 9U.K.

The structure of this Part is as follows— Chapter 2—

(a)imposes the charge to tax on pension income, and

(b)provides for deductions to be made from the amount of income chargeable;

Chapters 3 to 15 set out the types of income which are charged to tax under this Part and, for each type of income, identify—

(a)the amount of income chargeable to tax for a tax year, and

(b)the person liable to pay any tax charged;

[F1477Chapter 15A—

(a)provides for certain amounts paid under registered pension schemes in the form of lump sums to be subject to the charge to tax on pension income, and

(b)deals with exemptions from the charge to tax (whether under this Part or any other provision) in relation to certain other amounts paid under registered pension schemes in the form of lump sums.]

Textual Amendments

F1477Words in s. 565 substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 39, 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

Chapter 2U.K.Tax on pension income

566Nature of charge to tax on pension income and relevant definitionsU.K.

(1)The charge to tax on pension income under this Part is a charge to tax on that income excluding any exempt income.

(2)“Pension income” means the pensions, annuities and income of other types to which the provisions listed in subsection (4) apply.

This definition applies for the purposes of the Tax Acts.

(3)“Exempt income” means pension income on which no liability to income tax arises as a result of any provision of Chapters [F147815A] to 18 of this Part.

This definition applies for the purposes of this Part.

(4)These are the provisions referred to in subsection (2)—

ProvisionIncomeChapter (of this Part)
Section 569United Kingdom pensionsChapter 3
Section 573Foreign pensionsChapter 4
Section 577United Kingdom social security pensionsChapter 5
[F1479Section 579A Pensions under registered pension schemesChapter 5A]
Section 609Annuities for the benefit of dependantsChapter 10
Section 610Annuities under sponsored superannuation schemesChapter 10
Section 611Annuities in recognition of another’s servicesChapter 10
Section 615Certain overseas government pensions paid in the United KingdomChapter 11
Section 619The House of Commons Members' FundChapter 12
F1480. . .F1480. . .F1480. . .
Section 629Pre-1973 pensions paid under OPA 1973Chapter 14
Section 633Voluntary annual paymentsChapter 15
[F1481Section 637BPensions treated as arising from payment of pension commencement excess lump sums under registered pension schemes Chapter 15A ]
[F1482Section [F1483637G]Pensions treated as arising from payment of trivial commutation lump sums and winding-up lump sums under registered pension schemesChapter 15A
Section [F1484637N]Pensions treated as arising from payment of trivial commutation lump sum death benefits F1485... under registered pension schemesChapter 15A]

Textual Amendments

F1478Word in s. 566(3) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 40(2), 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

F1479Words in s. 566(4) table substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 3(2) (with Sch. 36)

F1480Words in s. 566(4) table repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 3(3), Sch. 42 Pt. 3 (with Sch. 36)

F1481Words in s. 566(4) table inserted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 40(3)(a), 124 (with Sch. 9 paras. 125-132)

F1482Words in s. 566(4) table inserted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 3(4) (with Sch. 36)

F1483Word in s. 566(4) table substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 40(3)(b), 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

F1484Word in s. 566(4) table substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 40(3)(c)(i), 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

F1485Words in s. 566(4) table omitted (for the tax year 2024-25 and subsequent tax years) by virtue of Finance Act 2024 (c. 3), Sch. 9 paras. 40(3)(c)(ii), 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

567Amount charged to taxU.K.

(1)The amount of pension income which is charged to tax under this Part for a particular tax year is as follows.

(2)In relation to each pension, annuity or other item of pension income, the amount charged to tax is the “net taxable pension income” for the tax year.

(3)The net taxable pension income for a pension, annuity or other item of pension income for a tax year is given by the formula—

where—

TPI means the amount of taxable pension income for that pension, annuity or item of pension income for that year (see subsection (4)), and

DPI means the total amount of any deductions allowed from the pension, annuity or item of pension income (see subsection (5)).

(4)For the purposes of this Act—

(a)the amount of taxable pension income for a pension, annuity or other item of pension income for a tax year is determined in accordance with Chapters 3 to [F148615A] of this Part (which contain provisions relating to this amount for each type of pension income); and

(b)in determining the amount of taxable pension income for a pension, annuity or other item of pension income, any exempt income is to be excluded.

(5)The deductions allowed from a pension, annuity or other item of pension income are those under—

  • [F1487section 567A (deduction to avoid double taxation where Part 7A has applied to the source of the pension income);]

  • section 617 (10% deduction from an overseas government pension to which section 615 applies);

  • Part 12 (payroll giving).

Textual Amendments

F1486Word in s. 567(4)(a) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 4 (with Sch. 36)

F1487Words in s. 567(5) inserted (with effect in accordance with Sch . 2 para. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 26

[F1488567ACases in which Part 7A has applied to source of pension incomeU.K.

(1)This section applies if—

(a)for a tax year there is an amount (“amount TPI”) of taxable pension income for a pension, annuity or other item of pension income,

(b)the pension, annuity or other item of pension income accrues or arises out of rights (“the relevant rights”) which represent, or have arisen or derived (directly or indirectly) from, a sum of money or asset which was the subject of a relevant step within the meaning of Part 7A, and

(c)Chapter 2 of that Part applied by reason of the relevant step.

(2)A deduction is allowed from amount TPI.

(3)The amount of the deduction allowed is the amount (“amount EI”) which counted as employment income of A under Chapter 2 of Part 7A in relation to the relevant step (see section 554Z2(1)).

(4)If amount EI exceeds amount TPI, the excess is to be carried forward to future tax years to be deducted under this section (when applicable) until all of amount EI has been deducted.

(5)Subsection (6) applies if it is determined on a just and reasonable basis that the relevant rights represent, or have arisen or derived from, only part of the sum of money or asset which was the subject of the relevant step.

(6)In subsection (3) the reference to the amount which counted as employment income is to be read as a reference to the corresponding proportion of that amount.]

Textual Amendments

F1488S. 567A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 27

568Person liable for taxU.K.

For the provision identifying which person is liable for any tax charged under this Part on a pension, annuity or other item of pension income, see Chapters 3 to [F148915A].

Textual Amendments

F1489Word in s. 568 substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 5 (with Sch. 36)

Chapter 3U.K.United Kingdom pensions: general rules

569United Kingdom pensionsU.K.

(1)This section applies to any pension paid by or on behalf of a person who is in the United Kingdom.

(2)But this section does not apply to a pension if any provision of Chapters 5 to 14 of this Part applies to it.

(3)For pensions paid by or on behalf of a person who is outside the United Kingdom, see Chapter 4 of this Part.

570“Pension”: interpretationU.K.

In this Chapter “pension” includes a pension which is paid voluntarily or is capable of being discontinued.

571Taxable pension incomeU.K.

If section 569 applies, the taxable pension income for a tax year is the full amount of the pension accruing in that year irrespective of when any amount is actually paid.

572Person liable for taxU.K.

If section 569 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

[F1490572ATemporary non-residentsU.K.

(1)This section applies if an individual is temporarily non-resident.

(2)Any pension within subsection (3) is to be treated for the purposes of section 571 as if it accrued in the period of return.

(3)A pension is within this subsection if—

(a)section 569 applies to it,

(b)it is in the form of a lump sum,

(c)it accrued in the temporary period of non-residence, and

(d)ignoring this section—

(i)it is not chargeable to tax under this Chapter, but

(ii)it would be so chargeable if the existence of any double taxation relief arrangements were disregarded.

(4)Subsection (3)(d)(i) includes a case where the charge could be prevented by making a DTR claim, even if no claim is in fact made.

(5)Nothing in any double taxation relief arrangements is to be read as preventing the individual from being chargeable to income tax in respect of any pension treated by virtue of this section as accruing in the period of return (or as preventing a charge to that tax from arising as a result).

(6)Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains—

(a)when an individual is to be regarded as “temporarily non-resident”, and

(b)what “the temporary period of non-residence” and “the period of return” mean.

(7)In this section—

  • “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

  • “DTR claim” means a claim for relief under section 6 of that Act.]

Textual Amendments

F1490S. 572A inserted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 129

Chapter 4U.K.Foreign pensions: general rules

573Foreign pensionsU.K.

(1)This section applies to any pension paid by or on behalf of a person who is outside the United Kingdom to a person who is resident in the United Kingdom.

(2)But this section does not apply to a pension if any provision of Chapters 5 to 14 of this Part applies to it.

[F1491(2A)This section does not apply to pension within section 574(1)(ba) if—

(a)the pension is paid in respect of a deceased member of a pension scheme who had not reached the age of 75 at the date of death, and

(b)no pension payments to the person entitled to the pension were made before 6 April 2015 in respect of the deceased member out of any of the following—

(i)the fund from which the pension is paid, and

(ii)any fund represented (to any extent) by that fund.

(2B)This section does not apply to pension within section 574(1)(bb) if the pension is paid in respect of a deceased individual who had not reached the age of 75 at the date of death.

(2C)Subsection (2A) is subject to subsection (2D).

(2D)This section does apply to pension within section 574(1)(ba) paid in respect of a deceased member of a pension scheme who had not reached the age of 75 at the date of death if the pension is paid in respect of sums or assets held for the purposes of the pension scheme under which the pension is paid (“the paying scheme”) that would, if the paying scheme were a registered pension scheme, be sums or assets—

(a)representing unused uncrystallised funds (within the meaning of paragraph 27E(4) and (5) of Schedule 28 to FA 2004) in the deceased member's case, and

(b)designated on or after 6 April 2015 as available for the payment of dependants' drawdown pension or nominees' drawdown pension, but

(c)not so designated before the end of the period of two years beginning with the earlier of the day on which the scheme manager of the paying scheme first knew of the member's death and the day on which the scheme manager could first reasonably have been expected to have known of it.]

[F1492(2E)Chapter 17 of this Part provides exemptions for certain annuities (see sections 646D and 646E: certain beneficiaries' annuities purchased out of unused or drawdown funds).

(2F)See also paragraph 45A of Schedule 36 to FA 2004 (exemption in certain cases for payments on or after 6 April 2015 to beneficiaries under joint-life or similar annuities purchased before 6 April 2006).]

(3)For pensions paid by or on behalf of a person who is in the United Kingdom, see Chapter 3 of this Part.

[F1493(4)This section also applies to a pension paid by or on behalf of a person who is outside the United Kingdom to a person who is not resident in the United Kingdom if—

(a)the pension is a relevant lump sum paid under a pension scheme to that person in respect of a member of the scheme, and

(b)the member is, or immediately before the member's death was, resident in the United Kingdom.]

Textual Amendments

F1491S. 573(2A)-(2D) inserted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(2)

F1492S. 573(2E)(2F) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 20

Modifications etc. (not altering text)

C79S. 573 applied (6.4.2023 for the tax year 2023-24 and subsequent tax years) by Finance (No. 2) Act 2023 (c. 30), s. 19(4)(8)

574“Pension”: interpretationU.K.

[F1494(1)For the purposes of this Chapter “pension” includes—

(a)an annuity under, or purchased with sums or assets held for the purposes of, or representing acquired rights under, a relevant non-UK scheme or an overseas pension scheme,

[F1495(aa)a relevant lump sum (see section 574A),]

(b)an amount paid under a relevant non-UK scheme or an overseas pension scheme which, if the scheme were a registered pension scheme, would be income withdrawal F1496... (within the meaning of [F1497paragraph 7] of Schedule 28 to FA 2004),

[F1498(ba)an amount paid under a relevant non-UK scheme or an overseas pension scheme which, if the scheme were a registered pension scheme, would be dependants' income withdrawal or nominees' income withdrawal (within the meaning of paragraphs 21 and 27D of Schedule 28 to FA 2004),

(bb)an amount paid under a relevant non-UK scheme or an overseas pension scheme which, if the scheme were a registered pension scheme, would be successors' income withdrawal (within the meaning of paragraph 27J of Schedule 28 to FA 2004),] and

(c)if conditions A and B are met, a pension which is paid voluntarily or is capable of being discontinued.]

(2)Condition A is that the pension is paid to—

(a)a former employee or a former office-holder,

(b)the widow or widower [F1499or surviving civil partner] of a former employee or a former office-holder, or

(c)any child, relative or dependant of a former employee or a former office-holder.

(3)Condition B is that the pension is paid by or on behalf of—

(a)the person—

(i)who employed the former employee, or

(ii)under whom the former office-holder held the office, or

(b)the successors of that person.

[F1500(4)In this section—

  • “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders;

  • “overseas pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(7) of that Act);

  • “relevant non-UK scheme” is to be read in accordance with paragraph 1(5) of Schedule 34 to FA 2004.]

Textual Amendments

F1494S. 574(1) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 21(2)(a)

F1496Words in s. 574(1)(b) omitted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(3)(a)(i)

F1497Words in s. 574(1)(b) substituted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(3)(a)(ii)

F1498S. 574(1)(ba)(bb) inserted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(3)(b)

F1500S. 574(4) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 21(2)(b)

[F1501574A“Pension”: relevant lump sumsU.K.

(1)A lump sum paid under a pension scheme to a member of the scheme, or to a person in respect of a member of the scheme, is “a relevant lump sum” for the purposes of this Chapter if—

(a)the scheme is none of the following—

(i)a registered pension scheme,

(ii)a relevant non-UK scheme, and

(iii)an employer-financed retirement benefits scheme established in the United Kingdom, and

(b)the payment of the lump sum is not a relevant step by reason of which Chapter 2 of Part 7A applies.

(2)A lump sum paid under a relevant non-UK scheme to a member of the scheme, or to a person in respect of a member of the scheme, is “a relevant lump sum” for the purposes of this Chapter if the effect of paragraphs 1 to 7 of Schedule 34 to FA 2004 is that the member payment provisions (see paragraph 1(4) of that Schedule) do not apply in relation to the payment of the lump sum.

[F1502(2A)A lump sum is not “a relevant lump sum” by virtue of subsection (2) if it is within paragraph 5ZA(1)(a) or (b) of Schedule 34 to FA 2004 (which specify certain lump sums paid to or in respect of transfer members of relevant non-UK schemes).]

(3)If section 573 applies to a relevant lump sum then, for the purposes of section 575, the full amount of the pension income arising by reason of the payment of the lump sum is the amount of the lump sum, reduced as follows—

  • Step 1 Deduct so much of the lump sum as is payable by reason of commutation of rights to receive pension income on which no liability to tax arises as a result of any provision of Chapter 17 of this Part.

  • Step 2 Where the lump sum is paid under a pension scheme that was an employer-financed retirement benefits scheme immediately before 6 April 2017, deduct so much of the lump sum left after Step 1 as is deductible in accordance with subsection (6). Where the lump sum is paid otherwise than under such a scheme, deduct so much of the lump sum left after Step 1 as is paid in respect of the value immediately before 6 April 2017 of rights, accrued by then, specifically to receive benefits by way of lump sum payments.

  • Step 3 If the lump sum is paid under an overseas pension scheme, deduct so much of the lump sum left after Step 2 as would, if the scheme were a registered pension scheme, not be liable to income tax under this Part. For the purposes of this Step—

    (a)

    treat amounts not included in taxable pension income because of [F1503section 637G(2)] as being not liable to tax;

    (b)

    assume that [F1504all of the member’s lump sum allowance is available].

(4)The amount given by subsection (3) is treated for the purposes of section 575 as arising when the lump sum is paid.

(5)The Commissioners may by regulations make provision (including provision amending this section) as to the assumptions to be made for the purposes of Step 3.

(6)These rules apply for the purposes of the first sentence of Step 2—

(a)“the post-Step 1 amount” means so much of the lump sum as is left after Step 1;

(b)“the relevant amount” means so much of the post-Step 1 amount as is paid in respect of rights specifically to receive benefits by way of lump sum payments;

(c)“reckonable service” means service in respect of which the rights to receive the relevant amount accrued (whether or not service in the same employment or with the same employer, and even if the rights originally accrued under a different employer-financed retirement benefits scheme established in or outside the United Kingdom);

(d)“pre-6 April 2017 reckonable service” means reckonable service that is service before 6 April 2017;

(e)“pre-6 April 2017 reckonable foreign service” means pre-6 April 2017 reckonable service that is foreign service;

(f)the deductible amount is the value immediately before 6 April 2017 of the rights then accrued to payment of so much of the relevant amount as is paid in respect of pre-6 April 2017 reckonable service if—

(i)at least 75% of pre-6 April 2017 reckonable service is made up of foreign service, or

(ii)the period of pre-6 April 2017 reckonable service exceeds 10 years and the whole of the last 10 years of that period is made up of foreign service, or

(iii)the period of pre-6 April 2017 reckonable service exceeds 20 years and at least 50% of that period, including any 10 of the last 20 years, is made up of foreign service;

(g)otherwise, the deductible amount is the appropriate fraction of the value immediately before 6 April 2017 of the rights then accrued to payment of so much of the relevant amount as is paid in respect of pre-6 April 2017 reckonable service;

(h)“the appropriate fraction” is given by—

where—

F is the period of pre-6 April 2017 reckonable foreign service, and

R is the period of pre-6 April 2017 reckonable service.

(7)In this section—

  • “employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 (see section 393A),

  • “foreign service” has the meaning given by section 395C,

  • “member”, in relation to a pension scheme, has the meaning given by section 151 of FA 2004,

  • “overseas pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(7) of that Act),

  • “payment” includes a transfer of assets and any other transfer of money's worth,

  • “pension scheme” has the meaning given by section 150(1) of FA 2004, and

  • “relevant non-UK scheme” is to be read in accordance with paragraph 1(5) of Schedule 34 to FA 2004.]

Textual Amendments

F1501S. 574A inserted (with effect in accordance with Sch. 3 para. 10(2) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 10(1)

F1502S. 574A(2A) inserted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 61(2), 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

F1503Words in s. 574A(3) substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 61(3)(a), 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

F1504Words in s. 574A(3) substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 61(3)(b), 124 (with Sch. 9 paras. 125-132 (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

575Taxable pension incomeU.K.

(1)If section 573 applies, the taxable pension income for a tax year is [F1505the full amount of the pension income arising in the tax year, but subject to subsections [F1506(1A)] F1507... and (3) [F1508and section 576A].]

[F1509(1A)If the person liable for the tax under this Part is an individual and the tax year is a split year as respects that individual, the taxable pension income for the tax year is the full amount of the pension income arising in the UK part of the year, subject to [F1510subsection] (3) and section 576A.]

F1511[F1512(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)[F1513The full amount of the pension income arising in the tax year, or (as the case may be) the UK part of the tax year,] is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of [F1514ITTOIA 2005] (relevant foreign income: remittance basis and deductions and reliefs).

F1515(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)See also Chapter 4 of that Part (unremittable income).]

Textual Amendments

F1506Word in s. 575(1) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 72(2)

F1507Word in s. 575(1) omitted (with effect in accordance with Sch. 3 para. 2(6)(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(a)(i)

F1508Words in s. 575(1) inserted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 21(3)

F1509S. 575(1A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 72(3)

F1510Word in s. 575(1A) substituted (with effect in accordance with Sch. 3 para. 2(6)(7) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(a)(ii)

F1511S. 575(2) omitted (with effect in accordance with Sch. 3 para. 2(6)(7) of the amending Act) by virtue of Finance Act 2017 (c. 10), Sch. 3 para. 2(1)

F1512S. 575(2)-(5) substituted for s. 575(2) (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 606(3) (with Sch. 2)

F1513Words in s. 575(3) substituted (with effect in accordance with Sch. 3 para. 2(6)(7) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(a)(iii)

F1514Words in s. 575(3) substituted (with effect in accordance with Sch. 3 para. 2(6)(7) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(a)(iv)

F1515S. 575(4) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 45

576Person liable for taxU.K.

If section 573 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

[F1516576ATemporary non-residentsU.K.

(1)This section applies if a person is temporarily non-resident.

(2)Any relevant withdrawals within subsection (3) are to be treated for the purposes of section 575 as if they arose in the period of return [F1517, but only if the total amount of—

(a)the relevant withdrawals within subsection (3), and

(b)the relevant withdrawals (as defined by section 579CA(4)) within section 579CA(3) for the same temporary period of non-residence,

exceeds £100,000].

(3)A relevant withdrawal is within this subsection if—

(a)it is paid to the person in the temporary period of non-residence, and

(b)ignoring this section, it is not chargeable to tax under this Part (or would not be if a DTR claim were made in respect of it).

[F1518(4)A “relevant withdrawal” is an amount paid under a relevant non-UK scheme that—

(a)is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be income withdrawal (within the meaning of paragraph 7 of Schedule 28 to FA 2004) paid to the person from the person's member's flexi-access drawdown fund in respect of the arrangement,

(b)is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be dependants' income withdrawal (within the meaning of paragraph 21 of Schedule 28 to FA 2004) paid to the person from the person's dependant's flexi-access drawdown fund in respect of the arrangement,

(c)is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be nominees' income withdrawal (within the meaning of paragraph 27D of Schedule 28 to FA 2004) paid to the person from the person's nominee's flexi-access drawdown fund in respect of the arrangement,

(d)is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be successors' income withdrawal (within the meaning of paragraph 27J of Schedule 28 to FA 2004) paid to the person from the person's successor's flexi-access drawdown fund in respect of the arrangement,

(e)is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a short-term annuity (within the meaning of paragraph 6 of Schedule 28 to FA 2004) purchased using sums or assets out of the person's member's flexi-access drawdown fund in respect of the arrangement,

(f)is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a dependants' short-term annuity (within the meaning of paragraph 20 of Schedule 28 to FA 2004) purchased using sums or assets out of the person's dependant's flexi-access drawdown fund in respect of the arrangement,

(g)is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a nominees' short-term annuity (within the meaning of paragraph 27C of Schedule 28 to FA 2004) purchased using sums or assets out of the person's nominee's flexi-access drawdown fund in respect of the arrangement,

(h)is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a successors' short-term annuity (within the meaning of paragraph 27H of Schedule 28 to FA 2004) purchased using sums or assets out of the person's successor's flexi-access drawdown fund in respect of the arrangement,

(i)is paid before 6 April 2015 to the person in respect of an arrangement relating to the person under the scheme which at the time of the payment was an arrangement to which section 165(3A) or 167(2A) of FA 2004 (flexible drawdown arrangements) applied and would, if the scheme had been a registered pension scheme, have been income withdrawal or dependants' income withdrawal (within the meaning of paragraphs 7 and 21 of Schedule 28 to FA 2004),

(j)is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme where—

(i)the payment would, if the scheme were a registered pension scheme, be of a lifetime annuity or dependants' annuity within paragraph 3(1A) or 17(1ZA), as the case may be, of Schedule 28 to FA 2004, and

(ii)the terms of the contract under which it is paid are such that there will or could be decreases in the amount of the annuity other than decreases which, if the scheme were a registered pension scheme, would be decreases from time to time allowed by regulations under paragraph 3(1)(d) or 17(1)(c), as the case may be, of Schedule 28 to FA 2004 (and any such regulations are to be treated as having effect for this purpose), or

(k)is a payment to the person under a money purchase arrangement relating to the person under the scheme that, if the scheme were a registered pension scheme, would be a payment to the person of a scheme pension that the person would for the purposes of Part 4 of FA 2004 be treated as having become entitled to at a time on or after 6 April 2015 when fewer than 11 other individuals were entitled to present payment of a scheme pension under the scheme.

(4A)For the purpose of determining whether the figure specified in subsection (2) is exceeded, any relevant withdrawal paid in a currency other than sterling is to be translated into sterling using the average exchange rate for the year ending with 31 March in the tax year in which the relevant withdrawal is paid.]

(5)If section 809B, 809D or 809E of ITA 2007 (remittance basis) [F1519applied] to the person for the year of return, any relevant withdrawal within subsection (3) that was remitted to the United Kingdom in the temporary period of non-residence is to be treated as remitted to the United Kingdom in the period of return.

(6)This section does not apply to a relevant withdrawal if—

(a)it is paid to or in respect of a relieved member of the scheme and is not referable to the member's UK tax-relieved fund under the scheme, or

(b)it is paid to or in respect of a transfer member of the scheme and is not referable to the member's relevant transfer fund under the scheme.

(7)Nothing in any double taxation relief arrangements is to be read as preventing the person from being chargeable to income tax in respect of any relevant withdrawal treated by virtue of this section as arising in the period of return (or as preventing a charge to that tax from arising as a result).

(8)Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains—

(a)when a person is to be regarded as “temporarily non-resident”, and

(b)what “the temporary period of non-residence” and “the period of return” mean.

(9)In this section—

  • “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

  • “DTR claim” means a claim for relief under section 6 of that Act;

  • [F1520“member's flexi-access drawdown fund” and “dependant's flexi-access drawdown fund” have the same meaning as in Part 4 of FA 2004 (see paragraphs 8A and 22A of Schedule 28 to FA 2004);]

  • “remitted to the United Kingdom” has the same meaning as in Chapter A1 of Part 14 of ITA 2007;

  • [F1521“scheme pension” means a scheme pension within the meaning of paragraph 2 of Schedule 28 to FA 2004 or a dependants' scheme pension within the meaning of paragraphs 16 to 16C of that Schedule;]

  • “the year of return” means the tax year that consists of or includes the period of return.

(10)The following expressions have the meaning given in Schedule 34 to FA 2004—

  • “relevant non-UK scheme” (see paragraph 1(5));

  • “relieved member” (see paragraph 1(7));

  • “transfer member” (see paragraph 1(8));

  • “member's UK tax-relieved fund” (see paragraph 3(2));

  • “member's relevant transfer fund” (see paragraph 4(2)).]

Textual Amendments

F1516S. 576A substituted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 116

F1517Words in s. 576A(2) inserted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 83(2)(5)

F1518S. 576A(4)(4A) substituted for s. 576A(4) (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 83(3)(5)

F1519Word in s. 576A(5) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(13)

F1520Words in s. 576A(9) substituted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 83(4)(a), (5)

F1521Words in s. 576A(9) inserted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 83(4)(b), (5)

Modifications etc. (not altering text)

C80S. 576A modified (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 84

C81S. 576A modified (with application in accordance with Sch. 3 para. 12(1)(2) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 12(1)

C82S. 576A modified (with application in accordance with Sch. 4 para. 10(1)(4) of the amending Act) by Finance Act 2017 (c. 10), Sch. 4 para. 10

C83S. 576A modified (with application in accordance with Sch. 3 para. 11(1)(2) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 11(1)

C84S. 576A modified (with application in accordance with Sch. 4 para. 9(1)(4) of the amending Act) by Finance Act 2017 (c. 10), Sch. 4 para. 9

Chapter 5U.K.United Kingdom social security pensions

577United Kingdom social security pensionsU.K.

(1)This section applies to—

  • the state pension,

  • graduated retirement benefit,

  • industrial death benefit,

  • widowed mother’s allowance,

  • widowed parent’s allowance, and

  • widow’s pension.

[F1522(1A)But this section does not apply to any social security pension lump sum (within the meaning of section 7 of F(No.2)A 2005).]

(2)In this section—

  • “state pension” means any pension payable under—

    (za)

    [F1523any provision of Part 1 of the Pensions Act 2014 or any corresponding provision under the law of Northern Ireland,]

    (a)

    section 44, 48A, [F152448AA,] 48B, 48BB, 51 or 78 of SSCBA 1992, or

    (b)

    section 44, [F152548A], 48B, 48BB, 51 or 78 of SSCB(NI)A 1992 [F1526or any provision under the law of Northern Ireland that corresponds to section 48AA of SSCBA 1992];

  • “graduated retirement benefit” means any benefit payable under—

    (a)

    section 36 or 37 of the National Insurance Act 1965 (c. 51), or

    (b)

    section 35 or 36 of the National Insurance Act (Northern Ireland) 1966 (c. 6 (N.I.));

  • “industrial death benefit” means any benefit payable under—

    (a)

    section 94 of, and Part 6 of Schedule 7 to, SSCBA 1992, or

    (b)

    section 94 of, and Part 6 of Schedule 7 to, SSCB(NI)A 1992;

  • “widowed mother’s allowance” means any allowance payable under—

    (a)

    section 37 of SSCBA 1992, or

    (b)

    section 37 of SSCB(NI)A 1992;

  • “widowed parent’s allowance” means any allowance payable under—

    (a)

    section 39A of SSCBA 1992, or

    (b)

    section 39A of SSCB(NI)A 1992;

  • “widow’s pension” means any pension payable under—

    (a)

    section 38 of SSCBA 1992, or

    (b)

    section 38 of SSCB(NI)A 1992.

F1527(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Chapter 17 of this Part provides a partial exemption for a pension to which this section applies in respect of any part of the pension which is attributable to an increase in respect of a child (see section 645).

Textual Amendments

F1522S. 577(1A) inserted (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 10(2)

F1523Words in s. 577(2) inserted (6.4.2016) by Pensions Act 2014 (c. 19), s. 56(4), Sch. 12 para. 45

F1524Word in s. 577 inserted (6.4.2016) by Pensions Act 2014 (c. 19), s. 56(4), Sch. 12 para. 74(a)

F1525Word in s. 577(2) substituted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 17 para. 9(4)(a)

F1526Words in s. 577 inserted (6.4.2016) by Pensions Act 2014 (c. 19), s. 56(4), Sch. 12 para. 74(b)

578Taxable pension incomeU.K.

If section 577 applies, the taxable pension income for a tax year is the full amount of the pension, benefit or allowance accruing in that year irrespective of when any amount is actually paid.

579Person liable for taxU.K.

If section 577 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension, benefit or allowance.

[F1528Chapter 5AU.K.PENSIONS UNDER REGISTERED PENSION SCHEMES

Textual Amendments

F1528Pt. 9 Ch. 5A inserted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 6 (with Sch. 36)

Modifications etc. (not altering text)

C85Pt. 9 Ch. 5A restricted (6.4.2006) by Finance Act 2004 (c. 12), Sch. 36 para. 43(2) (with s. 283(5), Sch. 36)

C86Pt. 9 Ch. 5A modified (6.4.2006) by Finance Act 2004 (c. 12), Sch. 36 paras. 44, 45 (with s. 283(5), Sch. 36)

C87Pt. 9 Ch. 5A modified (1.4.2012 being "the specified day", see S.I. 2012/687, 688 and 966) by The Postal Services Act 2011 (Taxation) Regulations 2012 (S.I. 2012/764), regs. 1(1), 23(2)

C88Pt. 9 Ch. 5A modified (1.4.2012 being "the specified day", see S.I. 2012/687, 688 and 966) by The Postal Services Act 2011 (Taxation) Regulations 2012 (S.I. 2012/764), regs. 1(1), 24

579APensionsU.K.

(1)This section applies to any pension under a registered pension scheme (but subject to subsection (2) [F1529and section 579CZA]).

(2)This section does not apply to a pension under a registered pension scheme if and to the extent that, when it is paid, a liability to the unauthorised payments charge arises in respect of the amount of the payment (see section 208 of FA 2004).

[F1530(3)Chapter 17 of this Part provides exemptions for certain annuities (see sections 646B and 646C: certain beneficiaries' annuities purchased out of unused or drawdown funds).]

Textual Amendments

F1529Words in s. 579A(1) inserted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(4)

F1530S. 579A(3) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 22

Modifications etc. (not altering text)

C90S. 579A applied (6.4.2023 for the tax year 2023-24 and subsequent tax years) by Finance (No. 2) Act 2023 (c. 30), s. 19(2)(8)

579BTaxable pension incomeU.K.

If section 579A applies, the taxable pension income for a tax year is the full amount of the pension under the registered pension scheme that accrues in that year irrespective of when any amount is actually paid [F1531This is subject to section 579CA.]

Textual Amendments

F1531Words in s. 579B inserted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 22(2)

579CPerson liable for taxU.K.

If section 579A applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension under the registered pension scheme.

[F1532579CZAExemption for beneficiaries' income withdrawal in some casesU.K.

(1)Section 579A does not apply to dependants' income withdrawal or nominees' income withdrawal if it is paid—

(a)in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death, and

(b)to a person from the person's—

(i)dependant's drawdown pension fund,

(ii)dependant's flexi-access drawdown fund, or

(iii)nominee's flexi-access drawdown fund,

in respect of a money purchase arrangement under a registered pension scheme.

(2)Section 579A does not apply to successors' income withdrawal if it is paid—

(a)in respect of a deceased beneficiary of a deceased member of a registered pension scheme where the beneficiary had not reached the age of 75 at the date of the beneficiary's death, and

(b)to a person from the person's successor's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme,

and here “beneficiary” means dependant, nominee or successor.

(3)Subsection (1) is subject to the following provisions of this section.

(4)Section 579A does apply to dependants' income withdrawal paid on or after 6 April 2015 to a person from the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme (“the drawdown fund”) if before 6 April 2015—

(a)any payment of dependants' income withdrawal was made from—

(i)the drawdown fund, or

(ii)any fund represented (to any extent) by the drawdown fund, or

(b)any payment was made of a dependants' short-term annuity purchased using sums or assets out of—

(i)the drawdown fund, or

(ii)any fund represented (to any extent) by the drawdown fund.

(5)Section 579A does apply to dependants' income withdrawal paid in respect of a deceased member of a registered pension scheme to a person from the person's dependant's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme (“the new fund”) if—

(a)any of the sums or assets that make up the new fund—

(i)became newly-designated dependant funds under paragraph 22A(2)(b) of Schedule 28 to FA 2004 or as a result of the operation of any of paragraphs 22B to 22D of that Schedule, or

(ii)arise, or (directly or indirectly) derive, from any such newly-designated dependant funds or from sums or assets which so arise or derive,

[F1533(b)before 6 April 2015—

(i)any payment of dependants' income withdrawal in respect of the deceased member was made to the person from, or

(ii)any payment in respect of the deceased member was made to the person of a dependants' short-term annuity purchased using sums or assets out of,

the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme, and]

(c)any of the sums or assets that made up that fund at the time of that payment to any extent make up, or are represented by sums or assets that to any extent make up, the new fund.

(6)Where relevant unused uncrystallised funds—

(a)are designated on or after 6 April 2015 as available for the payment of dependants' drawdown pension or nominees' drawdown pension, and

(b)as a result of the designation make up (to any extent) a person's dependant's flexi-access drawdown fund or nominee's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme, but

(c)are not so designated before the end of the relevant two-year period,

section 579A does apply to dependants' income withdrawal or nominees' income withdrawal paid to the person from the fund so far as it is paid in respect of sums or assets for the time being representing the whole or any part of those relevant unused uncrystallised funds.

(7)In this section—

  • “dependant”, “nominee” and “successor” have the meaning given (respectively) by paragraphs 15, 27A and 27F of Schedule 28 to FA 2004,

  • “dependant's drawdown pension fund”, “dependant's flexi-access drawdown fund”, “nominee's flexi-access drawdown fund” and “successor's flexi-access drawdown fund” have the meaning given (respectively) by paragraphs 22, 22A, 27E and 27K of Schedule 28 to FA 2004,

  • “money purchase arrangement” has the meaning given by section 152 of FA 2004, and

  • “the relevant two-year period”, in relation to relevant unused uncrystallised funds held for the purposes of a money purchase arrangement relating to a deceased individual under a registered pension scheme, means the period of two years beginning with the earlier of the day on which the scheme administrator of the scheme first knew of the individual's death and the day on which the scheme administrator could first reasonably have been expected to have known of it.

(8)For the purposes of this section, sums or assets held after the death of a member of a registered pension scheme for the purposes of a money purchase arrangement relating to the member under the scheme are “relevant unused uncrystallised funds” if—

(a)they are unused uncrystallised funds, and

(b)the member had not reached the age of 75 at the date of the member's death.

(9)Paragraph 27E(4) and (5) of Schedule 28 to FA 2004 (meaning of “unused uncrystallised funds”) apply for the purposes of subsection (8)(a).]

Textual Amendments

F1532S. 579CZA inserted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(5)

F1533S. 579CZA(5)(b) substituted (with effect in accordance with Sch. 4 para. 23(2) of the amending Act) by Finance Act 2015 (c. 11), Sch. 4 para. 23(1)

[F1534579CATemporary non-residentsU.K.

(1)This section applies if a person is temporarily non-resident.

(2)Any relevant withdrawals within subsection (3) are to be treated for the purposes of section 579B as if they accrued in the period of return [F1535, but only if the total amount of—

(a)the relevant withdrawals within subsection (3), and

(b)the relevant withdrawals (as defined by section 576A(4)) within section 576A(3) for the same temporary period of non-residence,

exceeds £100,000]

(3)A relevant withdrawal is within this subsection if—

(a)it is paid to the person in the temporary period of non-residence, and

(b)ignoring this section, it is not chargeable to tax under this Part (or would not be if a DTR claim were made in respect of it).

[F1536(4)A “relevant withdrawal” is—

(a)any income withdrawal paid to the person from a member's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(b)any dependants' income withdrawal paid to the person from a dependant's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(c)any nominees' income withdrawal paid to the person from a nominee's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(d)any successors' income withdrawal paid to the person from a successor's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(e)any payment to the person of a short-term annuity purchased using sums or assets out of a member's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(f)any payment to the person of a dependants' short-term annuity purchased using sums or assets out of a dependant's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(g)any payment to the person of a nominees' short-term annuity purchased using sums or assets out of a nominee's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(h)any payment to the person of a successors' short-term annuity purchased using sums or assets out of a successor's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme,

(i)any uncrystallised funds pension lump sum paid to the person in respect of an arrangement relating to the person under a registered pension scheme, but only so far as section 579A applies in relation to the sum (see section 636A),

(j)any income withdrawal, or dependants' income withdrawal, paid before 6 April 2015 to the person under a registered pension scheme in respect of an arrangement relating to the person under the scheme which at the time of the payment was an arrangement to which section 165(3A) or 167(2A) of FA 2004 applied (flexible drawdown arrangements),

(k)any payment to the person of a lifetime annuity or dependants' annuity where—

(i)the annuity is within paragraph 3(1A) or 17(1ZA), as the case may be, of Schedule 28 to FA 2004,

(ii)the terms of the contract under which the annuity is paid are such that there will or could be decreases in the amount of the annuity other than decreases from time to time allowed by regulations under paragraph 3(1)(d) or 17(1)(c), as the case may be, of Schedule 28 to FA 2004 (and any such regulations are to be treated as having effect for this purpose), and

(iii)the annuity is purchased using sums or assets held for the purposes of a registered pension scheme, F1537...

(l)any payment to the person of a scheme pension, or dependants' scheme pension, under a money purchase arrangement under a registered pension scheme where—

(i)the person first acquired an actual (rather than a prospective) right to receive the scheme pension on or after 6 April 2015,

(ii)when the person first acquired that actual right, fewer than 11 other individuals were entitled to the present payment of a scheme pension, or dependants' scheme pension, under the registered pension scheme, and

(iii)the scheme pension is not payable under an annuity contract treated under section 153(8) or (8A) of FA 2004 as having become a registered pension scheme[F1538, or

(m)any payment to the person of a lump sum to which section 579A applies by virtue of section 636A(4ZA).]

(4A)For the purpose of determining whether the figure specified in subsection (2) is exceeded, any relevant withdrawal paid in a currency other than sterling is to be translated into sterling using the average exchange rate for the year ending with 31 March in the tax year in which the relevant withdrawal is paid.]

(5)Nothing in any double taxation relief arrangements is to be read as preventing the person from being chargeable to income tax in respect of any relevant withdrawal treated by virtue of this section as accruing in the period of return (or as preventing a charge to that tax from arising as a result).

(6)Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains—

(a)when a person is to be regarded as “temporarily non-resident”, and

(b)what “the temporary period of non-residence” and “the period of return” mean.

(7)In this section—

  • “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

  • “DTR claim” means a claim for relief under section 6 of that Act;

  • [F1539“dependants' annuity”, “dependant's flexi-access drawdown fund”, “dependants' scheme pension”, “dependants' short-term annuity”, “lifetime annuity”, “member's flexi-access drawdown fund”, “money purchase arrangement”, “nominee's flexi-access drawdown fund”, “scheme pension”, “short-term annuity”, “successor's flexi-access drawdown fund” and “uncrystallised funds pension lump sum” have the same meaning as in Part 4 of FA 2004 (see section 152 of FA 2004 and paragraphs 2, 3, 6, 8A, 16 to 16C, 17, 20, 22A, 27E and 27K of Schedule 28, and paragraph 4A of Schedule 29, to FA 2004).]]

Textual Amendments

F1534S. 579CA substituted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 117

F1535Words in s. 579CA(2) inserted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 81(2)(5)

F1536S. 579CA(4)(4A) substituted for s. 579CA(4) (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 81(3)(5)

F1537Word in s. 579CA(4)(k) as substituted by paragraph 117 of Schedule 45 to the Finance Act 2013 omitted (with effect in accordance with s. 22(12) of the amending Act) by virtue of Finance (No. 2) Act 2015 (c. 33), s. 22(6)(a)

F1538S. 579CA(4)(m) and word as substituted by paragraph 117 of Schedule 45 to the Finance Act 2013 inserted (with effect in accordance with s. 22(12) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 22(6)(b)

F1539Words in s. 579CA(7) substituted (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 81(4)(5)

Modifications etc. (not altering text)

C91S. 579CA modified (6.4.2015) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 82

C92S. 579CA as it has effect if the year of departure is the tax year 2012-13 or an earlier tax year modified (with effect in accordance with s. 22(12) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 22(7)

[F1540579DInterpretationU.K.

In this Chapter—

  • “income withdrawal” has the meaning given by paragraph 7 of that Schedule;

  • [F1541“nominees' income withdrawal" has the meaning given by paragraph 27D of that Schedule;]

  • [F1541“successors' income withdrawal" has the meaning given by paragraph 27J of Schedule 28 to FA 2004.]

  • “pension under a registered pension scheme” includes—

    (a)

    an annuity under, or purchased with sums or assets held for the purposes of, or representing acquired rights under, a registered pension scheme, and

    (b)

    income withdrawal or dependants' income withdrawal [F1542, or nominees' income withdrawal or successors' income withdrawal,] under a registered pension scheme.]]

Textual Amendments

F1540S. 579D substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 22(4)

F1541Words in s. 579D inserted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(6)(a)

F1542Words in s. 579D inserted (with effect in accordance with Sch. 2 para. 25(7) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 25(6)(b)

F1543Chapter 6U.K.Approved retirement benefits schemes

Textual Amendments

F1543Pt. 9 Ch. 6 repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 7, Sch. 42 Pt. 3 (with Sch. 36)

Pensions and annuitiesU.K.

F1543580Pensions and annuitiesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1543581Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1543582Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unauthorised paymentsU.K.

F1543583Unauthorised paymentsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1543584Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1543585Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation etc.U.K.

F1543586Meaning of “retirement benefits scheme” etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1543587Application to marine pilots' benefit fundU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1543588Meaning of “employee” [F1544, “former civil partner] and “ex-spouse”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1543589RegulationsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1545Chapter 7U.K.Former approved superannuation funds

Textual Amendments

F1545Pt. 9 Ch. 7 repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 7, Sch. 42 Pt. 3 (with Sch. 36)

AnnuitiesU.K.

F1545590AnnuitiesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1545591Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1545592Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unauthorised paymentsU.K.

F1545593Unauthorised payments: application of section 583U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

InterpretationU.K.

F1545594Meaning of “former approved superannuation fund”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1546Chapter 8U.K.Approved personal pension schemes

Textual Amendments

F1546Pt. 9 Ch. 8 repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 7, Sch. 42 Pt. 3 (with Sch. 36)

AnnuitiesU.K.

F1546595AnnuitiesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1546596Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1546597Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income withdrawalsU.K.

F1546598Income withdrawalsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1546599Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1546600Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unauthorised personal pension paymentsU.K.

F1546601Unauthorised personal pension paymentsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1546602Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1546603Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

InterpretationU.K.

F1546604Meaning of “personal pension scheme” and related expressionsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1547Chapter 9U.K.Retirement annuity contracts

Textual Amendments

F1547Pt. 9 Ch. 9 repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 7, Sch. 42 Pt. 3 (with Sch. 36)

F1547605AnnuitiesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1547606Meaning of “retirement annuity contract”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1547607Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1547608Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 10U.K.Other employment-related annuities

609Annuities for the benefit of dependantsU.K.

(1)This section applies to any annuity which was granted for consideration consisting in whole or in part of sums [F1548—

(a)which, in the tax year 2012-13 or an earlier tax year, satisfied the conditions for relief under section 273 of ICTA or section 459 of ITA 2007 (obligatory contributions to secure an annuity for the benefit of dependants), or

(b)which fall within subsection (3)]

(2)But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

[F1549(3)A sum falls within this subsection if—

(a)in the tax year 2013-14 or a later tax year, the sum is paid by an individual, or is deducted from an individual's earnings, under an Act or the individual's terms and conditions of employment,

(b)the sum is for the purpose of—

(i)securing a deferred annuity after the individual's death for the individual's surviving spouse or civil partner, or

(ii)making provision after the individual's death for the individual's children, and

(c)the individual—

(i)is UK resident for the tax year in which the sum is paid or deducted, or

(ii)at any time in that tax year, falls within any of paragraphs (a) to (f) of section 460(3) of ITA 2007 (matters relating to residence).

(4)Subsection (3)(a) does not cover contributions paid by a person under—

(a)Part 1 of the Social Security Contributions and Benefits Act 1992, or

(b)Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

(5)In subsection (3)(a) “earnings” has the meaning given by section 62.]

Textual Amendments

F1548Words in s. 609(1) substituted (with effect in accordance with Sch. 39 para. 32(6) of the amending Act) by Finance Act 2012 (c. 14), Sch. 39 para. 32(4)

F1549S. 609(3)-(5) inserted (with effect in accordance with Sch. 39 para. 32(6) of the amending Act) by Finance Act 2012 (c. 14), Sch. 39 para. 32(5)

610Annuities under [F1550non-registered occupational pension] schemesU.K.

(1)This section applies to—

(a)any annuity paid under [F1551an occupational pension scheme that is not a registered pension scheme], and

(b)any annuity acquired using funds held for the purposes of [F1552such an occupational pension scheme].

(2)But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

(3)This section does not apply to an annuity to which [F1553Chapter 5A] of this Part applies.

[F1554(4)In this section “occupational pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(5) of that Act).]

Textual Amendments

F1550Words in s. 610 heading substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 8(5) (with Sch. 36)

F1551Words in s. 610(1)(a) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 8(2)(a) (with Sch. 36)

F1552Words in s. 610(1)(b) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 8(2)(b) (with Sch. 36)

F1553Words in s. 610(3) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 8(3) (with Sch. 36)

F1554S. 610(4) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 8(4) (with Sch. 36)

611Annuities in recognition of another’s servicesU.K.

(1)This section applies to any annuity purchased by any person in recognition of another person’s services in any office or employment.

(2)But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

(3)This section does not apply to an annuity to which [F1555Chapter 5A] of this Part applies.

(4)For the purposes of this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

Textual Amendments

F1555Words in s. 611(3) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 9 (with Sch. 36)

[F1556611AExemptions from sections 609 to 611U.K.

(1)Chapter 17 of this Part provides exemptions for certain annuities (see sections 646B to 646E: certain beneficiaries' annuities purchased out of unused or drawdown funds).

(2)See also paragraph 45A of Schedule 36 to FA 2004 (exemption in certain cases for payments on or after 6 April 2015 to beneficiaries under joint-life or similar annuities purchased before 6 April 2006).]

Textual Amendments

612Taxable pension income: UK annuitiesU.K.

(1)The taxable pension income for an annuity to which section 609, 610 or 611 applies is determined in accordance with this section if the annuity arises from a source in the United Kingdom.

(2)The taxable pension income for a tax year is the full amount of the annuity arising in that year.

613Taxable pension income: foreign annuitiesU.K.

(1)The taxable pension income for an annuity to which section 609, 610 or 611 applies is determined in accordance with this section if the annuity arises from a source outside the United Kingdom.

(2)The taxable pension income for a tax year is [F1557the full amount of the annuity arising in the tax year, but subject to [F1558subsection] (4).]

F1559[F1560(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)The annuity is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of [F1561ITTOIA 2005] (relevant foreign income: remittance basis and deductions and reliefs).

(5)But if the annuity arises in the Republic of Ireland, section 839 of that Act (annual payments payable out of relevant foreign income) applies with the omission of [F1562conditions B1 and B2 (and the reference to them in subsection (1))] and subsection (5)(a).

(6)See also Chapter 4 of that Part (unremittable income).]

Textual Amendments

F1558Word in s. 613(2) substituted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(b)(i)

F1559S. 613(3) omitted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by virtue of Finance Act 2017 (c. 10), Sch. 3 para. 2(2)

F1560S. 613(3)-(6) substituted for s. 613(3)(4) (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 607(3) (with Sch. 2)

F1561Words in s. 613(4) substituted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(b)(ii)

F1562Words in s. 613(5) substituted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(5)

614Person liable for taxU.K.

If section 609, 610 or 611 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the annuity.

Chapter 11U.K.Certain overseas government pensions paid in the UK

615Certain overseas government pensions paid in the United KingdomU.K.

(1)This section applies to a pension if conditions A, B and C are met.

(2)Condition A is that the pension—

(a)is payable—

(i)to a person who has been employed in overseas government service, or

(ii)to the widow, widower, [F1563surviving civil partner,] child, relative or dependant of a person who has been employed in overseas government service, and

(b)is payable in respect of that service.

(3)Condition B is that the pension—

(a)is payable in the United Kingdom, and

(b)is payable to a person who is resident in the United Kingdom.

(4)Condition C is that the pension is payable by or on behalf of the government of—

(a)a country which forms part of Her Majesty’s dominions,

(b)any other country which is for the time being mentioned in Schedule 3 to the British Nationality Act 1981 (c. 61), or

(c)any territory under Her Majesty’s protection.

(5)But condition C is not met if the pension is payable out of the public revenue of the United Kingdom or Northern Ireland.

(6)In condition A the references to a person being employed in overseas government service are to the person being employed outside the United Kingdom—

(a)in the service of the Crown, or

(b)in service under the government of a country or territory which falls within subsection (4).

(7)In this Chapter “pension” includes a pension which is paid voluntarily or is capable of being discontinued.

Textual Amendments

F1563Words in s. 615(2)(a)(ii) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 158

616Taxable pension incomeU.K.

If section 615 applies, the taxable pension income for a tax year is the full amount of the pension accruing in that year irrespective of when any amount is actually paid.

617Deduction allowed from taxable pension incomeU.K.

A deduction of 10% is allowed from an amount of taxable pension income determined under section 616 (see section 567).

618Person liable for taxU.K.

If section 615 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

Chapter 12U.K.House of Commons Members' Fund

619The House of Commons Members' FundU.K.

This section applies to any periodical payment granted out of—

(a)the House of Commons Members' Fund,

(b)sums appropriated from that Fund, or

(c)income from sums appropriated from that Fund.

620Meaning of “House of Commons Members' Fund”U.K.

In this Chapter “House of Commons Members' Fund” means the fund with that name [F1564specified in section 1 of the House of Commons Members' Fund Act 2016].

Textual Amendments

F1564Words in s. 620 substituted (12.8.2016) by House of Commons Members Fund Act 2016 (c. 18), ss. 8(1), 10

621Taxable pension incomeU.K.

If section 619 applies, the taxable pension income for a tax year is the total amount of the payments made in that year.

622Person liable for taxU.K.

If section 619 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the payments.

F1565Chapter 13U.K.Return of surplus employee additional voluntary contributions

Textual Amendments

F1565Pt. 9 Ch. 13 repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 10, Sch. 42 Pt. 3 (with Sch. 36 and with further transitional provisions in S.I. 2006/572, arts. 1(1), 38(3))

F1565623Return of surplus employee additional voluntary contributionsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1565624Taxable pension incomeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1565625Person liable for taxU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1565626Income tax treated as paidU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1565627Meaning of “grossing up”U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1565628InterpretationU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 14U.K.Pre-1973 pensions paid under the Overseas Pensions Act 1973

629Pre-1973 pensions paid under the Overseas Pensions Act 1973U.K.

(1)This section applies to a pension if—

(a)it is paid under section 1 of OPA 1973 (whether or not paid out of a fund established under a scheme made under that section),

(b)it is a pre-1973 pension, and

(c)it is paid to—

(i)the original pensioner, or

(ii)the widow or widower of the original pensioner.

(2)But this section does not apply to a part of a pension which is paid because the Pensions (Increase) Act 1971 (c. 56) applies to it (and accordingly section 569 applies to that part of the pension).

(3)Chapter 18 of this Part provides an exemption where a pension to which this section applies is paid to a person who is not resident in the United Kingdom (see sections 647 and 651).

630InterpretationU.K.

(1)For the purposes of this Chapter a person is the “original pensioner” in relation to a pension if—

(a)the pension is payable by virtue of the person’s service, and

(b)the person retired from that service before 6th April 1973.

(2)For the purposes of this Chapter a pension is a “pre-1973 pension” if, immediately before 6th April 1973—

(a)the pension was payable to—

(i)the original pensioner, or

(ii)the widow or widower of the original pensioner, and

(b)that person was resident in the United Kingdom.

631Taxable pension incomeU.K.

(1)If section 629 applies, the taxable pension income for a tax year is [F1566the full amount of the pension income arising in the tax year] .

[F1567(2)The full amount of the pension income arising in the tax year is to be calculated on the basis that the pension is 90% of its actual amount.

(3)The pension income is treated as relevant foreign income for the purposes of section 838 of that Act (expenses attributable to collection or payment of relevant foreign income).]

Textual Amendments

F1567S. 631(2)(3) substituted for s. 631(2) (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 608(3) (with Sch. 2)

632Person liable for taxU.K.

If section 629 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

Chapter 15U.K.Voluntary annual payments

633Voluntary annual paymentsU.K.

(1)This section applies to an annual payment which—

(a)is paid voluntarily, or

(b)is capable of being discontinued,

if conditions A and B are met.

(2)Condition A is that the payment is paid to—

(a)a former employee or a former office-holder,

(b)the widow or widower [F1568or surviving civil partner] of a former employee or former office-holder, or

(c)any child, relative or dependant of a former employee or a former office-holder.

(3)Condition B is that the payment is paid by or on behalf of—

(a)the person—

(i)who employed the former employee, or

(ii)under whom the former office-holder held the office, or

(b)the successors of that person.

(4)But this section applies to a payment which is paid by or on a behalf of a person who is outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

(5)In this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

Textual Amendments

634Taxable pension income: UK voluntary annual paymentsU.K.

(1)The taxable pension income for payments to which section 633 applies is determined in accordance with this section if the payments are made by or on behalf of a person who is in the United Kingdom.

(2)The taxable pension income for a tax year is the full amount of the payments accruing in that year irrespective of when any amount is actually paid.

635Taxable pension income: foreign voluntary annual paymentsU.K.

(1)The taxable pension income for payments to which section 633 applies is determined in accordance with this section if the payments are made by or on behalf of a person who is outside the United Kingdom.

(2)The taxable pension income for a tax year is [F1569the full amount of the pension income arising in the tax year, but subject to [F1570subsection] (4)] .

F1571[F1572(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)[F1573The full amount of the pension income arising in the tax year ] is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of [F1574ITTOIA 2005] (relevant foreign income: remittance basis and deductions and reliefs).

(5)But if that pension income arises in the Republic of Ireland, section 839 of that Act (annual payments payable out of relevant foreign income) applies with the omission of [F1575conditions B1 and B2 (and the reference to them in subsection (1))] and subsection (5)(a).

(6)See also Chapter 4 of that Part (unremittable income).]

Textual Amendments

F1570Word in s. 635(2) substituted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(c)(i)

F1571S. 635(3) omitted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by virtue of Finance Act 2017 (c. 10), Sch. 3 para. 2(3)

F1572S. 635(3)-(6) substituted for s. 635(3) (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 609(3) (with Sch. 2)

F1573Words in s. 635(4) substituted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(c)(ii)

F1574Words in s. 635(4) substituted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(4)(c)(iii)

F1575Words in s. 635(5) substituted (with effect in accordance with Sch. 3 para. 2(6) of the amending Act) by Finance Act 2017 (c. 10), Sch. 3 para. 2(5)

636Person liable for taxU.K.

If section 633 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the payment.

[F1576CHAPTER 15AU.K.Lump sums under registered pension schemes

Textual Amendments

F1576Pt. 9 Ch. 15A substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 41, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

Modifications etc. (not altering text)

C93Pt. 9 Ch. 15A modified (with effect in accordance with reg. 1(3) of the amending S.I.) by S.I. 2006/569, reg. 5(1) (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), reg. 10(2)(a))

C94Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2014 c. 26, Sch. 6 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 92(3), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 15, 17))

C95Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2016 c. 24, Sch. 4 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 93(3)(a), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 16(2), 17))

C96Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 6A (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 67, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

C97Pt. 9 Ch. 15A applied (with modifications) (6.4.2024 for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 19(1A)(1B) (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 76(3), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(7), 17)

C98Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2016 c. 24, Sch. 4 para. 9(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 93(4)(b), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 16(3), 17))

C99Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2013 c. 29, Sch. 22 para. 1(2) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 91(3), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 14, 17))

C100Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 7 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 68, 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(3), 17))

C101Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2011 c. 11, Sch. 18 para. 14(3) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 90(4), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 13, 17))

C102Pt. 9 Ch. 15A excluded (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 34 para. 5ZA (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 60(3), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

C103Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/572, arts. 25CA-25CC (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 95(5), 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17, 25(16)(17)) and S.I. 2024/1167, regs. 1(2)(3), 4(9)(10))

C104Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 18 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 75, 124 (with Sch. 9 paras. 125-132A)) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(6), 17))

C105Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 29A (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 85, 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

C106Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by S.I. 2006/207, reg. 18 (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 62(8), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4); and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

C107Pt. 9 Ch. 15A modified (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 12(3A)-(3H) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 71(2), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4; and (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17))

C108Pt. 9 Ch. 15A modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20B (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(10))

C109Pt. 9 Ch. 15A applied (with modifications) (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2010/1187, regs. 5-11( as amended) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 27(9)(b))

C110Pt. 9 Ch. 15A modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2006/572, art. 7 (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(3))

C111Pt. 9 Ch. 15A modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2010/1187, reg. 4 (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 27(3))

C112Pt. 9 Ch. 15A applied (with modifications) (18.11.2024 for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 34A (as inserted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 3(9) (with reg. 6))

C113Pt. 9 Ch. 15A applied (with modifications) (18.11.2024 for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 paras. 12, 12A (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(4)(5))

C114Pt. 9 Ch. 15A modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2006/575, reg. 42B (as substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 26(6))

C115Pt. 9 Ch. 15A modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20A (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(9))

C116Pt. 9 Ch. 15A modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20E (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 8(13))

F1576636A [F1577Exemptions and liabilities] for certain lump sums under registered pension schemesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1577Words in s. 636A heading substituted (with effect in accordance with Sch. 5 para. 4 of the amending Act) by Finance Act 2016 (c. 24), Sch. 5 para. 2(2)

F1576636AATaxable lump sum death benefitsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1576636BTrivial commutation and winding-up lump sumsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1576636CTrivial commutation and winding-up lump sum death benefitsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IntroductionU.K.

637IntroductionU.K.

(1)This Chapter makes provision about the income tax treatment of authorised lump sums and authorised lump sum death benefits.

(2)In this Chapter—

(a)“authorised lump sum” means a lump sum permitted by the lump sum rule in section 166 of FA 2004 to be paid by a registered pension scheme to a member of the scheme;

(b)“authorised lump sum death benefit” means a lump sum death benefit permitted by the lump sum death benefit rule in section 168 of that Act to be paid by a registered pension scheme in respect of a member of the scheme.

(3)Expressions used in this Chapter and Part 4 of FA 2004 (pensions etc) have the same meaning in this Chapter as in that Part.

Tax treatment of authorised lump sumsU.K.

637APension commencement lump sumsU.K.

No liability to income tax arises on a pension commencement lump sum paid under a registered pension scheme.

637BPension commencement excess lump sumsU.K.

A person to whom a pension commencement excess lump sum is paid under a registered pension scheme is treated as having taxable pension income for the tax year in which the payment is made equal to the amount of the lump sum.

637CSerious ill-health lump sumsU.K.

(1)Subject to subsections (2) and (4), no liability to income tax arises on a serious ill-health lump sum paid under a registered pension scheme.

(2)If—

(a)a serious ill-health lump sum is paid under a registered pension scheme to a member who (at the time of the payment) is under 75, and

(b)the lump sum exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)In subsection (2) “the permitted maximum”, in relation to a serious ill-health lump sum paid to a member, means so much of the member’s lump sum and death benefit allowance as is available [F1578on the member becoming] entitled to the lump sum (see section 637S).

(4)If a serious ill-health lump sum is paid under a registered pension scheme to a member who (at the time of the payment) is 75 or over, section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

Textual Amendments

F1578Words in s. 637C(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(2)

637DUncrystallised funds pension lump sumsU.K.

(1)Subject to subsection (2), where an uncrystallised funds pension lump sum is paid under a registered pension scheme—

(a)no liability to income tax arises on 25% of the lump sum, and

(b)section 579A (pensions) applies in relation to the remainder of the lump sum as it applies to any pension under a registered pension scheme.

(2)If—

(a)an uncrystallised funds pension lump sum is paid under a registered pension scheme, and

(b)25% of the lump sum is an amount that exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)In subsection (2) “the permitted maximum”, in relation to an uncrystallised funds pension lump sum paid to a member, means the lower of the following amounts—

(a)so much of the member’s lump sum allowance as is available [F1579on the member becoming] entitled to the lump sum (see section 637Q);

(b)so much of the member’s lump sum and death benefit allowance as is available [F1580on the member becoming] entitled to the lump sum (see section 637S).

Textual Amendments

F1579Words in s. 637D(3)(a) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(2)

F1580Words in s. 637D(3)(b) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(2)

637EShort service refund lump sumU.K.

A short service refund lump paid under a registered pension scheme is subject to income tax in accordance with section 205 of FA 2004 (charge to tax on scheme administrator in respect of such a lump sum) but not otherwise.

637FRefund of excess contributions lump sumsU.K.

No liability to income tax arises on a refund of excess contributions lump sum paid under a registered pension scheme.

637GTrivial commutation lump sums and winding-up lump sumsU.K.

(1)Subject to subsection (2), a member of a registered pension scheme to whom—

(a)a trivial commutation lump sum, or

(b)a winding-up lump sum,

is paid under the scheme is treated as having taxable pension income for the tax year in which the payment is made equal to the amount of the lump sum.

(2)If, immediately before the lump sum is paid, the member has uncrystallised rights under any one or more arrangements under the pension scheme, the amount of the taxable pension income [F1581—

(a)if all the member’s rights under the pension scheme are uncrystallised rights, is 75% of the lump sum, and

(b)otherwise,] is reduced by the tax-free element (if any).

(3)In subsection (2) “the tax-free element” means 25% of the value of any uncrystallised rights extinguished by the lump sum.

(4)In this section “uncrystallised rights” has the same meaning as in section 212 of FA 2004; and the value for the purposes of this section of any uncrystallised rights is to be calculated in accordance with that section.

Textual Amendments

Modifications etc. (not altering text)

C117S. 637G modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2006/572, art. 37 (as amended by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(22))

Tax treatment of authorised lump sum death benefitsU.K.

637HDefined benefits lump sum death benefitsU.K.

(1)Subject to subsections (2) to (6), no liability to income tax arises on a defined benefits lump sum death benefit paid under a registered pension scheme.

(2)If—

(a)a defined benefits lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is paid before the end of the relevant two year period, and

(c)the lump sum exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)If—

(a)a defined benefits lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(4)If—

(a)a defined benefits lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(5)If a defined benefits lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(6)If a defined benefits lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(7)In this section—

  • “non-qualifying person” has the same meaning as in section 206 of FA 2004;

  • “the permitted maximum”, in relation to a defined benefits lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available [F1582on the lump sum being] paid (see section 637S);

  • “qualifying person” means a person who is not a non-qualifying person;

  • “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it.

Textual Amendments

F1582Words in s. 637H(7) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(3)

Modifications etc. (not altering text)

C118S. 637H(2)-(4) modified (13.2.2025 with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 5

637IPension protection lump sum death benefitsU.K.

(1)Subject to subsections (2), (3) and (4) no liability to income tax arises on a pension protection lump sum death benefit paid under a registered pension scheme.

(2)If—

(a)a pension protection lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, and

(b)the lump sum exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)If a pension protection lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(4)If a pension protection lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(5)In this section—

  • “non-qualifying person” has the same meaning as in section 206 of FA 2004;

  • “the permitted maximum”, in relation to a pension protection lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available [F1583on the lump sum being] paid (see section 637S);

  • “qualifying person” means a person who is not a non-qualifying person.

Textual Amendments

F1583Words in s. 637I(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(3)

637JUncrystallised funds lump sum death benefitsU.K.

(1)Subject to subsections (2) to (6), no liability to income tax arises on an uncrystallised funds lump sum death benefit paid under a registered pension scheme.

(2)If—

(a)an uncrystallised funds lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is paid before the end of the relevant two year period, and

(c)the lump sum exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)If—

(a)an uncrystallised funds lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(4)If—

(a)an uncrystallised funds lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(5)If an uncrystallised funds lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(6)If an uncrystallised funds lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(7)In this section—

  • “non-qualifying person” has the same meaning as in section 206 of FA 2004;

  • “the permitted maximum”, in relation to an uncrystallised funds lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available [F1584on the lump sum being] paid (see section 637S);

  • “qualifying person” means a person who is not a non-qualifying person;

  • “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it.

Textual Amendments

F1584Words in s. 637J(7) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(3)

637KAnnuity protection lump sum death benefitsU.K.

(1)Subject to subsections (2), (3) and (4), no liability to income tax arises on an annuity protection lump sum death benefit paid under a registered pension scheme.

(2)If—

(a)an annuity protection lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75, and

(b)the lump sum exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)If an annuity protection lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(4)If an annuity protection lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(5)In this section—

  • “non-qualifying person” has the same meaning as in section 206 of FA 2004;

  • “the permitted maximum”, in relation to an annuity protection lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available [F1585on the lump sum being] paid (see section 637S);

  • “qualifying person” means a person who is not a non-qualifying person.

Textual Amendments

F1585Words in s. 637K(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(3)

637LDrawdown pension fund lump sum death benefitsU.K.

(1)Subject to subsections (2) to (6), no liability to income tax arises on a drawdown pension [F1586fund] lump sum death benefit paid under a registered pension scheme.

(2)If—

(a)a drawdown pension [F1587fund] lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is paid before the end of the relevant two year period, and

(c)the lump sum exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)If—

(a)a drawdown pension [F1588fund] lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(4)If—

(a)a drawdown pension [F1589fund] lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(5)If a drawdown pension [F1590fund] lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(6)If a drawdown pension [F1591fund] lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(7)A reference in this section to a “member”, in relation to a drawdown pension [F1592fund] lump sum death benefit under paragraph 17(2) of Schedule 29 to FA 2004 (lump sum payable on death of dependant of deceased member), is a reference to the dependant on whose death the lump sum is payable.

(8)In this section—

  • “non-qualifying person” has the same meaning as in section 206 of FA 2004;

  • “the permitted maximum”, in relation to a drawdown pension [F1593fund] lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available [F1594on the lump sum being] paid (see section 637S);

  • “qualifying person” means a person who is not a non-qualifying person;

  • “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it.

Textual Amendments

F1586Word in s. 637L(1) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1587Word in s. 637L(2)(a) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1588Word in s. 637L(3)(a) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1589Word in s. 637L(4)(a) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1590Word in s. 637L(5) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1591Word in s. 637L(6) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1592Word in s. 637L(7) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1593Word in s. 637L(8) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(4)

F1594Words in s. 637L(8) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(3)

637MFlexi-access drawdown lump sum death benefitsU.K.

(1)Subject to subsections (2) to (6), no liability to income tax arises on a flexi-access drawdown lump sum death benefit paid under a registered pension scheme.

(2)If—

(a)a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is paid before the end of the relevant two year period, and

(c)the lump sum exceeds the permitted maximum,

section 579A (pensions) applies to the excess as it applies to any pension under a registered pension scheme.

(3)If—

(a)a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(4)If—

(a)a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid in respect of a member who, on death, is under 75,

(b)the lump sum is not paid before the end of the relevant two year period, and

(c)the lump sum is paid to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(5)If a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a qualifying person,

section 579A (pensions) applies to the lump sum as it applies to any pension under a registered pension scheme.

(6)If a flexi-access drawdown lump sum death benefit under a registered pension scheme is paid—

(a)in respect of a member who, on death, is 75 or over, and

(b)to a non-qualifying person,

the lump sum is subject to income tax under section 206 of FA 2004 (special lump sum death benefits charge on scheme administrator) but not otherwise.

(7)A reference in this section to a “member”—

(a)in relation to a flexi-access drawdown lump sum death benefit under paragraph 17A(2) of Schedule 29 to FA 2004 (lump sum payable on death of dependant of deceased member), is a reference to the dependant on whose death the lump sum is payable;

(b)in relation to a flexi-access drawdown lump sum death benefit under paragraph 17A(3) or (4) of Schedule 29 to FA 2004 (lump sum payable on death of nominee or successor of deceased member), is a reference to the nominee or successor on whose death the lump sum is payable.

(8)In this section—

  • “non-qualifying person” has the same meaning as in section 206 of FA 2004;

  • “the permitted maximum”, in relation to a flexi-access drawdown lump sum death benefit paid in respect of a member, means so much of the member’s lump sum and death benefit allowance as is available [F1595on the lump sum being] paid (see section 637S);

  • “qualifying person” means a person who is not a non-qualifying person;

  • “the relevant two year period” means the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the member’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it.

Textual Amendments

F1595Words in s. 637M(8) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(3)

637NTrivial commutation lump sum death benefitsU.K.

A person to whom a trivial commutation lump sum death benefit is paid under a registered pension scheme is treated as having taxable pension income for the tax year in which the payment is made equal to the amount of the lump sum.

AllowancesU.K.

637PIndividual’s lump sum allowanceU.K.

An individual’s “lump sum allowance” is £268,275.

637QAvailability of individual’s lump sum allowanceU.K.

(1)This section is about the availability of an individual’s lump sum allowance on the occurrence of a relevant benefit crystallisation event (“the current event”).

(2)In this section—

(a)“relevant benefit crystallisation event”, in relation to an individual, means the individual becoming entitled to a relevant lump sum;

(b)“relevant lump sum” means—

(i)a pension commencement lump sum, or

(ii)an uncrystallised funds pension lump sum.

(3)If no relevant benefit crystallisation event has occurred in relation to the individual before the current event, the whole of the individual’s lump sum allowance is available.

(4)Otherwise, the amount of the individual’s lump sum allowance that is available is—

(a)so much of that allowance as is left after deducting the previously-used amount, or

(b)if none is left after deducting that amount, nil.

(5)For this purpose “the previously-used amount” is the aggregate of the non-taxable amounts in relation to each relevant benefit crystallisation event that has occurred in relation to the individual before the current event.

(6)In subsection (5) “non-taxable amount”, in relation to a relevant benefit crystallisation event, means so much (if any) of the relevant lump sum to which the event relates as [F1596is not, by virtue of any provision of this Chapter, taxable pension income] .

(7)A reference in this section to a relevant benefit crystallisation event is to a relevant benefit crystallisation event occurring on or after 6 April 2024.

(8)For transitional provision under which the amount of an individual’s lump sum allowance available on the occurrence of a relevant benefit crystallisation event may be reduced as a result of events occurring before 6 April 2024, see paragraph 125 of Schedule 9 to FA 2024.

Textual Amendments

F1596Words in s. 637Q(6) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(5)

Modifications etc. (not altering text)

C119S. 637Q applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20(1A) (as inserted by Finance Act 2024 (c. 3), Sch. 9 paras. 77(3), 124 (with Sch. 9 paras. 125-132)) (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(8)(b), 17)

637RIndividual’s lump sum and death benefit allowanceU.K.

An individual’s “lump sum and death benefit allowance” is £1,073,100.

Modifications etc. (not altering text)

C120S. 637R applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 19(2)(2A) (as substituted by Finance Act 2024 (c. 3), Sch. 9 paras. 76(4), 124 (with Sch. 9 paras. 125-132)) (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 17)

637SAvailability of individual’s lump sum and death benefit allowanceU.K.

(1)This section is about the availability of an individual’s lump sum and death benefit allowance on the occurrence of a relevant benefit crystallisation event (“the current event”).

(2)In this section—

(a)“relevant benefit crystallisation event”, in relation to an individual, means—

(i)the individual becoming entitled to a relevant lump sum, or

(ii)a person being paid a relevant lump sum death benefit in respect of the individual;

(b)“relevant lump sum” means—

(i)a pension commencement lump sum,

(ii)a serious ill-health lump sum, or

(iii)an uncrystallised funds pension lump sum;

(c)“relevant lump sum death benefit” means any authorised lump sum death benefit other than—

(i)a charity lump sum death benefit, or

(ii)a trivial commutation lump sum death benefit.

(3)If no relevant benefit crystallisation event has occurred in relation to the individual before the current event, the whole of the individual’s lump sum and death benefit allowance is available.

(4)Otherwise, the amount of the individual’s lump sum and death benefit allowance that is available is—

(a)so much of that allowance as is left after deducting the previously-used amount, or

(b)if none is left after deducting that amount, nil.

(5)For this purpose “the previously-used amount” is the aggregate of the non-taxable amounts in relation to each relevant benefit crystallisation event that has occurred in relation to the individual before the current event.

(6)In subsection (5) “non-taxable amount”, in relation to a relevant benefit crystallisation event, means so much (if any) of the relevant lump sum, or relevant lump sum death benefit, to which the event relates as [F1597is not, by virtue of any provision of this Chapter, taxable pension income] .

(7)Where more than one relevant benefit crystallisation event within subsection (2)(a)(i) occurs in relation to an individual on the same day, it is for the individual to decide the order in which they are to be treated as occurring for the purposes of this section.

F1598(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)A reference in this section to a relevant benefit crystallisation event is to a relevant benefit crystallisation event occurring on or after 6 April 2024.

(10)For transitional provision under which the amount of an individual’s lump sum and death benefit allowance available on the occurrence of a relevant benefit crystallisation event may be reduced as a result of events occurring before 6 April 2024, see paragraph 126 of Schedule 9 to FA 2024.

(11)For further transitional provision that may affect the operation of this section, see paragraph 20 of Schedule 36 to FA 2004 (pensions in payment before commencement of Part 4 of FA 2004).]

Textual Amendments

F1597Words in s. 637S(6) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(6)(a)

F1598S. 637S(8) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(6)(b)

Modifications etc. (not altering text)

C121S. 637S applied (with modifications) (for the tax year 2024-25 and subsequent tax years) by 2004 c. 12, Sch. 36 para. 20(2) (as amended by Finance Act 2024 (c. 3), Sch. 9 paras. 77(4)(a), 124 (with Sch. 9 paras. 125-132)) (as amended (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2024/1012, regs. 1(2)(3), 8(8)(c), 17)

[F1599637TSection 637S: multiple lump sum death benefits paidU.K.

(1)This section applies where two or more relevant benefit crystallisation events within section 637S(2)(a)(ii) occur in relation to an individual.

(2)The relevant benefit crystallisation events are to be treated for the purposes of section 637S as occurring simultaneously—

(a)immediately before the individual’s death, and

(b)immediately after any pension commencement lump sum to which the individual becomes entitled immediately before death by virtue of section 166(2) of FA 2004 (lump sum rule).

(3)In the application of section 637S for the purpose of determining how much of the individual’s lump sum and death benefit allowance is available on the occurrence of any of the relevant benefit crystallisation events mentioned in subsection (1)—

(a)the reference in subsection (3) of that section to the whole of the individual’s lump sum and death benefit allowance is to the relevant proportion of that allowance, and

(b)the reference in subsection (4) of that section to so much of the individual’s lump sum and death benefit allowance as is left after deducting the previously-used amount is to the relevant proportion of so much of that allowance as is left after deducting that amount.

(4)In subsection (3), “the relevant proportion” means—

where—

  • A is the amount of the lump sum death benefit the payment of which constitutes the relevant benefit crystallisation event in question;

  • B is the aggregate of the amounts of each lump sum death benefit the payment of which constitutes a relevant benefit crystallisation event mentioned in subsection (1).]

Textual Amendments

F1599S. 637T inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 3(7)

F1600Chapter 16U.K.Exemption for certain lump sums

Textual Amendments

F1600Pt. 9 Ch. 16 repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 12, Sch. 42 Pt. 3 (with Sch. 36)

Chapter 17U.K.Exemptions: any taxpayer

638Awards for braveryU.K.

(1)No liability to income tax arises on a pension or annuity if it is paid to the holder of an award for bravery in respect of the award.

(2)In this section “award for bravery” means—

  • the Victoria Cross,

  • the George Cross,

  • the Albert Medal,

  • the Edward Medal,

  • the Military Cross,

  • the Distinguished Flying Cross,

  • the Distinguished Conduct Medal,

  • the Conspicuous Gallantry Medal,

  • the Distinguished Service Medal,

  • the Military Medal,

  • the Distinguished Flying Medal.

639Pensions in respect of death due to military or war serviceU.K.

[F1601(1)]No liability to income tax arises on these pensions and allowances—

(a)a pension or allowance payable by or on behalf of [F1602the Ministry of Defence] under so much of [F1603instrument specified in subsection (2),] as relates to death due to—

(i)service in the armed forces of the Crown,

(ii)wartime service in the merchant navy, or

(iii)war injuries;

(b)a pension or allowance—

(i)payable by the Ministry of Defence in respect of death due to peacetime service in the armed forces of the Crown before 3rd September 1939, and

(ii)payable at rates, and subject to conditions, similar to those of a pension within paragraph (a);

(c)a pension or allowance—

(i)payable under the law of a country other than the United Kingdom, and

(ii)of a character substantially similar to a pension within paragraph (a) or (b).

[F1604(2)The instruments referred to in subsection (1)(a) are—

  • Defence (Local Defence Volunteers) Regulations 1940 (S.R. & O. 1940/748),

  • War Pensions (Coastguards) Scheme 1944 (S.R. & O. 1944/500),

  • War Pensions (Naval Auxiliary Personnel) Scheme 1964 (S.I. 1964/1985),

  • Pensions (Polish Forces) Scheme 1964 (S.I. 1964/2007),

  • War Pensions (Mercantile Marine) Scheme 1964 (S.I. 1964/2058),

  • Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Home Guard (1964 Cmnd. 2563),

  • Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Home Guard after 27th April 1952 (1964 Cmnd. 2564),

  • Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment (1971 Cmnd. 4567),

  • Personal Injuries (Civilians) Scheme 1983 (S.I. 1983/686),

  • Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983 (S.I. 1983/883).

(3)The Treasury may by order amend subsection (2).]

Textual Amendments

F1601S. 639 renumbered as s. 639(1) (retrospectively) by Finance Act 2005 (c. 7), s. 19(3)(8)

F1602Words in s. 639(a) substituted (retrospectively) by Finance Act 2005 (c. 7), s. 19(3)(a)(8)

F1603Words in s. 639(a) substituted (retrospectively) by Finance Act 2005 (c. 7), s. 19(3)(b)(8)

F1604S. 639(2)(3) inserted (retrospectively) by Finance Act 2005 (c. 7), s. 19(3)(8)

640Exemption under section 639 where income withheldU.K.

(1)This section applies if—

(a)an individual is entitled to both of the following—

(i)a pension or allowance mentioned in section 639 (“pension A”), and

(ii)any other pension or allowance (“pension B”), and

(b)the whole or a part of pension A is withheld because of the individual’s entitlement to pension B.

(2)In such a case, an amount of pension B equal to the withheld amount of pension A is treated for the purposes of section 639 as part of pension A.

[F1605640ALump sums provided under armed forces early departure schemeU.K.

No liability to income tax arises on a lump sum provided under a scheme established by the Armed Forces Early Departure Payments Scheme Order 2005 (S.I. 2005/437) [F1606or the Armed Forces Early Departure Payments Scheme Regulations 2014 (S.I. 2014/2328)].]

Textual Amendments

F1605S. 640A inserted (with effect in accordance with s. 19(9) of the amending Act) by Finance Act 2005 (c. 7), s. 19(5)

F1606Words in s. 640A inserted (1.4.2015) by Finance Act 2015 (c. 11), s. 15(1)(2)

641Wounds and disability pensionsU.K.

(1)No liability to income tax arises on—

(a)a wounds pension granted to a member of the armed forces of the Crown;

(b)retired pay of a disabled officer granted on account of medical unfitness attributable to or aggravated by service in the armed forces of the Crown;

(c)a disablement or disability pension granted to a member of the armed forces of the Crown, other than a commissioned officer, on account of medical unfitness attributable to or aggravated by service in the armed forces of the Crown;

(d)a disablement pension granted to a person who has been employed in the nursing services of any of the armed forces of the Crown on account of medical unfitness attributable to or aggravated by service in the armed forces of the Crown;

F1607(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)an injury or disablement pension payable under any War Risks Compensation Scheme for the Mercantile marine;

(g)a pension—

(i)granted to a person on account of disablement, and

(ii)payable under any scheme made under section 3, 4 or 5 of the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 (c. 83).

[F1608(h)a benefit under a scheme established by an order under section 1(2) of the Armed Forces (Pensions and Compensation) Act 2004 payable to a person by reason of his illness or injury—

(i)by way of a lump sum, or

(ii)following the termination of the person's service in the armed forces or reserve forces.]

(2)But if the Secretary of State certifies that a pension or retired pay of a kind listed in subsection (1) is only partly attributable to disablement or disability, that subsection applies only to the part attributable to disablement or disability.

Textual Amendments

F1607S. 641(1)(e) repealed (21.7.2008) by Statute Law (Repeals) Act 2008 (c. 12), Sch. 1 Pt. 1 Group 4

F1608S. 641(1)(h) inserted (with effect in accordance with s. 19(9) of the amending Act) by Finance Act 2005 (c. 7), s. 19(6)

642Compensation for National-Socialist persecutionU.K.

No liability to income tax arises on a pension or annuity which is payable under any special provision for victims of National-Socialist persecution which is made by the law of—

(a)the Federal Republic of Germany or any part of it, or

(b)Austria.

[F1609642ANetherlands Benefit Act for Victims of Persecution 1940-1945U.K.

No liability to income tax arises on a pension, annuity, allowance or other payment provided in accordance with the provisions of the scheme established under the law of the Netherlands and known as Wet uitkeringen vervolgingsslachtoffers 1940-1945.]

Textual Amendments

F1609S. 642A inserted (with effect in accordance with s. 23(2) of the amending Act) by Finance Act 2016 (c. 24), s. 23(1)

643Malawi, Trinidad and Tobago and Zambia government pensionsU.K.

(1)No liability to income tax arises on—

(a)a Malawi government pension,

(b)a Trinidad and Tobago government pension, or

(c)a Zambia government pension,

if conditions A, B and C are met.

(2)Condition A is that the pension is paid to—

(a)the original pensioner, or

(b)the widow or widower [F1610or surviving civil partner] of the original pensioner.

(3)Condition B is that the pension is now paid under section 1 of OPA 1973 (whether or not it is paid out of a fund established under a scheme made under that section).

(4)Condition C is that, at the time the pension is paid, provision is made by double taxation relief arrangements which would exempt the pension from income tax in the United Kingdom if the pension were still paid by the relevant government (rather than under section 1 of OPA 1973).

(5)Subsection (1) does not apply to any part of a pension which is paid because the Pensions (Increase) Act 1971 (c. 56) applies to it.

(6)In this section—

  • “double taxation relief arrangements” means arrangements [F1611which have effect under section 2(1) of TIOPA 2010;]

  • “Malawi government pension” means a pension payable by the government of Malawi for services rendered—

    (a)

    to the government of Malawi, or

    (b)

    to the government of the Federation of Rhodesia and Nyasaland,

    in the discharge of government functions;

  • “Trinidad and Tobago government pension” means a pension payable by the government of Trinidad and Tobago for services rendered to the government of Trinidad and Tobago in the discharge of governmental functions;

  • “Zambia government pension” means a pension payable by the government of Zambia for services rendered—

    (a)

    to the government of Zambia,

    (b)

    to the government of Northern Rhodesia, or

    (c)

    to the government of the Federation of Rhodesia and Nyasaland,

    in the discharge of governmental functions.

(7)For the purposes of this section a person is the “original pensioner” in relation to a pension if—

(a)the pension is payable by virtue of the person’s service, and

(b)the person retired from that service before 6th April 1973.

Textual Amendments

F1611Words in s. 643(6) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 60 (with Sch. 9 paras. 1-9, 22)

644Pensions payable where employment ceased due to disablementU.K.

(1)No liability to income tax arises on the exempt amount of a disablement pension.

(2)For the purposes of this section a pension is a “disablement pension” if—

(a)the pension is payable because a person has ceased to hold an employment or office because of disablement, and

(b)that disablement is attributable to—

(i)performance of the duties of the employment or office, or

(ii)war injuries.

But “disablement pension” does not include any pension to which section [F1612579A] applies.

(3)The exempt amount of a disablement pension is determined in accordance with the following steps.

Step 1

Determine what pension would have been payable if—

(a)the person had ceased to hold the employment or office because of the disablement mentioned in subsection (2)(a), but

(b)the disablement had not been attributable to—

(i) performance of the duties of the employment or office, or

(ii) war injuries.

Step 2

If no pension would have been payable, the exempt amount is the amount of the disablement pension.

If a pension of a smaller amount than the disablement pension would have been payable, the exempt amount is the amount by which the disablement pension exceeds the smaller amount.

In any other case, the exempt amount is nil.

(4)For the purposes of this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

Textual Amendments

F1612Word in s. 644(2) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 13 (with Sch. 36)

[F1613644AHealth and employment insurance paymentsU.K.

(1)No liability to income tax arises in respect of a pension or annuity payment if or to the extent that—

(a)were the payment an annual payment falling within Chapter 7 of Part 5 of ITTOIA 2005, it would be exempt from income tax under section 735 of that Act (health and employment insurance payments), and

(b)it meets conditions A and B.

(2)Condition A is that the payments are made—

(a)to a person (“the pensioner”) who made payments or contributions in respect of premiums under an insurance policy which another person took out wholly or partly for the pensioner's benefit, or

(b)to the pensioner's [F1614spouse or civil partner] .

(3)Condition B is that the payments are attributable on a just and reasonable basis to the payments or contributions in respect of premiums.]

Textual Amendments

F1614Words in s. 644A(2)(b) substituted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 161

645Social security pensions: increases in respect of childrenU.K.

(1)No liability to income tax arises on a part of a social security pension which is attributable to an increase in respect of a child.

(2)In this section “social security pension” means—

(a)any pension, benefit or allowance to which section 577 applies, and

(b)any pension, benefit or allowance which—

(i)is payable under the law of a country or territory outside the United Kingdom, and

(ii)is substantially similar in character to a pension, benefit or allowance to which section 577 applies.

646Former miners etc: coal and allowances in lieu of coalU.K.

(1)No liability to income tax arises on—

(a)the provision of coal or smokeless fuel—

(i)to a former colliery worker, or

(ii)to the widow or widower [F1615or surviving civil partner] of a former colliery worker, or

(b)any allowance paid to such a person in lieu of such provision,

if the condition in subsection (2) is met.

(2)That condition is that the amount of coal or fuel provided or in respect of which the allowance is paid does not substantially exceed the amount reasonably required for personal use.

(3)That condition is assumed to be met unless the contrary is shown.

(4)In this section “former colliery worker” means—

(a)any person who has ceased to be employed as a coal miner, or

(b)any other person who has ceased to be employed at or about a colliery otherwise than in clerical, administrative or technical work.

Textual Amendments

F1615Words in s. 646(1)(a)(ii) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 162

[F1616646AForeign pensions of consular employeesU.K.

(1)No liability to income tax arises in respect of foreign pension income of a consular officer or employee in the United Kingdom for a foreign state if—

(a)Her Majesty by Order in Council directs that this section applies to the foreign state for the purpose of giving effect to a reciprocal arrangement with that state, and

(b)the officer or employee meets conditions A to C.

(2)Condition A is that the officer or employee is not—

(a)a British citizen,

(b)a British overseas territories citizen,

(c)a British National (Overseas), or

(d)a British Overseas citizen.

(3)Condition B is that the officer or employee is not engaged in any trade, profession, vocation or employment in the United Kingdom, otherwise than as a consular officer or employee of the state in question.

(4)Condition C is that the officer or employee—

(a)is a permanent employee of that state, or

(b)was not ordinarily resident in the United Kingdom immediately before becoming a consular officer or employee in the United Kingdom of that state.

(5)In this section—

  • “consular officer or employee” includes any person employed for the purposes of the official business of a consular officer at—

    (a)

    any consulate,

    (b)

    any consular establishment, or

    (c)

    any other premises used for those purposes,

  • “foreign pension income” means—

    (a)

    income to which section 573 or 629 applies, and

    (b)

    income arising from a source outside the United Kingdom to which section 609, 610, 611 or 633 applies; and

  • “reciprocal agreement” has the same meaning as in section 302.

(6)Section 302(5) to (7) apply to an Order under subsection (1) and the operation of this section as they apply to an Order under section 302(1) and the operation of section 302.]

Textual Amendments

[F1617646BRegistered schemes: beneficiaries' annuities from unused fundsU.K.

(1)The charge to tax under this Part does not apply to a dependants' annuity, or nominees' annuity, payable to a person if—

(a)it is paid in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death,

(b)the member died on or after 3 December 2014,

(c)either—

(i)the annuity was purchased using unused drawdown funds or unused uncrystallised funds, or

(ii)the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity that was payable to the person by that other company, and was a dependants' annuity or nominees' annuity (as the case may be) purchased as mentioned in sub-paragraph (i) or this sub-paragraph, ceasing to be payable,

(d)in a case where the annuity is purchased as mentioned in paragraph (c)(i) and using (whether or not exclusively) unused uncrystallised funds, the person became entitled to it before the end of the period of two years beginning with the earlier of—

(i)the day on which the scheme administrator first knew of the member's death, and

(ii)the day on which the scheme administrator could first reasonably have been expected to know of the death,

(e)in a case where the annuity is purchased as mentioned in paragraph (c)(ii) and the prior annuity purchased as mentioned in paragraph (c)(i) was purchased using (whether or not exclusively) unused uncrystallised funds, the person became entitled to that prior annuity before the end of the period of two years specified in paragraph (d),

(f)no payment of the annuity is made before 6 April 2015, and

(g)in a case where the annuity is purchased as mentioned in paragraph (c)(ii), no payment is made before 6 April 2015 of—

(i)the prior annuity purchased as mentioned in paragraph (c)(i), and

(ii)any other annuity purchased as mentioned in paragraph (c)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(2)The charge to tax under this Part does not apply to a successor's annuity payable to a person if—

(a)it is paid in respect of a deceased member of a registered pension scheme,

(b)it is paid on the subsequent death of a dependant, nominee or successor of the member (“the beneficiary”),

(c)the beneficiary had not reached the age of 75 at the date of the beneficiary's death,

(d)the beneficiary died on or after 3 December 2014,

(e)either—

(i)the annuity was purchased using undrawn funds, or

(ii)the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity that was payable to the person by that other company, and was a successors' annuity purchased as mentioned in sub-paragraph (i) or this sub-paragraph, ceasing to be payable,

(f)no payment of the annuity is made before 6 April 2015, and

(g)in a case where the annuity is purchased as mentioned in paragraph (e)(ii), no payment is made before 6 April 2015 of—

(i)the prior annuity purchased as mentioned in paragraph (e)(i), and

(ii)any other annuity purchased as mentioned in paragraph (e)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(3)The charge to tax under this Part does not apply to a dependants' annuity or nominees' annuity payable to a person if—

(a)it is paid in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death,

(b)the member died on or after 3 December 2014,

(c)the annuity—

(i)was purchased together with a lifetime annuity payable to the member, or

(ii)was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity that was payable to the person by that other company, and was a dependants' annuity or nominees' annuity (as the case may be) purchased as mentioned in sub-paragraph (i) or this sub-paragraph, ceasing to be payable,

(d)no payment of the annuity is made before 6 April 2015, and

(e)in a case where the annuity is purchased as mentioned in paragraph (c)(ii), no payment is made before 6 April 2015 of—

(i)the prior annuity purchased as mentioned in paragraph (c)(i), and

(ii)any other annuity purchased as mentioned in paragraph (c)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(4)The charge to tax under this Part does not apply to payments to a person of a lifetime annuity if—

(a)the payments are payable to the person under pension rule 2 (see section 165 of FA 2004),

(b)either—

(i)a member of a registered pension scheme was entitled to be paid the annuity immediately before the member's death, or

(ii)the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity to which there was entitlement as mentioned in sub-paragraph (i), or which was purchased as mentioned in this sub-paragraph, ceasing to be payable,

(c)the member had not reached the age of 75 at the date of the member's death,

(d)the member died on or after 3 December 2014,

(e)any payment of the annuity made before 6 April 2015 is made to the member, and

(f)in a case where the annuity is one purchased as mentioned in paragraph (b)(ii), any payment made before 6 April 2015—

(i)of the prior annuity to which there is entitlement as mentioned in paragraph (b)(i), or

(ii)of any other annuity purchased as mentioned in paragraph (b)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity,

is made to the member.

(5)Paragraph 27E(3) to (5) of Schedule 28 to FA 2004 (meaning of “unused drawdown funds” and “unused uncrystallised funds”) apply for the purposes of subsection (1).

(6)Paragraph 27FA(2) of Schedule 28 to FA 2004 (meaning of “undrawn funds”) applies for the purposes of subsection (2)(e).

(7)For the purposes of subsection (3)(c), a dependants' annuity or nominees' annuity is purchased together with a lifetime annuity if the dependants' annuity or nominees' annuity (as the case may be) is related to the lifetime annuity, and paragraph 3(4A) and (4B) of Schedule 29 to FA 2004 (meaning of “related”) apply for the purposes of this subsection.

(8)For the purposes of this section, a person becomes entitled to an annuity when the person first acquires an actual (rather than a prospective right) to receive the annuity.

Textual Amendments

F1617Ss. 646B-646F inserted (with effect in accordance with Sch. 4 para. 17(2) of the amending Act) by Finance Act 2015 (c. 11), Sch. 4 para. 17(1)

646CRegistered schemes: beneficiaries' annuities from drawdown fundsU.K.

(1)The charge to tax under this Part does not apply to a dependants' short-term annuity, nominees' short-term annuity, dependants' annuity or nominees' annuity paid to a person if—

(a)it is paid in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death,

(b)the member died on or after 3 December 2014, and

(c)the annuity was purchased using sums or assets out of the person's—

(i)dependant's drawdown pension fund,

(ii)dependant's flexi-access drawdown fund, or

(iii)nominee's flexi-access drawdown fund,

in respect of a money purchase arrangement under a registered pension scheme.

(2)The charge to tax under this Part does not apply to a successors' short-term annuity, or successors' annuity, paid to a person if—

(a)it is paid in respect of a deceased beneficiary of a deceased member of a registered pension scheme where the beneficiary had not reached the age of 75 at the date of the beneficiary's death,

(b)the beneficiary died on or after 3 December 2014, and

(c)the annuity was purchased using sums or assets out of the person's successor's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme,

and here “beneficiary” means dependant, nominee or successor.

(3)Subsection (1) is subject to subsections (4) to (6).

(4)Subsection (1) does not exempt payments on or after 6 April 2015 to a person of a dependants' short-term annuity, or dependants' annuity, payable in respect of a deceased member of a registered pension scheme and purchased using sums or assets out of the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme (“the drawdown fund”) if before 6 April 2015—

(a)any payment of the annuity was made,

(b)any payment was made of any other dependants' short-term annuity, or dependants' annuity, purchased using sums or assets out of—

(i)the drawdown fund, or

(ii)any fund represented (to any extent) by the drawdown fund, or

(c)any payment of dependants' income withdrawal was made from—

(i)the drawdown fund, or

(ii)any fund represented (to any extent) by the drawdown fund.

(5)Subsection (1) does not exempt payments to a person of a dependants' short-term annuity, or dependants' annuity, payable in respect of a deceased member of a registered pension scheme and purchased using sums or assets out of the person's dependant's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme (“the new fund”) if—

(a)any of the sums or assets that make up the new fund—

(i)became newly-designated dependant funds under paragraph 22A(2)(b) of Schedule 28 to FA 2004 or as a result of the operation of any of paragraphs 22B to 22D of that Schedule, or

(ii)arise, or (directly or indirectly) derive, from any such newly-designated funds or from sums or assets that to any extent so arise or derive,

(b)before 6 April 2015—

(i)any payment of dependants' income withdrawal in respect of the deceased member was made to the person from, or

(ii)any payment in respect of the deceased member was made to the person of a dependants' short-term annuity, or dependants' annuity, purchased using sums or assets out of,

the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme, and

(c)any of the sums or assets that made up that fund at the time of the payment make up, or are represented by sums or assets that to any extent make up, the new fund.

(6)Where relevant unused uncrystallised funds—

(a)are designated on or after 6 April 2015 as available for the payment of dependants' drawdown pension or nominees' drawdown pension, and

(b)as a result of the designation make up (to any extent) a person's dependant's flexi-access drawdown fund or nominee's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme, but

(c)are not so designated before the end of the relevant two-year period,

subsection (1) does not exempt payments to the person of a dependants' short-term annuity, nominees' short-term annuity, dependants' annuity or nominees' annuity if any of the sums or assets used to purchase the annuity represent, at the time of the purchase, the whole or any part of those relevant unused uncrystallised funds.

(7)In this section “the relevant two-year period”, in relation to relevant unused uncrystallised funds held for the purposes of a money purchase arrangement relating to a deceased individual under a registered pension scheme, means the period of two years beginning with the earlier of—

(a)the day on which the scheme administrator first knew of the individual's death, and

(b)the day on which the scheme administrator could first reasonably have been expected to know of it.

(8)For the purposes of this section, sums or assets held after the death of a member of a registered pension scheme for the purposes of a money purchase arrangement relating to the member under the scheme are “relevant unused uncrystallised funds” if—

(a)they are unused uncrystallised funds, and

(b)the member had not reached the age of 75 at the date of the member's death.

(9)Paragraph 27E(4) and (5) of Schedule 28 to FA 2004 (meaning of “unused uncrystallised funds”) apply for the purposes of subsection (8)(a).

Textual Amendments

F1617Ss. 646B-646F inserted (with effect in accordance with Sch. 4 para. 17(2) of the amending Act) by Finance Act 2015 (c. 11), Sch. 4 para. 17(1)

646DNon-registered schemes: beneficiaries' annuities from unused fundsU.K.

(1)The charge to tax under this Part does not apply to an annuity payable to a person if—

(a)it is paid in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, who had not reached the age of 75 at the date of the member's death,

(b)it would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be a dependants' annuity or nominees' annuity,

(c)the member died on or after 3 December 2014,

(d)either—

(i)the annuity was purchased using sums or assets that would, if the scheme were a registered pension scheme, be unused drawdown funds or unused uncrystallised funds, or

(ii)the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity—

(a)that was payable to the person by that other insurance company,

(b)that was purchased as mentioned in sub-paragraph (i) or this sub-paragraph, and

(c)that would have been a dependants' annuity or nominees' annuity (as the case may be) if the scheme had been a registered pension scheme,

ceasing to be payable,

(e)no payment of the annuity is made before 6 April 2015, and

(f)in a case where the annuity is purchased as mentioned in paragraph (d)(ii), no payment is made before 6 April 2015 of—

(i)the prior annuity purchased as mentioned in paragraph (d)(i), and

(ii)any other annuity purchased as mentioned in paragraph (d)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(2)The charge to tax under this Part does not apply to an annuity payable to a person if—

(a)it is paid in respect of a deceased member of an overseas pension scheme or relevant non-UK scheme,

(b)it is paid on the subsequent death of an individual who would, if the scheme were a registered pension scheme, be a dependant, nominee or successor of the member (“the beneficiary”),

(c)it would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be a successors' annuity,

(d)the beneficiary had not reached the age of 75 at the date of the beneficiary's death,

(e)the beneficiary died on or after 3 December 2014,

(f)either—

(i)the annuity was purchased using sums or assets that would, if the scheme were a registered pension scheme, be undrawn funds, or

(ii)the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity—

(a)that was payable to the person by that other insurance company,

(b)that was purchased as mentioned in sub-paragraph (i) or this sub-paragraph, and

(c)that would have been a successors' annuity if the scheme had been a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8),

ceasing to be payable,

(g)no payment of the annuity is made before 6 April 2015, and

(h)in a case where the annuity is purchased as mentioned in paragraph (f)(ii), no payment is made before 6 April 2015 of—

(i)the prior annuity purchased as mentioned in paragraph (f)(i), and

(ii)any other annuity purchased as mentioned in paragraph (f)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(3)The charge to tax under this Part does not apply to an annuity payable to a person if—

(a)it is paid in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, who had not reached the age of 75 at the date of the member's death,

(b)it would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be a dependants' annuity payable to a dependant of the member or a nominees' annuity payable to a nominee of the member,

(c)the member died on or after 3 December 2014,

(d)the annuity—

(i)was purchased together with an annuity payable to the member that would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), have been a lifetime annuity, or

(ii)was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity—

(a)that was payable to the person by that other insurance company, and

(b)that would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), have been a dependants' annuity or nominees' annuity (as the case may be) purchased as mentioned in sub-paragraph (i) or this sub-paragraph,

ceasing to be payable,

(e)no payment of the annuity is made before 6 April 2015, and

(f)in a case where the annuity is purchased as mentioned in paragraph (d)(ii), no payment is made before 6 April 2015 of—

(i)the prior annuity purchased as mentioned in paragraph (d)(i), and

(ii)any other annuity purchased as mentioned in paragraph (d)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity.

(4)The charge to tax under this Part does not apply to payments to a person of an annuity if—

(a)either—

(i)a member of an overseas pension scheme, or relevant non-UK scheme, was entitled to be paid the annuity immediately before the member's death, or

(ii)the annuity was purchased using sums or assets transferred to an insurance company by another insurance company in consequence of an annuity to which there was entitlement as mentioned in sub-paragraph (i), or which was purchased as mentioned in this sub-paragraph, ceasing to be payable,

(b)the payments would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by subsection (8), be—

(i)payments of a lifetime annuity, and

(ii)payable to the person under pension rule 2 (see section 165 of FA 2004),

(c)the member had not reached the age of 75 at the date of the member's death,

(d)the member died on or after 3 December 2014,

(e)any payment of the annuity made before 6 April 2015 is made to the member, and

(f)in a case where the annuity is one purchased as mentioned in paragraph (a)(ii), any payment made before 6 April 2015—

(i)of the prior annuity to which there is entitlement as mentioned in paragraph (a)(i), or

(ii)of any other annuity purchased as mentioned in paragraph (a)(ii) that is in the chain of annuities beginning with that prior annuity and ending with the annuity,

is made to the member.

(5)Paragraph 27E(3) to (5) of Schedule 28 to FA 2004 (meaning of “unused drawdown funds” and “unused uncrystallised funds”) apply for the purposes of subsection (1).

(6)Paragraph 27FA(2) of Schedule 28 to FA 2004 (meaning of “undrawn funds”) applies for the purposes of subsection (2)(f).

(7)For the purposes of subsection (3)(d), an annuity is purchased together with another if they are purchased—

(a)in the form of a joint life annuity, or

(b)separately in circumstances in which the day on which the one is purchased is no earlier than seven days before, and no later than seven days after, the day on which the other is purchased.

(8)In this section “insurance company” means—

(a)an insurance company as defined by section 275 of FA 2004, or

(b)a person—

(i)whose normal business includes the activity of providing annuities,

(ii)who carries on that activity in a country or territory outside the United Kingdom, and

(iii)whose carrying on of that activity in any particular country or territory outside the United Kingdom—

(a)is regulated in that country or territory, or

(b)is lawful under the law of that country or territory because it is regulated in another country or territory,

and for this purpose an activity is regulated in a country or territory if it is regulated by the government of that country or territory or by a body established under the law of that country or territory for the purpose of regulating the carrying-on of the activity.

Textual Amendments

F1617Ss. 646B-646F inserted (with effect in accordance with Sch. 4 para. 17(2) of the amending Act) by Finance Act 2015 (c. 11), Sch. 4 para. 17(1)

646ENon-registered schemes: beneficiaries' annuities from drawdown fundsU.K.

(1)The charge to tax under this Part does not apply to an annuity paid to a person if—

(a)it is paid in respect of a deceased member of an overseas pension scheme, or a relevant non-UK scheme, who had not reached the age of 75 at the date of the member's death,

(b)the person would, if that scheme were a registered pension scheme, be a dependant or nominee of the member,

(c)the annuity was purchased using sums or assets held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme, and those sums or assets would if that scheme were a registered pension scheme form the whole or part of the person's—

(i)dependant's drawdown pension fund,

(ii)dependant's flexi-access drawdown fund, or

(iii)nominee's flexi-access drawdown fund,

in respect of the arrangement,

(d)the annuity would, if the scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a dependants' short-term annuity or dependants' annuity or (as the case may be) a nominees' short-term annuity or nominees' annuity, and

(e)the member died on or after 3 December 2014.

(2)The charge to tax under this Part does not apply to an annuity payable to a person if—

(a)it is paid in respect of a deceased individual (“the beneficiary”) who had not reached the age of 75 at the date of the beneficiary's death,

(b)the beneficiary would have been a dependant, nominee or successor of a deceased member of an overseas pension scheme, or relevant non-UK scheme, if that scheme had been a registered pension scheme,

(c)the person would, if that scheme were a registered pension scheme, be a successor of the member,

(d)the annuity was purchased using sums or assets out of a fund held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme and would, if that scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a successors' short-term annuity, or successors' annuity, purchased using sums or assets out of the person's successor's flexi-access drawdown fund in respect of the arrangement, and

(e)the beneficiary died on or after 3 December 2014.

(3)Subsection (1) is subject to subsections (4) and (5).

(4)Subsection (1) does not exempt payments on or after 6 April 2015 to a person of an annuity payable in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, if—

(a)the annuity is purchased using sums or assets held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme,

(b)the annuity would, if that scheme were a registered pension scheme and if “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a dependants' short-term annuity or dependants' annuity,

(c)the annuity was purchased using sums or assets out of a fund that would, if that scheme were a registered pension scheme, be the person's dependant's drawdown pension fund in respect of the arrangement (“the drawdown fund”), and

(d)before 6 April 2015—

(i)any payment of the annuity was made,

(ii)any payment was made to the person of any other annuity purchased using sums or assets out of the drawdown fund or out of any fund represented (to any extent) by the drawdown fund, or

(iii)any payment was made to the person out of the drawdown fund, or out of any fund represented (to any extent) by the drawdown fund, of any pension that would be dependants' income withdrawal if the fund concerned were held for the purposes of a registered pension scheme.

(5)Subsection (1) does not exempt payments to a person of an annuity payable in respect of a deceased member of an overseas pension scheme, or relevant non-UK scheme, if—

(a)the annuity was purchased using sums or assets held for the purposes of a money purchase arrangement under an overseas pension scheme or relevant non-UK scheme and would, if that scheme were a registered pension scheme and “insurance company” in Part 4 of FA 2004 had the meaning given by section 646D(8), be a dependants' short-term annuity or dependants' annuity,

(b)the annuity was purchased using sums or assets out of a fund (“the new fund”) that would, if that scheme were a registered pension scheme, be the person's dependant's flexi-access drawdown fund in respect of the arrangement,

(c)before 6 April 2015—

(i)any payment of pension in respect of the deceased member was made to the person from a fund held for the purposes of a money purchase arrangement under an overseas pension scheme, or relevant non-UK scheme, that would be a payment of dependants' income withdrawal from the person's dependant's drawdown pension fund in respect of the arrangement if the scheme were a registered pension scheme, or

(ii)any payment in respect of the deceased member was made to the person of an annuity purchased using sums or assets out of a fund held for the purposes of a money purchase arrangement under an overseas pension scheme, or relevant non-UK scheme, that would be a payment of a dependants' short-term annuity, or dependants' annuity, purchased using sums or assets out of the person's dependant's drawdown pension fund in respect of the arrangement if the scheme were a registered pension scheme, and

(d)any of the sums or assets that made up the fund mentioned in paragraph (c)(i) or (ii) make up, or are represented by sums or assets that to any extent make up, the new fund.

Textual Amendments

F1617Ss. 646B-646F inserted (with effect in accordance with Sch. 4 para. 17(2) of the amending Act) by Finance Act 2015 (c. 11), Sch. 4 para. 17(1)

646FInterpretation of sections 646B to 646EU.K.

In sections 646B to 646E, an expression listed in the first column of the table has the meaning given by the provision of FA 2004 listed against that expression in the second column of the table.

ExpressionProvision of FA 2004
dependantSchedule 28, paragraph 15
dependants' annuitySchedule 28, paragraph 17
dependant's drawdown pension fundSchedule 28, paragraph 22
dependant's flexi-access drawdown fundSchedule 28, paragraph 22A
dependants' income withdrawalSchedule 28, paragraph 21
dependants' short-term annuitySchedule 28, paragraph 20
insurance company (in sections 646B and 646C)section 275
lifetime annuitySchedule 28, paragraph 3
money purchase arrangementsection 152
nomineeSchedule 28, paragraph 27A
nominees' annuitySchedule 28, paragraph 27AA
nominee's flexi-access drawdown fundSchedule 28, paragraph 27E
nominees' short-term annuitySchedule 28, paragraph 27C
overseas pension schemesection 150(1) and (7)
relevant non-UK schemeSchedule 34, paragraph 1(5)
successorSchedule 28, paragraph 27F
successors' annuitySchedule 28, paragraph 27FA
successor's flexi-access drawdown fundSchedule 28, paragraph 27K
successors' short-term annuitySchedule 28, paragraph 27H]

Textual Amendments

F1617Ss. 646B-646F inserted (with effect in accordance with Sch. 4 para. 17(2) of the amending Act) by Finance Act 2015 (c. 11), Sch. 4 para. 17(1)

Chapter 18U.K.Exemptions: Non-UK resident taxpayers

647Introduction and meaning of “foreign residence condition” etc.U.K.

(1)The provisions of this Part provide that no liability to income tax arises on certain kinds of pensions if the foreign residence condition is met.

(2)The foreign residence condition is met in relation to a pension if the pension is payable to a person who is not resident in the United Kingdom.

(3)For the purposes of the foreign residence condition, a person is taken to be not resident in the United Kingdom only if—

(a)a person makes a claim to [F111the Commissioners for Her Majesty’s Revenue and Customs] that the person is not resident, and

(b)the [F1618Commissioners] [F1619are] satisfied that the person is not resident.

(4)In this Chapter “pension” includes—

(a)a gratuity or any sum payable on or in respect of death,

(b)a return of contributions, and

(c)any interest or other addition included in a return of contributions.

Textual Amendments

648The Central African Pension FundU.K.

(1)No liability to income tax arises on a pension which is paid from the Central African Pension Fund if the foreign residence condition is met.

(2)In this section “the Central African Pension Fund” means the fund established under that name by section 24 of the Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963 (S.I. 1963/2085).

649Commonwealth government pensionsU.K.

(1)No liability to income tax arises on a pension paid out of a fund which is established—

(a)in the United Kingdom,

(b)by a Commonwealth government,

(c)for the sole purpose of providing pensions payable in respect of service under that government,

if the foreign residence condition is met.

(2)In this section “Commonwealth government” means—

(a)the government of a territory or country mentioned in subsection (3),

(b)the government of any part of a territory or country mentioned in subsection (3), or

(c)a government constituted for two or more of the territories or countries mentioned in subsection (3).

(3)The territories and countries referred to in subsection (2) are—

(a)a country mentioned in Schedule 3 to the British Nationality Act 1981 (c. 61) apart from Australia, Canada, New Zealand, India, Sri Lanka and Cyprus,

(b)an associated state,

(c)a British overseas territory,

(d)a protectorate,

(e)a protected state, and

(f)a United Kingdom trust territory.

(4)In subsection (2)(c) the reference to a government constituted for two or more of the territories or countries mentioned in subsection (3) includes a reference to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more of those territories or countries.

(5)In subsection (3)(f) “United Kingdom trust territory” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations.

650Oversea Superannuation SchemeU.K.

(1)No liability to income tax arises on a pension which is paid under the Oversea Superannuation Scheme (formerly known as the Colonial Superannuation Scheme) if the foreign residence condition is met.

(2)For the purposes of subsection (1) a pension is paid under the Oversea Superannuation Scheme if—

(a)the pension is paid under the Scheme as it has effect (by reason of section 2(4A) of OPA 1973) as a scheme under section 2 of OPA 1973, or

(b)the pension is paid under a scheme which—

(i)the Secretary of State has made under section 2(1) of OPA 1973, and

(ii)corresponds to the Oversea Superannuation Scheme.

651Overseas Pensions Act 1973U.K.

(1)No liability to income tax arises on a pension which is paid under section 1 of OPA 1973 if the foreign residence condition is met.

(2)Subsection (1) applies whether or not the pension is paid out of a fund established under a scheme made under section 1 of OPA 1973.

(3)But subsection (1) does not apply to any part of a pension paid because the Pensions (Increase) Acts apply to it.

(4)In this section “the Pensions (Increase) Acts” means—

(a)the Pensions (Increase) Act 1971 (c. 56), and

(b)any Act passed after that Act for purposes which correspond to the purposes of that Act.

652Overseas Service Act 1958U.K.

(1)No liability to income tax arises on a pension—

(a)which is paid under the authority of the Overseas Service Act 1958 (c. 14), and

(b)which the Secretary of State certifies to be attributable to the employment of a person in the public services of an overseas territory,

if the foreign residence condition is met.

(2)If the Secretary of State certifies that only part of a pension paid under the authority of the 1958 Act is attributable to the employment of a person in the public services of an overseas territory, subsection (1) applies only to that part of the pension.

(3)For the purposes of subsections (1) and (2) a pension is paid under the authority of the 1958 Act if condition A or B is met.

(4)Condition A is that the pension is paid under either of the following—

(a)an order made under section 2 of the 1958 Act, or

(b)section 4(2) of the 1958 Act,

as it has effect (by reason of section 2(3) of OPA 1973) as a scheme under section 2 of OPA 1973.

(5)Condition B is that the pension is paid under a scheme which the Secretary of State—

(a)has made under section 2(1) of OPA 1973, and

(b)has certified to correspond to—

(i)an order made under section 2 of the 1958 Act, or

(ii)section 4(2) of the 1958 Act.

(6)For the purposes of this section, a person is taken to be employed in the public service of an overseas territory at any time when—

(a)the person is employed in any capacity under the government of that territory, or under any municipal or other local authority in it,

(b)the person is employed in circumstances not falling within paragraph (a), by a body corporate established for any public purpose in that territory by an enactment of a legislature empowered to make laws for that territory, or

(c)the person is the holder of a public office in that territory in circumstances not falling within paragraph (a) or (b).

(7)In subsection (6) references to the government of an overseas territory include references to—

(a)a government constituted for two or more overseas territories, and

(b)any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories.

(8)In this section—

  • “the 1958 Act” means the Overseas Service Act 1958 (c. 14);

  • “certified” means certified for the purposes of ICTA 1970, ICTA or this Act.

653Overseas Service Pensions FundU.K.

(1)No liability to income tax arises on a pension which is paid out of the Overseas Service Pensions Fund if the foreign residence condition is met.

(2)In this section “the Overseas Service Pensions Fund” means the fund with that name established under section 7(1) of the Overseas Aid Act 1966 (c. 21).

(3)In this section “pension” includes not only the things mentioned in section 647(4) but also any sum payable in respect of ill-health.

654The Pensions (India, Pakistan and Burma) Act 1955U.K.

(1)No liability to income tax arises on a pension paid under the authority of the Pensions (India, Pakistan and Burma) Act 1955 (c. 22) if the foreign residence condition is met.

(2)A pension is paid under the authority of the 1955 Act if—

(a)the pension is paid under the 1955 Act as it has effect (by reason of section 2(3) of OPA 1973) as a scheme under section 2 of OPA 1973, or

(b)the pension is paid under a scheme which the Secretary of State—

(i)has made under section 2(1) of OPA 1973, and

(ii)has certified to correspond to the provision made under the 1955 Act.

(3)This section does not apply to any part of a pension paid because the Pensions (Increase) Acts apply to it.

(4)In this section—

  • “the 1955 Act” means the Pensions (India, Pakistan and Burma) Act 1955 (c. 22);

  • “certified” means certified for the purposes of ICTA 1970, ICTA or this Act;

  • “the Pensions (Increase) Acts” means—

    (a)

    the Pensions (Increase) Act 1971 (c. 56), and

    (b)

    any Act passed after that Act for purposes which correspond to the purposes of that Act.

Part 10U.K.Social security income

Chapter 1U.K.Introduction

655Structure of Part 10U.K.

(1)The structure of this Part is as follows—

Chapter 2—

(a)imposes the charge to tax on social security income, and

(b)provides for deductions to be made from the amount of income chargeable;

Chapter 3 sets out the UK social security benefits which are charged to tax under this Part and identifies—

(a)the amount of income chargeable to tax for a tax year, and

(b)the person liable to pay any tax charged;

Chapters 4 and 5 deal with exemptions from the charge to tax on UK social security benefits (whether under this Part or any other provision);

Chapters 6 and 7 make provision about foreign benefits.

[F1620Chapter 8 makes provision for the high income child benefit charge.]

(2)For other provisions about the taxation of social security benefits, see—

  • section 151 of FA 1996 (power for the Treasury to make orders about the taxation of benefits payable under Government pilot schemes);

  • [F1621section 781 of ITTOIA 2005 (exemption from income tax for payments under New Deal 50plus);

  • section 782 of ITTOIA 2005 (exemption from income tax for payments under employment zone programmes);]

  • [F1622section 44 of FA 2016 (tax treatment of supplementary welfare payments: Northern Ireland);]

  • [F1623section 13 of FA 2020 (power to exempt social security benefits from income tax)] [F1624;

  • section 27 of F(No. 2)A 2023 (power to clarify tax treatment of devolved social security benefits).]

(3)For the charge to tax on social security pensions, see Part 9 (pension income).

Textual Amendments

F1620Words in s. 655(1) inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 5(3)

F1622Words in s. 655(2) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 44(8)

F1623Words in s. 655(2) inserted (22.7.2020) by Finance Act 2020 (c. 14), s. 13(3)

F1624Words in s. 655(2) inserted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), s. 27(5)

Chapter 2U.K.Tax on social security income

656Nature of charge to tax on social security incomeU.K.

(1)The charge to tax on social security income is a charge to tax on that income excluding any exempt income.

(2)“Exempt income” is social security income on which no liability to income tax arises as a result of any provision of Chapter 4, 5 or 7 of this Part.

This definition applies for the purposes of this Part.

657Meaning of “social security income”, “taxable benefits” etc.U.K.

(1)This section defines—

  • “social security income” for the purposes of the Tax Acts, and

  • “taxable benefits”, “Table A” and “Table B” for the purposes of this Part.

(2)“Social security income” means—

(a)the United Kingdom social security benefits listed in Table A,

(b)the United Kingdom social security benefits listed in Table B,

(c)the foreign benefits to which section 678 applies, and

(d)the foreign benefits to which section 681(2) applies.

(3)“Taxable benefits” means—

(a)the United Kingdom social security benefits listed in Table A, and

(b)the foreign benefits to which section 678 applies.

(4)Subsections (2) and (3) are subject to section 660(2).

(5)“Table A” means Table A in section 660.

(6)“Table B” means Table B in section 677.

658Amount charged to taxU.K.

(1)The amount of social security income which is charged to tax under this Part for a particular tax year is as follows.

(2)In relation to a taxable benefit, the amount charged to tax is the net taxable social security income for the tax year.

(3)The net taxable social security income for a taxable benefit for a tax year is given by the formula—

where—

TSSI means the amount of taxable social security income for that benefit for that year (see subsections (4) to (7)), and

PGD means the amount of the deduction (if any) allowed from the benefit under Part 12 (payroll giving).

(4)In relation to bereavement allowance, carer’s allowance, [F1625carer's allowance supplement,] [F1626carer support payment,] [F1627contributory employment and support allowance,] incapacity benefit [F1628income support, welfare supplementary payments payable pursuant to the loss of contributory employment and support allowance and welfare supplementary payments payable pursuant to the loss of, or a reduction in the amount payable of, income support] (which are listed in Table A), the amount of taxable social security income is determined in accordance with section 661.

(5)In relation to any other benefit listed in Table A, the amount of taxable social security income is the amount of the benefit that falls to be charged to tax.

(6)In relation to foreign benefits to which section 678 applies, the amount of taxable social security income is determined in accordance with section 679.

(7)In determining for the purposes of this Act the amount of taxable social security income, any exempt income is to be excluded.

Textual Amendments

F1625Words in s. 658(4) inserted (12.2.2019) by Finance Act 2019 (c. 1), s. 12(3)

F1627Words in s. 658(4) inserted (18.3.2008 for specified purposes, 27.10.2008 in so far as not already in force) by Welfare Reform Act 2007 (c. 5), s. 70(2), Sch. 3 para. 24(2); S.I. 2008/787, art. 2(1)(4)(f), Sch.

F1628Words in s. 658(4) substituted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 4

659Person liable for taxU.K.

The person liable for any tax charged under this Part is identified in—

(a)section 662 (UK benefits), or

(b)section 680 (foreign benefits).

Chapter 3U.K.Taxable UK social security benefits

660Taxable benefits: UK benefits – Table AU.K.

(1)This is Table A—

TABLE A
TAXABLE UK BENEFITS
Social security benefitPayable under
F1629. . .F1629. . .F1629. . .
F1629. . .
Bereavement allowanceF1630. . .F1630. . .
F1631. . .F1631. . .
Carer’s allowance

SSCBA 1992

Section 70

SSCB(NI)A 1992

Section 70

[F1632Carer's allowance supplement SS(S)A 2018[F1633Section 81]]
[F1634Carer support payment CA(CSP)(S)R 2023Regulation 3]
[F1635[F1636Employment and support allowance]

WRA 2007

Section 1(2)(a)

Any provision made for Northern Ireland which corresponds to section 1(2)(a) of WRA 2007]

Incapacity benefit

SSCBA 1992

Section 30A(1) or (5), 40 or 41

SSCB(NI)A 1992

Section 30A(1) or (5), 40 or 41

Income support

SSCBA 1992

Section 124

SSCB(NI)A 1992

Section 123

Jobseeker’s allowance

JSA 1995

Section 1

JS(NI)O 1995

Article 3

[F1637[F1638Statutory] paternity pay SSCBA 1992Section 171ZA or 171ZB
Any provision made for Northern Ireland which corresponds to section 171ZA or 171ZB of SSCBA 1992.]
Statutory adoption pay

SSCBA 1992

Section 171ZL

Any provision made for Northern Ireland which corresponds to section 171ZL of SSCBA 1992

Statutory maternity pay

SSCBA 1992

Section 164

SSCB(NI)A 1992

Section 160

[F1639Statutory shared parental pay

SSCBA 1992

Any provision made for Northern Ireland which corresponds to section 171ZU or 171ZV of SSCBA 1992

Section 171ZU or 171ZV]
[F1640Statutory parental bereavement pay

SSCBA 1992

Any provision made for Northern Ireland which corresponds to section 171ZZ6 of SSCBA 1992

Section 171ZZ6]
[F1641Statutory neonatal care pay

SSCBA 1992

Section 171ZZ16

Any provision made for Northern Ireland which corresponds to section 171ZZ16 of SSCBA 1992]

F1642. . .F1642. . .F1642. . .
Statutory sick pay

SSCBA 1992

Section 151

SSCB(NI)A 1992

Section 147.

[F1643Welfare supplementary payment payable pursuant to the loss of carer’s allowance WSP(LCP)R(NI) 2016Regulation 4
Welfare supplementary payment payable pursuant to the loss of contributory employment and support allowanceWSPR(NI) 2016Regulation 7
Welfare supplementary payment payable pursuant to the loss of, or a reduction of the amount payable of, income supportWSP(LCP)R(NI) 2016Regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(c)) or regulation 12
WSP(LDRP)R(NI) 2016Regulation 4, 5 or 6
Welfare supplementary payment payable pursuant to a reduction of the amount payable of jobseekers allowanceWSP(LCP)R(NI) 2016Regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(a))
WSP(LDRP)R(NI) 2016Regulation 11, 12, 13, 14 or 15]

(2)A benefit listed below is not “social security income” or a “taxable benefit” if it is charged to tax under another Part of this Act—

  • F1644[F1645...

  • F1646... statutory paternity pay;

  • statutory adoption pay;

  • statutory maternity pay;]

  • [F1647statutory shared parental pay;]

  • [F1648statutory parental bereavement pay;]

  • [F1649statutory neonatal care pay;]

  • statutory sick pay.

Textual Amendments

F1630Words in s. 660(1) omitted (6.4.2017) by virtue of Pensions Act 2014 (c. 19), s. 56(1), Sch. 16 para. 47; S.I. 2017/297, art. 3(2) (with arts. 4, 5)

F1631Words in s. 660(1) omitted (N.I.) (6.4.2017) by virtue of Pensions Act (Northern Ireland) 2015 (c. 5), s. 53(1), Sch. 16 para. 46; S.R. 2017/44, art. 2(2) (with arts. 3, 4)

F1632Words in s. 660 Table A inserted (12.2.2019) by Finance Act 2019 (c. 1), s. 12(2)

F1633Words in s. 660 Table A substituted (with retrospective effect to 12.2.2019) by Finance Act 2024 (c. 3), s. 18

F1635Words in s. 660 Table A inserted (18.3.2008 for specified purposes, 27.10.2008 in so far as not already in force) by Welfare Reform Act 2007 (c. 5), s. 70(2), Sch. 3 para. 24(3); S.I. 2008/787, art. 2(1), Sch.; S.I. 2008/787, art. 2(4)(f)

F1638Words in s. 660(1) Table A substituted (5.4.2015) by Children and Families Act 2014 (c. 6), s. 139(6), Sch. 7 para. 62(3); S.I. 2014/1640, art. 7(jj) (with art. 16)

F1641Words in s. 660(1) Table A inserted (17.1.2025) by Neonatal Care (Leave and Pay) Act 2023 (c. 20), s. 3(3), Sch. para. 47(2); S.I. 2025/41, reg. 2; and corresponding words expressed to be inserted (20.3.2025) by Finance Act 2025 (c. 8), s. 36(2)(a)

F1643Words in s. 660(1) Table A inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 5

F1649Words in s. 660(2) inserted (17.1.2025) by Neonatal Care (Leave and Pay) Act 2023 (c. 20), s. 3(3), Sch. para. 47(3); S.I. 2025/41, reg. 2; and same words expressed to be inserted (20.3.2025) by Finance Act 2025 (c. 8), s. 36(2)(b)

661Taxable social security incomeU.K.

(1)This section applies in relation to each of the following taxable benefits listed in Table A—

  • bereavement allowance,

  • carer’s allowance,

  • [F1650carer's allowance supplement,]

  • [F1651carer support payment,]

  • [F1652contributory employment and support allowance,]

  • incapacity benefit, F1653...

  • income support.

  • [F1654welfare supplementary payments payable pursuant to the loss of contributory employment and support allowance, and

  • welfare supplementary payments payable pursuant to the loss of, or a reduction of the amount payable of, income support.]

(2)The amount of taxable social security income for a taxable benefit for a tax year is the full amount of the benefit accruing in the tax year irrespective of when any amount is actually paid.

Textual Amendments

F1650Words in s. 661(1) inserted (12.2.2019) by Finance Act 2019 (c. 1), s. 12(4)

F1652Words in s. 661 inserted (18.3.2008 for specified purposes, 27.10.2008 in so far as not already in force) by Welfare Reform Act 2007 (c. 5), s. 70(2), Sch. 3 para. 24(4); S.I. 2008/787, art. 2(1)(4)(f), Sch.

F1653Word in s. 661(1) omitted (with effect in accordance with reg. 2 of the amending S.I.) by virtue of The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 6(a)

F1654Words in s. 661(1) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 6(b)

662Person liable for taxU.K.

The person liable for any tax charged under this Part on a taxable benefit listed in Table A is the person receiving or entitled to the benefit.

Chapter 4U.K.Taxable UK social security benefits: exemptions

Modifications etc. (not altering text)

C122Pt. 10 Chs. 4, 5: power to amend conferred (22.7.2020) by Finance Act 2020 (c. 14), s. 13(1)(2)

Incapacity benefitU.K.

663Long-term incapacity benefit: previous entitlement to invalidity benefitU.K.

(1)No liability to income tax arises on long-term incapacity benefit if—

(a)a person is entitled to the benefit for a day of incapacity for work which falls in a period of incapacity for work which is treated for the purposes of that benefit as having begun before 13th April 1995, and

(b)the part of that period which is treated as having fallen before that date includes a day for which that person was entitled to invalidity benefit.

(2)In this section—

  • “invalidity benefit” means invalidity benefit under—

    (a)

    Part 2 of SSCBA 1992, or

    (b)

    Part 2 of SSCB(NI)A 1992;

  • “long-term incapacity benefit” means incapacity benefit payable under—

    (a)

    section 30A(5), 40 or 41 of SSCBA 1992, or

    (b)

    section 30A(5), 40 or 41 of SSCB(NI)A 1992.

664Short-term incapacity benefit not payable at the higher rateU.K.

(1)No liability to income tax arises on short-term incapacity benefit unless it is payable at the higher rate.

(2)In this section—

(a)“short-term incapacity benefit” means incapacity benefit payable under—

(i)section 30A(1) of SSCBA 1992, or

(ii)section 30A(1) of SSCB(NI)A 1992;

(b)the reference to short-term incapacity benefit payable at the higher rate is to be construed in accordance with—

(i)section 30B of SSCBA 1992, or

(ii)section 30B of SSCB(NI)A 1992.

Income support [F1655and relevant welfare supplementary payments] U.K.

Textual Amendments

F1655Words in s. 665 cross-heading inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 7

665[F1656Exempt unless payable to a person involved in a trade dispute]U.K.

(1)No liability to income tax arises on income support unless—

(a)the income support is payable to one member of a F1657... couple (“the claimant”), and

(b)section 126 of SSCBA 1992 or section 125 of SSCB(NI)A 1992 (trade disputes) applies to the claimant but not to the other member of the couple.

(2)In this section [F1658“couple” has] the same meaning as in section 137(1) of SSCBA 1992 or section 133(1) of SSCB(NI)A 1992.

[F1659(3)No liability to income tax arises on a relevant welfare supplementary payment unless the whole or part of the payment relates to a period in which the claimant was prevented from being entitled to jobseeker’s allowance by–

(a)section 14 of the Jobseekers Act 1995 (trade disputes), or

(b)Article 16 of the Jobseekers (Northern Ireland) Order 1995 (trade disputes)

or would have been so prevented if otherwise entitled to that benefit.

(4)Where part of a relevant welfare supplementary payment relates to such a period no liability to income tax arises on the part that does not relate to such a period.]

Textual Amendments

F1656S. 665 heading substituted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 8(2)

F1657Words in s. 665(1)(a) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 163(a)

F1659S. 665(3)(4) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 8(3)

666Child maintenance bonusU.K.

No liability to income tax arises on a part of income support which is attributable to a child maintenance bonus (within the meaning of section 10 of CSA 1995 or Article 4 of CS(NI)O 1995).

667Amounts in excess of taxable maximumU.K.

(1)If the amount of income support [F1660and relevant welfare supplementary payments] paid to a person (“the claimant”) for a week or a part of a week exceeds the claimant’s taxable maximum for that period, no liability to income tax arises on the excess.

[F1661(2)The claimant’s taxable maximum for a period is determined–

(a)under section 668(1), (2) and (3) where the claimant is a member of a couple, and

(b)under section 668(2A) and (3) where the claimant is not a member of a couple.]

Textual Amendments

F1660Words in s. 667(1) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 9(2)

F1661S. 667(2) substituted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 9(3)

668Taxable maximumU.K.

(1)A claimant’s taxable maximum for a week is determined under this subsection if the applicable amount for the purpose of calculating the income support consists only of an amount in respect of the relevant couple.

The taxable maximum is equal to one half of the applicable amount.

(2)A claimant’s taxable maximum for a week is determined under this subsection if the applicable amount includes amounts that are not in respect of the relevant couple.

The taxable maximum is equal to one half of the amount which is included in the applicable amount in respect of the relevant couple.

[F1662(2A)A claimant’s taxable maximum for a week is determined under this subsection if the claimant is not a member of a couple.

The taxable maximum is equal to the applicable amount.]

(3)A claimant’s taxable maximum for a part of a week is determined as follows—

Step 1

Assume that the income support is paid to the claimant for the whole of, rather than part of, the week.

Step 2

Determine under subsection (1) or (2) what the claimant’s taxable maximum for that week would be on that assumption.

Step 3

Determine the claimant’s taxable maximum for the part of the week using this formula—

where—

N is the number of days in the part of the week for which the claimant is actually paid the income support, and

TMW is the taxable maximum for the whole week determined under step 2.

Textual Amendments

F1662S. 668(2A) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 10

669InterpretationU.K.

[F1663(A1)In sections 665 and 667 “relevant welfare supplementary payment” means a payment to which a person is entitled under–

(a)regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(c)) or regulation 12 of WSP(LCP)R(NI) 2016, or

(b)regulation 4 , 5 or 6 of WSP(LDRP)R(NI) 2016.]

(1)In section 668, except in relation to Northern Ireland—

  • “applicable amount” means the amount prescribed in relation to income support in regulations made under section 135 of SSCBA 1992;

  • [F1664“couple” has the same meaning as in section 137(1) of SSCBA 1992]

(2)In section 668, in relation to Northern Ireland—

  • “applicable amount” means the amount prescribed in relation to income support in regulations made under section 131 of SSCB(NI)A 1992;

  • [F1665“couple” has the same meaning as in section 133(1) of SSCB(NI)A 1992]

(3)In section 668 “relevant couple”, in relation to a claimant, means the F1666... couple of which the claimant is a member.

Textual Amendments

F1663S. 669(A1) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 11

F1666Words in s. 669(3) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 164(c)

Jobseeker’s allowance [F1667and relevant welfare supplementary payments] U.K.

Textual Amendments

F1667Words in s. 670 cross-heading inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 12

670Child maintenance bonusU.K.

No liability to income tax arises on a part of a jobseeker’s allowance which is attributable to a child maintenance bonus (within the meaning of section 10 of CSA 1995 or Article 4 of CS(NI)O 1995).

671Amounts in excess of taxable maximumU.K.

(1)If the amount of jobseeker’s allowance [F1668and relevant welfare supplementary payments] paid to a person (“the claimant”) for a week or a part of a week exceeds the claimant’s taxable maximum for that period, no liability to income tax arises on the excess.

(2)The claimant’s taxable maximum for a period is determined under sections 672 to 674.

Textual Amendments

F1668Words in s. 671(1) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 13

672Taxable maximum: generalU.K.

(1)A claimant’s taxable maximum for a week is determined—

(a)under section 673, if the claimant is paid an income-based jobseeker’s allowance for that week, or

(b)under section 674, if the claimant is paid a contribution-based jobseeker’s allowance for that week.

(2)A claimant’s taxable maximum for a part of a week is determined as follows—

Step 1

Assume that the jobseeker’s allowance is paid to the claimant for the whole of, rather than part of, the week.

Step 2

Determine under section 673 or 674 what the claimant’s taxable maximum for that week would be on that assumption.

Step 3

Determine the claimant’s taxable maximum for the part of the week using this formula—

where—

N is the number of days in the part of the week for which the claimant is actually paid the jobseeker’s allowance, and

TMW is the taxable maximum for the whole week determined under step 2.

673Taxable maximum: income-based jobseeker’s allowanceU.K.

(1)A claimant’s taxable maximum for a week is determined under this section if—

(a)the claimant is paid an income-based jobseeker’s allowance for that week, or

(b)the claimant is assumed under section 672(2) to be paid an income-based jobseeker’s allowance for that week.

(2)If the claimant is not a member of a F1669... couple, the claimant’s taxable maximum for the week is equal to the age-related amount which would be applicable to the claimant if a contribution-based jobseeker’s allowance were payable to the claimant for that week.

(3)If the claimant is a member of a F1670... couple, the claimant’s taxable maximum for the week is equal to the portion of the applicable amount which is included in the jobseeker’s allowance in respect of the couple for that week.

(4)But if—

(a)the claimant is a member of a F1671... couple, and

(b)the other member of that couple is prevented by section 14 of JSA 1995 or Article 16 of JS(NI)O 1995 (trade disputes) from being entitled to a jobseeker’s allowance,

the claimant’s taxable maximum for that week is equal to half the portion of the applicable amount which is included in the jobseeker’s allowance in respect of the couple for that week.

Textual Amendments

F1669Words in s. 673(2) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 165

F1670Words in s. 673(3) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 165

F1671Words in s. 673(4)(a) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 165

674Taxable maximum: contribution-based jobseeker’s allowanceU.K.

(1)A claimant’s taxable maximum for a week is determined under this section if—

(a)the claimant is paid a contribution-based jobseeker’s allowance for that week, or

(b)the claimant is assumed under section 672(2) to be paid a contribution-based jobseeker’s allowance for that week.

(2)If the claimant is not a member of a F1672... couple, the claimant’s taxable maximum for the week is equal to the age-related amount which is applicable to the claimant for that week.

(3)If the claimant is a member of a F1673... couple, the claimant’s taxable maximum for the week is equal to the portion of the applicable amount which would be included in the jobseeker’s allowance in respect of the couple if an income-based jobseeker’s allowance were payable to the claimant for that week.

Textual Amendments

F1672Words in s. 674(2) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 166

F1673Words in s. 674(3) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 166

675InterpretationU.K.

[F1674(A1)In section 671 “relevant welfare supplementary payments” means payments to which a person is entitled under–

(a)regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(a)) of WSP(LCP)R(NI) 2016, or

(b)regulation 11, 12, 13, 14 or 15 of WSP(LDRP)R(NI) 2016.]

(1)In sections 671 to 674, except in relation to Northern Ireland—

  • “age-related amount” and “applicable amount” mean the amounts determined as such in accordance with regulations made under section 4 of JSA 1995;

  • F1675...

  • [F1676“contribution-based jobseeker’s allowance” means a jobseeker’s allowance entitlement to which is based on the claimant satisfying conditions which include those set out in Article 4 of the JS(NI)O 1995;]

  • F1675...

  • [F1676“income-based jobseeker’s allowance” means a jobseeker’s allowance entitlement to which is based on the claimant satisfying conditions which include those set out in Article 5 of the JS(NI)O 1995 or a joint-claim jobseeker’s allowance (which means a jobseeker’s allowance entitlement to which arises by virtue of Article 3(2B) of the JS(NI)O 1995);]

  • [F1677“couple” has the same meaning as in section 35(1) of JSA 1995]

(2)In sections 671 to 674, in relation to Northern Ireland—

  • “age-related amount” and “applicable amount” mean the amounts determined as such in accordance with regulations made under Article 6 of JS(NI)O 1995;

  • “contribution-based jobseeker’s allowance” and “income-based jobseeker’s allowance” have the same meaning as in Article 3(4) of JS(NI)O 1995;

  • [F1678“couple” has the same meaning as in Article 2(2) of JS(NI)O 1995]

Textual Amendments

F1674S. 675(A1) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 14

F1675Words in s. 675(2) omitted (coming into force in accordance with reg. 1(1) of the amending Rule) by virtue of The Universal Credit (Consequential, Supplementary, Incidental and Miscellaneous Provisions) Regulations (Northern Ireland) 2016 (S.R. 2016/236), regs. 1(1), 12(3)(a)

Increases in respect of childrenU.K.

676Increases in respect of childrenU.K.

No liability to income tax arises on a part of a taxable benefit listed in Table A which is attributable to an increase in respect of a child.

Chapter 5U.K.UK social security benefits wholly exempt from income tax

Modifications etc. (not altering text)

677UK social security benefits wholly exempt from tax: Table BU.K.

(1)No liability to income tax arises on the United Kingdom social security benefits listed in Table B.

TABLE B—PART 1
BENEFITS PAYABLE UNDER PRIMARY LEGISLATION [F1679AND NORTHERN IRELAND WELFARE SUPPLEMENTARY PAYMENTS] [F1680etc]
Social security benefitPayable under
[F1681Adult Disability Payment

SS(S)A 2018

Sections 24 and 31]

Attendance allowance

SSCBA 1992

SSCB(NI)A 1992

Section 64

Section 64

Back to work bonus

JSA 1995

JS(NI)O 1995

Section 26

Article 28

Bereavement payment

F1682...

F1683...

F1682...

F1683...

[F1684Bereavement support payment

PA 2014

Any provision made for Northern Ireland which corresponds to section 30 of PA 2014

Section 30]

[F1685Best start grant SS(S)A 2018Sections 24 and 32]
Child benefit

SSCBA 1992

SSCB(NI)A 1992

Section 141

Section 137

Child’s special allowance

SSCBA 1992

SSCB(NI)A 1992

Section 56

Section 56

Child tax credit

TCA 2002

Part 1

Council tax benefit

SSCBA 1992

Section 131

[F1686Disability assistance for children and young people

SS(S)A 2018

Sections 24 and 31]

Disability living allowance

SSCBA 1992

SSCB(NI)A 1992

Section 71

Section 71

[F1685Discretionary housing payment SS(S)A 2018Section 88]
[F1685Discretionary support award DSR(NI) 2016Regulation 2]
[F1685Flexible support fund payment ETA 1973Section 2]
[F1685Funeral expense assistanceSS(S)A 2018Sections 24 and 35]
Guardian’s allowance

SSCBA 1992

SSCB(NI)A 1992

Section 77

Section 77

[F1687Health in pregnancy grant

SSCBA 1992

SSCB(NI)A 1992

Section 140A

Section 136A]

Housing benefit

SSCBA 1992

SSCB(NI)A 1992

Section 130

Section 129

[F1688In-work credit

ETA 1973

ETA(NI) 1950

Section 2

Section 1

In-work emergency discretion fund payment

ETA 1973

Section 2

In-work emergency fund payment

ETA(NI) 1950

Section 1]

[F1689Income-related employment and support allowance

WRA 2007

Section 1(2)(b)

Any provision made for Northern Ireland which corresponds to section 1(2)(b) of WRA 2007]
Industrial injuries benefit (apart from industrial death benefit)

SSCBA 1992

SSCB(NI)A 1992

Section 94

Section 94

[F1686Job start

ETA 1973

Section 2]

[F1690Payments made under the Parental Transitions Support schemeLGSA 2003Section 20]
Payments out of the social fund

SSCB(NI)A 1992

Section 138

SSCBA 1992

Section 134

[F1691Payments to secure the provision of food and drink, free of charge, to a person to whom a school lunch must be provided under section 53(2) of the Education (Scotland) Act 1980 , Article 58 of the Education and Libraries (Northern Ireland) Order 1986 , section 512(3) of the Education Act 1996 or Article 15(2) of the Further Education (Northern Ireland) Order 1997 SW(S)A 1968Section 12
C(S)A 1995Section 22
LGSA 2003Section 20
GOWA 2006Section 60
FPA(NI) 2009Section 4
LGE(W)A 2021Section 24]
[F1685Payment under a council tax reduction scheme: England LGFA 1992Section 13A(2)]
[F1692Pension Age Disability PaymentSS(S)A 2018Sections 24 and 31]
Pensioner’s Christmas bonus

SSCBA 1992

SSCB(NI)A 1992

Section 148

Section 144

[F1693Personal independence payment WRA 2012Section 77
Any provision made for Northern Ireland which corresponds to section 77 of WRA 2012]
[F1688Return to work credit

ETA 1973

ETA(NI) 1950

Section 2

Section 1]

[F1694Scottish Adult Disability Living Allowance SS(S)A 2018Sections 24 and 31]
Severe disablement allowance

SSCBA 1992

SSCB(NI)A 1992

Section 68

Section 68

[F1695Short-term assistanceF1696 SS(S)A 2018F1697 Section 36]
[F1698State maternity allowance SSCBA 1992 Section 35 or 35B
Any provision made for Northern Ireland which corresponds to section 35 or 35B of SSCBA 1992]
State pension credit

SPCA 2002

SPCA(NI) 2002

Section 1

Section 1

[F1699Universal credit WRA 2012Part 1
Any provision made for Northern Ireland which corresponds to Part 1 of WRA 2012]
[F1700Welfare supplementary payment payable pursuant a reduction of the amount payable of housing benefit HB(WSP)R(NI) 2017Regulation 2
WSPR(NI) 2016Regulation 4
Welfare supplementary payment payable pursuant to a reduction of the amount payable of employment and support allowanceWSP(LCP)R(NI) 2016Regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(b))
SP(LDRP)R(NI) 2016Regulation 20, 21 or 22
Welfare supplementary payment payable pursuant to the loss of disability living allowanceWSP(LDLA)R(NI) 2016Regulation 4, 8, 13 or 14
Welfare supplementary payment payable pursuant to a reduction in the amount payable of state pension creditWSP(LCP)R(NI) 2016Regulation 16
Welfare supplementary payment payable pursuant to a reduction in the amount payable of working tax creditWSP(LDRP)R(NI) 2016Regulation 27 or 28
Welfare supplementary payment payable pursuant to a reduction in the amount payable of state pension tax creditWSP(LDRP)R(NI) 2016Regulation 33 or 34]
[F1701Winter heating assistanceF1702 SS(S)A 2018 Section 30]
Working tax credit

TCA 2002

Part 1

[F1685Young carer grant SS(S)A 2018Sections 24 and 28]
TABLE B — PART 2
BENEFITS PAYABLE UNDER REGULATIONS
Social security benefitPayable under regulations made under
F1703. . .

F1703...

F1703...

F1703. . .
[F1704Discretionary housing payment CSPSSA 2000Section 69]
[F1705Payments made under the Best Start Foods scheme SSA 1988Section 13]
[F1706Payments made under the Healthy Start scheme SSA 1988Section 13]
Payments to reduce under-occupation by housing benefit claimants

WRPA 1999

WRP(NI)O 1999

Section 79

Article 70

[F1707Payments to secure the provision of food and drink, free of charge, to a person to whom a school lunch must be provided under Article 58 of the Education and Libraries (Northern Ireland) Order 1986 or Article 15(2) of the Further Education (Northern Ireland) Order 1997 FAA(NI) 2009Section 2]
[F1704Payment under a council tax reduction scheme: WalesLGFA 1992Section 13A(4)]
[F1708Scottish child payment

SS(S)A 2018

Section 79]

(2)Industrial death benefit is charged to tax under Part 9 (see section 577).

(3)In this section “industrial death benefit” means any benefit payable under—

(a)section 94 of, and Part 6 of Schedule 7 to, SSCBA 1992, or

(b)section 94 of, and Part 6 of Schedule 7 to, SSCB(NI)A 1992.

Textual Amendments

F1679Words in s. 677(1) inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 15(a)

F1680Word in s. 677(1) Table B Pt. 1 heading inserted (12.2.2019) by Finance Act 2019 (c. 1), s. 12(6)

F1681Words in s. 677(1) Table B Pt. 1 inserted (with effect in accordance with reg. 3 of the amending S.I.) by The Income Tax (Exemption of Social Security Benefits) Regulations 2022 (S.I. 2022/529), regs. 1(1), 2

F1682Words in s. 677(1) Table B Pt. 1 omitted (6.4.2017) by virtue of Pensions Act 2014 (c. 19), s. 56(1), Sch. 16 para. 48; S.I. 2017/297, art. 3(2) (with arts. 4, 5)

F1683Words in s. 677(1) Table B Pt. 1 omitted (N.I.) (6.4.2017) by virtue of Pensions Act (Northern Ireland) 2015 (c. 5), s. 53(1), Sch. 16 para. 47; S.R. 2017/44, art. 2(2) (with arts. 3, 4)

F1684Words in s. 677(1) inserted (with effect in accordance with s. 16(4) of the amending Act) by Finance Act 2015 (c. 11), s. 16(2)

F1685Words in s. 677(1) Table B Pt. 1 inserted (12.2.2019) by Finance Act 2019 (c. 1), s. 12(5)

F1686Words in s. 677(1) Table B Pt. 1 inserted (6.4.2020 with effect in relation to the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 12(2)(4)

F1687Words in s. 677(1) Table B Pt. 1 inserted (1.1.2009) by Health and Social Care Act 2008 (c. 14), ss. 138(4), 170(3)(4); S.I. 2008/3137, art. 2

F1688Words in s. 677(1) Table B Pt. 1 inserted (with effect in accordance with s. 46(3) of the amending Act) by Finance Act 2008 (c. 9), s. 46(1)

F1689Words in s. 677(1) Table B Pt. 1 inserted (18.3.2008 for specified purposes) by Welfare Reform Act 2007 (c. 5), s. 70(2), Sch. 3 para. 24(5); S.I. 2008/787, art. 2(1), Sch.

F1691Words in s. 677(1) Table B Pt. 1 inserted (with effect in accordance with reg. 3(4) of the amending S.I.) by The Income Tax (Tax Treatment of Carer Support Payment and Exemption of Social Security Benefits) Regulations 2023 (S.I. 2023/1148), regs. 1(1), 3(2)(a)

F1693Words in s. 677(1) Table B Pt. 1 inserted (8.4.2013 for specified purposes, 10.6.2013 in so far as not already in force) by Welfare Reform Act 2012 (c. 5), s. 150(3), Sch. 9 para. 49; S.I. 2013/358, art. 7(1)(2)(k), Sch. 3; S.I. 2013/1250, art. 2

F1695Words in s. 677(1) Table B Pt. 1 inserted (with effect in accordance with reg. 3 of the amending S.I.) by The Income Tax (Exemption of Social Security Benefits) Regulations 2021 (S.I. 2021/1341), regs. 1(1), 2(a)

F1696At present, the Scottish Ministers have only legislated in relation to eligibility to short-term assistance in cases where, generally, a decision about an individual’s entitlement to child disability payment has been superseded, or the individual is awaiting a re-determination or appeal about child disability payment to be decided. The relevant rules are contained in the Disability Assistance for Children and Young People (Scotland) Regulations 2021 (S.S.I. 2021/174), which came into force on 26 July 2021.

F1697This abbreviation is defined, in Part 1 of Schedule 1 to ITEPA, as Social Security (Scotland) Act 2018.

F1699Words in s. 677(1) Table B Pt. 1 inserted (with effect in accordance with s. 13(2) of the amending Act) by Finance Act 2013 (c. 29), s. 13(1)

F1700Words in s. 677(1) Table B Pt. 1 inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 15(b)

F1701Words in s. 677(1) Table B Pt. 1 inserted (with effect in accordance with reg. 4 of the amending S.I.) by The Income Tax (Exemption of Social Security Benefits) Regulations 2021 (S.I. 2021/1341), regs. 1(1), 2(b)

F1702At present, the Scottish Ministers have only legislated in relation to eligibility to winter heating assistance for children and young people. The eligibility rules are set out in the Winter Heating Assistance for Children and Young People (Scotland) Regulations 2020 (S.S.I. 2020/352), which came into force on 9 November 2020.

F1703Words in s. 677(1) Table B Pt. 2 repealed (22.7.2004) by Finance Act 2004 (c. 12), Sch. 17 para. 9(5), Sch. 42 Pt. 2(12)

F1704Words in s. 677(1) Table B Pt. 2 inserted (12.2.2019) by Finance Act 2019 (c. 1), s. 12(7)

F1705Words in s. 677(1) Table B Pt. 2 inserted (with effect in accordance with reg. 3(4) of the amending S.I.) by The Income Tax (Tax Treatment of Carer Support Payment and Exemption of Social Security Benefits) Regulations 2023 (S.I. 2023/1148), regs. 1(1), 3(2)(b)

F1706Words in s. 677(1) Table B Pt. 2 inserted (with effect in accordance with reg. 3(5) of the amending S.I.) by The Income Tax (Tax Treatment of Carer Support Payment and Exemption of Social Security Benefits) Regulations 2023 (S.I. 2023/1148), regs. 1(1), 3(2)(c)

F1707Words in s. 677(1) Table B Pt. 2 inserted (with effect in accordance with reg. 3(4) of the amending S.I.) by The Income Tax (Tax Treatment of Carer Support Payment and Exemption of Social Security Benefits) Regulations 2023 (S.I. 2023/1148), regs. 1(1), 3(2)(d)

F1708Words in s. 677(1) Table B Pt. 2 inserted (6.4.2020 with effect in relation to the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), s. 12(3)(4)

Modifications etc. (not altering text)

C125S. 677 modified (with effect in accordance with regs. 7, 8 of the amending S.I.) by The Income Tax (Exemption of Social Security Benefits) Regulations 2022 (S.I. 2022/529), regs. 1(1), 5

Chapter 6U.K.Taxable foreign benefits

678Taxable benefits: foreign benefitsU.K.

(1)This section applies to any benefit which is payable under the law of a country or territory outside the United Kingdom if—

(a)it is substantially similar in character to a benefit listed in Table A, and

(b)it is payable to a person resident in the United Kingdom.

(2)But this section does not apply to a benefit which is charged to tax under Part 9 (pension income).

679Taxable social security incomeU.K.

(1)If section 678 applies, the taxable social security income for a taxable benefit for a tax year is [F1709the full amount of the social security income arising in the tax year, but subject to subsection (2).]

[F1710(2)That income is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of ITTOIA 2005 (relevant foreign income: remittance basis and deductions and reliefs).

(3)See also Chapter 4 of that Part (unremittable income).]

Textual Amendments

F1710S. 679(2)(3) substituted for s. 679(2) (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 613(3) (with Sch. 2)

680Person liable for taxU.K.

The person liable for any tax charged under this Part on a benefit to which section 678 applies is the person receiving or entitled to the benefit.

Chapter 7U.K.Taxable and other foreign benefits: exemptions

681Taxable and other foreign benefits: exemptionsU.K.

(1)No liability to income tax arises on a taxable foreign benefit if, or to the extent that, the corresponding UK benefit is exempt income.

(2)No liability to income tax arises on a benefit which is payable under the law of a country or territory outside the United Kingdom if it is substantially similar in character to a United Kingdom social security benefit listed in Table B.

(3)In this section—

  • “taxable foreign benefit” means a benefit to which section 678 applies;

  • “corresponding UK benefit”, in relation to a taxable foreign benefit, means the taxable benefit listed in Table A to which the foreign benefit is substantially similar in character (see section 678).

[F1711681AForeign benefits of consular employeesU.K.

(1)No liability to income tax arises in respect of any benefit to which section 678 applies of a consular officer or employee in the United Kingdom for a foreign state if—

(a)Her Majesty by Order in Council directs that this section applies to the foreign state for the purpose of giving effect to a reciprocal arrangement with that state, and

(b)the officer or employee meets conditions A to C.

(2)Condition A is that the officer or employee is not—

(a)a British citizen,

(b)a British overseas territories citizen,

(c)a British National (Overseas), or

(d)a British Overseas citizen.

(3)Condition B is that the officer or employee is not engaged in any trade, profession, vocation or employment in the United Kingdom, otherwise than as a consular officer or employee of the state in question.

[F1712(4)Condition C is that—

(a)the officer or employee is a permanent employee of that state, or

(b)the officer or employee was non-UK resident for each of the 2 tax years preceding the tax year in which the officer or employee became a consular officer or employee in the United Kingdom of that state.]

(5)In this section—

  • “consular officer or employee” includes any person employed for the purposes of the official business of a consular officer at—

    (a)

    any consulate,

    (b)

    any consular establishment, or

    (c)

    any other premises used for those purposes, and

  • “reciprocal agreement” has the same meaning as in section 302.

(6)Section 302(5) to (7) apply to an Order under subsection (1) and the operation of this section as they apply to an Order under section 302(1) and the operation of section 302.]

Textual Amendments

F1712S. 681A(4) substituted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 39(1) (with Sch. 46 para. 39(2))

[F1713CHAPTER 8U.K.High income child benefit charge

Textual Amendments

F1713Pt. 10 Ch. 8 inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 1

681BHigh income child benefit chargeU.K.

(1)A person (“P”) is liable to a charge to income tax for a tax year if—

(a)P's adjusted net income for the year exceeds [F1714£60,000], and

(b)one or both of conditions A and B are met.

(2)The charge is to be known as a “high income child benefit charge”.

(3)Condition A is that—

(a)P is entitled to an amount in respect of child benefit for a week in the tax year, and

(b)there is no other person who is a partner of P throughout the week and has an adjusted net income for the year which exceeds that of P.

(4)Condition B is that—

(a)a person (“Q”) other than P is entitled to an amount in respect of child benefit for a week in the tax year,

(b)Q is a partner of P throughout the week, and

(c)P has an adjusted net income for the year which exceeds that of Q.

Textual Amendments

F1714Sum in s. 681B(1)(a) substituted (6.4.2024 for the tax year 2024-25 and subsequent years) by Finance (No. 2) Act 2024 (c. 12), s. 5(1)(3) (with s. 5(4)-(7))

681CThe amount of the chargeU.K.

(1)The amount of the high income child benefit charge to which a person (“P”) is liable for a tax year is the appropriate percentage of the total of—

(a)any amounts in relation to which condition A is met, and

(b)any amounts in relation to which condition B is met.

For conditions A and B, see section 681B.

(2)“The appropriate percentage” is—

(a)100%, or

(b)if less, the percentage determined by the formula—

Where—

ANI is P's adjusted net income for the tax year;

L is [F1715£60,000];

X is [F1716£200].

(3)If—

(a)the total of the amounts mentioned in paragraphs (a) and (b) of subsection (1), or the amount of the charge determined under that subsection, is not a whole number of pounds, or

(b)the percentage determined under subsection (2)(b) is not a whole number,

it is to be rounded down to the nearest whole number.

Textual Amendments

F1715Sum in s. 681C(2)(b) substituted (6.4.2024 for the tax year 2024-25 and subsequent years) by Finance (No. 2) Act 2024 (c. 12), s. 5(1)(3) (with s. 5(4)-(7))

F1716Sum in s. 681C(2)(b) substituted (6.4.2024 for the tax year 2024-25 and subsequent years) by Finance (No. 2) Act 2024 (c. 12), s. 5(2)(3) (with s. 5(4)-(7))

681DExtension of charge in cases where child not living with claimantU.K.

(1)This section applies where—

(a)a person (“R”) is entitled to an amount in respect of child benefit for a child for a week in a tax year by virtue of section 143(1)(b) of SSCBA 1992 or section 139(1)(b) of SSCB(NI)A 1992 (persons contributing to the cost of providing for a child),

(b)neither R, nor any person who is a partner of R throughout that week, is liable for a charge to income tax in respect of that amount under section 681B, and

(c)there is another person (“S”) who, for the purposes of section 143(1)(a) of SSCBA 1992 or section 139(1)(a) of SSCB(NI)A 1992 (persons with whom child is living), is a person who has the child living with him or her in that week.

(2)Section 681B applies as if S were entitled to the amount of child benefit mentioned in subsection (1)(a).

(3)Where there is more than one person to whom subsection (1)(c) applies in relation to an amount of child benefit for a week, subsection (2) applies only to the one with the highest adjusted net income for the tax year.

(4)For the purposes of subsection (1)(a), an amount of child benefit to which R is entitled for a week is to be ignored if—

(a)the period (which includes that week) for which R is entitled to child benefit by virtue of section 143(1)(b) of SSCBA 1992 or section 139(1)(b) of SSCB(NI)A 1992 in respect of the same child does not exceed 52 weeks, and

(b)R is entitled to child benefit in respect of the child for the week immediately before and the week immediately after that period by virtue of section 143(1)(a) of SSCBA 1992 or section 139(1)(a) of SSCB(NI)A 1992.

(5)In this section “child” means—

(a)a child within the meaning of section 142 of SSCBA 1992 or section 138 of SSCB(NI)A 1992, or

(b)a qualifying young person within the meaning of either of those sections.

681ESpecial casesU.K.

(1)The following amounts are to be disregarded for the purposes of this Chapter—

(a)amounts to which a person is entitled but in respect of which an election under section 13A of the Social Security Administration Act 1992 or section 11A of the Social Security Administration (Northern Ireland) Act 1992 (election for payment of child benefit not to be made if high income child benefit charge would be triggered) has effect;

(b)amounts to which a person is entitled by virtue of section 145A of SSCBA 1992 or section 141A of SSCB(NI)A 1992 (entitlement to child benefit after death of child or qualifying young person).

(2)Subsection (3) applies if—

(a)a person (“T”) is entitled to an amount in respect of child benefit for a week in a tax year or is treated as so entitled by virtue of section 681D(2),

(b)two or more other persons are partners of T throughout the week, and

(c)two or more of those persons would, apart from subsection (3), each be liable to a charge under section 681B(1) in relation to that amount.

(3)Only one of those persons is liable, namely the person with the highest adjusted net income for the tax year.

681FAlteration of income limit etc by Treasury orderU.K.

(1)The Treasury may by order—

(a)substitute another amount for the amount for the time being specified in section 681B(1)(a) and defined as “L” in section 681C(2), or

(b)substitute another amount for the amount defined as “X” in section 681C(2).

(2)An order under this section has effect for tax years beginning after the order is made.

(3)A statutory instrument containing an order under this section which increases any person's liability to income tax may not be made unless a draft of it has been laid before and approved by a resolution of the House of Commons.

681GMeaning of “partner”U.K.

(1)For the purposes of this Chapter a person is a “partner” of another person at any time if [F1717either condition A or condition B] is met at that time.

(2)Condition A is that the persons are [F1718married to, or civil partners of,] each other and are neither—

(a)separated under a court order, nor

(b)separated in circumstances in which the separation is likely to be permanent.

(3)Condition B is that the persons are [F1719not married to, or civil partners of, each other but are living together as if they were a married couple or civil partners].

F1720(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1721(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

681HOther interpretation provisionsU.K.

(1)This section applies for the purposes of this Chapter.

(2)“Adjusted net income” of a person for a tax year means the person's adjusted net income for that tax year as determined under section 58 of ITA 2007.

(3)“Week” means a period of 7 days beginning with a Monday; and a week is in a tax year if (and only if) the Monday with which it begins is in the tax year.]

Modifications etc. (not altering text)

C127S. 681H(3) applied (6.4.2024 for the tax year 2024-25 and subsequent years) by Finance (No. 2) Act 2024 (c. 12), s. 5(7))

Part 11U.K.Pay As You Earn

Modifications etc. (not altering text)

C128Pt. 11 power to amend or repeal conferred (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 10

Chapter 1U.K.Introduction

682Scope of this PartU.K.

(1)This Part provides for the assessment, collection and recovery of income tax in respect of PAYE income [F1722and includes provision in respect of the deduction of certain other amounts from, and the repayment of certain other amounts with, PAYE income].

(2)The provisions of this Part are contained in—

  • this Chapter (which gives the meaning of “PAYE income”),

  • Chapter 2 (PAYE: general),

  • Chapter 3 (PAYE: special types of payer or payee),

  • Chapter 4 (PAYE: special types of income),

  • Chapter 5 (PAYE settlement agreements), and

  • Chapter 6 (miscellaneous and supplemental).

(3)Provision for PAYE regulations is made by Chapters 2 to 6.

Textual Amendments

F1722Words in s. 682(1) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 9(2)

683PAYE incomeU.K.

(1)For the purposes of this Act and any other enactment (whenever passed) “PAYE income” for a tax year consists of—

(a)any PAYE employment income for the year,

(b)any PAYE pension income for the year, and

(c)any PAYE social security income for the year.

(2)“PAYE employment income” for a tax year means income which consists of—

(a)any taxable earnings from an employment in the year (determined in accordance with section 10(2)), and

(b)any taxable specific income from an employment for the year (determined in accordance with section 10(3)).

(3)“PAYE pension income” for a tax year means, subject to [F1723subsections (3A) [F1724to [F1725(3D)]]], taxable pension income for the year determined in accordance with any of the following provisions—

  • section 571 (United Kingdom pensions),

  • section 578 (United Kingdom social security pensions),

  • [F1726section 579B (pension under registered pension scheme),]

  • [F1727section 612, so far as relating to annuities to which section 610 applies (annuities under non-registered occupational pension schemes),]

  • section 616 (certain overseas government pensions paid in the United Kingdom),

  • section 621 (the House of Commons Members' Fund),

  • section 634 (voluntary annual payments).

  • [F1728section 637B (tax treatment of pension commencement excess lump sums),

  • section 637G (tax treatment of trivial commutation lump sums and winding-up lump sums),

  • section 637N (trivial commutation lump sum death benefits).]

[F1729(3ZA)PAYE employment income” for a tax year does not include any taxable specific income treated as paid or received in that tax year by section 394A or 554Z4A (temporary non-residents).]

[F1730(3A)“PAYE pension income” for a tax year also includes any social security pension lump sum (within the meaning of section 7 of F(No.2)A 2005) in respect of which a charge to income tax arises under that section for that tax year.]

[F1731(3B)PAYE pension income” for a tax year does not include any taxable pension income that is treated as accruing in that tax year by section 572A or 579CA (temporary non-residents).]

[F1732(3C)PAYE pension income” for a tax year does not include any taxable pension income that is treated as accruing in that tax year by virtue of [F1733Chapter 15A of Part 9 (pension income: lump sums under registered pension schemes)] so far as having effect as applied by [F1734paragraph 1(3)(e)] of Schedule 34 to FA 2004.]

[F1735(3D)“PAYE pension income” for a tax year does not include any amount to which section 579A applies by virtue of any of the following provisions—

  • section 637H(2) (certain defined benefits lump sum death benefits),

  • section 637I(2) (certain pension protection lump sum death benefits),

  • section 637J(2) (certain uncrystallised funds lump sum death benefits),

  • section 637K(2) (certain annuity protection lump sum death benefits),

  • section 637L(2) (certain drawdown pension fund lump sum death benefits),

  • section 637M(2) (certain flexi-access drawdown lump sum death benefits).]

F1736(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)“PAYE social security income” for a tax year means taxable social security income for the year determined in accordance with section 658(4) or (5) (taxable United Kingdom social security benefits).

Textual Amendments

F1723Words in s. 683(3) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 60(2)

F1724Words in s. 683(3) substituted (with effect in accordance with s. 22(12) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 22(8)(a)

F1725Word in s. 683(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 4(2)(a)

F1726Words in s. 683(3) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 14(2) (with Sch. 36)

F1727Words in s. 683(3) inserted (6.4.2007) by Finance Act 2005 (c. 7), Sch. 10 paras. 60, 64(2)

F1728Words in s. 683(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 4(2)(b)

F1729S. 683(3ZA) inserted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 130(2)

F1730S. 683(3A) inserted (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 10(4)

F1731S. 683(3B) substituted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 130(3)

F1732S. 683(3C) inserted (with effect in accordance with s. 22(12) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 22(8)(b)

F1733Words in s. 683(3C) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 4(3)(a)

F1734Words in s. 683(3C) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 4(3)(b)

F1735S. 683(3D) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 4(4)

Modifications etc. (not altering text)

C129S. 683 modified (22.7.2004) by Finance Act 2004 (c. 12), Sch. 36 para. 43(3) (with s. 283(5), Sch. 36)

C130S. 683(3) extended (22.7.2004) by Finance Act 2004 (c. 12), Sch. 36 para. 46 (with s. 283(5), Sch. 36)

Chapter 2U.K.PAYE: general

684PAYE regulationsU.K.

(1)[F111The Commissioners F1737...] must make regulations (“PAYE regulations”) with respect to the assessment, charge, collection and recovery of income tax in respect of all PAYE income.

(2)[F1738The provision that may be made in PAYE regulations includes] any such provision as is set out in the following list.

List of Provisions

1. Provision—

(a)for requiring persons making payments of, or on account of, PAYE income to make, at the [F1739relevant time], deductions or repayments of income tax calculated by reference to tax tables prepared by [F111the Commissioners F1740...], and

(b)for making persons who are required to make any such deductions or repayments accountable to or, as the case may be, entitled to repayment from the Board.

[F1741“The relevant time” is—

(a)if the payment is a notional payment for the purposes of section 710 and the person is treated by virtue of any Act as making it at a time before the date on which the Act is passed, that date, and

(b)in any other case, the time when the payment is made.]

[F17421ZA. Provision—

(a)for authorising a person (“P”), in a case where the PAYE income of an employee (whether an employee of P or of another person) includes an amount charged to tax under any of [F1743Chapters 3 to 10] of Part 3 in respect of the provision of a benefit of a specified kind—

(i)to make deductions of income tax in respect of the benefit from any payment or payments actually made of, or on account of, PAYE income of the employee, or

(ii)to make repayments of such income tax,

(b)for any such deductions or repayments to be made at a specified time,

(c)for the amount of any such deductions or repayments to be calculated in accordance with the regulations,

(d)for the provision of the benefit to be treated for specified purposes as a payment of PAYE income, and

(e)for making persons who make any such deductions or repayments accountable to or, as the case may be, entitled to repayment from the Commissioners.]

[F17441A. Provision—

(a)for deductions to be made, if and to the extent that the payee does not object, with a view to securing that income tax payable in respect of any income of a payee for a tax year which is not PAYE income is deducted from PAYE income of the payee paid during that year; and

(b)as to the circumstances and manner in which a payee may object to the making of deductions.

2. Provision—

(a)for repayments or deductions to be made, if and to the extent that the payee does not object, in respect of any amounts overpaid or [F1745(or treated as overpaid) on account of, or any amounts other than relevant debts remaining unpaid (or treated as remaining unpaid)] on account of—

(i)income tax in respect of income for a previous tax year, or

(ii)capital gains tax in respect of chargeable gains for such a year; and

(b)as to the circumstances in which repayments or deductions may be made, and the circumstances and manner in which a payee may object to the making of repayments or deductions.

[F17462ZA. Provision—

(a)for deductions to be made, if and to the extent that the payee does not object, with a view to securing that income tax payable for a tax year by the payee by virtue of section 681B (high income child benefit charge) is deducted from PAYE income of the payee paid during that year,

(b)for repayments to be made in a tax year, if and to the extent that the payee does not object, in respect of any amounts overpaid on account of income tax under that section for that tax year, and

( c)as to the circumstances and manner in which a payee may object to the making of deductions or repayments.]

[F17472A. Provision—

(a)for deductions to be made in respect of relevant debts of a payee,

(b)as to the circumstances in which such deductions may be made, and

( c)where such deductions are made, as to the date on which the relevant debts are to be treated as paid.]

3. Provision for the production to, and inspection by, persons authorised by the Board of wages sheets and other documents and records for the purposes of satisfying themselves that [F1748amounts have been and are] being deducted, repaid and accounted for in accordance with the regulations.

4. Provision for requiring an employer or former employer to provide any information, within a prescribed time, about payments or other benefits provided or to be provided, including those provided or to be provided in connection with—

(a)the termination of a person’s employment, or

(b)a change in the duties of or general earnings from a person’s employment.

[F17494ZA. Provision-

(a)for authorising or requiring a person who provides with respect to payments of or on account of PAYE income a service that is specified or of a specified description (“a relevant payment service”) to supply to Her Majesty's Revenue and Customs information about payments with respect to which the service is provided, or any information the Commissioners may request about features of the service provided or to be provided with respect to particular payments;

(b)for conferring power on the Commissioners to specify by directions circumstances in which provision made by virtue of paragraph (a) or subsection (4ZB) is not to apply in relation to a payment;

(c)for securing that a supply of information that is authorised by regulations under paragraph (a) is not treated as breaching any obligation of confidence owed in respect of the information by the person supplying it;

(d)for prohibiting or restricting the disclosure, otherwise than to Her Majesty's Revenue and Customs, of information by a person to whom it was supplied pursuant to a requirement imposed by virtue of subsection (4ZB);

(e)for requiring a person who provides, or is to provide, a relevant payment service to take steps (including any steps that may be specified, or further specified, in accordance with item 8A(b)) for facilitating the meeting by persons making payments of obligations imposed by virtue of subsection (4ZB).]

[F17504A. Provision authorising the recovery from the payee rather than the payer of any amount that an officer of Revenue and Customs] considers should have been deducted by the payer.]

[F17514B. Provision for and in connection with requiring the giving, in specified circumstances, of security (or further security) for the payment of amounts in respect of which a person is or may be accountable to the Commissioners under the regulations.]

5. Provision for the way in which any matters provided for by the regulations are to be proved.

6. Provision—

(a)for requiring the payment of interest on sums due to the Board which are not paid by the due date,

(b)for determining the date (being not less than 14 days after the end of the tax year in respect of which the sums are due) from which such interest is to be calculated, and

(c)for enabling the repayment or remission of such interest [F1752or interest under section 101 of FA 2009] .

7. Provision for requiring the payment of interest on sums due from the Board and for determining the date from which such interest is to be calculated.

[F17537A. Provision for excluding payments of such description as may be specified from the operation of the regulations in such circumstances as may be specified. Provision for excluding payments of such description as may be specified from the operation of the regulations in such circumstances as may be specified.

8. Provision for the making of decisions by [F1754Her Majesty’s Revenue and Customs] as to any matter required to be decided for the purposes of the regulations and for appeals against such decisions.]

[F17558A. Provision requiring compliance with any directions the Commissioners may give—

(a)about the form and manner in which any information is to be provided under the regulations;

(b)specifying, or further specifying, steps for the purposes of item 4ZA(e);

(c)specifying information that a person making payments of or on account of PAYE income must provide about the method by which the payments are made.]

9. Provision for appeals with respect to matters arising under the regulations which would otherwise not be the subject of an appeal.

10. Different provision for different cases or classes of case.

11. Any incidental, consequential, supplementary and transitional provision which appears to the Board to be expedient.

(3)[F1756The deductions of income tax—

(a)required to be made by PAYE regulations under item 1 in the above list, or

(b)which a person is authorised to make by PAYE regulations under item 1ZA in that list,

may be required to be made at the basic rate or other rates in such cases or classes of case as may be provided by the regulations.]

[F1757(3A)PAYE regulations under item 2A in the above list may not make provision enabling deductions totalling more than [F1758£17,000 ]to be made from a payee's income for a tax year without the payee's consent.

(3B)The Treasury may by order amend the amount specified in subsection (3A).]

[F1759(3C)References in items 4ZA and 8A of the above list to directions include directions making different provision for different cases.]

(4)Interest required to be paid by PAYE regulations under item 6 or 7 in the above list [F1760or by section 101 of FA 2009, in connection with sums due to the Commissioners under the PAYE Regulations,] must be paid without any deduction of income tax and may not be taken into account in computing any income, profits or losses for any tax purposes.

[F1761(4ZA)Item 8A in the above list does not prejudice the power of the Commissioners under subsection (1) to make provision in PAYE regulations about the matters mentioned in that item.

(4ZB)The persons to whom PAYE information regulations may require information to be supplied include, in the case of information about a payment, a person who provides, or is to provide, with respect to the payment a service such as is mentioned in item 4ZA(a) in the above list.

(4ZC)In subsection (4ZB) “PAYE information regulations” means PAYE regulations that require information to be supplied for any purpose authorised by subsections (1) and (2).]

[F1762(4A)A person who fails to comply with a requirement imposed under PAYE regulations to give security, or further security, for the payment of any amount commits an offence if the failure continues for such period as is specified; and a person guilty of an offence under this subsection is liable [F1763on summary conviction—

(a)in England and Wales, to a fine;

(b)in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale]]

(5)PAYE regulations must not affect any right of appeal to the [F1764tribunal] which a person would have apart from the regulations.

(6)It does not matter for the purposes of PAYE regulations that income is wholly or partly income for a tax year other than that in which the payment is made.

(7)PAYE regulations have effect despite anything in the Income Tax Acts.

(7A)[F1765Nothing in PAYE regulations may be read—

(a)as preventing the making of arrangements for the collection of tax [F1766or other amounts] in such manner as may be agreed by, or on behalf of, the payer and [F165an officer of Revenue and Customs], or

(b)as requiring the payer to comply with the regulations in circumstances in which [F165an officer of Revenue and Customs] is satisfied that it is unnecessary or not appropriate for the payer to do so.

[F1767(7AA)In this [F1768Part] “relevant debt”, in relation to a payee, means—

(a)a sum payable by the payee to the Commissioners under or by virtue of an enactment, other than an excluded debt, and

(b)a sum payable by the payee to the Commissioners under a contract settlement.

(7AB)For the purposes of subsection (7AA)—

(a)child tax credit or working tax credit that the payee is liable to repay is an excluded debt, and

(b)if the payee is an employer, any amount that the payee is required to deduct from the PAYE income of employees for a tax year is an excluded debt until the tax year has ended.]

(7B)References in this section and section 685 to income tax in respect of PAYE income are references to income tax in respect of that income if reasonable assumptions are (when necessary) made about other income.

(7C)In this section and section 685—

[F1769“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

“contract settlement” means an agreement made in connection with the liability of the payee or another person to make a payment to the Commissioners under or by virtue of an enactment;]

“payer” means any person paying PAYE income and “payee” means any person in receipt of such income;

“specified” means specified in PAYE regulations.]

(8)In this Act and any other enactment (whenever passed) “PAYE regulations” means regulations under this section.]

Textual Amendments

F1737Words in s. 684(1) omitted (21.7.2009) by virtue of Finance Act 2009 (c. 10), Sch. 58 para. 2

F1738Words in s. 684(2) substituted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 3(2)

F1739Words in s. 684(2) substituted (with effect in accordance with s. 94(5) of the amending Act) by Finance Act 2006 (c. 25), s. 94(3)(a); S.I. 2007/1081, art. 2

F1740Words in s. 684(2) omitted (21.7.2009) by virtue of Finance Act 2009 (c. 10), Sch. 58 para. 3(3)

F1741Words in s. 684(2) inserted (with effect in accordance with s. 94(5) of the amending Act) by Finance Act 2006 (c. 25), s. 94(3)(b); S.I. 2007/1081, art. 2

F1742Words in s. 684(2) inserted (26.3.2015) by Finance Act 2015 (c. 11), s. 17(2)

F1743Words in s. 684(2) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 15

F1744S. 684(2) Items 1A and 2 substituted for s. 684(2) Item 2 (10.7.2003) by Finance Act 2003 (c. 14), s. 145(1)(a)

F1745Words in s. 684(2) substituted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 3(4)

F1746S. 684(2) Item 2ZA inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 5(4)

F1747Words in s. 684(2) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 3(5)

F1748Words in s. 684(2) substituted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 3(6)

F1749S. 684(2) Item 4ZA inserted (17.7.2012) by Finance Act 2012 (c. 14), s. 225(2)(a)

F1750S. 684(2) Item 4A inserted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(1)(b)

F1751S. 684(2): Item 4B inserted (19.7.2011) by virtue of Finance Act 2011 (c. 11), s. 85(2)

F1753S. 684(2) Items 7A and 8 substituted for s. 684(2) Item 8 (10.7.2003) by Finance Act 2003 (c. 14), s. 145(1)(c)

F1755S. 684(2) Item 8A inserted (17.7.2012) by Finance Act 2012 (c. 14), s. 225(2)(b)

F1756S. 684(3) substituted (26.3.2015) by Finance Act 2015 (c. 11), s. 17(3)

F1757S. 684(3A)(3B) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 4

F1758Sum in s. 684(3A) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax (Earnings and Pensions) Act 2003 (Section 684(3A)) Order 2014 (S.I. 2014/2438), arts. 1, 2(2)

F1759S. 684(3C) inserted (17.7.2012) by Finance Act 2012 (c. 14), s. 225(3)

F1761S. 684(4ZA)-(4ZC) inserted (17.7.2012) by Finance Act 2012 (c. 14), s. 225(4)

F1762S. 684(4A) inserted (19.7.2011) by Finance Act 2011 (c. 11), s. 85(3)

F1763Words in s. 684(4A) substituted (12.2.2019) by Finance Act 2019 (c. 1), s. 82(3)

F1765S. 684(7A)-(7C) inserted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(2)

F1766Words in s. 684(7A)(a) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 5

F1767S. 684(7AA)(7AB) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 6

F1769Words in s. 684(7C) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 7

Modifications etc. (not altering text)

C132S. 684(4A) applied by S.I. 2001/1004, Sch. 4 Pt. 3B para. 29X (as inserted (6.4.2012) by The Social Security (Contributions) (Amendment No. 3) Regulations 2012 (S.I. 2012/821), regs. 1(1), 18)

685Tax tablesU.K.

(1)[F111The Commissioners F1770...] must construct tax tables with a view to securing that so far as possible—

(a)the total income tax payable in respect of PAYE income for any tax year [F1771and any relevant debts payable during that tax year are] deducted from PAYE income paid during that year, and

(b)the income tax [F1772and any relevant debts] deductible or repayable on the occasion of any payment of, or on account of, PAYE income [F1773are such] that the following proportions are the same—

(i)the proportion which the total net income tax [F1774and any relevant debts] deducted since the beginning of the tax year bears to the total income tax [F1775and the total amount of any relevant debts] payable for the year, and

(ii)the proportion which the part of the tax year which ends with the date of the payment bears to the whole year.

(2)References in subsection (1) to the total income tax payable for the year are to be read as references to the total income tax estimated to be payable for the year in respect of the income in question—

(a)subject to a provisional deduction for allowances and reliefs, and

[F1776(b)subject to an adjustment in respect of amounts required to be deducted or repaid by PAYE regulations made under item 1A[F1777, 2 [F1778, 2ZA] or 2A] in the list in section 684(2).]

(3)For the purpose of estimating the total income tax payable as mentioned in subsection (1)(a), it may be assumed, in relation to any payment of, or on account of, PAYE income, that the following proportions will be the same—

(a)the proportion which the income paid in the part of the tax year which ends with the making of the payment bears to the income for the whole year, and

(b)the proportion which that part of the tax year bears to the whole year.

[F1779(4)PAYE regulations may make provision, where it appears to [F165an officer of Revenue and Customs] that it is impracticable for a payer to deduct tax by reference to tax tables—

(a)for deductions to be made by the payer in accordance with other arrangements agreed as mentioned in section 684(7A)(a), or

(b)for the payee to be required to keep records and make payments and returns as if he were the payer.]

Textual Amendments

F1770Words in s. 685(1) omitted (21.7.2009) by virtue of Finance Act 2009 (c. 10), Sch. 58 para. 9(3)(a)

F1776S. 685(2)(b) substituted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(3)

F1777Words in s. 685(2)(b) substituted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 9(3)(b)

F1778Word in s. 685(2)(b) inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 5(5)

F1779S. 685(4) inserted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(4)

686Meaning of “payment”U.K.

(1)For the purposes of PAYE regulations, a payment of, or on account of, PAYE income of a person is treated as made at the earliest of the following times—

Rule 1

The time when the payment is made.

Rule 2

The time when the person becomes entitled to the payment.

Rule 3

If the person is a director of a company and the income is income from employment with the company (whether or not as director), whichever is the earliest of—

(a)the time when sums on account of the income are credited in the company’s accounts or records (whether or not there is any restriction on the right to draw the sums);

(b)if the amount of the income for a period is determined before the period ends, the time when the period ends;

(c)if the amount of the income for a period is not determined until after the period has ended, the time when the amount is determined.

[F1780But this is subject to subsection (5) (PAYE pension income: social security pension lump sums).]

(2)Rule 3 applies if the person is a director of the company at any time in the tax year in which the time mentioned falls.

(3)In this section “director” means—

(a)in relation to a company whose affairs are managed by a board of directors or similar body, a member of that board or body,

(b)in relation to a company whose affairs are managed by a single director or other person, that director or person, and

(c)in relation to a company whose affairs are managed by the members themselves, a member of the company,

and includes any person in accordance with whose directions or instructions the company’s directors (as defined above) are accustomed to act.

(4)For the purposes of subsection (3) a person is not regarded as a person in accordance with whose directions or instructions the company’s directors are accustomed to act merely because the directors act on advice given by that person in a professional capacity.

[F1781(5)For the purposes of PAYE regulations, a payment of, or on account of, an amount which is PAYE pension income of a person by virtue of section 683(3A) (social security pension lump sums) is to be treated as made at the time when the payment is made.]

Textual Amendments

F1780Words in s. 686(1) inserted (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 10(5)

Chapter 3U.K.PAYE: special types of payer or payee

687Payments by intermediaryU.K.

(1)If any payment of, or on account of, PAYE income of an employee is made by an intermediary of the employer, the employer is to be treated, for the purposes of PAYE regulations, as making a payment of the income of an amount equal to the amount given by subsection (3).

(2)Subsection (1) does not apply if the intermediary (whether or not a person to whom PAYE regulations apply) deducts income tax [F1782and any relevant debts] from the payment the intermediary makes, and accounts for it, in accordance with PAYE regulations.

(3)The amount referred to is—

(a)if the amount of the payment made by the intermediary is an amount to which the recipient is entitled after deduction of income tax [F1783and any relevant debts] , the aggregate of the amount of the payment and the amount of any income tax due [F1784and any relevant debts deductible] , and

(b)in any other case, the amount of the payment.

(4)For the purposes of this section a payment of, or on account of, PAYE income of an employee is made by an intermediary of the employer if it is made—

(a)by a person acting on behalf of the employer and at the expense of the employer or a person connected with the employer, or

(b)by trustees holding property for any persons who include or class of persons which includes the employee.

[F1785(5)This section does not apply in relation to a payment so far as the sum paid is employment income under Chapter 2 of Part 7A.]

Textual Amendments

F1785S. 687(5) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 28

[F1786687APayment of employment income under Part 7AU.K.

(1)This section applies if—

(a)the value of a relevant step counts as employment income under Chapter 2 of Part 7A, and

(b)the relevant step is the payment of a sum of money,

and references to A and B are to be read accordingly.

(2)For the purposes of PAYE regulations B is treated as making a payment of PAYE income of A of an amount which, on the basis of the best estimate which can reasonably be made, is the amount of the employment income.

(3)The payment is treated as made on the latest of the following days—

(a)the day on which the relevant step is taken,

(b)the day on which A's employment with B starts, and

(c)the day which is 30 days after the day on which FA 2011 is passed.

(4)Subsection (2) does not apply if the person who takes the relevant step (whether or not a person to whom PAYE regulations apply) deducts income tax from the payment, and accounts for it, in accordance with PAYE regulations.]

Textual Amendments

F1786S. 687A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 29

688Agency workersU.K.

[F1787(1)This section applies if the remuneration receivable by an individual in consequence of providing services falls to be treated under section 44 (agency workers) as earnings from an employment.

(1A)The relevant provisions have effect as if the individual held the employment with or under the deemed employer, subject to subsection (2).

(1B)For the purposes of sections 687, 689 and 689A, if—

(a)a person other than the deemed employer or an intermediary of the deemed employer makes a payment of, or on account of, PAYE income of the individual, and

(b)the payment is not within subsection (2),

the person is to be treated as making the payment as an intermediary of the deemed employer.]

(2)If—

[F1788(a)the client is not the deemed employer, and]

(b)a payment of, or on account of, PAYE income of the individual is made by a person acting on behalf of the client, and at the expense of the client or a person connected with the client,

section 687 and, in relation to any payment treated as made by the client under section 687, section 710 have effect in relation to the payment as if the client and not the [F1789deemed employer] were the employer for the purposes of the relevant provisions.

[F1790(2A)PAYE regulations may make provision for, or in connection with, the recovery from a director or officer of a company, in such circumstances as may be specified in the regulations, of—

(a)any amount the company is, by virtue of section 44(4) to (6) or 46A, to deduct, or account for, in accordance with PAYE regulations, and

(b)any interest or penalty, in respect of an amount within paragraph (a), for which the company is liable.]

(3)In [F1791this section—

  • “the client” means the person who is the client for the purposes of section 44;

  • [F1792“company" includes a limited liability partnership; ]

  • “the deemed employer” means the person with whom the individual is treated under section 44 as having an employment, the duties of which consist of the services;]

  • [F1793“director” has the meaning given by section 67;

  • “officer” in relation to a company, means any manager, secretary or other similar officer of the company, or any person acting or purporting to act as such;]

  • “the relevant provisions” means this Chapter except section 691, Chapter 4 of this Part and section 710.

Textual Amendments

F1787S. 688(1)-(1B) substituted for s. 688(1) (6.4.2014) by Finance Act 2014 (c. 26), s. 16(8)(11)

F1788S. 688(2)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 16(9)(a)(11)

F1789Words in s. 688(2) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 16(9)(b)(11)

F1790S. 688(2A) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 17(3)

F1791Words in s. 688(3) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 16(10)(11)

F1792Words in s. 688(3) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 17(4)(a)

F1793Words in s. 688(3) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 17(4)(b)

[F1794688AManaged service companies: recovery from other personsU.K.

(1)PAYE regulations may make provision authorising the recovery from a person within subsection (2) of any amount that an officer of Revenue and Customs considers should have been deducted by a managed service company (“the MSC”) from a payment of, or on account of, PAYE income of an individual.

(2)The persons are—

(a)a director or other office-holder, or an associate, of the MSC,

(b)an MSC provider,

(c)a person who (directly or indirectly) has encouraged or been actively involved in the provision by the MSC of the services of the individual, and

(d)a director or other office-holder, or an associate, of a person (other than an individual) who is within paragraph (b) or (c).

(3)A person does not fall within subsection (2)(c) merely by virtue of—

(a)providing legal or accountancy advice in a professional capacity, or

(b)placing the individual with persons who wish to obtain the services of the individual (including by contracting with the MSC for the provision of those services).

(4)The supplementary provision that may be made by the regulations includes provision as to the liability of one person within subsection (2) to another such person.

(5)In this section—

  • “associate” has the meaning given by section 61I,

  • “director” has the meaning given by section 67,

  • “managed service company” has the meaning given by section 61B [F1795but for the purposes of section 339A has the meaning given by subsection (11) of that section] , and

  • “MSC provider” means an MSC provider who is involved with the MSC (within the meaning of section 61B).

(6)Section 61C(4) (extended meaning of “associate”) applies for the purposes of subsection (2)(d).

(7)The Treasury may by order amend this section (but not this subsection or subsection (8)).

(8)The Treasury must not make an order under subsection (7) unless a draft of it has been laid before and approved by a resolution of the House of Commons.]

Textual Amendments

F1794S. 688A inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), s. 25(2), Sch. 3 para. 6

F1795Words in s. 688A(5) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 14(2)

[F1796688AAWorkers' services provided through intermediaries: recovery of PAYEU.K.

(1)PAYE Regulations may make provision for, or in connection with, the recovery of a deemed employer PAYE debt from a relevant person.

(2)“A deemed employer PAYE debt” means an amount—

(a)that a person (“the deemed employer”) is liable to pay under PAYE regulations in consequence of being treated under section 61N(3) as having made a deemed direct payment to a worker [F1797(other than by virtue of section 61WA)], and

(b)that an officer of Revenue and Customs considers there is no realistic prospect of recovering from the deemed employer within a reasonable period.

(3)“Relevant person”, in relation to a deemed employer PAYE debt, means a person who is not the deemed employer and who—

(a)is the highest person in the chain identified under section 61N(1) in determining that the deemed employer is to be treated as having made the deemed direct payment, or

(b)is the second highest person in that chain and is a qualifying person (within the meaning given by section 61N(8)) at the time the deemed employer is treated as having made that deemed direct payment.]

Textual Amendments

F1796S. 688AA inserted (22.7.2020) by Finance Act 2020 (c. 14), Sch. 1 para. 19 (with Sch. 1 paras. 30-34)

F1797Words in s. 688AA(2)(a) inserted (with effect in accordance with s. 21(10) of the amending Act) by Finance Act 2021 (c. 26), s. 21(9)

[F1798688ABWorkers’ providing services through intermediaries etc: cases where taxes already paidU.K.

(1)PAYE regulations may make the following provision.

(2)Provision for an amount to be treated as having been recovered from the payee, and for that amount not to be recoverable from the payer (“the deemed employer”), where—

(a)the deemed employer would otherwise be liable to pay an amount under PAYE regulations in consequence of being treated under section 61N(3) as having made a deemed direct payment to a worker (other than by virtue of section 61WA), and

(b)an amount of income tax or corporation tax has already been paid, or assessed, in respect of income referable to that payment.

(3)Provision for the amount referred to in the opening words of subsection (2) to be the best estimate which can reasonably be made by an officer of Revenue and Customs (whether generally or specifically) of the amount referred to in subsection (2)(b).

(4)Provision preventing a person specified in PAYE regulations from—

(a)making a claim for the repayment of, or relief in respect of, an amount referred to in subsection (2)(b), or

(b)deducting, or setting off, the amount referred to in that subsection from, or against, any tax liability of the person,

in a case where an estimate of that amount is treated as having been recovered from the payee as a result of provision made by virtue of this section.

(5)In this section, “payee” and “payer” have the same meaning as in section 684 (see subsection (7C) of that section).]

Textual Amendments

F1798S. 688AB inserted (with effect in accordance with s. 17(2) of the amending Act) by Finance Act 2024 (c. 3), s. 17(1)

[F1799688BTravel expenses of workers providing services through intermediaries: recovery of unpaid taxU.K.

(1)PAYE regulations may make provision for, or in connection with, the recovery from a director or officer of a company, in such circumstances as may be specified in the regulations, of amounts within any of subsections (2) to (5).

(2)An amount within this subsection is an amount that the company is to account for in accordance with PAYE regulations by virtue of section 339A(7) to (9) (persons providing fraudulent documents).

(3)An amount within this subsection is an amount which the company is to deduct and pay in accordance with PAYE regulations by virtue of section 339A in circumstances where—

(a)the company is an employment intermediary,

(b)on the basis that section 339A does not apply by virtue of subsection (3) of that section, the company has not deducted and paid the amount, but

(c)the company has not been provided by any other person with evidence from which it would be reasonable in all the circumstances to conclude that subsection (3) of that section applied (and the mere assertion by a person that the manner in which the worker provided the services was not subject to (or to the right of) supervision, direction or control by any person is not such evidence).

(4)An amount within this subsection is an amount that the company is to deduct and pay in accordance with PAYE regulations by virtue of section 339A in a case where subsection (4) of that section applies (services provided under arrangements made by intermediaries).

(5)An amount within this subsection is any interest or penalty in respect of an amount within any of subsections (2) to (4) for which the company is liable.

(6)In this section—

  • “company” includes a limited liability partnership;

  • “director” has the meaning given by section 67;

  • “employment intermediary” has the same meaning as in section 339A;

  • “officer”, in relation to a company, means any manager, secretary or other similar officer of the company, or any person acting or purporting to act as such]

Textual Amendments

F1799S. 688B inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 14(3)

689Employee of non-UK employerU.K.

(1)This section applies if—

(a)an employee during any period works for a person (“the relevant person”) who is not the employer of the employee,

(b)any payment of, or on account of, PAYE income of the employee in respect of that period is made by a person who is the employer or an intermediary of the employer or of the relevant person,

(c)PAYE regulations do not apply to the person making the payment or, if that person makes the payment as an intermediary of the employer or of the relevant person, the employer, and

(d)income tax [F1800and any relevant debts are] not deducted, or not accounted for, in accordance with the regulations by the person making the payment or, if that person makes the payment as an intermediary of the employer or of the relevant person, the employer.

[F1801(1ZA)But this section does not apply if section 689A applies or would apply but for a certificate issued under regulations made under subsection (7) of that section.]

[F1802(1A)Subject to subsection (4), subsection (1)(b) does not apply in relation to a payment so far as the sum paid is employment income under Chapter 2 of Part 7A.]

[F1803(1B)Subsection (1C) applies if—

(a)the employee worked for the relevant person during the period under or in consequence of arrangements made between the relevant person and a third person,

(b)the third person did not make the payment of, or on account of, PAYE income of the employee, and

(c)PAYE regulations would apply to the third person if the third person were to make a payment of, or on account of, PAYE income of the employee.

(1C)The third person is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount given by subsection (3).]

(2)[F1804If subsection (1C) does not apply, the] relevant person is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount given by subsection (3).

(3)The amount referred to is—

(a)if the amount of the payment actually made is an amount to which the recipient is entitled after deduction of income tax [F1805and any relevant debts due under the PAYE regulations] , the aggregate of the amount of the payment and the amount of any income tax [F1806and any relevant debts deductible] due, and

(b)in any other case, the amount of the payment.

(4)If, by virtue of any of sections [F1807687A and] 693 to 700, an employer would be treated for the purposes of PAYE regulations (if they applied to the employer) as making a payment of any amount to an employee, [F1808and if the case is not within subsection (4A),] this section has effect as if—

(a)the employer were also to be treated for the purposes of this section as making an actual payment of that amount, and

(b)paragraph (a) of subsection (3) were omitted.

[F1809(4A)A case is within this subsection if—

(a)the section concerned is section 687A or 695A (employment income under Part 7A), and

(b)the relevant step concerned is within paragraph 1 of Schedule 11 to F(No. 2)A 2017 (loans etc outstanding on 5 April 2019).

(And this section does not apply in a case within this subsection.)]

(5)For the purposes of this section a payment of, or on account of, PAYE income of an employee is made by an intermediary of the employer or of the relevant person if it is made—

(a)by a person acting on behalf of the employer or the relevant person and at the expense of the employer or the relevant person or a person connected with the employer or the relevant person, or

(b)by trustees holding property for any persons who include or class of persons which includes the employee.

(6)In this section and sections 690 and 691 “work”, in relation to an employee, means the performance of any duties of the employment of the employee and any reference to the employee’s working is to be read accordingly.

Textual Amendments

F1801S. 689(1ZA) inserted (6.4.2014) by Finance Act 2014 (c. 26), s. 21(4)(10)

F1802S. 689(1A) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 30(2)

F1803S. 689(1B)(1C) inserted (6.4.2014) by Finance Act 2014 (c. 26), s. 20(2)(4)

F1804Words in s. 689(2) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 20(3)(4)

F1807Words in s. 689(4) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 30(3)

F1808Words in s. 689(4) inserted (15.3.2018) by Finance Act 2018 (c. 3), Sch. 1 para. 12(2)

F1809S. 689(4A) inserted (15.3.2018) by Finance Act 2018 (c. 3), Sch. 1 para. 12(3)

[F1810689AOil and gas workers on the continental shelfU.K.

(1)This section applies if—

(a)any payment of, or on account of, PAYE income of a continental shelf worker in respect of a period is made by a person who is the employer or an intermediary of the employer or of the relevant person,

(b)PAYE regulations do not apply to the person making the payment or, if that person makes the payment as an intermediary of the employer or of the relevant person, to the employer, and

(c)income tax and any relevant debts are not deducted, or not accounted for, in accordance with PAYE regulations by the person making the payment or, if that person makes the payment as an intermediary of the employer or of the relevant person, by the employer.

(2)Subject to subsection (5), subsection (1)(a) does not apply in relation to a payment so far as the sum paid is employment income under Chapter 2 of Part 7A.

(3)The relevant person is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the continental shelf worker of an amount equal to the amount given by subsection (4).

(4)The amount referred to is—

(a)if the amount of the payment actually made is an amount to which the recipient is entitled after deduction of income tax and any relevant debts under PAYE regulations, the aggregate of the amount of the payment and the amount of any income tax due and any relevant debts deductible, and

(b)in any other case, the amount of the payment.

(5)If, by virtue of any of sections 687A and 693 to 700, an employer would be treated for the purposes of PAYE regulations (if they applied to the employer) as making a payment of any amount to a continental shelf worker, this section has effect as if—

(a)the employer were also to be treated for the purposes of this section as making an actual payment of that amount, and

(b)paragraph (a) of subsection (4) were omitted.

(6)For the purposes of this section a payment of, or on account of, PAYE income of a continental shelf worker is made by an intermediary of the employer or of the relevant person if it is made—

(a)by a person acting on behalf of the employer or the relevant person and at the expense of the employer or the relevant person or a person connected with the employer or the relevant person, or

(b)by trustees holding property for any persons who include, or a class of persons which includes, the continental shelf worker.

(7)PAYE regulations may make provision for, or in connection with, the issue by Her Majesty's Revenue and Customs of a certificate to a relevant person in respect of one or more continental shelf workers—

(a)confirming that, in respect of payments of, or on account of, PAYE income of the continental shelf workers specified or described in the certificate, income tax and any relevant debts are being deducted, or accounted for, as mentioned in subsection (1)(c), and

(b)disapplying this section in relation to payments of, or on account of, PAYE income of those workers while the certificate is in force.

(8)Regulations under subsection (7) may, in particular, make provision about—

(a)applying for a certificate;

(b)the circumstances in which a certificate may, or must, be issued or cancelled;

(c)the form and content of a certificate;

(d)the effect of a certificate (including provision modifying the effect mentioned in subsection (7)(b) or specifying further effects);

(e)the effect of cancelling a certificate.

(9)Subsection (10) applies if—

(a)there is more than one relevant person in relation to a continental shelf worker, and

(b)in consequence of the same payment within subsection (1)(a), each of them is treated under subsection (3) as making a payment of PAYE income of the worker.

(10)If one of the relevant persons complies with section 710 (notional payments: accounting for tax) in respect of the payment that person is treated as making, the other relevant persons do not have to comply with that section in respect of the payments they are treated as making.

(11)In this section—

  • “continental shelf worker” means a person in an employment some or all of the duties of which are performed—

    (a)

    in the UK sector of the continental shelf (as defined in section 41), and

    (b)

    in connection with exploration or exploitation activities (as so defined);

  • “employer” means the employer of the continental shelf worker;

  • “relevant person”, in relation to a continental shelf worker, means—

    (a)

    if the employer has an associated company (as defined in section 449 of CTA 2010) with a place of business or registered office in the United Kingdom, the associated company, or

    (b)

    in any other case, the person who holds the licence under Part 1 of the Petroleum Act 1998 in respect of the area of the UK sector of the continental shelf where some or all of the duties of the continental shelf worker's employment are performed.

[F1811(12)The Treasury may by regulations modify the definitions of “continental shelf worker” and “relevant person”, as the Treasury thinks appropriate.

(13)Regulations under subsection (12) may—

(a)make different provision for different cases or different purposes,

(b)make incidental, consequential, supplementary or transitional provision or savings, and

(c)amend this section.]]

Textual Amendments

F1810S. 689A inserted (26.3.2014 for specified purposes, 6.4.2014 in so far as not already in force) by Finance Act 2014 (c. 26), s. 21(5)(9)

F1811S. 689A(12)(13) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 21(8)

[F1812690Internationally mobile employeesU.K.

(1)This section applies in relation to an employee if the employee is or has been internationally mobile at any time in tax year 2025-26 or a subsequent tax year.

(2)An employee is “internationally mobile” at a time in a tax year if at that time the employee works or is likely to work both inside and outside the UK during the tax year (“the mobile tax year”) and at that time—

(a)the employee is or is likely to be non-UK resident for the mobile tax year, or

(b)the mobile tax year is or is likely to be a split year as respects the employee.

(3)If the employer makes an uncertain payment to the employee in any tax year, the entire payment is to be treated for the purposes of PAYE regulations as a payment of PAYE income of the employee.

(4)For the purposes of this section and sections 690A and 690B, an “uncertain payment” means a payment of, or on account of, the income of the employee to the extent that—

(a)the employer is unable to ascertain the extent to which the income is PAYE income, and

(b)the reason for the employer being unable to ascertain that extent is connected to the employee being or having been internationally mobile in the mobile tax year.

(5)Subsection (3) is without prejudice to—

(a)any assessment in respect of the income of the employee in question, and

(b)any right to repayment of income tax and any relevant debts overpaid and any obligation to pay income tax underpaid and any relevant debts that remain wholly or partly unpaid.

(6)For the purposes of this section and sections 690A to 690E—

(a)any reference to a payment made by the employer includes a reference to a payment made by a person acting on behalf of the employer and at the expense of the employer or a person connected with the employer, and

(b)in a case where section 689 or 689A applies, any reference to a payment made by the employer is to be read as a reference to a payment treated, for the purposes of PAYE regulations, as made by the relevant person.

Textual Amendments

F1812Ss. 690-690C substituted for s. 690 (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 21(1)(2) (with s. 21(3))

690AEmployer notification for internationally mobile employeesU.K.

(1)This section applies in relation to an employee if the employee is or has been internationally mobile within the meaning of section 690(2) at any time in tax year 2025-26 or a subsequent tax year (“the mobile tax year”).

(2)The appropriate person may give a notice to an officer of Revenue and Customs at any time during the mobile tax year—

(a)that the employer is proposing to treat a proportion of any uncertain payment made by the employer to the employee as not being PAYE income of the employee for the purposes of PAYE regulations, and

(b)specifying that proportion.

(3)If a notice given under this section has effect, the proportion of any uncertain payment made by the employer to the employee in any tax year which is to be treated for the purposes of PAYE regulations as not being a payment of PAYE income is the proportion specified in the notice.

(4)But if section 690D(4) (employer notification for qualifying new resident) also applies to a payment made by the employer, subsection (3) does not apply to the payment to the extent that it is a qualifying payment within the meaning of section 690D.

(5)A notice given under this section—

(a)does not have effect if a direction has previously been given to the appropriate person under section 690B (direction by HMRC in relation to internationally mobile employees) in relation to the employee and the mobile tax year;

(b)otherwise, has effect when it is acknowledged by an officer of Revenue and Customs.

(6)A notice given under this section ceases to have effect if—

(a)a direction under section 690B is given to the appropriate person in relation to the employee and the mobile tax year,

(b)a subsequent notice is given by the appropriate person under this section and is acknowledged by an officer of Revenue and Customs, or

(c)where the notice was given on the basis that the employee was likely to be a non-UK resident for the mobile tax year, a subsequent notice—

(i)is given by the appropriate person under section 690D (employer notification for qualifying new resident) on the basis that the employee is or is likely to be a qualifying new resident for the mobile tax year, and

(ii)is acknowledged by an officer of Revenue and Customs.

(7)A notice given under this section must be in such manner and form, and contain such information, as may be specified in a general direction made by the Commissioners for His Majesty’s Revenue and Customs.

(8)Subsection (3) is without prejudice to—

(a)any assessment in respect of the income of the employee in question, and

(b)any right to repayment of income tax and any relevant debts overpaid and any obligation to pay income tax underpaid and any relevant debts that remain wholly or partly unpaid.

(9)For the purposes of this section and sections 690B, 690D and 690E —

(a)where an amount of employment income is treated as PAYE income paid by the employer for the purposes of PAYE regulations by virtue of section 693 (cash vouchers), section 694 (non-cash vouchers) or section 695 (credit-tokens), the employer is to be treated as making a payment of that amount of employment income, and

(b)“the appropriate person” means—

(i)the person designated by the employer for the purpose of this section and sections 690B, 690D and 690E and, if no person is so designated, the employer, and

(ii)in a case where section 689 or 689A applies, the references to the employer in sub-paragraph (i) are to be read as references to the relevant person (within the meaning of section 689 or 689A).

Textual Amendments

F1812Ss. 690-690C substituted for s. 690 (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 21(1)(2) (with s. 21(3))

690BDirection by HMRC in relation to internationally mobile employeesU.K.

(1)This section applies where—

(a)a notice given during the mobile tax year under section 690A has effect, and

(b)it appears to an officer of Revenue and Customs that the proportion of any uncertain payment made by the employer to the employee that is treated as not being a payment of PAYE income for the purposes of PAYE regulations should not be the proportion specified in the notice.

(2)An officer of Revenue and Customs may give a direction—

(a)for determining a proportion of any uncertain payment made by the employer to the employee which is to be treated for the purposes of PAYE regulations as not being a payment of PAYE income, or

(b)that any such payment is to be treated entirely as PAYE income for the purposes of PAYE regulations.

(3)A direction under subsection (2)—

(a)must specify the employee and the mobile tax year,

(b)must be given by notice to the appropriate person, and

(c)may be varied by notice to the appropriate person from a date specified in the notice (which may not be earlier than 30 days from the date on which the notice is given).

(4)If—

(a)a direction under subsection (2) has effect, and

(b)any uncertain payment is made by the employer to the employee in any tax year,

the direction applies in relation to the payment.

(5)A direction under subsection (2) has effect when it is given.

(6)A direction under subsection (2) ceases to have effect if—

(a)the notice to which the direction relates was given on the basis that the employee was likely to be non-UK resident for the mobile tax year, and

(b)a notice has subsequently been—

(i)given by the appropriate person under section 690D (employer notification for qualifying new resident) on the basis that the employee is or is likely to be a qualifying new resident for the mobile tax year, and

(ii)acknowledged by an officer of Revenue and Customs.

(7)Subsection (4) is without prejudice to—

(a)any assessment in respect of the income of the employee in question, and

(b)any right to repayment of income tax and any relevant debts overpaid and any obligation to pay income tax underpaid and any relevant debts that remain wholly or partly unpaid.

Textual Amendments

F1812Ss. 690-690C substituted for s. 690 (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 21(1)(2) (with s. 21(3))

690CEmployees who were internationally mobile etc. before 2025-26U.K.

(1)This section applies in relation to an employee if the employee falls within subsection (2) or (3) in relation to a tax year that was before tax year 2025-26.

(2)An employee falls within this subsection in relation to a tax year if the employee worked both inside and outside the UK in that tax year and—

(a)the employee was non-UK resident for that tax year or it appears likely to the employer that the employee was non-UK resident, or

(b)the tax year was a spilt year as respects the employee or it appears likely to the employer that the tax year was such a year.

(3)An employee falls within this subsection in relation to a tax year if—

(a)the employee worked outside the UK in the tax year,

(b)the employee met the requirement of section 26A for that tax year or it appears likely to the employer that the employee met that requirement, and

(c)the employee has made a claim under section 809B of ITA 2007 (claim for remittance basis) for that tax year or it appears likely to the employer that the employee has or will make such a claim.

(4)If the employer makes a payment to the employee of, or on account of, general earnings for that tax year, the amount of the payment that is to be treated as PAYE income for the purposes of the PAYE regulations is the amount that, on the basis of the best estimate that can be reasonably made, is likely to be PAYE income.

(5)For the purposes of subsection (4)—

(a)where this section applies to an employee because it appears likely to the employer that a certain state of affairs exists, the employer may assume that state of affairs exists;

(b)whether general earnings are “for” that tax year is determined in accordance with sections 29 and 30.]

Textual Amendments

F1812Ss. 690-690C substituted for s. 690 (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 21(1)(2) (with s. 21(3))

[F1813690DEmployer notification for qualifying new residentsU.K.

(1)This section applies in relation to an employee if—

(a)the employee is or is likely to be a qualifying new resident for a tax year (“the qualifying year”), and

(b)the employee works or is likely to work outside the UK during the qualifying year.

(2)The appropriate person may give a notice to an officer of Revenue and Customs at any time during the qualifying year—

(a)that the employer is proposing to treat the foreign proportion of any qualifying payment made by the employer to the employee as not being PAYE income of the employee for the purposes of PAYE regulations, and

(b)specifying that proportion.

(3)For the purposes of this section and section 690E—

(a)a “qualifying payment” means a payment of, or on account of, an amount of employment income of the employee that is likely to be qualifying employment income;

(b)the “foreign proportion” of a qualifying payment is the proportion of the employment income that, on the basis of the best estimate that can reasonably be made, is likely to be qualifying foreign employment income.

(4)If a notice given under this section has effect, the proportion of any qualifying payment made by the employer to the employee in any tax year which is to be treated for the purposes of PAYE regulations as not being a payment of PAYE income is the proportion specified in the notice.

(5)A notice given under this section—

(a)does not have effect if a direction has previously been given to the appropriate person under section 690E (direction by HMRC in relation to qualifying new residents) in relation to the employee and the qualifying year;

(b)otherwise, has effect when it is acknowledged by an officer of Revenue and Customs.

(6)A notice given under this section ceases to have effect if—

(a)a direction under section 690E is given to the appropriate person in relation to the employee and the qualifying year,

(b)a subsequent notice is given by the appropriate person under this section and is acknowledged by an officer of Revenue and Customs, or

(c)a subsequent notice—

(i)is given by the appropriate person under section 690A (employer notification for internationally mobile employee) on the basis that the employee is or is likely to be non-UK resident in the qualifying year, and

(ii)is acknowledged by an officer of Revenue and Customs.

(7)A notice given under this section must be in such manner and form, and contain such information, as may be specified in a general direction made by the Commissioners for His Majesty’s Revenue and Customs.

(8)Subsection (4) is without prejudice to—

(a)any assessment in respect of the income of the employee in question, and

(b)any right to repayment of income tax and any relevant debts overpaid and any obligation to pay income tax underpaid and any relevant debts that remain wholly or partly unpaid.

(9)For the purposes of this section and section 690E—

(a)where an amount of employment income is treated as PAYE income paid by the employer for the purposes of PAYE regulations by virtue of section 687A or 695A (employment income under Part 7A) or section 696 (readily convertible assets), the employer is to be treated as making payment of that amount of employment income, and

(b)“qualifying new resident”, “qualifying employment income” and “qualifying foreign employment income” have the same meaning as in Chapter 5C of Part 2 (relief for new residents on foreign employment income).

Textual Amendments

F1813Ss. 690D, 690E inserted for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 4 (with Sch. 8 Pt. 3)

690EDirection by HMRC in relation to qualifying new residentsU.K.

(1)This section applies where—

(a)a notice given during the qualifying year under section 690D has effect, and

(b)it appears to an officer of Revenue and Customs that the proportion of any qualifying payment made by the employer to the employee that is treated as not being a payment of PAYE income for the purposes of PAYE regulations should not be the proportion specified in the notice.

(2)An officer of Revenue and Customs may give a direction—

(a)for determining a proportion of any qualifying payment made by the employer to the employee which is to be treated for the purposes of PAYE regulations as not being a payment of PAYE income, or

(b)that any such payment is to be treated entirely as PAYE income for the purposes of PAYE regulations.

(3)A direction under subsection (2)—

(a)must specify the employee and the qualifying year,

(b)must be given by notice to the appropriate person, and

(c)may be varied by notice to the appropriate person from a day specified in the notice (which may not be earlier than 30 days from the date on which the notice is given).

(4)If—

(a)a direction under subsection (2) has effect, and

(b)any qualifying payment is made by the employer to the employee in any tax year,

the direction applies to the payment.

(5)A direction under subsection (2) has effect when it is given.

(6)A direction under subsection (2) ceases to have effect if a notice has subsequently been—

(a)given by the appropriate person under section 690A (employer notification for internationally mobile employee) on the basis that the employee is or is likely to be non-UK resident for the qualifying year, and

(b)acknowledged by an officer of Revenue and Customs.

(7)Subsection (4) is without prejudice to—

(a)any assessment in respect of the income of the employee in question, and

(b)any right to repayment of income tax and any relevant debts overpaid and any obligation to pay income tax underpaid and any relevant debts that remain wholly or partly unpaid.]

Textual Amendments

F1813Ss. 690D, 690E inserted for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(3), Sch. 8 para. 4 (with Sch. 8 Pt. 3)

691Mobile UK workforceU.K.

(1)This section applies if it appears to [F111the Commissioners for Her Majesty’s Revenue and Customs] that—

(a)a person (“the relevant person”) has entered into or is likely to enter into an agreement that employees of another person (“the contractor”) are in any period to work for, but not as employees of, the relevant person,

(b)payments of, or on account of, PAYE income of the employees in respect of work done in that period are likely to be made by or on behalf of the contractor, and

(c)PAYE regulations would apply on the making of such payments but it is likely that income tax [F1814and any relevant debts] will not be deducted, or will not be accounted for, in accordance with the regulations.

(2)The [F1815Commissioners] may give a direction that, if—

(a)any of the employees of the contractor work in any period for, but not as employees of, the relevant person, and

(b)any payment is made by the relevant person in respect of work done by the employees in that period,

[F1816income tax and any relevant debts are] to be deducted in accordance with the provisions of this section by the relevant person on making the payment.

(3)A direction under subsection (2)—

(a)must specify the relevant person and the contractor to whom it relates;

(b)must be given by notice to the relevant person; and

(c)may at any time be withdrawn by notice to the relevant person.

(4)The [F1815Commissioners] must take such steps as are reasonably practicable to ensure that a contractor is supplied with a copy of any notice under subsection (3) which relates to him.

(5)If—

(a)a direction under subsection (2) has effect, and

(b)any employees of the contractor specified in the direction work for, but not as employees of, the relevant person so specified,

income tax [F1817and any relevant debts are], subject to and in accordance with PAYE regulations, to be deducted by the relevant person on making any payment in respect of that work as if so much of the payment as is attributable to work done by each employee were a payment of PAYE income of that employee.

Textual Amendments

692Organised arrangements for sharing tipsU.K.

(1)PAYE regulations may make provision with respect to organised arrangements for tips to be shared among employees by a person (“P”) who is not the principal employer.

(2)PAYE regulations may include provisions which, for the purposes of PAYE regulations—

(a)treat every payment made by P to an employee by way of the employee’s share of any tips (including the retention by P of P’s own share if P is an employee) as a payment of PAYE income by P, and

(b)treat P as the employer in relation to every such payment.

(3)PAYE regulations may also include provisions which—

(a)apply if P has failed to comply with any of the requirements of PAYE regulations, and

(b)treat the principal employer, for the purposes of PAYE regulations, as making payments to the employees of any tips paid over to P by the principal employer.

(4)In this section—

  • “the principal employer” means the person under whose general control and management the employees work;

  • “tips” means gratuities and service charges.

Chapter 4U.K.PAYE: special types of income

Income provided by means of vouchers and tokensU.K.

693Cash vouchersU.K.

(1)If a cash voucher to which Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) applies is received by an employee at any time, the employer is to be treated, for the purposes of PAYE regulations, as making at that time a payment of PAYE income of the employee of an amount equal to the amount ascertained under [F1818subsection (2) of, or (as the case may be) referred to in subsection (1A)(b) of, section 81] (benefit of cash voucher treated as earnings).

(2)This section does not apply to the provision of a cash voucher if—

(a)the voucher is used to meet expenses, and

(b)if the amount for which the voucher is capable of being exchanged had been paid directly to the employee by his or her employer, the amount would not have been PAYE income except by virtue of section 70 (sums in respect of expenses).

(3)This section does not apply to the provision of a cash voucher if it is exchanged for an amount which—

(a)is used to meet expenses, and

(b)if it had been paid directly to the employee by the employer, would not have been PAYE income except by virtue of section 70.

(4)PAYE regulations may exclude from the scope of this section the provision of cash vouchers in circumstances specified in the regulations.

(5)A cash voucher provided for an employee and appropriated to the employee—

(a)by attaching it to a card held for the employee, or

(b)in any other way,

is to be treated for the purposes of this section as having been received by the employee at the time when it is appropriated.

Textual Amendments

F1818Words in s. 693(1) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 57

694Non-cash vouchersU.K.

(1)If a non-cash voucher to which this section applies is received by an employee, the employer is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount ascertained under section 87(2) [F1819or 87A(4)] (benefit of non-cash voucher treated as earnings).

(2)This section applies to a non-cash voucher to which Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) applies if—

(a)either of the conditions set out below is met with respect to the voucher, and

(b)the voucher is not of a description for the time being excluded from the scope of this section by PAYE regulations.

(3)The first condition is met with respect to a non-cash voucher if it is capable of being exchanged for anything which, if provided to the employee at the time when the voucher is received, would fall to be regarded as a readily convertible asset.

(4)The second condition is met with respect to a non-cash voucher if (but for section 701(2)(b)) it would fall itself to be regarded as a readily convertible asset.

(5)A payment under subsection (1) is made—

(a)in the case of a non-cash voucher other than a cheque voucher, at the time when the cost of provision is incurred or, if later, the time when the voucher is received by the employee;

(b)in the case of a cheque voucher, at the time when the voucher is handed over in exchange for money, goods or services.

(6)For the purposes of subsection (5)—

  • “cheque voucher” has the same meaning as in Chapter 4 of Part 3;

  • “cost of provision”, in relation to a voucher provided by an employer, has the meaning given by section 87;

  • and a cheque voucher that is posted is to be treated as handed over at the time of posting.

(7)A non-cash voucher provided for an employee and appropriated to the employee—

(a)by attaching it to a card held for the employee, or

(b)in any other way,

is to be treated for the purposes of this section as having been received by the employee at the time when it is appropriated.

Textual Amendments

F1819Words in s. 694(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 58

695Credit-tokensU.K.

(1)On each occasion on which an employee uses a credit-token provided to the employee because of the employee’s employment to obtain—

(a)money, or

(b)anything which, if provided to the employee at the time when the credit-token is used, would fall to be regarded as a readily convertible asset,

the employer is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount ascertained under section 94(2) (benefit of credit-token treated as earnings).

[F1820(1A)If the credit-token is provided pursuant to optional remuneration arrangements, the reference in subsection (1) to the amount ascertained under section 94(2) is to be read as a reference to what that amount would be were the credit-token provided otherwise than pursuant to optional remuneration arrangements.

In this subsection “optional remuneration arrangements” is to be interpreted in accordance with section 69A.]

(2)The use of a credit-token by an employee to obtain money is excluded from the scope of this section if the money—

(a)is used to meet expenses, and

(b)if it had been paid directly to the employee by the employer, would not have been PAYE income except by virtue of section 70 (sums in respect of expenses).

(3)PAYE regulations may make provision for excluding from the scope of this section any other description of use of a credit-token.

Textual Amendments

F1820S. 695(1A) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 59

Income provided in other waysU.K.

[F1821695AEmployment income under Part 7AU.K.

(1)This section applies if—

(a)the value of a relevant step counts as employment income under Chapter 2 of Part 7A, and

(b)the relevant step is not the payment of a sum of money,

and references to A and B are to be read accordingly.

(2)For the purposes of PAYE regulations B is treated as making a payment of PAYE income of A of an amount which, on the basis of the best estimate which can reasonably be made, is—

(a)the amount of the employment income, less

(b)so much of that amount (if any) to which section 554Z9(2) or 554Z10(2) applies.

(3)The payment is treated as made on the latest of the following days—

(a)the day on which the relevant step is taken,

(b)the day on which A's employment with B starts, and

(c)the day which is 30 days after the day on which FA 2011 is passed.

(4)Subsection (2) does not apply if the person who takes the relevant step (whether or not a person to whom PAYE regulations apply) accounts for income tax on the relevant step in accordance with PAYE regulations.]

Textual Amendments

F1821S. 695A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 31

696Readily convertible assetsU.K.

(1)If any PAYE income of an employee is provided in the form of a readily convertible asset, the employer is to be treated, for the purposes of PAYE regulations, as making a payment of that income of an amount equal to the amount given by subsection (2).

(2)The amount referred to is the amount which, on the basis of the best estimate that can reasonably be made, is the amount of income likely to be PAYE income in respect of the provision of the asset.

[F1822(3)This section does not apply to any PAYE income so far as it is employment income under Chapter 2 of Part 7A.]

Textual Amendments

F1822S. 696(3) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 32

697Enhancing the value of an assetU.K.

(1)This section applies if—

(a)any PAYE income of an employee is provided in the form of anything enhancing the value of an asset in which the employee or a member of the employee’s family or household already has an interest, and

(b)that asset, with its value enhanced, would be treated as a readily convertible asset if PAYE income were provided to the employee in the form of the asset at the time of the enhancement.

(2)Section 696 has effect as if—

(a)the employee had been provided, at the time of the enhancement, with PAYE income in the form of the asset (with its value enhanced), instead of with what enhanced its value, and

(b)the reference in subsection (2) to the provision of the asset were a reference to the enhancement of its value.

(3)Any reference in this section to enhancing the value of an asset is a reference to—

(a)the provision of any services by which the asset or any right or interest in it is improved or otherwise made more valuable,

(b)the provision of any property the addition of which to the asset improves it or otherwise increases its value, or

(c)the provision of any other enhancement by the application of money or property to the improvement of the asset or to securing an increase in its value or the value of any right or interest in it.

(4)There is excluded from the scope of what constitutes enhancing the value of an asset for the purposes of this section any enhancement of value arising on the acquisition by the employee (whether or not as a result of the exercise of a right to acquire shares) of—

(a)any shares acquired by the employee under a scheme approved under F1823... Schedule 9 to ICTA (approved profit sharing schemes),

[F1824(aa)any shares acquired by the employee under a scheme which is a Schedule 3 SAYE option scheme (see Schedule 3),]

[F1825(ab)any shares acquired by the employee under a scheme which is a Schedule 4 CSOP scheme (see Schedule 4),]

(b)any right over or interest in shares obtained or acquired by the employee under [F1826a scheme mentioned in any of the preceding paragraphs], or

(c)any shares acquired by the employee as a result of the exercise of a right over shares obtained before 27th November 1996,

if the shares in question form part of the share capital of a company falling within section 701(3).

(5)PAYE regulations may make provision excluding such other matters as may be described in the regulations from the scope of what constitutes enhancing the value of an asset for the purposes of this section.

Textual Amendments

F1823Words in s. 697(4)(a) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 137(a), 146 (with Sch. 8 paras. 147-157)

F1824S. 697(4)(aa) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 137(b), 146 (with Sch. 8 paras. 147-157)

F1825S. 697(4)(ab) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 201, 204 (with Sch. 8 paras. 205-215)

F1826Words in s. 697(4)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 137(c), 146 (with Sch. 8 paras. 147-157)

[F1827698PAYE: special charges on employment-related securitiesU.K.

(1)This section applies where by reason of the operation of—

(a)section 426 (chargeable events in relation to restricted securities and restricted interests in securities),

(b)section 438 (chargeable events in relation to convertible securities and interests in convertible securities),

(c)section 446B (charge on acquisition where market value of securities or interest artificially depressed),

(d)section 446L (charge where market value of securities artificially enhanced),

(e)section 446U (securities or interest acquired for less than market value: charge on discharge of notional loan),

[F1828(ea)section 446UA (securities or interest acquired for less than market value: charge in avoidance cases),]

(f)section 446Y (charge where securities or interest disposed of for more than market value), or

(g)section 447 (chargeable benefit from securities or interest),

in relation to employment-related securities, an amount counts as employment income of an employee.

(2)Sections 684 to 691 and 696 have effect as if—

(a)the employee were provided with PAYE income in the form of the employment-related securities by the employer on the relevant date, and

(b)the reference in subsection (2) of section 696 to the amount of income likely to be PAYE income in respect of the provision of the asset were to the amount likely to count as employment income.

[F1829(2A)For the purposes of this section the amount likely to count as employment income under section 426 or 438 means the amount after deducting the amount of any relief likely to be available under section 428A or 442A (relief for secondary Class 1 contributions met by employee).]

(3)In a case in which the employment-related securities are not readily convertible assets, if—

(a)the amount counts as income by virtue of section 427(3)(c), 439(3)(b), (c) or (d), 446Y or 447, and

(b)the whole or any part of the consideration or benefit concerned takes the form of a payment or consists in the provision of an asset,

subsection (4) applies.

(4)Sections 684 to 691 and 696 have effect —

(a)to the extent that the consideration or benefit takes the form of a payment, as if it were a payment of PAYE income of the employee by the employer, and

(b)to the extent that the consideration or benefit consists in the provision of an asset, as if the provision of the asset were the provision of PAYE income in the form of the asset by the employer on the relevant date.

(5)Section 696 as applied by subsection (4)(b) has effect as if the reference in subsection (2) of that section to the amount of income likely to be PAYE income were to the same proportion of the amount likely to count as employment income as so much of the consideration or benefit as consists in the provision of the asset bears to the whole of the consideration or benefit.

(6)In this section “the relevant date” means—

(a)in relation to an amount counting as employment income under section 426 or 438, the date on which the chargeable event in question occurs,

(b)in relation to an amount counting as employment income under section 446B, the date of the acquisition of the securities or interest in securities in question,

(c)in relation to an amount counting as employment income under section 446L, the valuation date in question,

(d)in relation to an amount counting as employment income under section 446U, the date on which the notional loan in question is treated as discharged,

[F1830(da)in relation to an amount counting as employment income under section 446UA, the date of the acquisition of the securities or interest in securities in question,]

(e)in relation to an amount counting as employment income under section 446Y, the date of the disposal of the securities or interest in securities in question, and

(f)in relation to an amount counting as employment income under section 447, the date on which the benefit in question is received.

(7)In this section “employment-related securities” has the same meaning as in Chapters 1 to 4 of Part 7.

[F1831(8)This section is subject to section 700A (employment-related securities etc: [F1832internationally mobile employees]).]]

Textual Amendments

F1827 S. 698 substituted for ss. 698, 699 (1.9.2003 with effect in accordance with Sch. 22 para. 12(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 12(1); S.I. 2003/1997, art. 2

F1828S. 698(1)(ea) inserted (with effect in accordance with Sch. 2 para. 16(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 16(2)

F1830S. 698(6)(da) inserted (with effect in accordance with Sch. 2 para. 16(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 16(3)

F1831S. 698(8) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 36

F1832Words in s. 698(8) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(14)

F1827699PAYE: conversion of sharesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1827 S. 698 substituted for ss. 698, 699 (1.9.2003 with effect in accordance with Sch. 22 para. 12(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 12(1); S.I. 2003/1997, art. 2

[F1833700PAYE: gains from securities optionsU.K.

(1)This section applies where by reason of the operation of section 476 (acquisition of securities pursuant to securities option etc) in relation to an employment-related securities option an amount counts as employment income of an employee.

(2)In a case where the amount counts as employment income by virtue of section 477(3)(a) (acquisition of securities), sections 684 to 691 and 696 have effect as if—

(a)the employee were provided with PAYE income in the form of the securities by the employer on the relevant date, and

(b)the reference in subsection (2) of section 696 to the amount of income likely to be PAYE income in respect of the provision of the asset were to the amount likely to count as employment income.

(3)In a case where the amount counts as income by virtue of section 477(3)(b) or (c) (assignment or release for consideration or receipt of benefit), sections 684 to 691 and 696 have effect —

(a)to the extent that the consideration or benefit takes the form of a payment, as if it were a payment of PAYE income of the employee by the employer, and

(b)to the extent that the consideration or benefit consists in the provision of an asset, as if the provision of the asset were the provision of PAYE income in the form of the asset by the employer on the relevant date.

(4)Section 696 as applied by subsection (3)(b) has effect as if the reference in subsection (2) of that section to the amount of income likely to be PAYE income were to the same proportion of the amount likely to count as employment income as so much of the consideration or benefit as consists in the provision of the asset bears to the whole of the consideration or benefit.

[F1834(4A)For the purposes of this section the amount likely to count as employment income under section 476 means the amount after deducting the amount of any relief likely to be available under section 481 or 482 (relief for secondary Class 1 contributions or special contribution met by employee).]

(5)In this section “the relevant date” means the date on which the chargeable event in question occurs.

(6)In this section—

  • “employment-related securities option”, and

  • “securities”,

  • have the same meaning as in Chapter 5 of Part 7.

[F1835(7)This section is subject to section 700A (employment-related securities etc: [F1836internationally mobile employees]).]]

Textual Amendments

F1835S. 700(7) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 37

F1836Words in s. 700(7) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(15)

[F1837700AEmployment-related securities etc: [F1838internationally mobile employees] U.K.

(1)This section applies if—

(a)section 698 or 700 applies, and

(b)part or all of the amount that counts as employment income is foreign securities income or is likely to be foreign securities income.

(2)The amount of the payment treated under section 696 as made is limited to—

(a)the amount that, on the basis of the best estimate that can reasonably be made, is likely to count as employment income, minus

(b)the amount that, on the basis of such an estimate, is likely to be foreign securities income.

(3)References in this section to “foreign securities income” are to income that is foreign securities income for the purposes of section [F183941F].]

Textual Amendments

F1837S. 700A inserted (with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 38

F1838Words in s. 700A heading substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 3(16)

F1839Word in s. 700A(3) substituted (with effect in accordance with Sch. 9 para. 48 of the amending Act) by Finance Act 2014 (c. 26), Sch. 9 paras. 21, 47

SupplementalU.K.

701Meaning of “asset”U.K.

(1)In this Chapter “asset” includes any property and in particular any investment of a kind specified in Part 3 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544).

This is subject to subsection (2).

(2)In this Chapter “asset” does not include—

(a)any payment actually made of, or on account of, PAYE income;

(b)F1840... any cash voucher, non-cash voucher or credit-token;

(c)the following—

(i)any shares acquired by the employee (whether or not as a result of the exercise of a right to acquire shares) under a scheme approved under F1841... F1842... Schedule 9 to ICTA (approved profit sharing schemes),

[F1843(iza)any shares acquired by the employee under a scheme which is a Schedule 3 SAYE option scheme (see Schedule 3),]

[F1844(ia)any shares acquired by the employee [F1845under a scheme [F1846which is a Schedule 4 CSOP scheme (see Schedule 4)] in circumstances in which Condition A or B as set out in section 524(2) or (2A) is met;]]

F1847(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii)any shares acquired by the employee as the result of the exercise of a right over shares obtained before 27th November 1996 [F1848where the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the right was obtained or is exercised],

if the shares in question form part of the ordinary share capital of a company falling within subsection (3); or

(d)any description of property for the time being excluded from the scope of this section by PAYE regulations.

(3)A company falls within this subsection if it—

(a)is the employer (“the employer company”);

(b)has control of the employer company; or

(c)either is, or has control of, a company which is a member of a consortium owning either the employer company or a company having control of the employer company.

[F1849(3A)Paragraph (c) of subsection (2) does not apply to shares after their acquisition as mentioned in that paragraph.]

(4)In this section “share” includes stock.

(5)For the purposes of this section a company is a member of a consortium owning another company if it is one of a number of companies which between them beneficially own not less than 75% of the other company’s ordinary share capital and each of which beneficially owns not less than 5% of that capital.

Textual Amendments

F1842Words in s. 701(2)(c)(i) repealed (with effect in accordance with Sch. 21 para. 18(5) of the amending Act) by Finance Act 2003 (c. 14), Sch. 21 para. 18(2), Sch. 43 Pt. 3(3)

F1844S. 701(2)(c)(ia) inserted (with effect in accordance with Sch. 21 para. 18(5) of the amending Act) by Finance Act 2003 (c. 14), Sch. 21 para. 18(3)

F1845Words in s. 701(2)(c)(ia) substituted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(9)(a)

F1847S. 701(2)(c)(ii) repealed (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(9)(b), Sch. 42 Pt. 2(11)

F1848Words in s. 701(2)(c)(iii) inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(9)(c)

F1849S. 701(3A) inserted (18.6.2004 with effect in accordance with s. 88(11)-(13) of the amending Act) by Finance Act 2004 (c. 12), s. 88(10)

702Meaning of “readily convertible asset”U.K.

(1)In this Chapter “readily convertible asset” means—

(a)an asset capable of being sold or otherwise realised on—

(i)a recognised investment exchange (within the meaning of the Financial Services and Markets Act 2000 (c. 8)),

(ii)the London Bullion Market,

(iii)the New York Stock Exchange, or

(iv)a market for the time being specified in PAYE regulations;

(b)an asset consisting in—

(i)the rights of an assignee, or any other rights, in respect of a money debt that is or may become due to the employer or any other person,

(ii)property that is subject to a warehousing regime, or any right in respect of property so subject, or

(iii)anything that is likely (without anything being done by the employee) to give rise to, or to become, a right enabling a person to obtain an amount or total amount of money which is likely to be similar to the expense incurred in the provision of the asset; or

(c)an asset for which trading arrangements are in existence, or are likely to come into existence in accordance with—

(i)any arrangements of another description existing when the asset is provided, or

(ii)any understanding existing at that time.

(2)For the purposes of this section trading arrangements for any asset provided to any person exist whenever there exist any arrangements the effect of which in relation to that asset is to enable—

(a)that person, or

(b)a member of that person’s family or household,

to obtain an amount or total amount of money that is, or is likely to be, similar to the expense incurred in the provision of that asset.

(3)PAYE regulations may exclude any description of arrangements from being trading arrangements for the purposes of this section.

(4)References in this section to enabling a person to obtain an amount of money are to be read—

(a)as references to enabling an amount to be obtained by that person by any means at all, including in particular—

(i)by using any asset or other property as security for a loan or advance, or

(ii)by using any rights comprised in or attached to any asset or other property to obtain any asset for which trading arrangements exist; and

(b)as including references to cases where a person is enabled to obtain an amount as a member of a class or description of persons, as well as where the person is so enabled in the person’s own right.

(5)For the purposes of this section an amount is similar to the expense incurred in the provision of any asset if it is, or is an amount of money equivalent to—

(a)the amount of the expense so incurred, or

(b)a greater amount, or

(c)an amount that is less than that amount but not substantially so.

[F1850(5A)An asset consisting in securities which is not a readily convertible asset apart from this subsection is to be treated as a readily convertible asset unless the securities are shares that are corporation tax deductible.

(5B)For the purposes of subsection (5A) shares are corporation tax deductible if they are acquired by a person—

(a)by reason of that, or another person's, employment with a company, or

(b)pursuant to an option granted by reason of that, or another person's, employment with a company,

and the company is entitled to corporation tax relief in respect of the shares under [F1851Part 12 of CTA 2009] (corporation tax relief for employee share acquisition).

(5C)If a person acquires additional shares by virtue of holding shares that are corporation tax deductible, the additional shares are to be treated for the purposes of subsection (5A) as if they were corporation tax deductible.

(5D)If—

(a)on a person ceasing to be beneficially entitled to shares that are corporation tax deductible, that person acquires other shares, and

(b)the circumstances are such that the shares to which the person ceases to be beneficially entitled constitute “original shares” and the other shares constitute a “new holding” for the purposes of sections 127 to 130 of TCGA 1992,

the shares that constitute the new holding are to be treated for the purposes of subsection (5A) as if they were corporation tax deductible.]

(6)In this section—

  • “money” includes money expressed in a currency other than sterling;

  • “money debt” means any obligation which falls to be, or may be, settled—

    (a)

    by the payment of money, or

    (b)

    by the transfer of a right to settlement under an obligation which is itself a money debt;

  • [F1852"securities" has the same meaning as in Chapters 1 to 5 of Part 7 (employment income from securities) (see section 420),

  • “shares” includes—

    (a)

    an interest in shares, and

    (b)

    stock or an interest in stock,]

  • “warehousing regime” means—

    (a)

    a warehousing or fiscal warehousing regime (within the meaning of sections 18 to 18F of the Value Added Tax Act 1994 (c. 23)); or

    (b)

    any corresponding arrangements in a State other than the United Kingdom which is a Contracting Party to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as adjusted by the Protocol signed at Brussels on 17th March 1993.

Textual Amendments

F1850S. 702(5A)-(5D) inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 15(2)

F1851Words in s. 702(5B) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 555 (with Sch. 2 Pts. 1, 2)

F1852Words in s. 702(6) inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 15(3)

Modifications etc. (not altering text)

C133S. 702 modified (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 15(4)

C134S. 702 modified (17.12.2020 for specified purposes, 31.12.2020 in so far as not already in force) by 1994 c. 23, Sch. 9ZB para. 26(3) (as inserted by Taxation (Post-transition Period) Act 2020 (c. 26), s. 11(1)(e), Sch. 2 para. 2 (with s. 3(4), Sch. 2 para. 7(7)-(10)); S.I. 2020/1642, reg. 9)

Chapter 5U.K.PAYE settlement agreements

703IntroductionU.K.

This Chapter provides—

(a)for employers to make agreements with [F1853Her Majesty's Revenue and Customs] (“PAYE settlement agreements”) under which they agree to be accountable to the [F1854Commissioners] for sums in respect of income tax on general earnings of their employees; and

(b)for such earnings to be treated for certain purposes of the Income Tax Acts as excluded from the employees' income.

Textual Amendments

F1853Words in s. 703(a) substituted (with effect in accordance with s. 6(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 6(1)

704Sums payable by employers under agreementsU.K.

(1)PAYE regulations may provide—

(a)for a person to make a PAYE settlement agreement with [F1855Her Majesty's Revenue and Customs]; and

(b)to such extent as may be prescribed, for that person’s accountability, and the sums to be accounted for, in respect of income tax on general earnings of that person’s employees to be determined—

(i)in accordance with the agreement, and

(ii)not in accordance with PAYE regulations which would apply apart from this Chapter.

(2)Without prejudice to the generality of section 684(2), any power of the [F1856Commissioners] to make PAYE regulations with respect to sums falling to be accounted for under such regulations includes power to make the corresponding provision with respect to sums falling to be accounted for in accordance with a PAYE settlement agreement.

Textual Amendments

F1855Words in s. 704(1)(a) substituted (with effect in accordance with s. 6(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 6(1)

705Approximations allowed in calculationsU.K.

PAYE regulations may provide for a PAYE settlement agreement to allow sums which an employer is to account for—

(a)to be computed, if two or more persons hold employments to which the agreement relates, by reference to a number of those persons all taken together;

(b)to include sums representing income tax on an estimated amount taken to be the aggregate of the amounts of PAYE income consisting of—

(i)taxable benefits provided or made available by reason of the employments to which the agreement relates, and

(ii)expenses paid to the persons holding those employments; and

(c)to be computed in a manner under which they do not necessarily represent an amount of income tax which would be payable (apart from the agreement) by persons holding employments to which the agreement relates.

706Exclusion of general earnings from income etc.U.K.

PAYE regulations may provide—

(a)that sums accountable for by an employer under a PAYE settlement agreement, or any other sums, are not to be treated for any prescribed purpose as tax deducted from general earnings;

(b)that an employee is to have no right to be treated as having paid tax in respect of sums accountable for by the employer under such an agreement;

(c)that an employee is to be treated, except—

(i)for the purposes of the obligations imposed on the employer by such an agreement, and

(ii)to such further extent as may be prescribed,

as relieved from any prescribed obligations of the employee under the Income Tax Acts in respect of general earnings from an employment to which the agreement relates; and

(d)that such earnings are to be treated as excluded from the employee’s income for such further purposes of the Income Tax Acts, and to such extent, as may be prescribed.

707Interpretation of this ChapterU.K.

In this Chapter—

  • “employment” means any employment the general earnings from which are (or, apart from any regulations made by virtue of [F1857this Chapter], would be) PAYE income and related expressions are to be construed accordingly;

  • “prescribed” means prescribed by PAYE regulations;

  • “taxable benefit”, in relation to an employee, means any benefit provided or made available, otherwise than in the form of a payment of money, to the employee, or to a person who is a member of the employee’s family or household.

Textual Amendments

F1857Words in s. 707 substituted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(5)

Chapter 6U.K.Miscellaneous and supplemental

[F1858707AProvision of additional information to His Majesty’s Revenue and CustomsU.K.

(1)PAYE regulations may include provision requiring an employer to provide any information that is specified or described in regulations made by the Commissioners (whether or not that information is also relevant to the assessment, charge, collection and recovery of income tax in respect of PAYE income).

(2)The Commissioners for His Majesty’s Revenue and Customs may only specify or describe information in regulations under subsection (1) if the Commissioners consider that the information is relevant for the purpose of the collection and management of any of the taxes listed in section 1 of TMA 1970.]

Textual Amendments

F1858S. 707A inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2024 (c. 3), s. 36(4)(5)

708PAYE repaymentsU.K.

(1)PAYE regulations may provide that no repayment of income tax may be made under such regulations to a person—

(a)during a period for which the person has claimed jobseeker’s allowance, or

(b)at a time when the person is prevented by the trade disputes provisions from being entitled to a jobseeker’s allowance, or would be so prevented if the person otherwise met the conditions for entitlement.

(2)Different provision may be made with respect to—

(a)persons within subsection (1)(a), and

(b)persons within subsection (1)(b).

(3)“The trade disputes provisions” means—

(a)section 14 of JSA 1995, or

(b)Article 16 of JS(NI)O 1995.

709Additional provision for certain assessmentsU.K.

(1)This section applies if—

(a)an assessment to income tax is made as respects relevant income (with or without other income), and

(b)the assessment is made after the end of the period of 12 months following the tax year for which it is made.

(2)In so far as it relates to relevant income, the assessment is to be made in accordance with the practice generally prevailing at the end of that period.

(3)“Relevant income” means income which—

(a)has been taken into account in the making of deductions or repayments of tax under PAYE regulations, and

(b)was received not less than 12 months before the beginning of the tax year in which the assessment is made.

710Notional payments: accounting for taxU.K.

(1)If an employer makes a notional payment of PAYE income of an employee, the employer must[F1859, subject to and in accordance with PAYE regulations,] deduct income tax at the relevant time from any payment or payments the employer actually makes of, or on account of, PAYE income of the employee.

(2)For the purposes of this section—

(a)a notional payment is a payment treated as made by virtue of any of sections 687, [F1860687A,] 689[F1861, 689A] and 693 to 700, other than a payment whose amount is given by section 687(3)(a)[F1862, 689(3)(a) or 689A(4)(a)], and

(b)any reference to an employer includes a reference to a person who is treated as making a payment by virtue of section 689(2) [F1863or 689A(3)].

(3)Subsection (4) applies if, because the payments actually made are insufficient for the purpose, the employer is unable to deduct the full amount of the income tax as required by subsection (1).

(4)The employer must[F1864, subject to and in accordance with PAYE regulations,] account to [F111the Commissioners for Her Majesty’s Revenue and Customs] at the relevant time for an amount of income tax equal to the amount of income tax the employer is required, but is unable, to deduct.

(5)PAYE regulations may make provision—

(a)with respect to the time when any notional payment (or description of notional payment) is made;

(b)applying (with or without modifications) any specified provisions of the regulations for the time being in force in relation to deductions from actual payments to amounts [F1865deducted or accounted for (or required to be deducted or accounted for)] in respect of any notional payments;

(c)with respect to the collection and recovery of amounts [F1866deducted or accounted for (or required to be deducted or accounted for)] in respect of notional payments.

(6)Any amount—

(a)which an employer deducts as mentioned in subsection (1), or

(b)for which an employer accounts as mentioned in subsection (4),

is to be treated as [F1867an amount of tax which], at the time when the notional payment is made, [F1867is deducted] in respect of the employee’s liability to income tax.

(7)“The relevant time” means [F1868(subject to subsection (7A))]—

(a)in subsection (1), any occasion—

(i)on or after the time when the notional payment is made, and

(ii)falling within the same income tax period,

on which the employer actually makes a payment of, or on account of, PAYE income of the employee;

(b)in subsection (4), any time within 14 days of the end of the income tax period in which the notional payment was made.

[F1869(7A)In a case where the notional payment is treated by virtue of any Act as made before the date on which the Act is passed—

(a)the reference in sub-paragraph (i) of paragraph (a) of subsection (7) to the time when the notional payment is made is to the date on which the Act is passed,

(b)the reference in sub-paragraph (ii) of that paragraph to any occasion falling within the same income tax period is to any occasion falling before the end of the income tax period next after that in which that date falls, and

(c)the reference in paragraph (b) of that subsection to the income tax period in which the notional payment was made is to the income tax period next after that in which that date falls.]

(8)In subsection (7) “income tax period” has the same meaning as in the Income Tax (Employments) Regulations 1993 (S.I. 1993/744), or any subsequent regulations making corresponding provision.

Textual Amendments

F1859Words in s. 710(1) inserted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(6)(a)

F1860Word in s. 710(2)(a) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 33

F1861Words in s. 710(2)(a) inserted (6.4.2014) by Finance Act 2014 (c. 26), s. 21(7)(a)(i)(10)

F1862Words in s. 710(2)(a) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 21(7)(a)(ii)(10)

F1863Words in s. 710(2)(b) inserted (6.4.2014) by Finance Act 2014 (c. 26), s. 21(7)(b)(10)

F1864Words in s. 710(4) inserted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(6)(a)

F1865Words in s. 710(5)(b) substituted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(6)(b)

F1866Words in s. 710(5)(c) substituted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(6)(b)

F1867Words in s. 710(6) substituted (10.7.2003) by Finance Act 2003 (c. 14), s. 145(6)(c)

F1868Words in s. 710(7) inserted (with effect in accordance with s. 94(5) of the amending Act) by Finance Act 2006 (c. 25), s. 94(4)(a); S.I. 2007/1081, art. 2

F1869S. 710(7A) inserted (with effect in accordance with s. 94(5) of the amending Act) by Finance Act 2006 (c. 25), s. 94(4)(b); S.I. 2007/1081, art. 2

Modifications etc. (not altering text)

711Right to make a returnU.K.

(1)A person who has PAYE income for a tax year in respect of which deductions or repayments are made under PAYE regulations may by notice require [F165an officer of Revenue and Customs] to give that person a notice under section 8 of TMA 1970 (personal return) for the tax year.

(2)A notice to [F165an officer of Revenue and Customs] under subsection (1) must be given no later than [F18703 years] after the 31st October next following the tax year.

Textual Amendments

F1870Words in s. 711(2) substituted (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 49; S.I. 2009/403, art. 2(2) (with art. 10)

712Interpretation of this PartU.K.

(1)In this Part—

  • “employee” means a person who holds or has held employment with another person;

  • “employer” means—

    (a)

    in relation to an employee, a person with whom the employee holds or has held an employment, and

    (b)

    in relation to any PAYE income of an employee, the person who is the employer of the employee in relation to the employment in respect of which the income is or was provided or, as the case may be, by reference to which it falls to be regarded as PAYE income. The above definitions are subject to sections 688 and 710(2)(b).

  • [F1871“ relevant debt ” has the meaning given by section 684(7AA).]

(2)Sections 4 and 5 apply for the purposes of this Part as they apply for the purposes of the employment income Parts.

Textual Amendments

Part 12U.K.Payroll giving

713Donations to charity: payroll deduction schemeU.K.

(1)This section applies if—

(a)an individual is entitled to receive payments of, or on account of, PAYE income in respect of which PAYE regulations require deductions or repayments of income tax in accordance with those regulations, and

(b)at the request of the individual, the person making the payments (the “payer”) withholds sums from them as donations.

(2)In determining whether there is such a requirement under PAYE regulations for the purposes of subsection (1)(a), any requirement under the regulations which requires the deduction of an amount in calculating the payments of, or on account of, PAYE income is to be disregarded.

(3)The amount of the donations is allowed as a deduction in calculating the amount of the individual’s income which is charged to tax in accordance with subsection (4).

(4)In the case of a payment of, or on account of—

(a)taxable earnings from an employment, the deduction is allowed from the taxable earnings from the employment in calculating the net taxable earnings from the employment for the relevant tax year for the purposes of Part 2 (see section 11(1));

(b)taxable specific income from an employment, the deduction is allowed from that taxable specific income in calculating the net taxable specific income from the employment for the relevant tax year for the purposes of Part 2 (see section 12(1));

(c)taxable pension income for a pension, annuity or other item of pension income, the deduction is allowed from that taxable pension income in calculating the net taxable pension income for that income for the relevant tax year for the purposes of Part 9 (see section 567(3));

(d)taxable social security income for a taxable benefit, the deduction is allowed from that taxable social security income in calculating the net taxable social security income for that benefit for the relevant tax year for the purposes of Part 10 (see section 658(3)).

(5)For the purposes of subsection (4) “relevant tax year” means—

(a)in the case of paragraphs (a) and (b), the tax year in which the donation is withheld, and

(b)in the case of paragraphs (c) and (d), the tax year for which the income referred to in subsection (1)(a) is taxable pension income or taxable social security income, as the case may be.

[F1872(6)This section is subject to section 809ZM of ITA 2007 (removal of income tax relief in respect of tainted charity donations etc).]

Textual Amendments

F1872S. 713(6) inserted (with effect in accordance with Sch. 3 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 3 para. 5

714Meaning of “donations”U.K.

(1)For the purposes of this Part “donations” means sums which—

(a)are withheld by the payer under a scheme which is an approved scheme at the time of the withholding,

(b)constitute gifts by the individual to one or more specified charities under the scheme, and

(c)satisfy the conditions (if any) set out in the scheme.

(2)In this section—

  • “approved scheme” means a scheme which is approved (or is of a kind approved) by [F165an officer of Revenue and Customs] and under which—

    (a)

    the payer is required to pay sums withheld to a body which is an approved agent at the time of the withholding, and

    (b)

    the approved agent is required—

    (i)

    to pay sums withheld to the specified charity or charities, or

    (ii)

    in a case where the agent is itself a specified charity, to retain any sum due to itself;

  • “charity” F1873... includes each of the bodies mentioned in [F1874section 468 of CTA 2010];

  • “specified charity” means a charity specified by the individual.

(3)For the purposes of this section a body is an “approved agent” if it is approved by [F165an officer of Revenue and Customs] for the purpose of paying donations to one or more charities.

Textual Amendments

F1873Words in s. 714(2) omitted (coming into force for the tax year 2012-13 and subsequent tax years) by virtue of Finance Act 2010 (c. 13), Sch. 6 paras. 17(7), 34(2); S.I. 2012/736, art. 13

F1874Words in s. 714(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 394 (with Sch. 2)

715Approval of schemes: regulation by TreasuryU.K.

(1)The Treasury may by regulations prescribe the circumstances in which [F165an officer of Revenue and Customs] may grant or withdraw approval of any—

(a)scheme,

(b)kind of scheme, or

(c)agent.

(2)The circumstances, whether relating to the terms of schemes or the qualifications of agents or otherwise, are to be such as the Treasury think fit.

(3)The Treasury may by regulations make provision—

(a)requiring a payer or agent who participates (or has at any time participated) in an approved scheme under this Part—

F1875(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)in prescribed circumstances, to furnish to [F165an officer of Revenue and Customs] prescribed information;

(b)for, and in relation to, appeals F1876... against [F1877a refusal by an officer of Revenue and Customs to approve], or [F1878the officer's] withdrawal of approval from, any—

(i)scheme,

(ii)kind of scheme, or

(iii)agent;

(c)generally for giving effect to sections 713 and 714.

In this subsection “prescribed” means prescribed by the regulations.

Textual Amendments

Part 13U.K.Supplementary provisions

Alteration of amountsU.K.

716Alteration of amounts by Treasury orderU.K.

(1)The Treasury may by order increase or further increase the sums of money specified in any of the following provisions.

(2)They are—

(a)section 179(2)(a) (limit on exception for advances for necessary expenses),

(b)section 241(3)(a) and (b) (incidental overnight expenses: overall exemption limit),

(c)section 264(2) and (3) (annual parties and functions),

(d)section 287(1) (limit on exemption under Chapter 7 of Part 4: removal benefits and expenses),

(e)section 322(1) and (4) (suggestion awards: “the permitted maximum”),

(f)section 323(2) (long service awards),

[F1879(fa)section 323A(4) (trivial benefits provided by employers: cost of providing benefit),

(fb)section 323B(2) (trivial benefits provided by employers: annual exempt amount),]

(g)section 324(6) (small gifts from third parties), and

(h)section 358(3)(b) (business entertainment and gifts: other exceptions).

(3)An order relating to section 241(3)(a) or (b) may make provision for determining what earnings are treated as received on or after the date when the order comes into force.

(4)An order relating to section 287(1) applies to a change of an employee’s residence where the employment change occurs on or after the day specified in the order for the purpose.

“The employment change” here has the same meaning as in Chapter 7 of Part 4 (see section 275).

Textual Amendments

F1879S. 716(2)(fa)(fb) inserted (with effect in accordance with s. 13(5) of the amending Act) by Finance Act 2016 (c. 24), s. 13(3)

[F1880Priority rule for certain dividends etcU.K.

Textual Amendments

F1880S. 716A and cross-heading inserted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 615 (with Sch. 2)

716APriority rule for dividends etc. of UK resident companies etc.U.K.

[F1881(1)] Any income, so far as it falls within—

(a)Part 2, 9 or 10 of this Act, and

(b)Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.),

is dealt with under Chapter 3 of Part 4 of ITTOIA 2005.

[F1882(2)Subsection (1) is subject to section 554Z2(2).]]

Textual Amendments

F1881S. 716A renumbered as s. 716A(1) (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 34(2)

F1882S. 716A(2) inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 34(3)

[F1883Employment intermediaries: information powersU.K.

Textual Amendments

F1883S. 716B and cross-heading inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 18(1)

716BEmployment intermediaries to keep, preserve and provide information etcU.K.

(1)For purposes connected with Chapter 7 of Part 2 (treatment of workers supplied by agencies) or Part 11 (PAYE), the Commissioners for Her Majesty's Revenue and Customs may by regulations make provision for, or in connection with, requiring a specified employment intermediary—

(a)to keep and preserve specified information, records or documents for a specified period;

(b)to provide Her Majesty's Revenue and Customs with specified information, records or documents within a specified period or at specified times.

(2)An “employment intermediary” is a person who makes arrangements under or in consequence of which—

(a)an individual works, or is to work, for a third person, or

(b)an individual is, or is to be, remunerated for work done for a third person.

(3)For the purposes of subsection (2), an individual works for a person if—

(a)the individual performs any duties of an employment for that person (whether or not the individual is employed by that person), or

(b)the individual provides, or is involved in the provision of, a service to that person.

(4)In subsection (1) “specified” means specified or described in regulations made under this section.

(5)Regulations under this section may—

(a)make different provision for different cases or different purposes, and

(b)make incidental, consequential, supplementary or transitional provision or savings.]

Orders and regulationsU.K.

717Orders and regulations made by Treasury or [F1884Commissioners] U.K.

(1)Any power of the Treasury or [F111the Commissioners for Her Majesty’s Revenue and Customs] to make any order or regulations under this Act is exercisable by statutory instrument.

This is subject to subsection (2).

(2)Subsection (1) does not apply to the power conferred by section 28(5) (overseas Crown employment: order excepting certain earnings) [F1885or section 421L(7) (persons to whom section 421J applies: order in relation to excluded securities).]

(3)Any statutory instrument containing any order or regulations made by the Treasury or [F111the Commissioners for Her Majesty’s Revenue and Customs] under this Act is subject to annulment in pursuance of a resolution of the House of Commons.

This is subject to subsection (4).

(4)Subsection (3) does not apply to any statutory instrument made under [F1886section 24A(11) (assumptions about related employments),] [F1887section 270AA(3) (exemption from income tax for qualifying childcare vouchers: meaning of “eligible employee”),] [F1888section 318AZA(3) (exemption from income tax for other care: meaning of “eligible employee”),][F1889section 323C(1) (trivial benefits provided by employers),] section 343(3) (deduction for professional membership fees: order adding certain fees) [F1890or section 688A(7) (PAYE regulations: managed service companies)] [F1891or to which [F1892section 312A(10) (reduction of tax-exempt amount in respect of certain bonus payments) [F1893, section 402D(10) (meaning of basic pay for purpose of calculating charge on termination award), section 404B(4) (reduction of tax-free threshold for employment-termination etc payments)] or] section 681F(3) (variation of income limit etc for high income child benefit charge: orders increasing liability to tax) applies] .

Textual Amendments

F1885Words in s. 717(2) inserted (19.7.2007) by Finance Act 2007 (c. 11), Sch. 26 para. 10(3)

F1886Words in s. 717(4) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 3 para. 6

F1887Words in s. 717(4) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 63(5), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F1888Words in s. 717(4) inserted (21.4.2017) by Childcare Payments Act 2014 (c. 28), ss. 64(6), 75(2); S.I. 2017/578, reg. 3(f) (with reg. 8)

F1889Words in s. 717(4) inserted (with effect in accordance with s. 13(5) of the amending Act) by Finance Act 2016 (c. 24), s. 13(4)

F1890Words in s. 717(4) inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), s. 25(2), Sch. 3 para. 7

F1891Words in s. 717(4) inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 5(6)

F1892Words in s. 717(4) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 37 para. 6

F1893Words in s. 717(4) inserted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 5(9)

InterpretationU.K.

718Connected personsU.K.

[F1894Section 993 of ITA 2007] (how to tell whether persons are connected) applies for the purposes of this Act.

Textual Amendments

F1894Words in s. 718 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 442 (with Sch. 2)

719[F1895Meaning of “control”]U.K.

[F1896Section 995 of ITA 2007 (meaning of “control”)] applies for the purposes of this Act, unless otherwise indicated.

Textual Amendments

F1895S. 719 sidenote substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 443(b) (with Sch. 2)

F1896Words in s. 719 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 443(a) (with Sch. 2)

F1897720Meaning of “ an officer of Revenue and Customs ” etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

721Other definitionsU.K.

(1)In this Act—

  • “cash voucher” has the same meaning as in Chapter 4 of Part 3 (see section 75),

  • [F1898“the Contributions and Benefits Act” means SSCBA 1992 or SSCB(NI)A 1992;]

  • “credit-token” has the same meaning as in Chapter 4 of Part 3 (see section 92),

  • [F1899“foreign employer” means an individual, partnership or body of persons resident outside, and not resident in, the United Kingdom,]

  • “non-cash voucher” has the same meaning as in Chapter 4 of Part 3 (see section 84),

  • F1900...

F1901(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Any reference in this Act to being domiciled in the United Kingdom is to be read as a reference to being domiciled in any part of the United Kingdom.

(4)For the purposes of this Act the following are members of a person’s family—

(a)the person’s spouse [F1902or civil partner],

(b)the person’s children and their spouses [F1903or civil partners],

(c)the person’s parents, and

(d)the person’s dependants.

(5)For the purposes of this Act the following are members of a person’s family or household—

(a)members of the person’s family,

(b)the person’s domestic staff, and

(c)the person’s guests.

(6)The following provisions (which relate to the legal equality of illegitimate children) are to be disregarded in interpreting references in this Act to a child or children—

(a)section 1 of the Family Law Reform Act 1987 (c. 42);

(b)the paragraph inserted in Schedule 1 to the Interpretation Act 1978 (c. 30) by paragraph 73 of Schedule 2 to the 1987 Act;

(c)section 1(2) of the Law Reform (Parent and Child) (Scotland) Act 1986 (c. 9);

(d)Article 155 of the Children (Northern Ireland) Order 1995 (S.I. 1995/755 (N.I. 2)).

(7)In the employment income Parts any reference to earnings which is not limited by the context—

(a)to earnings within Chapter 1 of Part 3, or

(b)to any other particular description of earnings,

includes a reference to any amount treated as earnings by any of the provisions mentioned in section 7(5) (meaning of “employment income” etc.).

Textual Amendments

F1898Words in s. 721(1) inserted (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 7(2); S.I. 2004/1945, art. 2

F1899Words in s. 721(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 39

F1900Words in s. 721(1) repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 444(2)(b), Sch. 3 Pt. 1 (with Sch. 2)

Modifications etc. (not altering text)

C137S. 721 applied (6.4.2006) by Finance Act 2004 (c. 12), ss. 173(11), 284(1) (with Sch. 36)

Amendments, repeals, citation etc.U.K.

722Consequential amendmentsU.K.

Schedule 6 contains consequential amendments.

723Commencement and transitional provisions and savingsU.K.

(1)This Act comes into force on 6th April 2003 and has effect—

(a)for the purposes of income tax, for the tax year 2003-04 and subsequent tax years, and

(b)for the purposes of corporation tax, for accounting periods ending after 5th April 2003.

(2)Subsection (1) is subject to Schedule 7, which contains transitional provisions and savings.

724Repeals and revocationsU.K.

(1)The enactments specified in Part 1 of Schedule 8 (which include certain spent provisions) are repealed to the extent specified.

(2)The instruments specified in Part 2 of that Schedule are revoked to the extent specified.

725CitationU.K.

This Act may be cited as the Income Tax (Earnings and Pensions) Act 2003.

SCHEDULES

Section 2

SCHEDULE 1U.K.Abbreviations and defined expressions

Part 1U.K.Abbreviations of Acts and instruments

Modifications etc. (not altering text)

C138Sch. 1 Pt. 1 modified (with effect in accordance with reg. 8 of the amending S.I.) by The Income Tax (Exemption of Social Security Benefits) Regulations 2021 (S.I. 2021/1341), regs. 1(1), 7

C139Sch. 1 Pt. 1 modified (with effect in accordance with regs. 7, 8 of the amending S.I.) by The Income Tax (Exemption of Social Security Benefits) Regulations 2022 (S.I. 2022/529), regs. 1(1), 6

[F1904FA followed by a year The Finance Act of that year
F(No.2)A followed by a yearThe Finance (No.2) Act of that year.]
[F1905ETA(NI) 1950 The Employment and Training Act (Northern Ireland) 1950 (c. 29 (N.I.))]
[F1906SW(S)A 1968 The Social Work (Scotland) Act 1968]
TMA 1970The Taxes Management Act 1970 (c. 9)
ICTA 1970The Income and Corporation Taxes Act 1970 (c. 10)
F1907. . .F1907. . .
F1907. . .F1907. . .
[F1905ETA 1973 The Employment and Training Act 1973 (c. 50)]
OPA 1973The Overseas Pensions Act 1973 (c. 21)
F1907. . .F1907. . .
F1907. . .F1907. . .
F1907. . .F1907. . .
F1907. . .F1907. . .
ICTAThe Income and Corporation Taxes Act 1988 (c. 1)
[F1906SSA 1988 The Social Security Act 1988]
F1907. . .F1907. . .
F1907. . .F1907. . .
[F1908LGFA 1992 Local Government Finance Act 1992]
SSCBA 1992The Social Security Contributions and Benefits Act 1992 (c. 4)
SSCB(NI)A 1992The Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)
TCGA 1992The Taxation of Chargeable Gains Act 1992 (c. 12)
VERA 1994The Vehicle Excise and Registration Act 1994 (c. 22)
F1907. . .F1907. . .
JSA 1995The Jobseekers Act 1995 (c. 18)
CSA 1995The Child Support Act 1995 (c. 34)
[F1906C(S)A 1995 The Children (Scotland) Act 1995]
CS(NI)O 1995The Child Support (Northern Ireland) Order 1995 (S.I. 1995/2702 (N.I. 13))
JS(NI)O 1995The Jobseekers (Northern Ireland) Order 1995 (S.I. 1995/2705 (N.I. 15))
F1907. . .F1907. . .
ERA 1996The Employment Rights Act 1996 (c. 18)
ER(NI)O 1996The Employment Rights (Northern Ireland) Order 1996 (S.I. 1996/1919 (N.I. 16))
F1907. . .F1907. . .
WRPA 1999The Welfare Reform and Pensions Act 1999 (c. 30)
WRP(NI)O 1999The Welfare Reform and Pensions (Northern Ireland) Order 1999 (S.I. 1999/3147 (N.I. 11))
F1907. . .F1907. . .
[F1908CSPSSA 2000 Child Support, Pensions and Social Security Act 2000]
CAA 2001The Capital Allowances Act 2001 (c. 2)
F1907. . .F1907. . .
SPCA 2002The State Pension Credit Act 2002 (c. 16)
TCA 2002The Tax Credits Act 2002 (c. 21)
SPCA(NI) 2002The State Pension Credit Act (Northern Ireland) 2002 (c. 14 (N.I.))
[F1906LGSA 2003 The Local Government in Scotland Act 2003]
F1907. . .F1907. . .
[F1909ITTOIA 2005The Income Tax (Trading and Other Income) Act 2005]
F1907. . . F1907. . .
[F1906GOWA 2006 The Government of Wales Act 2006]
[F1910ITA 2007 The Income Tax Act 2007]
[F1911WRA 2007 The Welfare Reform Act 2007]
[F1912CTA 2009 The Corporation Tax Act 2009]
[F1906FAA(NI) 2009 The Financial Assistance Act (Northern Ireland) 2009]
[F1906FPA(NI) 2009 The Financial Provisions Act (Northern Ireland) 2009]
[F1913CTA 2010 The Corporation Tax Act 2010]
[F1914TIOPA 2010 The Taxation (International and Other Provisions) Act 2010]
[F1915WRA 2012 The Welfare Reform Act 2012]
[F1916PA 2014 The Pensions Act 2014]
[F1908DSR(NI) 2016 Discretionary Support Regulations (Northern Ireland) 2016 (S.R. (N.I.) 2016 No. 270)]
[F1917HB(WSP)R(NI) 2017 The Housing Benefit (Welfare Supplementary Payment) Regulations (Northern Ireland) 2017 S.R. (N.I.) 2017 No. 35
WSPR(NI) 2016The Welfare Supplementary Payments Regulations (Northern Ireland) 2016 S.R.(N.I.) 2016 No. 178
WSP(LDLA)R(NI) 2016The Welfare Supplementary Payment (Loss of Disability Living Allowance) Regulations (Northern Ireland) 2016 S.R.(N.I.) 2016 No. 250
WSP(LCP)R(NI) 2016The Welfare Supplementary Payment (Loss of Carer Payments) Regulations (Northern Ireland) 2016 S.R.(N.I.) 2016 No. 253
WSP(LDRP)R(NI) 2016The Welfare Supplementary Payment (Loss of Disability-Related Premiums) Regulations (Northern Ireland) 2016 S.R.(N.I.) 2016 No. 254]
[F1908SS(S)A 2018 Social Security (Scotland) Act 2018]
[F1906LGE(W)A 2021 The Local Government and Elections (Wales) Act 2021]
[F1918CA(CSP)(S)R 2023 The Carer’s Assistance (Carer Support Payment) (Scotland) Regulations 2023]

Textual Amendments

F1904Words in Sch. 1 Pt. 1 inserted (21.7.2009) by Finance Act 2009 (c. 10), s. 126(3)

F1905Words in Sch. 1 Pt. 1 inserted (with effect in accordance with s. 46(3) of the amending Act) by Finance Act 2008 (c. 9), s. 46(2)

F1907Words in Sch. 1 Pt. 1 omitted (21.7.2009) by virtue of Finance Act 2009 (c. 10), s. 126(4)

F1908Words in Sch. 1 Pt. 1 inserted (12.2.2019) by Finance Act 2019 (c. 1), s. 12(8)

F1910Words in Sch. 1 Pt. 1 inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 445 (with Sch. 2)

F1911Words in Sch. 1 Pt. 1 inserted (18.3.2008 for specified purposes, 27.10.2008 in so far as not already in force) by Welfare Reform Act 2007 (c. 5), s. 70(2), Sch. 3 para. 24(6); S.I. 2008/787, art. 2(1), Sch.; S.I. 2008/787, art. 2(4)(f)

F1912Words in Sch. 1 Pt. 1 inserted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 556(a) (with Sch. 2 Pts. 1, 2)

F1913Words in Sch. 1 Pt. 1 inserted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 395(2) (with Sch. 2)

F1914Words in Sch. 1 Pt. 1 inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 323 (with Sch. 9 paras. 1-9, 22)

F1915Words in Sch. 1 Pt. 1 inserted (8.4.2013 for specified purposes, 10.6.2013 in so far as not already in force) by Welfare Reform Act 2012 (c. 5), s. 150(3), Sch. 9 para. 50; S.I. 2013/358, art. 7(1)(2)(k), Sch. 3; S.I. 2013/1250, art. 2

F1916Words in Sch. 1 Pt. 1 inserted (with effect in accordance with s. 16(4) of the amending Act) by Finance Act 2015 (c. 11), s. 16(3)

F1917Words in Sch. 1 Pt. 1 inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 16

Part 2U.K.Index of expressions defined in this Act or ICTA

Note: this index does not apply to expressions used in any of Chapters 6 to 9 of Part 7 (share incentive plans and other arrangements for acquiring shares): separate indexes appear at the end of Schedules 2 to 5.

accessory (in Chapter 6 of Part 3) [F1919sections 125(2) and 125A(2)]
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
[F1921the acquisition (in Chapters 1 to 4 of Part 7) section 421B(8) (see also section 446Q(4))]
F1920. . .F1920. . .
[F1921the acquisition (in Chapter 5 of Part 7) section 471(5)]
F1922. . .F1922. . .
[F1923adjusted net income (in Chapter 8 of Part 10) section 681H]
age of a car F1924... (in Chapter 6 of Part 3) section 171(3)
agency contract (in Chapter 7 of Part 2)section 47(1)
[F1925amount foregone (in relation to a benefit) (in the benefits code) section 69B]
annual rental value (in Chapter 10 of Part 3)section 207
annual value (in Chapter 5 of Part 3)section 110
F1922. . .F1922. . .
F1922. . .F1922. . .
F1922. . .F1922. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
asset (in Chapter 4 of Part 11)section 701
F1920. . .F1920. . .
assignment (in the application of the Act to Scotland) [F1926section 1008(1) of ITA 2007]
associate (in Chapter 8 of Part 2)section 60
[F1927associate (in Chapter 9 of Part 2) section 61I (but see section 61C(4))]
associate (in Chapter 11 of Part 7)section 549(4)
associated company (in Chapter 8 of Part 2)section 61(1)
[F1921associated company (in section 421H(1) and Chapters 2 to 4 of Part 7) section 421H(2)]
F1920. . .F1920. . .
[F1921associated person (in Chapters 1 to 4 of Part 7) section 421C]
[F1921associated person (in Chapter 5 of Part 7) section 472]
available for private use (in Chapter 6 of Part 3)section 118(1)
basic rate [F1928section 6(2) of ITA 2007 (as applied by section 989 of that Act)]
benefit (in Chapter 10 of Part 3)section 201(2)
benefit (in Chapter 3 of Part 6)section 402
the benefits code (in the employment income Parts)section 63(1)
[F111the Commissioners for Her Majesty’s Revenue and Customs]section 720(2)
body of persons [F1929section 989 of ITA 2007]
business (in Chapter 8 of Part 2)section 61(1)
[F1927business (in Chapter 9 of Part 2) section 61J]
business travel (in Chapter 6 of Part 3)section 171(1)
business travel (in Chapter 2 of Part 4) [F1930sections 235A and 236(1)]
capital allowance [F1931section 989 of ITA 2007]
car (in Chapter 6 of Part 3)section 115(1)
car (in Chapter 2 of Part 4)section 235(2)
car (in Chapter 3 of Part 4)section 249
car is available to an employee (in Chapter 6 of Part 3)section 116(1)
car first made available to an employee (in Chapter 6 of Part 3)section 116(2)(a)
car made available by reason of employment (in Chapter 6 of Part 3)section 117
car with a CO2 emissions figure (in Chapter 6 of Part 3)section 134(1)
car without a CO2 emissions figure (in Chapter 6 of Part 3)section 134(2)
cash vouchersection 721(1)
[F1921chargeable event (in Chapter 3B of Part 7) section 446P(5)]
charging provisions of Chapter 4 of Part 2 (in the employment income Parts)section 14(3)
charging provisions of Chapter 5 of Part 2 (in the employment income Parts)section 20(3)
cheque voucher (in Chapter 4 of Part 3)section 84(4)
child, childrenF1932... section 721(6)
[F1927the client (in Chapter 9 of Part 2) section 61D(4)]
close company [F1933section 989 of ITA 2007]
company [F1934section 992 of ITA 2007]
company (in Chapter 8 of Part 2)section 61(1)
[F1935company (in Chapter 10A of Part 4) section 312I]
F1920. . .F1920. . .
company vehicle (in Chapter 2 of Part 4)section 236(2)
connected (in the context of “connected person” or one person being “connected” with another) [F1936section 993 of ITA 2007] (see section 718)
[F1921consideration (in Chapters 2 to 5 of Part 7) sections 421(2) and 421A]
[F1921consideration given for the acquisition of employment-related securities (in Chapters 2 to 3A of Part 7) section 421I]
F1920. . .F1920. . .
[F1937the Contributions and Benefits Act section 721(1)]
control [F1938section 995 of ITA 2007] (see section 719)
control (in the benefits code)section 69
F1920. . .F1920. . .
[F1921convertible securities (in Chapters 2 to 3A of Part 7) section 436]
cost of provision in relation to non-cash voucher (in Chapter 4 of Part 3)section 87(3)
credit-tokensection 721(1)
cycle (in Chapter 2 of Part 4)section 235(5)
date of first registration (in relation to a car F1924...) (in Chapter 6 of Part 3)section 171(2)
deductible payment (in Part 8)section 558
the deductibility provisions (in Part 5)section 332
[F1939dependants' income withdrawal (in Chapter 5A of Part 9) section 579D]
F1920. . .F1920. . .
diesel (in Chapter 6 of Part 3)section 171(1)
director (in the benefits code)section 67(1)
F1922. . .F1922. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
director (in Chapter 10 of Part 7)section 548(1)
director, full-time working (in the benefits code)section 67(3)
disabled person’s badge (in Chapter 6 of Part 3)section 171(4)
distribution [F1940section 989 of ITA 2007]
domiciled in the United Kingdomsection 721(3)
donations (in Part 12)section 714(1)
earnings (in the employment income Parts)section 62 and see section 721(7)
earnings (from which deductions are allowed) (in Part 5)section 327(2)(a)
earnings charged on receipt (in Part 5)section 335(4)
earnings charged on remittance (in Part 5)section 335(4)
earnings “for” a tax year (in Chapter 4 of Part 2)section 16
earnings “for” a tax year (in Chapter 5 of Part 2)section 29
earnings-only exemptionsection 227(2)
EC certificate of conformity (in Chapter 6 of Part 3)section 171(1)
EC type-approval certificate (in Chapter 6 of Part 3)section 171(1)
eligible period (in Chapter 6 of Part 5)section 378(2)
employed (in the employment income Parts)sections 4 and 5(2)(a)
employed (in the benefits code)section 66(1)(b)
employee (in the employment income Parts)sections 4 and 5(2)(b)
employee (in the benefits code)section 66(1)(b) (see also section 216(5))
employee (in Chapter 3 of Part 3)section 70(4)
F1920. . .F1920. . .
F1920. . .F1920. . .
employee (in Chapter 10 of Part 3)section 201(5)
F1922. . .F1922. . .
F1922. . .F1922. . .
[F1921the employee (in Chapters 1 to 4 of Part 7) section 421B(8)]
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
[F1921the employee (in Chapter 5 of Part 7) section 471(5)]
employee (in Chapter 10 of Part 7)section 548(1)
employee (in Chapter 11 of Part 7)section 549(5)
employee (in Part 8)section 562(2)
F1922. . .F1922. . .
employee (in Chapter 13 of Part 9)section 628(1)
employee (in Part 11)section 712(1)
employee benefit trust (in Chapter 11 of Part 7)section 550
[F1921employee-controlled (in Chapters 2 to 4 of Part 7) section 421H(1)]
F1920. . .F1920. . .
F1920. . .F1920. . .
the employee offer (in Chapter 10 of Part 7)section 544(1)
employer (in the employment income Parts)sections 4 and 5(2)(c)
employer (in the benefits code)section 66(1)(b)
the employer (in the benefits code)section 66(2)(b)
F1922. . .F1922. . .
[F1921the employer (in Chapters 1 to 4 of Part 7) section 421B(8)]
[F1921the employer (in Chapter 5 of Part 7) section 471(5)]
employer (in Part 8)section 562(2)
employer (in Part 11)section 712(1)
[F1941employer-financed retirement benefits scheme (in Chapter 2 of Part 6) section 393A]
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
employer’s national insurance contributions (in Chapter 8 of Part 2)section 61(1)
[F1927employer's national insurance contributions (in Chapter 9 of Part 2) section 61J]
employment (in the employment income Parts)sections 4 and 5(1)
employment (in the benefits code)section 66(1)(a)
the employment (in the benefits code)section 66(2)(a)
F1922. . .F1922. . .
[F1921the employment (in Chapters 1 to 4 of Part 7) section 421B(8)]
[F1921the employment (in Chapter 5 of Part 7) section 471(5)]
employment (in Part 8)section 562(2)
employment (in Chapter 5 of Part 11)section 707
employment as a seafarer (in Chapter 6 of Part 5)section 384(1)
the employment change (in Chapter 7 of Part 4)section 275
employment incomesection 7(2)
the employment income Partssection 3(2)
employment income exemptionsection 227(3)
employment-related benefit (in Chapter 10 of Part 3)section 201(2)
employment-related loan (in Chapter 7 of Part 3)section 174
[F1921employment-related securities (in Chapters 1 to 5 of Part 7) section 421B(8) (see also section 484(4))]
[F1921employment-related securities option (in Chapter 5 of Part 7) section 471(5)]
F1920. . .F1920. . .
F1920. . .F1920. . .
engagement to which Chapter 8 of Part 2 applies (in Chapter 8 of Part 2)section 49(5)
excluded benefits (in Chapter 10 of Part 3)section 202
F1942. . .F1942. . .
F1942. . .F1942. . .
excluded services (in Chapter 7 of Part 2)section 47(2)
F1922. . .F1922. . .
exempt income (for the purposes of the employment income Parts)section 8
exempt income (for the purposes of Part 9)section 566(3)
exempt income (for the purposes of Part 10)section 656(2)
F1922. . .F1922. . .
F1922. . .F1922. . .
foreign employersection 721(1)
F1922. . .F1922. . .
[F1943former civil partner (in Chapter 2 of Part 6) section 588(1)
[F1943former civil partner (in Chapter 6 of Part 9) section 588(1)
former employee (in Part 8)section 562(1)
former employer (in relation to former employee) (in Part 8)section 563
former employment (in relation to former employee) (in Part 8)section 563
F1944. . .F1944. . .
general earningssection 7(3)
[F1945generally accepted accounting practice [F1946section 997 of ITA 2007]]
F1920. . .F1920. . .
House of Commons Members' Fund (in Chapter 12 of Part 9)section 620
the included amount (in Chapter 5 of Part 5)section 369(2)
[F1939income withdrawal (in Chapter 5A of Part 9) section 579D]
F1922. . .F1922. . .
individual learning account training (in Chapter 4 of Part 4)section 256
initial extra accessory (in Chapter 6 of Part 3)section 126(2)
F1947. . .F1947. . .
F1948. . .F1948. . .
[F1921interest, in relation to securities (or shares) (in Chapters 1 to 5 of Part 7) section 420(8)]
interest in residence (in Chapter 7 of Part 4)section 276(3)
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
last day on which car available (in Chapter 6 of Part 3)section 116(2)(b)
later accessory (in Chapter 6 of Part 3)section 126(3)
the limitation day (in Chapter 7 of Part 4)section 274
list price (of a car) (in Chapter 6 of Part 3)section 123(1)
list price (of accessories) (in Chapter 6 of Part 3)section 127
listed provision (in Chapter 11 of Part 7)section 549(2)
loan (in Chapter 7 of Part 3)section 173(2)(a)
local authority [F1949section 999 of ITA 2007]
F1942. . .F1942. . .
[F1950lower-paid employment as a minister of religion (in the benefits code) section 66(5)
lower-paid employment as a minister of religion (in Part 4)section 290D]
making a loan (in Chapter 7 of Part 3)section 173(2)(b)
[F1927managed service company (in Chapter 9 of Part 2) section 61B]
F1920. . .F1920. . .
F1920. . .F1920. . .
[F1921market value (in Chapters 1 to 5 of Part 7) section 421(1)]
F1920. . .F1920. . .
market value (of asset) (in Chapter 10 of Part 3)section 208
material interest (in company) (in the benefits code)section 68
members of a person’s familysection 721(4)
member of a person’s family or householdsection 721(5)
mileage allowance payments (in Chapter 2 of Part 4)section 229(2)
motor cycle (in Chapter 2 of Part 4)section 235(4)
national insurance contributions (in Chapter 8 of Part 2)section 61(1)
[F1927national insurance contributions (in Chapter 9 of Part 2) section 61J]
[F1951net income section 23 of ITA 2007 (as applied by section 989 of that Act]
net taxable earnings (for the purposes of Part 2)section 11
net taxable specific income (for the purposes of Part 2)section 12
F1922. . .F1922. . .
F1922. . .F1922. . .
non-cash vouchersection 721(1)
[F1921non-commercial increase (in Chapter 3B of Part 7) section 446K(4)]
[F1921non-commercial reduction (in Chapter 3B of Part 7) section 446K(4)]
non-standard accessory (in Chapter 6 of Part 3)section 125(4)
the normal self-assessment filing date [F1952section 989 of ITA 2007]
notice [F1953section 989 of ITA 2007]
[F1921the notional loan (in Chapter 3C of Part 7) section 446S(1)]
notional price (of a car) (in Chapter 6 of Part 3)section 124(1)
notional price (of accessories) (in Chapter 6 of Part 3)section 130(1)
office (in the employment income Parts)section 5(3)
office (in Part 8)section 564(3)
official rate of interest (in Chapter 7 of Part 3)section 181
[F1954offshore installation [F1955sections 1001 and 1002 of ITA 2007]]
F1920. . .F1920. . .
[F1925optional remuneration arrangements (in the benefits code) section 69A]
ordinary commuting (in Chapter 3 of Part 4)section 249
ordinary share capital [F1956section 989 of ITA 2007]
original pensioner (in Chapter 14 of Part 9)section 630(1)
[F1957the overseas part section 989 of ITA 2007]
passenger payments (in Chapter 2 of Part 4)section 233(3)
[F1923partner (in Chapter 8 of Part 10) section 681G]
PAYE incomesection 683
PAYE provisions (in Chapter 8 of Part 2)section 61(1)
[F1927PAYE provisions (in Chapter 9 of Part 2) section 61J]
PAYE regulationssection 684(8)
F1920. . .F1920. . .
pension (in Chapter 3 of Part 9)section 570
pension (in Chapter 4 of Part 9)section 574
pension (in Chapter 11 of Part 9)section 615(7)
pension (in Chapter 18 of Part 9)section 647(4)
pension incomesection 566(2)
[F1958pension under a registered pension scheme (in Chapter 5A of Part 9) section 579D]
permanent workplace (in Chapter 3 of Part 4)section 249
permanent workplace (in Part 5)section 339(2)
person involved in providing the accommodation (in Chapter 5 of Part 3)section 112
person paying an amount (in Chapter 2 of Part 5)section 333(2)
F1922. . .F1922. . .
F1922. . .F1922. . .
personal representatives [F1959section 989 of ITA 2007]
persons providing a benefit (in Chapter 10 of Part 3)section 209
post-employment earnings (in relation to former employee) (in Part 8)section 563
premium (in relation to qualifying insurance contract) (in Chapter 2 of Part 5)section 346(3)(a)
premium (in relation to qualifying insurance contract) (in Part 8)section 558(3)(a)
pre-1973 pension (in Chapter 14 of Part 9)section 630(2)
prescribed (in Chapter 5 of Part 11)section 707
price of a car (in Chapter 6 of Part 3)section 122
private use (in Chapter 6 of Part 3)section 118(2)
the property, in relation to living accommodation (in Chapter 5 of Part 3)section 113
F1922. . .F1922. . .
provision of cash voucher for employee (in Chapter 4 of Part 3)section 74
provision of credit-token for employee (in Chapter 4 of Part 3)section 91(a)
provision of non-cash voucher for employee (in Chapter 4 of Part 3)section 83
F1922. . .F1922. . .
the public offer (in Chapter 10 of Part 7)section 544(1)
published price of the manufacturer, importer or distributor of the accessory (in Chapter 6 of Part 3)section 129(1)
published price of the manufacturer, importer or distributor of the car (in relation to accessory) (in Chapter 6 of Part 3)section 128(1)
qualifying accessory (in Chapter 6 of Part 3)section 125(1)
qualifying journey (in Chapter 3 of Part 4)section 249
readily convertible asset (in Chapter 4 of Part 11)section 702
receipt of cash voucher by employee (in Chapter 4 of Part 3)section 74
receipt of money earnings (in Chapter 4 of Part 2)section 18
F1960. . .F1960. . .
receipt of non-cash voucher by employee (in Chapter 4 of Part 3)section 83
receipt of non-money earnings (in Chapter 4 of Part 2)section 19
F1961. . .F1961. . .
[F1921recognised stock exchange [F1962section 1005 of ITA 2007]]
[F1963registered pension scheme [F1964section 150(2) of FA 2004 (as applied by section 989 of ITA 2007)]]
registrant discount (in Chapter 10 of Part 7)section 547
F1922. . .F1922. . .
F1920. . .F1920. . .
F1922. . .F1922. . .
[F1941relevant benefits (in Chapter 2 of Part 6) section 393B]
[F1965relevant debt (in Part 11) section 684(7AA)]
F1922. . .F1922. . .
relevant engagements (in Chapter 8 of Part 2)section 50(4)
[F1921relevant period (in Chapter 3B of Part 7) section 446O]
relevant retirement benefit (in relation to former employee) (in Part 8)section 563
[F1927the relevant services (in Chapter 9 of Part 2) section 61D(4)]
F1922. . .F1922. . .
relevant taxes (in Chapter 6 of Part 3)section 171(1)
remittance of earnings (in Chapter 5 of Part 2)section 33
remuneration (in Chapter 7 of Part 2)section 47(3)
residence, former residence and new residence (in Chapter 7 of Part 4)section 276(1), (2)
[F1941responsible person (in Chapter 2 of Part 6) section 399A]
[F1921restricted securities and restricted interest in securities (in Chapters 2, 3A and 3B of Part 7) sections 423 and 424]
[F1921restriction (in Chapters 2, 3A and 3B of Part 7) section 432(8)]
F1922. . .F1922. . .
retirement benefits scheme (in Chapter 1 of Part 6)section 387(1)
F1922. . .F1922. . .
road fuel gas (in Chapter 6 of Part 3)section 171(1)
F1966. . .F1966. . .
F1920. . .F1920. . .
[F1921secondary Class 1 contributions (in Chapter 5 of Part 7) section 484(7)]
[F1921securities (in Chapters 1 to 5 of Part 7) section 420]
[F1921securities option (in Chapters 1 to 5 of Part 7) section 420(8)]
F1920. . .F1920. . .
F1920. . .F1920. . .
[F1921shares (in Chapters 1 to 5 of Part 7) section 420(8)]
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
F1920. . .F1920. . .
shares (in Chapter 10 of Part 7)section 548(1)
ship (in Chapter 6 of Part 5)section 385
social security incomesection 657(2)
F1967. . .F1967. . .
specific employment incomesection 7(4)
[F1957split year section 989 of ITA 2007]
standard accessory (in Chapter 6 of Part 3)section 125(4)
[F1943stepchild (in Parts 4 and 5 [F1968section 246 of the Civil Partnership Act 2004 (as applied by section 989 of ITA 2007)]]
51% subsidiary [F1969section 989 of ITA 2007]
Table A (in Part 10)section 657(5)
Table B (in Part 10)section 657(6)
tax [F1970section 989 of ITA 2007]
F1971. . .F1971. . .
taxable benefit (in Chapter 5 of Part 11)section 707
taxable benefits (in Part 10)section 657(3)
taxable cheap loan (in Chapter 7 of Part 3)section 175(2)
taxable earnings (in the employment income Parts)section 10(2)
taxable employment under Part 2 (in the benefits code)section 66(3)
taxable pension income (in Part 9)section 567(3), (4)
the taxable period (in Chapter 5 of Part 3)section [F1972102(1)]
taxable person (in Chapter 3 of Part 6)section 403(6)
taxable social security income (in Part 10)section 658(4)-(7)
taxable specific income (in the employment income Parts)section 10(3)
tax year [F1973section 4(2) of ITA 2007 (as applied by section 989 of that Act)]
the tax year (in Part 5)section 327(2)(b)
the tax year 2003-04 etc. [F1974section 4(4) of ITA 2007 (as applied by section 989 of that Act)]
F1920. . .F1920. . .
F1920. . .F1920. . .
total income [F1975section 23 of ITA 2007 (as applied by section 989 of that Act)]
trade [F1976section 989 of ITA 2007]
[F1935trade (in Chapter 10A of Part 4) section 312I]
transport voucher (in Chapter 4 of Part 3)section 84(3)
[F1977tribunal section 989 of ITA 2007]
United Kingdom [F1978section 1013 of ITA 2007]
UK approval certificate (in Chapter 6 of Part 3)section 171(1)
[F1957the UK part section 989 of ITA 2007]
F1966. . .F1966. . .
use of credit-token by employee (in Chapter 4 of Part 3)section 91(b)
[F1921valuation date (in Chapter 3B of Part 7) section 446O]
F1920. . .F1920. . .
van (in Chapter 6 of Part 3)section 115(1)
van (in Chapter 2 of Part 4)section 235(3)
van is available to an employee (in Chapter 6 of Part 3)section 116(1)
van made available by reason of employment (in Chapter 6 of Part 3)section 117
[F1921variation, in relation to a restriction (in Chapter 2 of Part 7) section 427(4)]
[F1923week (in Chapter 8 of Part 10) section 681H]
[F1927the worker (in Chapter 9 of Part 2) section 61D(4)]
workplace (in Chapter 3 of Part 4)section 249
workplace (in Part 5)section 339(1)
work-related training (in Chapter 4 of Part 4)section 251(1)]]

Textual Amendments

F1919Words in Sch. 1 Pt. 2 substituted (with effect in accordance with s. 14(5) of the amending Act) by Finance Act 2012 (c. 14), s. 14(4)

F1920Sch. 1 Pt. 2 entries repealed (1.9.2003 with effect in accordance with Sch. 22 para. 42(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 42(2), Sch. 43 Pt. 3(4); S.I. 2003/1997, art. 2

F1921Words in Sch. 1 Pt. 2 inserted (1.9.2003 with effect in accordance with Sch. 22 para. 42(4) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 42(3); S.I. 2003/1997, art. 2

F1922Words in Sch. 1 Pt. 2 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F1923Words in Sch. 1 Pt. 2 inserted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by Finance Act 2012 (c. 14), Sch. 1 para. 5(7)

F1924Words in Sch. 1 Pt. 2 repealed (22.7.2004) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(9)

F1925Words in Sch. 1 Pt. 2 inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 60

F1926Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(2) (with Sch. 2)

F1927Words in Sch. 1 Pt. 2 Table inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), s. 25(2), Sch. 3 para. 8

F1928Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(3) (with Sch. 2)

F1929Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(4) (with Sch. 2)

F1930Words in Sch. 1 substituted (with effect in accordance with s. 29(7) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 29(6)

F1931Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(5) (with Sch. 2)

F1932Words in Sch. 1 Pt. 2 Table repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(6), Sch. 3 Pt. 1 (with Sch. 2)

F1933Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(7) (with Sch. 2)

F1934Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(8) (with Sch. 2)

F1935Words in Sch. 1 Pt. 2 inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 37 para. 7

F1936Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(9) (with Sch. 2)

F1937Words in Sch. 1 Pt. 2 substituted (1.9.2004) by Finance Act 2004 (c. 12), s. 85(2), Sch. 16 para. 7(3); S.I. 2004/1945, art. 2

F1938Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(10) (with Sch. 2)

F1939Words in Sch. 1 Pt. 2 inserted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 61

F1940Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(11) (with Sch. 2)

F1941Words in Sch. 1 Pt. 2 inserted (6.4.2006) by Finance Act 2004 (c. 12), ss. 249(12), 284(1) (with Sch. 36)

F1942Words in Sch. 1 Pt. 2 omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 21(2)

F1945Words in Sch. 1 Pt. 2 inserted (with effect in accordance with Sch. 2 para. 2(8) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 2 para. 2(7)

F1946Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(12) (with Sch. 2)

F1948Sch. 1 Pt. 2 Table entry repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(13), Sch. 3 Pt. 1 (with Sch. 2)

F1949Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(14) (with Sch. 2)

F1950Words in Sch. 1 Pt. 2 inserted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 21(3)

F1951Words in Sch. 1 Pt. 2 Table inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(15) (with Sch. 2)

F1952Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(16) (with Sch. 2)

F1953Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(17) (with Sch. 2)

F1954Words in Sch. 1 Pt. 2 inserted (with effect in accordance with Sch. 27 para. 16 of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 15

F1955Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(18) (with Sch. 2)

F1956Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(19) (with Sch. 2)

F1957Words in Sch. 1 Pt. 2 inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 105

F1958Words in Sch. 1 Pt. 2 inserted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 15 (with Sch. 36)

F1959Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(20) (with Sch. 2)

F1960Sch. 1 entry omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 40(a)

F1961Sch. 1 entry omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 40(b)

F1962Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(21) (with Sch. 2)

F1963Words in Sch. 1 Pt. 2 inserted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 65(3) (with Sch. 36)

F1964Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(22) (with Sch. 2)

F1966Sch. 1 Pt. 2 Table entries repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 556(b), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F1968Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(24) (with Sch. 2)

F1969Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(25) (with Sch. 2)

F1970Words in Sch. 1 Pt. 2 substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 395(3) (with Sch. 2)

F1971Words in Sch. 1 Pt. 2 omitted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 1 para. 61(3)

F1972Word in Sch. 1 Pt. 2 substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 61

F1973Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(28) (with Sch. 2)

F1974Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(29) (with Sch. 2)

F1975Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(30) (with Sch. 2)

F1976Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(31) (with Sch. 2)

F1978Words in Sch. 1 Pt. 2 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 446(32) (with Sch. 2)

Section 488

SCHEDULE 2U.K.F1979... share incentive plans

Textual Amendments

F1979Word in Sch. 2 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 14, 89 (with Sch. 8 paras. 90-96)

Part 1U.K.Introduction

[F1980Introduction to Schedule 2] share incentive plans (SIPs)U.K.

Textual Amendments

1[F1981(A1)For the purposes of the SIP code a share incentive plan (a “SIP”) is a Schedule 2 SIP if the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP.]U.K.

(3)The requirements consist of general requirements (see Part 2) and requirements as to—

  • the eligibility of individuals (see Part 3),

  • the types of shares that may be awarded (see Part 4),

  • free shares (see Part 5),

  • partnership shares (see Part 6),

  • matching shares (see Part 7),

  • cash dividends and dividend shares (see Part 8), and

  • the trustees (see Part 9).

[F1982(4)Sub-paragraph (A1) is subject to Part 10 of this Schedule which—

(a)requires notice of a plan to be given to Her Majesty's Revenue and Customs (“HMRC”) in order for the plan to be a Schedule 2 SIP (see paragraph 81A(1)),

(b)provides for a plan in relation to which such notice is given to be a Schedule 2 SIP (see paragraph 81A(4)), and

(c)gives power to HMRC to enquire into a plan and to decide that the plan should not be a Schedule 2 SIP (see paragraphs 81F to 81I).]

[F1983(5)Sub-paragraph (A1) is also subject to Part 10A of this Schedule (disqualifying events).]

Textual Amendments

F1981Sch. 2 para. 1(A1) substituted for Sch. 2 para. 1(1)(2) (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 16(2), 89 (with Sch. 8 paras. 90-96)

F1982Sch. 2 para. 1(4) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 16(3), 89 (with Sch. 8 paras. 90-96)

F1983Sch. 2 para. 1(5) inserted (with effect in accordance with Sch. 3 para. 2(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 2(2)

SIPs: free shares and partnership sharesU.K.

2(1)In the SIP code a “share incentive plan” (or “SIP” for short) means (in accordance with section 488(4)) a plan established by a company providing—U.K.

(a)for shares to be appropriated to employees without payment (“free shares”), or

(b)for shares to be acquired on behalf of employees out of sums deducted from their salary (“partnership shares”).

(2)In the SIP code, in relation to a SIP—

  • “the company” means the company which established the plan;

  • “plan requirements” means requirements applying to the plan;

  • “the trustees” means the body of persons established under Part 9 to exercise functions in connection with the plan.

Matching sharesU.K.

3(1)A SIP that provides for partnership shares may also provide for shares to be appropriated without payment to employees in proportion to the partnership shares acquired by them (“matching shares”).U.K.

(2)If a SIP contains provision for all, or more than one, of the following—

  • free shares,

  • partnership shares, and

  • matching shares,

the plan may provide for the company to decide when the provisions relating to each kind of share are to have effect.

Group plansU.K.

4(1)A SIP established by a company that controls other companies (a “parent company”) may extend to all or any of those other companies.U.K.

(2)In the SIP code a SIP established by a parent company which so extends is referred to as a “group plan”.

(3)In relation to a group plan a “constituent company” means—

(a)the parent company, or

(b)any other company to which for the time being the plan is expressed to extend.

(4)Paragraph 91 deals with jointly owned companies and companies controlled by them.

Meaning of “award of shares”, “participant” etc.U.K.

5(1)For the purposes of the SIP code an “award of shares” is made under a SIP on each occasion when in accordance with the plan—U.K.

(a)free or matching shares are appropriated to employees, or

(b)partnership shares are acquired on behalf of employees.

(2)Accordingly, references to shares awarded to an individual under a SIP are to—

(a)free or matching shares appropriated to the individual, or

(b)partnership shares acquired on the individual’s behalf,

under the plan.

(3)For the purposes of the SIP code an individual participates in an award of free, matching or partnership shares under a SIP if shares included in that award are—

(a)in the case of an award of free or matching shares, appropriated to the individual, or

(b)in the case of an award of partnership shares, acquired on the individual’s behalf.

(4)In the SIP code, in relation to a SIP, “participant” means an individual to whom shares have been awarded under the plan.

Part 2U.K.General requirements

General requirements F1984...: introductionU.K.

Textual Amendments

6[F1985(1)] A SIP must meet the plan requirements contained in— U.K.

  • paragraph 7 (the purpose of the plan),

  • paragraph 8 (all-employee nature of plan),

  • paragraph 9 (participation on same terms),

  • paragraph 10 (no preferential treatment for directors and senior employees),

  • paragraph 11 (no further conditions), and

  • paragraph 12 (no loan arrangements).

[F1986(2)The requirements of this Part are also to be taken to include the requirements of paragraphs 89 and 90 (plan termination notices etc).]

Textual Amendments

F1985 Sch. 2 para. 6 renumbered as Sch. 2 para. 6(1) (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 18(1), 89 (with Sch. 8 paras. 90-96)

F1986Sch. 2 para. 6(2) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 18(2), 89 (with Sch. 8 paras. 90-96)

The purpose of the planU.K.

7(1)The purpose of the plan must be to provide[F1987, in accordance with this Schedule,] benefits to employees in the [F1988form] of shares in a company which give them a continuing stake in that company.U.K.

[F1989(1A)The plan must not provide benefits to employees otherwise than in accordance with this Schedule.

(1B)For example, the plan must not provide cash to employees as an alternative to shares.

(1C)Sub-paragraph (1A) does not prohibit an employee receiving a benefit from a company as a result of any shares in that company being held on the employee's behalf under the plan where the employee would have received the same benefit from the company had the shares been acquired by the employee otherwise than by virtue of the plan.]

F1990(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1987Words in Sch. 2 para. 7(1) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 19(2)(a), 89 (with Sch. 8 paras. 90-96)

F1988Word in Sch. 2 para. 7(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 19(2)(b), 89 (with Sch. 8 paras. 90-96)

F1989Sch. 2 para. 7(1A)-(1C) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 19(3), 89 (with Sch. 8 paras. 90-96)

F1990Sch. 2 para. 7(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 19(4), 89 (with Sch. 8 paras. 90-96)

All-employee nature of planU.K.

8(1)The plan must provide that every employee who—U.K.

(a)meets the requirements of Part 3 of this Schedule (eligibility of individuals) in relation to an award of shares under the plan, and

(b)is a UK resident taxpayer,

is eligible to participate in the award, and is invited to do so.

[F1991(2)An employee is a UK resident taxpayer if—

(a)the employee's earnings from the employment by reference to which the employee meets the employment requirement are (or would be if there were any) general earnings to which section 15 applies (earnings for year when employee UK resident) F1992...

F1992(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The plan] must not contain any feature which has or is likely to have the effect of discouraging any description of employees within sub-paragraph (1) from participating in an award of shares under the plan.

(4)Sub-paragraph (3) does not apply to any provision required or authorised by this Schedule.

(5)The plan may provide that an employee who—

(a)meets the requirements of Part 3 of this Schedule (eligibility of individuals) in relation to an award of shares under the plan, but

(b)is not a UK resident taxpayer (see sub-paragraph (2)),

is eligible to participate in the award, and may be invited to do so.

(6)For the purposes of the SIP code an individual is a “qualifying employee”, in relation to an award of shares, if the individual—

(a)is eligible to participate in it under sub-paragraph (1), or

(b)is eligible to participate in it under sub-paragraph (5) and has been invited to do so.

Textual Amendments

F1991Sch. 2 para. 8(2) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 41

F1992Sch. 2 para. 8(2)(b) and word omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 40(1) (with Sch. 46 para. 40(2))

Participation on same termsU.K.

9(1)The requirement of this paragraph is that—U.K.

(a)every employee who is invited to participate in an award must be invited to participate on the same terms, and

(b)those who do participate must actually do so on the same terms.

(2)The requirement of this paragraph is infringed by the awarding of free shares by reference to factors other than those mentioned in sub-paragraph (3).

(3)The requirement of this paragraph is not infringed by the awarding of free shares by reference to—

(a)an employee’s remuneration,

(b)an employee’s length of service, or

(c)hours worked by an employee;

but this is subject to sub-paragraph (4).

(4)If the awarding of free shares is by reference to more than one of the factors mentioned in sub-paragraph (3), the requirement of this paragraph is infringed unless—

(a)each factor gives rise to a separate entitlement related to the level of remuneration, length of service or (as the case may be) hours worked, and

(b)the total entitlement is the sum of those separate entitlements.

(5)In the case of an award of free shares which provides for performance allowances, this paragraph has effect as provided in—

(a)paragraph 41 (performance allowances: method one), or

(b)paragraph 42 (performance allowances: method two).

(6)In sub-paragraph (5) “performance allowances” has the meaning given in paragraph 34(4).

(7)In the case of an award of partnership shares, the requirement of this paragraph is not infringed by the operation of any percentage limit specified in or under paragraph 46(2) or (3) (maximum amount of deductions) so far as the application of that limit to employees with different levels of remuneration results in deductions of different amounts or in the award of different numbers of shares.

No preferential treatment for directors and senior employeesU.K.

10(1)The first requirement of this paragraph is that no feature of the plan has or is likely to have the effect of conferring benefits wholly or mainly—U.K.

(a)on directors, or

(b)on employees receiving the higher or highest levels of remuneration.

(2)The second requirement of this paragraph applies only if the plan is established by a company that is a member of a group.

(3)The requirement is that the identity of the company (or, if it is a group plan, the constituent companies) must not be such that the plan has or is likely to have the effect of conferring benefits wholly or mainly—

(a)on employees of companies that are members of the group who receive the higher or highest levels of remuneration, or

(b)on directors of such companies.

(4)The requirements of this paragraph are not infringed by the awarding of free shares in circumstances where (as a result of paragraph 9(3) and (4)) that would not constitute an infringement of the requirements of paragraph 9.

No further conditionsU.K.

11U.K.No conditions apart from those required or authorised by this Schedule may be imposed on an employee’s participation in an award of shares under the plan.

No loan arrangementsU.K.

12(1)The arrangements for the plan must not make any provision, or be associated in any way with any provision made, for loans to some or all of the employees of—U.K.

(a)the company, or

(b)in the case of a group plan, of any constituent company.

(2)The operation of the plan must not be associated in any way with such loans.

(3)In sub-paragraph (1) “arrangements” includes any scheme, agreement, undertaking or understanding, whether or not legally enforceable.

Part 3U.K.Eligibility of individuals

Eligibility of individuals: introductionU.K.

13U.K.A SIP must meet the plan requirements contained in—

  • paragraph 14 (time of eligibility to participate),

  • paragraph 15 (the employment requirement),

  • [F1993paragraph 18 (requirement not to participate simultaneously in connected SIPs), [F1994and] paragraph 18A (successive participation in connected SIPs)]

  • F1995...

Textual Amendments

F1993Words in Sch. 2 para. 13 substituted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 3

F1994Word in Sch. 2 para. 13 inserted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 34(a)

F1995Words in Sch. 2 para. 13 omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 34(b)

Time of eligibility to participateU.K.

14(1)The plan must provide that an individual may only participate in an award of shares if the individual is eligible to participate in the award at the appropriate time mentioned below.U.K.

(2) In the case of an award of free shares, the appropriate time is the time when the award is made.

(3)In the case of an award of partnership shares where the plan does not provide for an accumulation period, the appropriate time is the time of the deduction of the partnership share money relating to the award.

(4)In the case of an award of partnership shares where the plan does provide for an accumulation period, the appropriate time is the time of the first deduction of partnership share money relating to the award.

(5)In the case of an award of matching shares where the plan does not provide for an accumulation period, the appropriate time is the time of the deduction of the partnership share money relating to the award of partnership shares to which the matching shares relate.

(6)In the case of an award of matching shares where the plan does provide for an accumulation period, the appropriate time is the time of the first deduction of partnership share money relating to the award of partnership shares to which the matching shares relate.

(7)For the purposes of this paragraph an individual is eligible to participate in an award of shares under the plan if and only if the requirements of the plan are met as to—

(a)employment (see paragraph 15),

[F1996(b)not participating simultaneously in connected SIPs (see paragraph 18), [F1997and]

(ba)successive participation in connected SIPs (see paragraph 18A), F1998...]

F1998(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)In the case of an individual within paragraph 8(5) (all-employee nature of plan: non-UK resident taxpayer), the individual is not eligible to participate in an award of shares under the plan unless (in addition to the requirements mentioned in sub-paragraph (7)) any further eligibility requirements of the plan are met.

Textual Amendments

F1996Sch. 2 para. 14(7)(b)(ba) substituted for Sch. 2 para. 14(7)(b) (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 4

F1997Word in Sch. 2 para. 14(7)(b) inserted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 35(a)

F1998Sch. 2 para. 14(7)(c) and word omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 35(b)

The employment requirementU.K.

15(1)The plan must provide that an individual is not eligible to participate in an award of shares unless the individual meets the requirement in sub-paragraph (2).U.K.

(2)The requirement is that the individual—

(a)is an employee of—

(i)the company, or

(ii)in the case of a group plan, a constituent company, and

(b)if the plan provides for a qualifying period, has at all times during that period been an employee of a qualifying company.

(3)In the SIP code “the employment requirement” means the requirement in sub-paragraph (2).

(4)This paragraph is supplemented—

(a)as regards qualifying periods, by paragraph 16, and

(b)as regards the meaning of “qualifying company”, by paragraph 17.

Qualifying periodsU.K.

16(1)This paragraph applies if the plan provides for a qualifying period in relation to an award. U.K.

(2)In the case of an award of free shares, the qualifying period must be a period of not more than 18 months ending with the date on which the award is made.

(3)In the case of an award of partnership shares where the plan does not provide for an accumulation period, the qualifying period must be a period of not more than 18 months ending with the deduction of partnership share money relating to the award.

(4)In the case of an award of partnership shares where the plan does provide for an accumulation period, the qualifying period must be a period of not more than 6 months ending with the start of the accumulation period relating to the award.

(5)In the case of an award of matching shares where the plan does not provide for an accumulation period, the qualifying period must be a period of not more than 18 months ending with the deduction of partnership share money relating to the award of partnership shares to which the matching shares relate.

(6)In the case of an award of matching shares where the plan does provide for an accumulation period, the qualifying period must be a period of not more than 6 months ending with the start of the accumulation period relating to the award of partnership shares to which the matching shares relate.

(7)In relation to an award, the same qualifying period must apply in relation to all employees—

(a)of the company, or

(a)in the case of a group plan, of the constituent companies.

(8)The plan may authorise the company to specify different qualifying periods in respect of different awards of shares, but the requirements in sub-paragraphs (2) to (7) apply to periods so specified.

Meaning of “qualifying company”U.K.

17(1)For the purposes of paragraph 15(2) “qualifying company” has the meaning given by this paragraph.U.K.

(2)Except in the case of a group plan, “qualifying company” means—

(a)the company, or

(b)a company that, when the individual was employed by it, was an associated company—

(i)of the company, or

(ii)of another company qualifying under this paragraph.

(3)In the case of a group plan, “qualifying company” means—

(a)a company that is a constituent company at the end of the qualifying period mentioned in paragraph 15(2),

(b)a company that, when the individual was employed by it, was a constituent company, or

(c)a company that, when the individual was employed by it, was an associated company of—

(i)(i)a company qualifying under paragraph (a) or (b), or

(ii)another company qualifying under this paragraph.

Requirement not to participate in other SIPsU.K.

18(1)The plan must provide that an individual is not eligible to participate in an award of free, matching or partnership shares under the plan in a tax year if the individual—U.K.

F1999(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)is at the same time to participate, in an award of shares under another [F2000Schedule 2] SIP established by the company or a connected company.

(2)For the purposes of this paragraph an individual is to be treated as having participated in an award of free shares under a SIP if the individual would have participated in that award but for the individual’s failure to obtain a performance allowance (see paragraph 34).

(3)In this paragraph “connected company” means— (a)a company which controls or is controlled by the company or which is controlled by a company which also controls the company, or (b)a company which is a member of a consortium owning the company or which is owned in part by the company as a member of a consortium.

Textual Amendments

F1999Sch. 2 para. 18(1)(a) repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 5, Sch. 43 Pt. 3(3)

F2000Words in Sch. 2 para. 18(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 20, 89 (with Sch. 8 paras. 90-96)

[F2001Participation in more than one connected SIP in a tax yearU.K.

Textual Amendments

F2001Sch. 2 para. 18A and cross-heading inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 2

18A(1) The plan must provide that, if an individual participates in an award of shares under the plan in a tax year in which he has already participated in an award of shares under one or more other [F2002Schedule 2] SIPs established by the company or a connected company—U.K.

(a)paragraph 35 (maximum annual award of free shares),

(b)paragraph 46 (maximum amount of partnership share money deductions), and (c)paragraph 64 (limit on amount reinvested), apply as if the plan and the other plan or plans were a single plan.

(2)In this paragraph “connected company” has the same meaning as in paragraph 18.]

Textual Amendments

The “no material interest” requirementU.K.

F200319U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2003Sch. 2 paras. 19-24 omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 36

Meaning of “material interest”U.K.

F200320U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2003Sch. 2 paras. 19-24 omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 36

Material interest: options and interests in SIPsU.K.

F200321U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2003Sch. 2 paras. 19-24 omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 36

Meaning of “associate”U.K.

F200322U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2003Sch. 2 paras. 19-24 omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 36

Meaning of “associate”: trustees of employee benefit trustU.K.

F200323U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2003Sch. 2 paras. 19-24 omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 36

Meaning of “associate”: trustees of discretionary trustU.K.

F200324U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2003Sch. 2 paras. 19-24 omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 36

Part 4U.K.Types of shares that may be awarded

Types of share that may be awarded: introductionU.K.

25(1)The requirements of the following paragraphs must be met with respect to any shares that may be awarded under a SIP—U.K.

  • paragraph 26 (shares must be part of ordinary share capital of certain companies),

  • paragraph 27 (requirement as to listing etc.),

  • paragraph 28 (shares must be fully paid up and not redeemable), [F2004and]

  • paragraph 29 (prohibited shares)

  • F2005...

(2)In this Part of this Schedule “eligible shares” means shares that may be awarded under the plan.

Textual Amendments

F2004Word in Sch. 2 para. 25(1) inserted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 47(a)

F2005Words in Sch. 2 para. 25(1) omitted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 47(b)

Shares must be part of ordinary share capital of certain companiesU.K.

26U.K.Eligible shares must form part of the ordinary share capital of—

(a)the company,

(b)a company which has control of the company, or

(c)a company which either is, or has control of, a company which is a member of a consortium owning either the company or a company having control of the company.

Requirement as to listing etc.U.K.

27(1)Eligible shares must be—U.K.

(a)shares of a class listed on a recognised stock exchange,

(b)shares in a company which is not under the control of another company, F2006...

[F2007(ba)shares in a company which is subject to an employee-ownership trust, or]

(c)shares in a company which is under the control of a listed company.

(2)A “listed company” is a company whose shares are listed on a recognised stock exchange, other than—

(a)a close company, or

(b)a company that would be a close company if resident in the United Kingdom.

[F2008(3)But a company is not a close company for the purposes of sub-paragraph (2) if it is subject to an employee-ownership trust.

(4)A company (“C”) is “subject to an employee-ownership trust” if—

(a)C meets the trading requirement set out in section 312D,

(b)C meets the indirect employee-ownership requirement,

(c)neither C, nor any other company which is a member of the same group of companies as C, is a service company, and

(d)C is not under the control of another company (ignoring for this purpose another company acting in its capacity as the trustee of the settlement by virtue of which C meets the indirect employee-ownership requirement).

(5)Section 312E (the indirect employee-ownership requirement) applies for the purposes of sub-paragraph (4), subject to the following modifications—

(a)subsection (3) of that section has effect as if—

(i)the words “during the qualifying period” were omitted, and

(ii)in paragraph (a) for “10 December 2013” there were substituted “ 1 October 2014 ”, and

(b)subsection (4) has effect as if for paragraph (b) there were substituted—

“(b)section 236L of that Act applies as if the reference in subsection (1)(c) of that section to the period of 12 months ending with the time in question were a reference to any time on or after 1 October 2014.”

(6)Section 312G (meaning of “service company”) applies for the purposes of sub-paragraph (4)(c), subject to the following modifications—

(a)in subsection (3)(b), the reference to the company which makes the payment is to be read as a reference to C,

(b)in subsection (4)(a), the reference to the time the payment is made is to be read as a reference to any time, and

(c)in subsection (4)(b), the reference to any time before the time the payment is made is to be read as a reference to any time.]

Textual Amendments

Shares must be fully paid up and not redeemableU.K.

28(1)Eligible shares must be—U.K.

(a)fully paid up, and

(b)not redeemable.

(2)For the purposes of sub-paragraph (1)(a) shares are not to be regarded as fully paid up if there is an undertaking to pay cash at a future date to the company whose shares they are.

(3)For the purposes of sub-paragraph (1)(b) “redeemable” shares include shares that may become redeemable at a future date.

(4)Sub-paragraph (1)(b) does not apply to shares in [F2009a registered co-operative society].

[F2010(5)In sub-paragraph (4) “registered co-operative society” means—

(a)a society registered as a co-operative society under the Co-operative and Community Benefit Societies Act 2014,

(b)a pre-commencement society (within the meaning of that Act) that is a co-operative society within the meaning of section 2 of that Act,

(c)a society registered or deemed to be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 that is a co-operative society within the meaning of section 1 of that Act , or

(d) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.]

Textual Amendments

F2009Words in Sch. 2 para. 28(4) substituted (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 154, Sch. 4 para. 82(2) (with Sch. 5)

Prohibited sharesU.K.

29(1)Eligible shares must not be shares in—U.K.

(a)a service company, or

(b)a company that—

(i)has control of a service company, and

(ii)is under the control of a person or persons who fall within sub-paragraph (2)(b)(i) or (ii) as it applies to a service company.

(2)For the purposes of this paragraph a company is a “service company” if—

(a)the business carried on by it consists substantially in the provision of the services of persons employed by it, and

(b)the majority of those services are provided to—

(i)a person who has control of the company,

(ii)two or more persons who together have control of the company, or

(iii)a company associated with the company.

(3)For the purposes of sub-paragraph (2)(b)(iii) a company is associated with another company if both companies are under the control of the same person or persons.

(4)For the purposes of sub-paragraphs (1) to (3)—

(a)a partnership is to be treated as a single person; and

(b)where a partner (alone or together with others) has control of a company, the partnership is to be treated as having (in the same way) control of that company.

(5)For the purposes of this paragraph the question whether a person controls a company is to be determined in accordance with [F2011sections 450 and 451 of CTA 2010].

Textual Amendments

F2011Words in Sch. 2 para. 29(5) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(3) (with Sch. 2)

Only certain kinds of restriction allowedU.K.

F201230U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2012Sch. 2 paras. 30-33 omitted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 48

Permitted restrictions: voting rightsU.K.

F201231U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2012Sch. 2 paras. 30-33 omitted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 48

Permitted restrictions: provision for forfeitureU.K.

F201232U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2012Sch. 2 paras. 30-33 omitted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 48

Permitted restrictions: pre-emption conditionsU.K.

F201233U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2012Sch. 2 paras. 30-33 omitted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 48

Part 5U.K.Free shares

Free shares: introductionU.K.

34(1)If a SIP provides for free shares, it must meet the plan requirements contained in—U.K.

  • paragraph 35 (maximum annual award), and

  • paragraph 36 (the holding period).

(2)If a SIP provides for free shares and for performance allowances, the requirements of the following paragraphs also apply—

  • paragraph 38 (performance allowances: general application),

  • paragraph 39 (performance allowances: targets and measures),

  • paragraph 40 (performance allowances: information to be given to employees), and

  • either paragraph 41 or 42 (performance allowances: methods of awarding shares).

(3)The plan must meet any plan requirements contained in those paragraphs.

(4)For the purpose of the SIP code a plan provides for performance allowances if it provides for—

(a)whether or not free shares will be awarded to an individual, or

(b)the number or value of free shares awarded,

to be conditional on performance targets being met.

Maximum annual awardU.K.

35(1)The plan must provide that the initial market value of the free shares awarded to a participant in a tax year is not to exceed [F2013£3,600] .U.K.

(2)The “initial market value” of shares means their market value on the date on which they are awarded.

[F2014(2A)The Treasury may by order amend sub-paragraph (1) by substituting for any amount for the time being specified there an amount specified in the order.]

F2015(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2015(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2013Word in Sch. 2 para. 35(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 49(2)(4)

F2014Sch. 2 para. 35(2A) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 50(2)

F2015Sch. 2 para. 35(3)(4) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 49

The holding periodU.K.

36(1)The plan must require the company in respect of each award of free shares to specify a period (“the holding period”) during which a participant is bound by contract with the company—U.K.

(a)to permit the free shares awarded to the participant to remain in the hands of the trustees, and

(b)not to assign, charge or otherwise dispose of the beneficial interest in the shares.

(2)The holding period—

(a)must be a period of at least 3 years but not more than 5 years, beginning with the date on which the shares in question are awarded to the participant, and

(b)must be the same for all shares in the same award.

(3)The plan—

(a)may authorise the company to specify different holding periods from time to time, but

(b)must prevent the company from increasing the holding period specified in respect of free shares that have been awarded under the plan.

(4)The participant’s obligations with respect to the holding period are subject to—

(a)paragraph 37 (power to authorise trustees to accept general offers etc.),

(b)paragraph 79 (meeting by trustees of PAYE obligations), and

(c)paragraph 90(5) (termination of plan: early removal of shares with participant’s consent).

(5)If at any time in the holding period the participant ceases to be in relevant employment, the participant’s obligations with respect to that period come to an end.

Holding period: power of participant to direct trustees to accept general offers etc.U.K.

37(1)A participant may direct the trustees to do any of the following during the holding period.U.K.

(2)The participant may direct the trustees to accept an offer for any of the participant’s free shares (“the original shares”) if the acceptance or agreement will result in a new holding being equated with the original shares for the purposes of capital gains tax.

(3)The participant may direct the trustees to agree to a transaction affecting the participant’s free shares, or such of them as are of a particular class, if the transaction would be entered into as a result of a compromise, arrangement or scheme applicable to or affecting—

(a)all the ordinary share capital of the company or, as the case may be, all the shares of the class in question, or

(b)all the shares, or all the shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in [F2016a Schedule 2] SIP.

(4)The participant may direct the trustees to accept an offer for the participant’s free shares of—

(a)cash, with or without other assets, or

(b)a qualifying corporate bond (whether alone or with other assets or cash or both),

if the offer forms part of a general offer falling within sub-paragraph (5).

(5)A general offer falls within this sub-paragraph if—

(a)it is made to holders of shares of the same class as the participant’s or to holders of shares in the same company, and

(b)it is made in the first instance on a condition such that if it is satisfied the person making the offer will have control of that company.

(6)In sub-paragraph (5) “control” has the meaning given by [F2017sections 450 and 451 of CTA 2010].

[F2018(7)For the purposes of sub-paragraph (5) it does not matter if the general offer is made to different shareholders by different means.

(8)If in the case of a takeover offer (as defined in section 974 of the Companies Act 2006) there arises a right under section 983 of that Act to require the offeror to acquire the participant's free shares, or such of them as are of a particular class, the participant may direct the trustees to exercise that right.]

Textual Amendments

F2017Words in Sch. 2 para. 37(6) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(4) (with Sch. 2)

F2018Sch. 2 para. 37(7)(8) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 20(1) (with Sch. 2 para. 20(2))

Performance allowances: general applicationU.K.

38U.K.A plan that provides for performance allowances in relation to an award must make provision for such allowances for all qualifying employees in relation to that award.

Performance allowances: targets and measuresU.K.

39(1)A plan that provides for performance allowances must comply with the following requirements with respect to performance targets and performance measures.U.K.

(2)The performance targets must be set for performance units comprising one or more employees.

(3)The performance measures used must—

(a)be based on business results or other objective criteria, and

(b)be fair and objective measures of the performance of the units to which they are or may be applied.

(4)For the purposes of an award of free shares under the plan an employee must not be a member of more than one performance unit.

Performance allowances: information to be given to employeesU.K.

40(1)A plan that provides for performance allowances in relation to an award of shares must require the company—U.K.

(a)to notify each qualifying employee who has accepted an invitation to participate in the award of the performance targets and measures which, under the plan, will be used to determine the number or value of free shares awarded to the employee, and

(b)to notify all qualifying employees—

(i)of the company, or

(ii)in the case of a group plan, of any constituent company,

in general terms, of the performance measures to be used to determine the number or value of free shares to be awarded to each employee participating in the award.

(2)The notices must be given as soon as reasonably practicable.

(3)The company may exclude from the notice mentioned in sub-paragraph (1)(b) any information whose disclosure the company reasonably considers would prejudice commercial confidentiality.

Performance allowances: method oneU.K.

41(1)The requirements of this paragraph are those contained in sub-paragraph (2).U.K.

(2)In the case of an award in relation to which the plan provides for performance allowances—

(a)at least 20% of the shares in the award must be awarded without reference to performance in accordance with the requirement of paragraph 9 (participation on same terms),

(b)the remaining shares must be awarded by reference to performance, and

(c)the highest number of shares within paragraph (b) awarded to an individual must not be more than four times the highest number of shares within paragraph (a) awarded to an individual.

(3)In determining for the purposes of sub-paragraph (2)(a) whether the requirement of paragraph 9 is met, the shares to which sub-paragraph (2)(a) applies are to be treated as a separate award of free shares.

(4)If the plan meets the requirements of this paragraph, the requirement of paragraph 9 does not apply to any provision of the plan relating to the awarding of shares within sub-paragraph (2)(b).

(5)If free shares of different classes are awarded, the requirements of this paragraph apply separately in relation to each class.

Performance allowances: method twoU.K.

42(1)The requirements of this paragraph are those contained in sub-paragraphs (2) and (3).U.K.

(2)In the case of an award in relation to which the plan provides for performance allowances—

(a)some or all of the shares in the award must be awarded by reference to performance, and

(b)the awarding of the shares to qualifying employees who are members of the same performance unit must meet the requirement of paragraph 9 (participation on same terms).

(3)The performance targets set in connection with such an award must be consistent targets (see sub-paragraph (6)).

(4)In determining for the purposes of sub-paragraph (2)(b) whether the requirement of paragraph 9 is met, the free shares awarded in respect of each performance unit are to be treated as a separate award of free shares.

(5)If this method is used, nothing in paragraph 9 requires the awarding of shares to members of different performance units to be on the same terms.

(6)In sub-paragraph (3) “consistent targets” means targets which, at the time when they are set in accordance with the plan, can reasonably be viewed as being comparable in terms of the likelihood of their being met by the performance units to which they apply.

Part 6U.K.Partnership shares

Partnership shares: introductionU.K.

43(1)If a SIP provides for partnership shares, the following paragraphs apply—U.K.

  • paragraph 44 (partnership share agreements),

  • paragraph 45 (deductions from salary),

  • paragraph 46 (maximum amount of deductions),

  • paragraph 47 (minimum amount of deductions),

  • paragraph 48 (notice of possible effect of deductions on benefit entitlement),

  • paragraph 49 (partnership share money held for employee),

  • paragraph 50 (application of money deducted where no accumulation periods),

  • paragraph 51 (accumulation periods),

  • paragraph 52 (application of money deducted in accumulation period),

  • paragraph 53 (restriction on number of shares awarded),

  • paragraph 54 (stopping and re-starting deductions),

  • paragraph 55 (withdrawal from partnership share agreement),

  • paragraph 56 (repayment of partnership share money on withdrawal of approval or termination), and

  • paragraph 57 (access to partnership shares).

(2)The plan must meet any plan requirements contained in those paragraphs.

[F2019(2A)The plan must provide that partnership shares are not to be subject to any provision for forfeiture.]

[F2020(2B)Partnership shares may (notwithstanding sub-paragraph (2A) if relevant) be subject to provision requiring partnership shares acquired on behalf of an employee to be offered for sale but only if the requirement of sub-paragraph (2C) is met.

(2C)The consideration at which the shares are required to be offered for sale must be at least equal to—

(a)the amount of partnership share money applied in acquiring the shares on behalf of the employee, or

(b)if lower, the market value of the shares at the time they are offered for sale.]

(3)References in the SIP code to the trustees acquiring partnership shares on behalf of an employee include their appropriating to an employee shares already held by them.

(4)In the SIP code references to an employee’s “salary” are to be read as follows—

(a)in the case of an individual within the scope of the charge to tax under Part 2 of this Act, they are to be read as references to such of the earnings of the eligible employment—

(i)as are liable to be paid under deduction of tax under PAYE regulations, after deducting any amounts included by virtue of the benefits code, or

(ii)as would be liable to be so paid apart from the SIP code;

(b)in the case of an individual not within the scope of the charge to tax under Part 2 of this Act, they are to be read as references to such of the earnings of the eligible employment as would have fallen within sub-paragraph (i) or (ii) of paragraph (a) if the individual had been within the scope of that charge to tax.

(5)In sub-paragraph (4) “the eligible employment” means the employment by reference to which the employee is eligible to participate in the plan.

Textual Amendments

F2019Sch. 2 para. 43(2A) inserted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 50

Partnership share agreementsU.K.

44(1)The plan must provide for qualifying employees to enter into agreements with the company (“company A”) under which—U.K.

(a)the employee authorises the employer company to deduct part of the employee’s salary for the purchase of partnership shares, and

(b)company A undertakes to arrange for partnership shares to be awarded to the employee in accordance with the plan.

(2)Such agreements are referred to in the SIP code as “partnership share agreements”.

(3)In sub-paragraph (1) “the employer company” means the company by reference to which the employee meets the employment requirement in relation to the plan.

Deductions from salaryU.K.

45(1)The plan must provide for a partnership share agreement to be given effect by deductions from the employee’s salary.U.K.

(2)Amounts so deducted are referred to in the SIP code as “partnership share money”.

(3)The partnership share agreement must specify—

(a)what amounts are to be deducted, and

(b)at what intervals;

but this does not prevent the employee and the company agreeing to vary those amounts or intervals.

(4)For the purposes of sub-paragraph (3)(a) the agreement may specify a percentage of the employee’s salary.

(5)The plan must require the employer company to calculate the amounts and intervals having regard to paragraph 46 (maximum amount of deductions from salary).

(6)In sub-paragraph (5) “the employer company” means the company by reference to which the employee meets the employment requirement in relation to the plan.

Maximum amount of deductionsU.K.

46(1)The amount of partnership share money deducted from an employee’s salary must not exceed [F2021£1,800] in any tax year. U.K.

(2)The amount of partnership share money deducted from an employee’s salary [F2022for any tax year must not exceed 10% of the employee’s salary for the tax year.]

(3)The plan may authorise the company to specify lower limits than those specified in sub-paragraphs (1) and (2).

(4)If it does so, different limits may be specified in relation to different awards of shares.

[F2023(4A)A limit lower than that specified in sub-paragraph (2) may be framed—

(a)as a proposition substituting a percentage lower than that so specified, or

(b)as a proposition that a particular description of earnings is not to be regarded as forming part of an employee’s salary for the purposes of that sub-paragraph.]

(5)Any amount deducted in excess of that allowed by sub-paragraph (1) or (2), or any lower limit in the plan, must be paid over to the employee as soon as practicable.

[F2024(6)The Treasury may by order amend sub-paragraph (1) by substituting for any amount for the time being specified there an amount specified in the order.]

Textual Amendments

F2021Word in Sch. 2 para. 46(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), s. 49(3)(4)

F2022Words in Sch. 2 para. 46(2) substituted (with effect in accordance with Sch. 21 para. 7(5) of the amending Act) by Finance Act 2003 (c. 14), Sch. 21 para. 7(3)

F2023Sch. 2 para. 46(4A) inserted (10.7.2003) by virtue of Finance Act 2003 (c. 14), Sch. 21 para. 7(4)

F2024Sch. 2 para. 46(6) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 50(3)

Minimum amount of deductionsU.K.

47(1)The plan may provide that the amount to be deducted under a partnership share agreement [F2025on any occasion] must not be less than a minimum amount specified in the plan.U.K.

(2)The specified minimum amount must not be greater than £10.

F2026(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2025Words in Sch. 2 para. 47 substituted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 8(a)

F2026Sch. 2 para. 47(3) repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 8(b), Sch. 43 Pt. 3(3)

Notice of possible effect of deductions on benefit entitlementU.K.

48(1)The plan must provide that the company may not enter into a partnership share agreement with an employee unless the agreement contains a notice under this paragraph.U.K.

(2)A notice under this paragraph is a notice in a prescribed form containing prescribed information as to the possible effect of deductions on an employee’s entitlement to social security benefits, statutory sick pay [F2027, statutory neonatal care pay] and statutory maternity pay.

(3)In this paragraph “prescribed” means prescribed by regulations made by [F111the Commissioners for Her Majesty’s Revenue and Customs].

Textual Amendments

F2027Words in Sch. 2 para. 48(2) inserted (20.3.2025) by Finance Act 2025 (c. 8), s. 36(3)

Partnership share money held for employeeU.K.

49(1)The plan must provide that partnership share money deducted under a partnership share agreement is—U.K.

(a)paid to the trustees as soon as practicable, and

(b)held by them on behalf of the employee until such time as it is applied by them in acquiring partnership shares on the employee’s behalf.

(2)Sub-paragraph (1) is subject to paragraphs 50(5)(b) and 52(6)(b) and (7) (obligations to pay money to the employee).

(3)The plan must provide for the trustees to keep any money required to be held by them under this paragraph in an account (interest bearing or otherwise) with—

(a)a person falling within [F2028section 991(2)(b) of ITA 2007] (certain institutions permitted to accept deposits),

(b)a building society, or

(c)a firm falling within [F2029section 991(2)(c) of ITA 2007] (EEA firms permitted to accept deposits).

(4)The plan must provide for the trustees to account to an employee for the interest if the partnership share money held on behalf of the employee is held in an interest bearing account.

Textual Amendments

F2028Words in Sch. 2 para. 49(3)(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(2)(a) (with Sch. 2)

F2029Words in Sch. 2 para. 49(3)(c) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(2)(b) (with Sch. 2)

Application of money deducted where no accumulation periodsU.K.

50(1)If the plan does not provide for an accumulation period, it must provide for partnership share money to be applied by the trustees in acquiring partnership shares on behalf of the employee on the acquisition date.U.K.

(2)The number of shares awarded to each employee must be determined in accordance with the market value of the shares on the acquisition date.

(3)Sub-paragraphs (1) and (2) are subject to paragraph 53 (restriction on number of shares awarded).

(4)In those sub-paragraphs “the acquisition date” means the date set by the trustees in relation to the award of partnership shares, which must be not later than 30 days after the last date on which the partnership share money to be applied in acquiring the shares was deducted.

(5)Any surplus partnership share money remaining after the acquisition of shares by the trustees—

(a)may with the agreement of the employee be carried forward and added to the amount of the next deduction, and

(b)in any other case must be paid over to the employee as soon as practicable.

Accumulation periodsU.K.

51(1)The plan may provide for accumulation periods not exceeding 12 months.U.K.

(2)If the plan does so, the following provisions apply.

(3)The partnership share agreements—

(a)must specify when each accumulation period begins and ends;

(b)may specify that an accumulation period comes to an end on the occurrence of a specified event.

(4)However—

(a)the beginning of the first accumulation period must not be later than the date on which the first deduction of partnership share money is made; and

(b)the accumulation period which applies in relation to each award of partnership shares must be the same for all individuals entering into the partnership share agreements.

(5)The plan may also provide that if—

(a)during an accumulation period, a transaction occurs in relation to any of the shares (“the original holding”) to be acquired under a partnership share agreement which results in a new holding of shares being equated with the original holding for the purposes of capital gains tax, and

(b)the employee consents,

the partnership share agreement is to have effect after the time of the transaction as if it were an agreement for the purchase of the shares comprised in the new holding.

Application of money deducted in accumulation periodU.K.

52(1)This paragraph applies if the plan provides for one or more accumulation periods.U.K.

(2)The plan must provide for the partnership share money deducted in each accumulation period under a partnership share agreement to be applied by the trustees in acquiring partnership shares on behalf of the employee on the acquisition date.

[F2030(2A)The number of shares awarded to the employee must be determined in accordance with one of sub-paragraphs (3), (3A) and (3B) and the partnership share agreement must specify which one of those sub-paragraphs is to apply for the purposes of the agreement.]

(3)[F2031If the agreement specifies that this sub-paragraph is to apply, the number of shares awarded to the] employee must be determined in accordance with the lower of—

(a)the market value of the shares at the beginning of the accumulation period, and

(b)the market value of the shares on the acquisition date.

[F2032(3A)If the agreement specifies that this sub-paragraph is to apply, the number of shares awarded to the employee must be determined in accordance with the market value of the shares at the beginning of the accumulation period.

(3B)If the agreement specifies that this sub-paragraph is to apply, the number of shares awarded to the employee must be determined in accordance with the market value of the shares on the acquisition date.]

(4)Sub-paragraphs (2) [F2033to (3B)] are subject to sub-paragraphs (7) and (8) and to paragraph 53 (restriction on number of shares awarded).

(5)In sub-paragraphs (2) [F2033to (3B)] “the acquisition date” means the date set by the trustees in relation to the award of partnership shares, which must be not later than 30 days after the end of the accumulation period which applies in relation to the award.

(6)Any surplus partnership share money remaining after the acquisition of shares by the trustees—

(a)may with the agreement of the employee be carried forward to the next accumulation period, and

(b)in any other case must be paid over to the employee as soon as practicable.

(7)The plan must provide that where the employee ceases to be in relevant employment during an accumulation period, any partnership share money deducted in the period is to be paid over to the individual as soon as practicable.

(8)The partnership share agreement may provide that, where an accumulation period comes to an end on the occurrence of a specified event, the partnership share money deducted in that period must be paid over to the individual as soon as practicable instead of being applied in acquiring shares.

Textual Amendments

F2030Sch. 2 para. 52(2A) inserted (with effect in accordance with Sch. 2 para. 81 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 79(2)

F2031Words in Sch. 2 para. 52(3) substituted (with effect in accordance with Sch. 2 para. 81 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 79(3)

F2032Sch. 2 para. 52(3A)(3B) inserted (with effect in accordance with Sch. 2 para. 81 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 79(4)

F2033Words in Sch. 2 para. 52(4)(5) substituted (with effect in accordance with Sch. 2 para. 81 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 79(5)

Restriction on number of shares awardedU.K.

53(1)The plan may authorise the company to specify the maximum number of shares (“the award maximum”) to be included in an award of partnership shares.U.K.

(2)If the plan does so—

(a)a different number may be specified by the company in relation to different awards, and

(b)the following provisions apply to the plan.

(3)The plan must require partnership share agreements to contain an undertaking by the company to notify the employee of any restriction on the number of shares to be included in an award.

(4)The plan must require the notice to be given—

(a)if there is no accumulation period, before the deduction of the partnership share money relating to the award, and

(b)if there is an accumulation period, before the beginning of the accumulation period relating to the award.

(5)The plan must provide that, where the award maximum in respect of an award of partnership shares is smaller than the number of shares which would otherwise be included in the award, the number of partnership shares acquired on behalf of each employee under paragraph 50(1) or 52(2) must be reduced proportionately.

Stopping and re-starting deductionsU.K.

54(1)The plan must provide that an employee may at any time give notice to the company to stop deductions under a partnership share agreement.U.K.

(2)The plan must provide that, unless a later date is specified in the notice, the company must, on receiving a notice within sub-paragraph (1), ensure within 30 days after receipt of the notice that no further deductions are made by it under the partnership share agreement.

(3)The plan must also provide that an employee who has stopped deductions—

(a)may subsequently give notice to the company to re-start deductions under the agreement, but

(b)may not make up deductions that have been missed.

(4)If the plan makes provision for one or more accumulation periods, it may prevent an employee re-starting deductions more than once in any accumulation period.

(5)The plan must provide that, unless a later date is specified in the notice, the company must, on receiving a notice within sub-paragraph (3), re-start deductions under the partnership share agreement not later than the re-start date.

(6)“The re-start date” means the date of the first deduction due under the partnership share agreement more than 30 days after receipt of the notice under sub-paragraph (3).

(7)In this paragraph “notice” means notice in writing.

Withdrawal from partnership share agreementU.K.

55(1)The plan must provide that an employee may at any time give notice to the company of the employee’s withdrawal from a partnership share agreement.U.K.

(2)The plan must provide that, unless a later date is specified in the notice, a notice of withdrawal takes effect 30 days after it is received by the company.

(3)The plan must provide that, where an employee withdraws from a partnership share agreement, any partnership share money held on behalf of the employee is to be paid over to the employee as soon as practicable.

(4)In this paragraph “notice” means notice in writing.

Repayment of partnership share money on [F2034plan ceasing to be a Schedule 2 SIP] or terminationU.K.

Textual Amendments

F2034Words in Sch. 2 para. 56 cross-heading substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 24, 89 (with Sch. 8 paras. 90-96)

56(1)The plan must provide that, where the [F2035plan is not to be a Schedule 2 SIP by virtue of paragraph 81H or 81I], any partnership share money held on behalf of an employee is to be paid over to the employee.U.K.

(2)The plan must require the payment to be made as soon as practicable after [F2036the relevant day].

[F2037(2A)If the plan is not to be a Schedule 2 SIP by virtue of paragraph 81H, in sub-paragraph (2) “the relevant day” means—

(a)the last day of the period in which notice of an appeal under paragraph 81K(2)(a) may be given, or

(b)if notice of such an appeal is given, the day on which the appeal is determined or withdrawn.

(2B)If the plan is not to be a Schedule 2 SIP by virtue of paragraph 81I, in sub-paragraph (2) “the relevant day” means—

(a)the last day of the period in which notice of an appeal under paragraph 81K(3) may be given, or

(b)if notice of such an appeal is given, the day on which the appeal is determined or withdrawn.]

(3)The plan must provide that, where a plan termination notice is issued in respect of the plan (see paragraph 90), any partnership share money held on behalf of an employee is to be paid over to the employee.

(4)The plan must require the payment to be made as soon as practicable after the plan termination notice is notified to the trustees under paragraph 89(2).

Textual Amendments

F2035Words in Sch. 2 para. 56(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 25(2), 89 (with Sch. 8 paras. 90-96)

F2036Words in Sch. 2 para. 56(2) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 25(3), 89 (with Sch. 8 paras. 90-96)

F2037Sch. 2 para. 56(2A)(2B) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 25(4), 89 (with Sch. 8 paras. 90-96)

Access to partnership sharesU.K.

57(1)The plan must provide that when partnership shares have been awarded to an employee, the employee may at any time withdraw any or all of the partnership shares from the plan.U.K.

(2)If the employee does so, there may be a charge to tax by virtue of section 506 (charge on partnership shares ceasing to be subject to plan).

Part 7U.K.Matching shares

Matching shares: introductionU.K.

58U.K.If a SIP provides for matching shares it must meet the plan requirements contained in—

  • paragraph 59 (general requirements for matching shares),

  • paragraph 60 (ratio of matching shares to partnership shares), and

  • paragraph 61 (holding period for matching shares).

General requirements for matching sharesU.K.

59(1)The plan must provide for the matching shares to be—U.K.

(a)shares of the same class and carrying the same rights as the partnership shares to which they relate;

(b)awarded on the same day as the partnership shares to which they relate are awarded; and

(c)awarded to all employees who participate in the award on exactly the same basis.

F2038(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2038Sch. 2 para. 59(2) omitted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 51

Ratio of matching shares to partnership sharesU.K.

60(1)The partnership share agreement must specify—U.K.

(a)the ratio of matching shares to partnership shares for the time being offered by the company, and

(b)the circumstances and manner in which the ratio may be changed by the company.

(2)The ratio must not exceed 2:1 and must be applied by reference to the number of shares.

(3)A partnership share agreement must provide for the employee to be informed by the company if the ratio offered by the company changes before partnership shares are awarded to the employee under the agreement.

[F2039(4)The Treasury may by order amend sub-paragraph (2) by substituting for any ratio for the time being specified there a ratio specified in the order.]

Textual Amendments

F2039Sch. 2 para. 60(4) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 50(4)

Holding period for matching sharesU.K.

61U.K.Paragraphs 36 and 37 (the holding period and related matters) apply in relation to matching shares as they apply in relation to free shares.

Part 8U.K.Cash dividends and dividend shares

Reinvestment of cash dividendsU.K.

62(1)A SIP may provide that, where the company so directs, the trustees must apply [F2040some or all of the] cash dividends in respect of plan shares held on behalf of—U.K.

(a)all participants, or

(b)all participants who elect to reinvest their dividends,

in acquiring further shares on their behalf.

[F2041(1A)The company's direction must set out—

(a)the amount of the cash dividends to be applied as mentioned in sub-paragraph (1), or

(b)how that amount is to be determined.]

(2)Sub-paragraph (1) is subject to paragraph 63 (requirements to be met as regards cash dividends).

(3)In the SIP code—

(a)the application of cash dividends as mentioned in sub-paragraph (1) is referred to as “reinvestment”; and

(b)the further plan shares acquired are referred to as “dividend shares”.

(4)The company may [F2042modify or] revoke a direction requiring the reinvestment of cash dividends.

(5)References in the SIP code to the trustees acquiring dividend shares on behalf of a participant include their appropriating to a participant shares already held by them.

Textual Amendments

F2040Words in Sch. 2 para. 62(1) substituted (with effect in accordance with Sch. 2 para. 86 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 83(2)

F2041Sch. 2 para. 62(1A) inserted (with effect in accordance with Sch. 2 para. 86 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 83(3)

F2042Words in Sch. 2 para. 62(4) inserted (with effect in accordance with Sch. 2 para. 86 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 83(4)

Requirements to be met as regards cash dividendsU.K.

63(1)If a SIP makes the provision authorised by paragraph 62(1) (reinvestment of cash dividends), the following paragraphs apply—U.K.

  • F2043...

  • paragraph 65 (general requirements as to dividend shares),

  • paragraph 66 (acquisition of dividend shares),

  • paragraph 67 (holding period for dividend shares), and

  • paragraph 68 (reinvestment: amounts to be carried forward).

(2)The plan must meet any plan requirements contained in those paragraphs.

(3)A SIP must in any event meet the plan requirement contained in paragraph 69 (cash dividends not required to be reinvested).

Textual Amendments

F2043Words in Sch. 2 para. 63(1) omitted (with effect in accordance with Sch. 2 para. 89 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 87

Limit on amount reinvestedU.K.

F204464U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2044Sch. 2 para. 64 omitted (with effect in accordance with Sch. 2 para. 89 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 88

General requirements as to dividend sharesU.K.

65[F2045(1)] The plan must provide that dividend shares are to be shares— U.K.

(a)which are in the same company and of the same class, and carry the same rights, as the shares in respect of which the dividend is paid, and

(b)which are not subject to any provision for forfeiture.

[F2046(2)Dividend shares may (notwithstanding sub-paragraph (1)(b) if relevant) be subject to provision requiring dividend shares acquired on behalf of an employee to be offered for sale but only if the requirement of sub-paragraph (3) is met.

(3)The consideration at which the shares are required to be offered for sale must be at least equal to—

(a)the amount of the cash dividends applied in acquiring the shares on behalf of the employee, or

(b)if lower, the market value of the shares at the time they are offered for sale.]

Textual Amendments

F2045Sch. 2 para. 65 renumbered as Sch. 2 para. 65(1) (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 26(2), 89 (with Sch. 8 paras. 90-96)

F2046Sch. 2 para. 65(2)(3) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 26(3), 89 (with Sch. 8 paras. 90-96)

Acquisition of dividend sharesU.K.

66(1)The plan must provide that the trustees must treat participants fairly and equally in exercising their powers in relation to the acquisition of dividend shares.U.K.

(2)The plan must provide for the trustees to acquire dividend shares on behalf of participants on the acquisition date.

(3)The number of dividend shares acquired on behalf of each participant must be determined in accordance with the market value of the shares on the acquisition date.

(4)In this paragraph “the acquisition date” means the date set by the trustees for the acquisition of dividend shares and falling not later than 30 days after the dividend is received by them.

Holding period for dividend sharesU.K.

67U.K.Paragraphs 36 and 37 (the holding period and related matters) apply in relation to dividend shares as they apply in relation to free shares, except that the holding period must be 3 years.

Reinvestment: amounts to be carried forwardU.K.

68[F2047(1)This paragraph applies where an amount is not reinvested because it is not sufficient to acquire a share.]U.K.

(2)The amount may be retained by the trustees and carried forward to be added to the amount of the next cash dividend to be reinvested.

(3)If so retained, the trustees must hold the amount so as to be separately identifiable for the purposes of sub-paragraphs (4) and (5).

(4)An amount retained under this paragraph must be paid over to the participant—

F2048(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)if F2049... the participant ceases to be in relevant employment (see paragraph 95), or

(c)if F2049... a plan termination notice is issued in respect of the plan (see paragraph 90).

(5)An amount required to be paid over to the participant under sub-paragraph (4) must be paid over as soon as practicable.

F2050(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2047Sch. 2 para. 68(1) substituted (with effect in accordance with Sch. 2 para. 86 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 84

F2048Sch. 2 para. 68(4)(a) and word omitted (with effect in accordance with Sch. 2 para. 90(4)(5) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 90(2)(a)

F2049Words in Sch. 2 para. 68(4)(b)(c) omitted (with effect in accordance with Sch. 2 para. 90(4)(5) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 90(2)(b)

F2050Sch. 2 para. 68(6) omitted (with effect in accordance with Sch. 2 para. 90(4)(5) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 90(3)

Cash dividends where no requirement to reinvestU.K.

69(1)The plan must require any distributable cash dividends in respect of plan shares held on behalf of a participant to be paid over to the participant as soon as practicable.U.K.

(2)“Distributable cash dividends” means cash dividends [F2051so far as they] are not required to be reinvested under the plan.

Textual Amendments

F2051Words in Sch. 2 para. 69(2) substituted (with effect in accordance with Sch. 2 para. 86 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 85

Part 9U.K.Trustees

Requirements etc. relating to trustees: introductionU.K.

70(1)A SIP must meet the plan requirements contained in—U.K.

  • paragraph 71(1) and (2) (establishment of trustees), and

  • paragraph 79 (meeting by trustees of PAYE obligations).

(2)The following provisions also relate to the trustees—

  • paragraph 71(3) to (6) (the trust instrument and classes of trustees)

  • paragraph 72 (duty to act in accordance with participant’s directions),

  • paragraph 73 (duty not to dispose of plan shares),

  • paragraph 74 (duty to make payments to participants),

  • paragraph 75 (duty to give notice of award of shares etc.),

  • paragraph 76 (power to borrow),

  • paragraph 77 (power to raise funds to subscribe for rights issue), [F2052and]

  • F2053...

  • paragraph 80 (other duties in relation to tax liabilities).

Textual Amendments

F2052Word in Sch. 2 para. 70(2) inserted (with effect in accordance with Sch. 2 para. 93(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 92(a)

F2053Words in Sch. 2 para. 70(2) omitted (with effect in accordance with Sch. 2 para. 93(2) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 92(b)

Establishment of trusteesU.K.

71(1)The plan must provide for the establishment of a body of trustees consisting of persons resident in the United Kingdom (“the trustees”).U.K.

(2)The plan must provide that the trustees are required—

(a)in the case of free or matching shares, to acquire shares and appropriate them to employees in accordance with the plan,

(b)in the case of partnership shares, to apply partnership share money in acquiring shares on behalf of employees in accordance with the plan, and

(c)in the case of dividend shares, to apply cash dividends in acquiring shares on behalf of participants in accordance with the plan.

(3)The functions of the trustees with respect to shares held by them must be regulated by a trust (“the plan trust”)—

(a)which is constituted under the law of a part of the United Kingdom, and

(b)the terms of which are embodied in an instrument which complies with the requirements of this Part of this Schedule (“the trust instrument”).

(4)The trust instrument must not contain any terms which are neither essential nor reasonably incidental to complying with the requirements of this Part of this Schedule.

(5)The trust instrument may contain terms that—

(a)define who is a professional trustee and who is a non-professional trustee;

(b)require the trustees to include at least one person who is a professional trustee and at least two who are non-professional trustees;

(c)require at least half of the non-professional trustees to have been, before being appointed as trustees, selected in accordance with a specified process of selection;

(d)require the trustees so selected to be persons who are employees of the company or, in the case of a group plan, of a participating company.

(6)The terms mentioned in sub-paragraph (5) are to be regarded as reasonably incidental to complying with the requirements of this Part of this Schedule for the purposes of sub-paragraph (4).

[F2054Duty to monitor participants in connected schemesU.K.

Textual Amendments

F2054 Sch. 2 para. 71A and cross-heading inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 6

71AU.K.The trust instrument must require the trustees to maintain records of participants who have participated in one or more other [F2055Schedule 2] SIPs established by the company or a connected company.]

Textual Amendments

Duty to act in accordance with participant’s directionsU.K.

72(1)The trust instrument must require the trustees—U.K.

(a)to dispose of a participant’s plan shares, and

(b)to deal with any right conferred in respect of any of a participant’s plan shares to be allotted other shares, securities or rights of any description,

only in accordance with a direction given by or on behalf of the participant.

(2)Sub-paragraph (1) is subject to—

(a)paragraph 73 (duty not to dispose of plan shares), and

(b)any provision in the plan made in accordance with paragraph 79 (meeting by trustees of PAYE obligations).

(3)The plan may provide for participants to give such general directions, to such effect and in such terms, as are specified in the plan.

Duty not to dispose of plan sharesU.K.

73(1)This paragraph applies to a participant’s plan shares that are free, matching or dividend shares.U.K.

(2)The trust instrument must prohibit the trustees from disposing of any of those shares (to the participant or otherwise) at any time during the holding period, unless the participant has at that time ceased to be in relevant employment.

(3)Sub-paragraph (2) is subject to—

(a)paragraph 37 (holding period: power to direct trustees to accept general offers etc.),

(b)paragraph 77 (power of trustees to raise funds to subscribe for rights issue),

(c)paragraph 79 (meeting by trustees of PAYE obligations), and

(d)paragraph 90(5) (termination of plan: early removal of shares with participant’s consent).

Duty to make payments to participantsU.K.

74(1)The trust instrument must require the trustees to pay over to a participant as soon as practicable—U.K.

(a)any money received by them in respect of, or by reference to, any of the participant’s shares, or

(b)any money’s worth so received unless it consists of new shares within the meaning of paragraph 87 (company reconstructions).

(2)Sub-paragraph (1) is subject to—

(a)paragraphs 62 to 69 (cash dividends and dividend shares),

(b)the trustees' obligations under sections 510 to 514 (PAYE: shares ceasing to be subject to plan; capital receipts), and

(c)the trustees' PAYE obligations.

Duty to give notice of award of shares etc.U.K.

75(1)The trust instrument must make the following provision regarding notices.U.K.

(2)It must provide that, as soon as practicable after any free or matching shares have been awarded to an employee, the trustees must give the employee notice of the award—

(a)specifying the number and description of those shares,

[F2056(aa)if the shares are subject to any restriction, giving details of the restriction,]

(b)stating their market value on the date on which they were awarded to the employee, and

(c)stating the holding period applicable to them.

(3)It must provide that, as soon as practicable after any partnership shares have been awarded to an employee, the trustees must give the employee notice of the award—

(a)specifying the number and description of those shares,

[F2057(aa)if the shares are subject to any restriction, giving details of the restriction,]

(b)stating the amount of partnership share money applied by the trustees in acquiring the shares on behalf of the employee, and

[F2058(c)stating the market value in accordance with which the number of shares awarded to the employee was determined.]

(4)It must provide that, as soon as practicable after any dividend shares have been acquired on behalf of a participant, the trustees must give the participant notice of the acquisition—

(a)specifying the number and description of those shares,

(b)stating their market value on the acquisition date (as defined by paragraph 66(4)),

(c)stating the holding period applicable to them, and

(d)informing the participant of any amount carried forward under paragraph 68 (reinvestment: amounts to be carried forward).

(5)It must provide that, where any foreign cash dividend is received in respect of plan shares held on behalf of a participant, the trustees must give the participant notice of the amount of any foreign tax deducted from the dividend before it was paid.

(6)In sub-paragraph (5) “foreign cash dividend” means a cash dividend paid in respect of plan shares in a company not resident in the United Kingdom.

Textual Amendments

F2056Sch. 2 para. 75(2)(aa) inserted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 52

F2057Sch. 2 para. 75(3)(aa) inserted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 52

F2058Sch. 2 para. 75(3)(c) substituted (with effect in accordance with Sch. 2 para. 81 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 80

Power of trustees to borrowU.K.

76U.K.The trust instrument may provide that the trustees have power to borrow—

(a)to acquire shares for the purposes of the plan, and

(b)for such other purposes as may be specified in the trust instrument.

Power of trustees to raise funds to subscribe for rights issueU.K.

77(1)The trustees may dispose of some of the rights arising under a rights issue in order to be able to obtain sufficient funds to exercise other such rights.U.K.

(2)The power conferred by sub-paragraph (1) is subject to paragraph 72 (duty to act in accordance with participant’s directions).

Acquisition by trustees of shares from employee share ownership trustU.K.

F205978U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2059Sch. 2 para. 78 omitted (with effect in accordance with Sch. 2 para. 93(2) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 93(1)

Meeting by trustees of PAYE obligationsU.K.

79(1)The plan must make provision to ensure that, where a PAYE obligation is imposed on the trustees as a result of any of a participant’s plan shares ceasing to be subject to the plan, the trustees are able to meet that obligation—U.K.

(a)by disposing of any of those shares, or

(b)if there are any remaining plan shares of the participant, by disposing of any of those shares, or

(c)by the participant paying to the trustees a sum equal to the amount required to discharge the obligation.

(2)A “PAYE obligation” includes an obligation under any of sections 510 to 512 (PAYE: shares ceasing to be subject to the plan).

(3)For the purposes of sub-paragraph (1) any reference to the trustees disposing of shares includes a reference to their acquiring the shares as trustees for the purposes of the trust.

(4)A disposal of any of the participant’s plan shares in accordance with provision made under sub-paragraph (1)(b) may give rise to a charge to tax under—

  • section 505 (charge on free or matching shares ceasing to be subject to plan),

  • section 506 (charge on partnership shares ceasing to be subject to plan), or

  • [F2060Chapter 3 or 4 of Part 4 of ITTOIA 2005 (dividends etc. from UK or non-UK resident companies etc.) as a result of section 394(2) or 407(2) of that Act (distribution or dividend payment when dividend shares cease to be subject to plan).]

Textual Amendments

F2060Words in Sch. 2 para. 79(4) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 617(3) (with Sch. 2)

Other duties of trustees in relation to tax liabilitiesU.K.

80(1)The trust instrument must require the trustees to maintain such records as may be necessary for the purposes of—U.K.

(a)their own PAYE obligations, or

(b)the PAYE obligations of the employer company so far as they relate to the plan.

(2)In sub-paragraph (1)—

  • “PAYE obligations”, in relation to the trustees, includes obligations under sections 510 to 514 (PAYE: shares ceasing to be subject to plan and capital receipts);

  • “the employer company” has the same meaning as in section 513.

(3)The trust instrument must require the trustees, where the participant becomes liable to income tax under—

(a)this Act, or

(b)[F2061Chapter 3 or 4 of Part 4 of ITTOIA 2005 (dividends etc. from UK or non-UK resident companies etc.)],

by reason of the occurrence of any event, to inform the participant of any facts relevant to determining that liability.

(4)[F2062Sections 1105 to 1108 of CTA 2010 (information relating to distributions to be provided by nominee) apply] in relation to—

(a)the balance of any cash dividend paid over to the participant under paragraph 64(3),

(b)any amount paid over to a participant under paragraph 68(4) (dividend retained for reinvestment and later paid out), or

(c)any relevant dividend (see sub-paragraph (5)),

as if it were a payment to which [F2063section 1105(1)(b) of that Act] applied (and, in the case of an amount within paragraph (b) above, as if the cash dividend had been paid at the time of the payment to the participant under paragraph 68(4)).

(5)In a case where dividend shares cease to be subject to the plan before the end of the period of 3 years beginning with the date on which they were acquired on a participant’s behalf, the cash dividend applied to acquire dividend shares on the participant’s behalf is a “relevant dividend” for the purposes of sub-paragraph (4)(c).

Textual Amendments

F2061Words in Sch. 2 para. 80(3)(b) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 617(4) (with Sch. 2)

F2062Words in Sch. 2 para. 80(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(5)(a) (with Sch. 2)

F2063Words in Sch. 2 para. 80(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(5)(b) (with Sch. 2)

[F2064PART 10U.K.Notification of plans, annual returns and enquiries

Textual Amendments

F2064Sch. 2 Pt. 10 substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 28, 89 (with Sch. 8 paras. 90-96)

Notice of SIP to be given to HMRCU.K.

81A(1)For a SIP to be a Schedule 2 SIP, notice of the SIP must be given to Her Majesty's Revenue and Customs (“HMRC”).U.K.

(2)The notice must—

(a)be given by the company,

(b)contain, or be accompanied by, such information as HMRC may require, and

(c)contain a declaration within sub-paragraph (3) made by such persons as HMRC may require.

(3)A declaration within this sub-paragraph is a declaration—

(a)that the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP, and

(b)if the declaration is made after the first date on which awards of shares are made under the SIP (“the first award date”), that those requirements—

(i)were met in relation to those awards of shares, and

(ii)have otherwise been met in relation to the SIP at all times on or after the first award date when shares appropriated to, or acquired on behalf of, individuals under the SIP have been held under the SIP.

(4)If notice is given under this paragraph in relation to a SIP, for the purposes of the SIP code the SIP is to be a Schedule 2 SIP at all times on and after the relevant date (but not before that date).

(5)But if the notice is given after the initial notification deadline, the SIP is to be a Schedule 2 SIP only from the beginning of the relevant tax year.

[F2065(5A)Sub-paragraph (5) does not apply if the company satisfies HMRC (or, on an appeal under paragraph 81K, the tribunal) that there is a reasonable excuse for failing to give notice on or before the initial notification deadline.

(5B)Paragraph 81C(9) (what constitutes a reasonable excuse) applies for the purposes of sub-paragraph (5A).

(5C)Where HMRC are required under sub-paragraph (5A) to consider whether there was a reasonable excuse, HMRC must notify the company of their decision within the period of 45 days beginning with the day on which HMRC received the company's request to consider the excuse.

(5D)Where HMRC are required to notify the company as specified in sub-paragraph (5C) but do not do so—

(a)HMRC are to be treated as having decided that there was no reasonable excuse, and

(b)HMRC must notify the company of the decision which they are treated as having made.]

(6)For the purposes of this Part—

  • “the initial notification deadline” is 6 July in the tax year following that in which the first award date falls,

  • “the relevant date” is—

    (a)

    the date on which the declaration within sub-paragraph (3) is made, or

    (b)

    if that declaration is made after the first award date, the first award date, and

  • “the relevant tax year” is—

    (a)

    the tax year in which the notice under this paragraph is given, or

    (b)

    if that notice is given on or before 6 July in that tax year, the preceding tax year.

(7)Sub-paragraph (4) is subject to the following paragraphs of this Part.

Textual Amendments

F2065Sch. 2 para. 81A(5A)-(5D) inserted (with effect in accordance with Sch. 3 para. 3(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 3(2)

Annual returnsU.K.

81B(1)This paragraph applies if notice is given in relation to a SIP under paragraph 81A.U.K.

(2)The company must give to HMRC a return for the tax year in which the relevant date falls and for each subsequent tax year (subject to sub-paragraph (9)).

(3)If paragraph 81A(5) applies in relation to the SIP, in sub-paragraph (2) the reference to the tax year in which the relevant date falls is to be read as a reference to the relevant tax year.

(4)A return for a tax year must—

(a)contain, or be accompanied by, such information as HMRC may require, and

(b)be given on or before 6 July in the following tax year.

(5)The information which may be required under sub-paragraph (4)(a) includes (in particular) information to enable HMRC to determine the liability to tax, including capital gains tax, of—

(a)any person who has participated in the SIP, or

(b)any other person whose liability to tax the operation of the SIP is relevant to.

(6)If during a tax year an alteration is made in a key feature of—

(a)the SIP, or

(b)the plan trust,

the return for the tax year must contain a declaration within sub-paragraph (7) made by such persons as HMRC may require.

(7)A declaration within this sub-paragraph is a declaration that the alteration has not caused the requirements of Parts 2 to 9 of this Schedule not to be met in relation to the SIP.

(8)For the purposes of sub-paragraph (6) a “key feature” of a SIP or plan trust is a provision of the SIP or plan trust which is necessary in order for the requirements of Parts 2 to 9 of this Schedule to be met in relation to the SIP.

(9)A return is not required for any tax year following that in which the termination condition is met in relation to the SIP.

(10)For the purposes of this Part “the termination condition” is met in relation to a SIP when—

(a)a plan termination notice has been issued in relation to it under paragraph 89, and

(b)all the requirements under paragraphs 56(3), 68(4)(c) and 90 have been met by the trustees.

(11)If the company becomes aware that—

(a)anything which should have been included in, or should have accompanied, a return for a tax year was not included in, or did not accompany, the return,

(b)anything which should not have been included in, or should not have accompanied, a return for a tax year was included in, or accompanied, the return, or

(c)any other error or inaccuracy has occurred in relation to a return for a tax year,

the company must give an amended return correcting the position to HMRC without delay.

81C(1)This paragraph applies if the company fails to give a return for a tax year (containing, or accompanied by, all required information and declarations) on or before the date mentioned in paragraph 81B(4)(b) (“the date for delivery”).U.K.

(2)The company is liable for a penalty of £100.

(3)If the company's failure continues after the end of the period of 3 months beginning with the date for delivery, the company is liable for a further penalty of £300.

(4)If the company's failure continues after the end of the period of 6 months beginning with the date for delivery, the company is liable for a further penalty of £300.

(5)The company is liable for a further penalty under this sub-paragraph if—

(a)the company's failure continues after the end of the period of 9 months beginning with the date for delivery,

(b)HMRC decide that such a penalty should be payable, and

(c)HMRC give notice to the company specifying the period in respect of which the penalty is payable.

(The company may be liable for more than one penalty under this sub-paragraph.)

(6)The penalty under sub-paragraph (5) is £10 for each day that the failure continues during the period specified in the notice under sub-paragraph (5)(c).

(7)The period specified in the notice under sub-paragraph (5)(c)—

(a)may begin earlier than the date on which the notice is given, but

(b)may not begin until after the end of the period mentioned in sub-paragraph (5)(a) or, if relevant, the end of any period specified in any previous notice under sub-paragraph (5)(c) given in relation to the failure.

(8)Liability for a penalty under this paragraph does not arise if the company satisfies HMRC (or, on an appeal under paragraph 81K, the tribunal) that there is a reasonable excuse for its failure.

(9)For the purposes of sub-paragraph (8)—

(a)an insufficiency of funds is not a reasonable excuse, unless attributable to events outside the company's control,

(b)where the company relies on any other person to do anything, that is not a reasonable excuse unless the company took reasonable care to avoid the failure, and

(c)where the company had a reasonable excuse for the failure but the excuse ceased, the company is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Notices and returns to be given electronically etcU.K.

81D(1)A notice under paragraph 81A, and any information accompanying the notice, must be given electronically.U.K.

(2)A return under paragraph 81B, and any information accompanying the return, must be given electronically.

(3)But, if HMRC consider it appropriate to do so, HMRC may allow the company to give a notice or return or any accompanying information in another way; and, if HMRC do so, the notice, return or information must be given in that other way.

(4)The Commissioners for Her Majesty's Revenue and Customs—

(a)must prescribe how notices, returns and accompanying information are to be given electronically;

(b)may make different provision for different cases or circumstances.

81E(1)This paragraph applies if a return under paragraph 81B, or any information accompanying such a return—U.K.

(a)is given otherwise than in accordance with paragraph 81D, or

(b)contains a material inaccuracy—

(i)which is careless or deliberate, or

(ii)which is not corrected as required by paragraph 81B(11).

(2)The company is liable for a penalty of an amount decided by HMRC.

(3)The penalty must not exceed £5,000.

(4)For the purposes of sub-paragraph (1)(b)(i) an inaccuracy is careless if it is due to a failure by the company to take reasonable care.

EnquiriesU.K.

81F(1)This paragraph applies if notice is given in relation to a SIP under paragraph 81A.U.K.

(2)HMRC may enquire into the SIP if HMRC give notice to the company of HMRC's intention to do so no later than—

(a)6 July in the tax year following the tax year in which the initial notification deadline falls, or

(b)if the notice under paragraph 81A is given after the initial notification deadline, 6 July in the second tax year following the relevant tax year.

(3)HMRC may enquire into the SIP if HMRC give notice to the company of HMRC's intention to do so no later than 12 months after the date on which a declaration within paragraph 81B(7) is given to HMRC.

(4)Sub-paragraph (5) applies if (at any time) HMRC have reasonable grounds for believing that requirements of Parts 2 to 9 of this Schedule—

(a)are not met in relation to the SIP, or

(b)have not been met in relation to the SIP.

(5)HMRC may enquire into the SIP if HMRC give notice to the company of HMRC's intention to do so.

(6)Notice may be given, and an enquiry may be conducted, under sub-paragraph (2), (3) or (5) even though the termination condition has been met in relation to the SIP.

81G(1)An enquiry under paragraph 81F(2), (3) or (5) is completed when HMRC give the company a notice (a “closure notice”) stating—U.K.

(a)that HMRC have completed the enquiry, and

(b)that—

(i)paragraph 81H is to apply,

(ii)paragraph 81I is to apply, or

(iii)neither paragraph 81H nor paragraph 81I is to apply.

(2)If the company receives notice under paragraph 81F(2), (3) or (5), the company may make an application to the tribunal for a direction requiring a closure notice for the enquiry to be given within a specified period.

(3)The application is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act).

(4)The tribunal must give a direction unless satisfied that HMRC have reasonable grounds for not giving the closure notice within the specified period.

81H(1)This paragraph applies if HMRC decide—U.K.

(a)that requirements of Parts 2 to 9 of this Schedule—

(i)are not met in relation to the SIP, or

(ii)have not been met in relation to the SIP, and

(b)that the situation is, or was, so serious that this paragraph should apply.

(2)If this paragraph applies—

(a)the SIP is not to be a Schedule 2 SIP with effect from—

(i)such relevant time as is specified in the closure notice, or

(ii)if no relevant time is specified, the time of the giving of the closure notice, and

(b)the company is liable for a penalty of an amount decided by HMRC.

(3)Sub-paragraph (2)(a) does not affect the operation of the SIP code in relation to shares appropriated to, or acquired on behalf of, an individual under the SIP before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).

(4)In particular, if the SIP was a Schedule 2 SIP when the shares were appropriated to, or acquired on behalf of, the individual, the SIP is to continue to be a Schedule 2 SIP in relation to those shares.

(5)The penalty under sub-paragraph (2)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of—

(a)the total income tax for which participants in the SIP have not been liable, or will not be liable in the future, and

(b)the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future,

in consequence of the SIP having been a Schedule 2 SIP at any relevant time before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).

(6)The liabilities covered by sub-paragraph (5) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraphs (3) and (4).

(7)In this paragraph “relevant time” means any time before the giving of the closure notice when requirements of Parts 2 to 9 of this Schedule were not met in relation to the SIP.

81I(1)This paragraph applies if HMRC decide—U.K.

(a)that requirements of Parts 2 to 9 of this Schedule—

(i)are not met in relation to the SIP, or

(ii)have not been met in relation to the SIP, but

(b)that the situation is not, or was not, so serious that paragraph 81H should apply.

(2)If this paragraph applies, the company—

(a)is liable for a penalty of an amount decided by HMRC, and

(b)must, no later than 90 days after the relevant day, secure that the requirements of Parts 2 to 9 of this Schedule are met in relation to the SIP.

(3)The penalty under sub-paragraph (2)(a) must not exceed £5,000.

(4)In sub-paragraph (2)(b) “the relevant day” means—

(a)the last day of the period in which notice of an appeal under paragraph 81K(2)(b) may be given, or

(b)if notice of such an appeal is given, the day on which the appeal is determined or withdrawn.

(5)Sub-paragraph (2)(b) does not apply if the termination condition was met in relation to the SIP before the giving of the closure notice or is met before the end of the 90 day period mentioned in sub-paragraph (2)(b).

(6)If the company fails to comply with sub-paragraph (2)(b), HMRC may give the company a notice stating that that is the case (a “default notice”).

(7)If the company is given a default notice—

(a)the SIP is not to be a Schedule 2 SIP with effect from—

(i)such relevant time as is specified in the default notice, or

(ii)if no relevant time is specified, the time of the giving of the default notice, and

(b)the company is liable for a further penalty of an amount decided by HMRC.

(8)Sub-paragraph (7)(a) does not affect the operation of the SIP code in relation to shares appropriated to, or acquired on behalf of, an individual under the SIP before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be).

(9)In particular, if the SIP was a Schedule 2 SIP when the shares were appropriated to, or acquired on behalf of, the individual, the SIP is to continue to be a Schedule 2 SIP in relation to those shares.

(10)The penalty under sub-paragraph (7)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of—

(a)the total income tax for which participants in the SIP have not been liable, or will not be liable in the future, and

(b)the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future,

in consequence of the SIP having been a Schedule 2 SIP at any relevant time before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be).

(11)The liabilities covered by sub-paragraph (10) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraphs (8) and (9).

(12)In this paragraph “relevant time” means any time before the giving of the default notice when requirements of Parts 2 to 9 of this Schedule were not met in relation to the SIP.

Assessment of penaltiesU.K.

81J(1)This paragraph applies if the company is liable for a penalty under this Part.U.K.

(2)HMRC must assess the penalty and notify the company of the assessment.

(3)Subject to sub-paragraphs (4) and (5), the assessment must be made no later than 12 months after the date on which the company becomes liable for the penalty.

(4)In the case of a penalty under paragraph 81E(1)(b), the assessment must be made no later than—

(a)12 months after the date on which HMRC become aware of the inaccuracy, and

(b)6 years after the date on which the company becomes liable for the penalty.

(5)In the case of a penalty under paragraph 81H(2)(b) or 81I(2)(a) or (7)(b) where notice of appeal is given under paragraph 81K(2) or (3), the assessment must be made no later than 12 months after the date on which the appeal is determined or withdrawn.

(6)A penalty payable under this Part must be paid—

(a)no later than 30 days after the date on which the notice under sub-paragraph (2) is given to the company, or

(b)if notice of appeal is given against the penalty under paragraph 81K(1) or (4), no later than 30 days after the date on which the appeal is determined or withdrawn.

(7)The penalty may be enforced as if it were corporation tax or, if the company is not within the charge to corporation tax, income tax charged in an assessment and due and payable.

(8)Sections 100 to 103 of TMA 1970 do not apply to a penalty under this Part.

AppealsU.K.

81K[F2066(A1)The company may appeal against a decision of HMRC under paragraph 81A(5A) that there was no reasonable excuse for its failure to give notice on or before the initial notification deadline.]U.K.

(1)The company may appeal against a decision of HMRC that the company is liable for a penalty under paragraph 81C or 81E.

(2)The company may appeal against—

(a)a decision of HMRC mentioned in paragraph 81H(1) or a decision of HMRC to specify, or not to specify, a relevant time in the closure notice;

(b)a decision of HMRC mentioned in paragraph 81I(1).

(3)The company may appeal against a decision of HMRC—

(a)to give the company a default notice under paragraph 81I;

(b)to specify, or not to specify, a relevant time in the default notice.

(4)The company may appeal against a decision of HMRC as to the amount of a penalty payable by the company under this Part.

(5)The company may appeal against a decision of an officer of Revenue and Customs to give a direction under section 998 of CTA 2009 (withdrawal of corporation tax deductions in relation to a Schedule 2 SIP).

(6)Notice of appeal must be given to HMRC no later than 30 days after the date on which—

[F2067(za)in the case of an appeal under sub-paragraph (A1), notice of HMRC's decision is given to the company;]

(a)in the case of an appeal under sub-paragraph (1) or (4), the notice under paragraph 81J(2) is given to the company;

(b)in the case of an appeal under sub-paragraph (2), the closure notice is given;

(c)in the case of an appeal under sub-paragraph (3), the default notice is given;

(d)in the case of an appeal under sub-paragraph (5), notice of the officer's decision is given to the company.

(7)On an appeal under sub-paragraph [F2068(A1),] (1), (3)(a) or (5) which is notified to the tribunal, the tribunal may affirm or cancel the decision.

(8)On an appeal under sub-paragraph (2) or (3)(b) which is notified to the tribunal, the tribunal may—

(a)affirm or cancel the decision, or

(b)substitute for the decision another decision which HMRC had power to make.

(9)On an appeal under sub-paragraph (4) which is notified to the tribunal, the tribunal may—

(a)affirm the amount of the penalty decided, or

(b)substitute another amount for that amount.

(10)Subject to this paragraph and paragraph 81J, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to corporation tax or, if the company is not within the charge to corporation tax, income tax.]

Textual Amendments

F2066Sch. 2 para. 81K(A1) inserted (with effect in accordance with Sch. 3 para. 3(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 3(3)(a)

F2067Sch. 2 para. 81K(6)(za) inserted (with effect in accordance with Sch. 3 para. 3(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 3(3)(b)

F2068Word in Sch. 2 para. 81K(7) inserted (with effect in accordance with Sch. 3 para. 3(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 3(3)(c)

[F2069PART 10AU.K.Disqualifying events

Textual Amendments

F2069Sch. 2 Pt. 10A inserted (with effect in accordance with Sch. 3 para. 2(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 2(3)

85A(1)A SIP ceases to be a Schedule 2 SIP if (and with effect from the time when) a disqualifying event occurs.U.K.

(2)The following are disqualifying events—

(a)an alteration being made in—

(i)the share capital of a company any of whose shares are subject to the plan trust, or

(ii)the rights attaching to any shares of such a company,

that materially affects the value of the shares that are subject to the plan trust;

(b)shares of a class of shares that is subject to the plan trust receiving different treatment in any respect from the other shares of that class.

(3)Sub-paragraph (2)(b) applies in particular to different treatment in respect of—

(a)the dividend payable,

(b)repayment, or

(c)any offer of substituted or additional shares, securities or rights of any description in respect of the shares.

(4)Sub-paragraph (2)(b) does not however apply where the difference in treatment arises from—

(a)a key feature of the plan, or

(b)any of the participants' shares being subject to any restriction.

(5)Nor does sub-paragraph (2)(b) apply as a result only of the fact that shares which have been newly issued receive, in respect of dividends payable with respect to a period beginning before the date on which they were issued, treatment less favourable than that accorded to shares issued before that date.

(6)For the purposes of this paragraph a “key feature” of a plan is a provision of it that is necessary to meet the requirements of this Schedule.

(7)This paragraph does not affect the operation of the SIP code in relation to shares awarded to participants in the plan before the disqualifying event occurred.]

Part 11U.K.Supplementary provisions

Company reconstructionsU.K.

86(1)In this Part of this Schedule a “company reconstruction” means a transaction to which this paragraph applies.U.K.

(2)This paragraph applies to a transaction which occurs in relation to any of a participant’s plan shares (“the original holding”) and—

(a)results in a new holding being equated with the original holding for the purposes of capital gains tax, or

(b)would have that result but for the fact that what would be the new holding consists of or includes a qualifying corporate bond.

(3)But where an excluded issue of shares is made—

(a)that issue of shares does not by itself count as a transaction within sub-paragraph (2); and

(b)if made as part of a transaction within that sub-paragraph (that is, as part of a company reconstruction), the shares issued are to be regarded as not forming part of the new holding.

(4)An “excluded issue of shares” means an issue of shares of any of the following descriptions (in respect of which a charge to income tax arises)—

(a)redeemable shares or securities issued as mentioned in [F2070paragraph C or D in section 1000(1) of CTA 2010] (distributions);

(b)share capital issued in circumstances such that [F2071section 1022(3) of CTA 2010] (bonus issues) applies;

(c)share capital to which [F2072section 410 of ITTOIA 2005 (stock dividends) applies that is issued in a case where subsection (2) or (3) of that section applies.]

Textual Amendments

F2070Words in Sch. 2 para. 86(4)(a) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(6)(a) (with Sch. 2)

F2071Words in Sch. 2 para. 86(4)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(6)(b) (with Sch. 2)

F2072Words in Sch. 2 para. 86(4)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(6)(c) (with Sch. 2)

Consequences of company reconstructionsU.K.

87(1)In the SIP code references to a participant’s plan shares in relation to a SIP are to be read, after the time of a company reconstruction—U.K.

(a)as referring to the new shares, or

(b)as including those shares,

as the case may be.

This is subject to the following provisions of this paragraph.

(2)For the purposes of the SIP code—

(a)a company reconstruction is to be treated as not involving a disposal of the shares comprised in the original holding;

(b)new shares are to be treated as having been awarded to the participant on the date on which the corresponding old shares were awarded;

(c)the conditions in Part 4 of this Schedule (types of share that may be awarded) are to be treated as fulfilled with respect to any new shares if they were (or were treated as) fulfilled with respect to the corresponding old shares; and

(d)the provisions of—

(i)sections 489 to 514 (SIPs: income tax advantages and charges under this Act),

[F2073(ii)sections 392 to 395 and 405 to 408 of ITTOIA 2005 (SIPs: special rules for charges under Chapters 3 and 4 of Part 4 of that Act (dividends etc. from UK or non-UK resident companies etc.)) and section 770 of that Act (exemption for amounts applied by SIP trustees acquiring dividend shares or retained for reinvestment),]

(iii)sections 686B and 686C of ICTA (SIPs: income tax advantages for trustees), and

(iv)Part 1 of Schedule 7D to TCGA 1992 (SIPs: capital gains tax),

apply in relation to the new shares as they would have applied in relation to the corresponding old shares.

(3)If the corresponding old shares were dividend shares, the reference in sub-paragraph (2)(b) to the corresponding old shares being awarded is a reference to those shares being acquired on behalf of the participant.

(4)Sub-paragraphs (1) to (3) are subject to paragraph 88 (treatment of shares acquired under rights issue).

(5)For the purposes of the SIP code if, as part of a company reconstruction, trustees become entitled to a capital receipt, their entitlement to the capital receipt is to be taken to arise before the new holding comes into being.

(6)In the SIP code, in the context of a new holding, “shares” includes securities and rights of any description which form part of the new holding for the purposes of Chapter 2 of Part 4 of TCGA 1992 (reorganisation of share capital etc.).

(7)In this paragraph—

(a)“new shares” means shares comprised in the new holding which were issued in respect of, or otherwise represent, shares comprised in the original holding;

(b)“the new holding” and “the original holding” mean respectively the new and original holdings mentioned in paragraph 86(2);

(c)“corresponding old shares”, in relation to any new shares, means the shares in respect of which the new shares are issued or which the new shares otherwise represent.

Textual Amendments

F2073Sch. 2 para. 87(2)(d)(ii) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 617(6) (with Sch. 2)

Treatment of shares acquired under rights issueU.K.

88(1)This paragraph applies for the purposes of the SIP code where the trustees exercise rights arising under a rights issue and conferred in respect of a participant’s plan shares.U.K.

(2)In such a case, any shares or securities or rights allotted are to be treated as if they were plan shares—

(a)identical to the shares in respect of which the rights were conferred, and

(b)appropriated to, or acquired on behalf of, the participant under the plan in the same way and at the same time as those shares.

(3)If, however, either of the conditions set out in sub-paragraph (4) is met, sub-paragraph (5) applies instead.

(4)The conditions are—

(a)that the funds used by the trustees to exercise the rights are not provided by the exercise of the trustees' powers under paragraph 77 (trustees' powers to raise funds to subscribe for rights issue);

(b)that similar rights are not conferred in respect of all ordinary shares in the company.

(5)If either of those conditions is met—

(a)any shares, securities or rights allotted are not plan shares, and

(b)sections 127 to 130 of TCGA 1992 (reorganisation of share capital etc.) do not apply in relation to them.

Termination of planU.K.

89(1)The plan may provide for the company to issue a plan termination notice in respect of the plan in circumstances specified in the plan.U.K.

(2)The plan must provide that, where a plan termination notice is issued, a copy of the notice must be given, without delay, to—

F2074(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)the trustees,

(c)each individual who has plan shares, and

(d)each individual who has entered into a partnership share agreement which was in force immediately before the notice was issued.

Textual Amendments

Effect of plan termination noticeU.K.

90(1)This paragraph applies if the company has issued a plan termination notice under paragraph 89.U.K.

(2)No further shares may be [F2075appropriated to, or acquired on behalf of,] individuals under the plan.

(3)The trustees must remove the plan shares from the plan as soon as practicable after whichever is the later of—

(a)the end of the notice period, or

(b)the first date on which the shares may be removed from the plan without giving rise to a charge to income tax under sections 501 to 507 (SIPs: tax charges) on the participant on whose behalf they are held.

(4)In sub-paragraph (3) “the notice period” means the period of 3 months beginning with the date on which the requirements imposed by the plan in accordance with paragraph 89(2) are met in respect of the plan termination notice.

(5)The trustees may remove a participant’s shares from the plan at an earlier date with the participant’s consent.

(6)Any consent given by the participant before receiving a copy of the plan termination notice is to be disregarded for the purposes of sub-paragraph (5).

(7)As soon as practicable after the plan termination notice is issued, the trustees must pay any money held on an individual’s behalf to the individual.

(8)In this paragraph references to the trustees removing the plan shares from the plan are to their doing the following in the case of each participant—

(a)transferring the shares to the participant on behalf of whom they are held, or to another person, at the participant’s direction, or

(b)disposing of the shares and accounting (or holding themselves ready to account) for the proceeds to the participant or to another person at the participant’s direction.

(9)Where a participant has died, the references in this paragraph to a participant are to the participant’s personal representatives.

Textual Amendments

Jointly owned companiesU.K.

91(1)This paragraph applies for the purposes of the provisions of the SIP code relating to group plans.U.K.

(2)Each joint owner of a jointly owned company is to be treated as controlling every company within sub-paragraph (3).

(3)The companies within this sub-paragraph are—

(a)the jointly owned company, and

(b)any company controlled by that company.

(4)However, no company within sub-paragraph (3) may be—

(a)a constituent company in more than one group plan, or

(b)a constituent company in a particular group plan if another company within that sub-paragraph is a constituent company in a different group plan.

(5)In this paragraph a “jointly owned company” means a company—

(a)of which 50% of the issued share capital is owned by one person and 50% by another, and

(b)which is not controlled by any one person.

(6)This paragraph does not apply for the purposes of paragraph 27(1)(b) (requirement that plan shares are in a company not under another company’s control).

Determination of market valueU.K.

92(1)For the purposes of the SIP code the “market value” of shares has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act.U.K.

[F2076(2)For the purposes of this Schedule the market value of shares subject to a restriction is to be determined as if they were not subject to the restriction.]

(3)Where the market value of shares on any date has to be determined for the purposes of the SIP code, [F165an officer of Revenue and Customs] and the trustees may agree that it is to be determined by reference—

(a)to a date or dates, or

(b)to an average of the values on a number of dates,

stated in the agreement.

Textual Amendments

F2076Sch. 2 para. 92(2) substituted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 55

Modifications etc. (not altering text)

C140Sch. 2 para. 92(2) applied by 2005 c. 5, s. 407(3C) (as inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 63(3), 89 (with Sch. 8 paras. 90-96))

C141Sch. 2 para. 92(2) applied by 2005 c. 5, s. 394(3C) (as inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 57(3), 89 (with Sch. 8 paras. 90-96))

Power to require informationU.K.

93[F2077(1)An officer of Revenue and Customs may by notice require a person to provide the officer with any information—U.K.

(a)which the officer reasonably requires for the performance of any functions of Her Majesty's Revenue and Customs or an officer of Revenue and Customs under the SIP code, and

(b)which the person to whom the notice is addressed has or can reasonably obtain.]

(2)The power conferred by this paragraph extends, in particular, to—

(a)information to enable [F165an officer of Revenue and Customs] —

[F2078(i)to check anything contained in a notice under paragraph 81A or a return under paragraph 81B or to check any information accompanying such a notice or return, or”, and]

(ii)to determine the liability to tax, including capital gains tax, of any person who has participated in a plan [F2079or any other person whose liability to tax the operation of a plan is relevant to], and

(b)information about the administration of a plan and any proposed alteration of the terms of a plan.

(3)The notice must require the information to be provided within a specified period, which must not end earlier than 3 months after the date when the notice is given.

Textual Amendments

F2077Sch. 2 para. 93(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 31(2), 89 (with Sch. 8 paras. 90-96)

F2078Sch. 2 para. 93(2)(a)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 31(3)(a), 89 (with Sch. 8 paras. 90-96)

F2079Words in Sch. 2 para. 93(2)(a)(ii) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 31(3)(b), 89 (with Sch. 8 paras. 90-96)

Meaning of “associated company”U.K.

94(1)For the purposes of the SIP code one company is an “associated company” of another company at a given time if—U.K.

(a)one has control of the other, or

(b)both are under the control of the same person or persons.

(2)Sub-paragraph (1) does not, however, apply for the purposes of paragraph 29 (prohibited shares).

(3)For the purposes of sub-paragraph (1) the question whether a person controls a company is to be determined in accordance with [F2080sections 450 and 451 of CTA 2010].

Textual Amendments

F2080Words in Sch. 2 para. 94(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(7) (with Sch. 2)

Meaning of participant ceasing to be in relevant employmentU.K.

95(1)This paragraph explains what is meant, for the purposes of the SIP code, by a participant ceasing to be in relevant employment.U.K.

(2)For the purposes of the SIP code “relevant employment” means employment by the company or any associated company.

(3)A participant who remains in the employment of the company or any associated company does not cease to be in relevant employment.

Meaning of shares being withdrawn from planU.K.

96(1)For the purposes of the SIP code plan shares are withdrawn from a SIP when—U.K.

(a)they are transferred by the trustees to the participant, or another person, on the direction of the participant,

(b)the participant assigns, charges or otherwise disposes of the beneficial interest in the shares, or

(c)they are disposed of by the trustees, on the direction of the participant, in circumstances where the trustees account (or hold themselves ready to account) for the proceeds to the participant or to another person.

(2)Where the participant has died, the references in sub-paragraph (1) to the participant are to the participant’s personal representatives.

Meaning of shares ceasing to be subject to planU.K.

97(1)For the purposes of the SIP code plan shares cease to be subject to a SIP when—U.K.

(a)they are withdrawn from the plan,

(b)the participant to whom the shares were awarded ceases to be in relevant employment at a time when the shares are subject to the plan, or

(c)the trustees dispose of the shares under provision made in accordance with paragraph 79 (meeting by trustees of PAYE obligations).

(2)If an individual—

(a)participates in an award of partnership shares, and

(b)ceases to be in relevant employment at any time during the acquisition period relating to that award,

the individual is to be treated for the purposes of this paragraph as ceasing to be in relevant employment immediately after the shares are awarded.

(3)In sub-paragraph (2) “the acquisition period” in relation to an award means—

(a)where there was no accumulation period, the period beginning with the deduction of the partnership share money and ending with the acquisition date (as defined by paragraph 50(4)), and

(b)where there was an accumulation period, the period beginning with the end of that period and ending immediately before the acquisition date (as defined by paragraph 52(5)).

(4)If a participant ceases to be in relevant employment, the participant’s plan shares are to be treated as ceasing to be subject to the plan on the date of leaving.

Meaning of “the specified retirement age”U.K.

F208198U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2081Sch. 2 para. 98 omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 5 (with Sch. 2 para. 17)

Minor definitionsU.K.

99(1)In the SIP code—U.K.

  • “articles of association”, in relation to a company, includes any other written agreement between the shareholders of the company;

  • “company” means a body corporate;

  • “group of companies” means a company and any other companies of which it has control, and “group company” has a corresponding meaning;

  • “participant’s plan shares”, in relation to a SIP, means plan shares that have been awarded to an individual participant;

  • “PAYE obligations” means (subject to paragraphs 79(2) and 80(2)) obligations of any person under—

    (a)

    Part 11 of this Act, or

    (b)

    PAYE regulations;

  • “plan shares”, in relation to a SIP, means—

    (a)

    free, partnership or matching shares which have been awarded to participants under the plan,

    (b)

    dividend shares which have been acquired on behalf of participants under the plan, and

    (c)

    shares in relation to which paragraph 87(1) applies (company reconstructions: new shares),

    and which (in each case) remain subject to the plan;

  • “provision for forfeiture” means a provision to the effect that a participant ceases to be beneficially entitled to shares on the occurrence of certain events, and “forfeiture” is to be read accordingly;

  • “qualifying corporate bond” has the meaning given by section 117 of TCGA 1992;

  • “redundancy” has the same meaning as in ERA 1996 or ER(NI)O 1996;

  • “rights arising under a rights issue” means rights conferred in respect of a participant’s plan shares to be allotted, on payment, other shares or securities or rights of any description in the same company.

(2)For the purposes of the SIP code references to “shares” include fractions of shares forming part of the share capital of a company registered in a foreign country the law of which recognises such fractions.

(3)For the purposes of the SIP code a company is a member of a consortium owning another company if it is one of a number of companies—

(a)which between them beneficially own not less than 75% of the other company’s ordinary share capital, and

(b)each of which beneficially owns not less than 5% of that capital.

[F2082(4)For the purposes of the SIP code—

(a)shares are subject to a “restriction” if there is any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) of section 423 (restricted securities) would apply if the references in those subsections to the employment-related securities were to the shares, and

(b)the “restriction” is that provision.]

Textual Amendments

F2082Sch. 2 para. 99(4) inserted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 56

Index of defined expressionsU.K.

100U.K.In the SIP code the following expressions are defined or otherwise explained by the provisions indicated below:

accumulation periodparagraph 51
F2083. . .F2083. . .
articles of associationparagraph 99(1)
associated companyparagraph 94 (and see paragraph 29(3))
award of sharesparagraph 5(1)
F2084. . .. . .
building society [F2085section 989 of ITA 2007]
ceasing to be in relevant employment (in relation to a participant)paragraph 95
ceasing to be subject to plan (in relation to shares)paragraph 97
child [F2086section 721(6)]
close company [F2087section 989 of ITA 2007] F2088...
companyparagraph 99(1)
the company (in relation to a SIP)paragraph 2(2)
company reconstruction (in Part 11 of this Schedule)paragraph 86(1)
connected personsection 718
consortium (member of)paragraph 99(3)
constituent companyparagraph 4(3)
controlsection 719 (and see paragraphs 29(5), 37(6) and 94(3))
distribution [F2089section 989 of ITA 2007]
dividend sharesparagraph 62(3)(b)
earningssection 62 and see section 721(7)
eligible shares (in Part 4 of this Schedule)paragraph 25(2)
employee, employed, employer and employmentsection 4
the employment requirementparagraph 15(3)
forfeiture, provision forparagraph 99(1)
free sharesparagraph 2(1)(a)
group companyparagraph 99(1)
group of companiesparagraph 99(1)
group planparagraph 4(2)
holding periodparagraph 36 (and see paragraph 67)
F2084. . .
market value (of shares)paragraph 92
matching sharesparagraph 3(1)
notice (except in paragraph 54 or 55) [F2090section 989 of ITA 2007]
ordinary share capital [F2091section 989 of ITA 2007]
parent companyparagraph 4(1)
participant (in relation to a SIP)paragraph 5(4)
participant’s plan sharesparagraph 99(1) (and see paragraph 87(1))
participation in an award of sharesparagraph 5(3)
partnership share agreementparagraph 44
partnership share moneyparagraph 45(2)
partnership sharesparagraph 2(1)(b)
PAYE deductionsection 488(4)
PAYE obligationsparagraph 99(1)
PAYE regulationssection 684(8)
performance allowancesparagraph 34(4)
personal representatives [F2092section 989 of ITA 2007]
plan requirements (in relation to a SIP)paragraph 2(2)
plan shares (in relation to a SIP)paragraph 99(1) (and see paragraphs 86 to 88)
the plan trustparagraph 71(3)
provision for forfeitureparagraph 99(1)
qualifying corporate bondparagraph 99(1)
qualifying employeeparagraph 8(6)
recognised stock exchange [F2093section 1005 of ITA 2007]
redundancyparagraph 99(1)
reinvestmentparagraph 62(3)(a)
relevant employmentparagraph 95(2)
[F2094restriction (in relation to shares) paragraph 99(4)]
rights arising under a rights issueparagraph 99(1)
salaryparagraph 43(4)
share incentive plan (“SIP”)section 488(4)
[F2095Schedule 2 SIPparagraph 1 and Part 10 of this Schedule]
sharesparagraph 99(2) (and in the context of a new holding, paragraph 87(6))
the SIP codesection 488(3)
F2096. . .F2096. . .
F2097. . .F2097. . .
tax [F2098section 989 of ITA 2007]
[F2099tribunal section 989 of ITA 2007]
tax year [F2100section 4(2) of ITA 2007 (as applied by section 989 of that Act)]
the trusteesparagraphs 2(2), 71(1)
the trust instrumentparagraph 71(3)
withdrawal of shares from planparagraph 96(1)

Textual Amendments

F2084Sch. 2 para. 100 entry repealed (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 121(e), Sch. 5; S.I. 2005/1126, art. 2(2)(h)(i)

F2085Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(a) (with Sch. 2)

F2086Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(b) (with Sch. 2)

F2087Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(c) (with Sch. 2)

F2088Words in Sch. 2 para. 100 Table omitted (with effect in accordance with Sch. 2 para. 38 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 37

F2089Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(d) (with Sch. 2)

F2090Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(e) (with Sch. 2)

F2091Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(f) (with Sch. 2)

F2092Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(g) (with Sch. 2)

F2093Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(h) (with Sch. 2)

F2094Words in Sch. 2 para. 100 Table inserted (with effect in accordance with Sch. 2 para. 58 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 57

F2097Words in Sch. 2 para. 100 Table omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 6 (with Sch. 2 para. 17)

F2098Words in Sch. 2 para. 100 substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 396(8) (with Sch. 2)

F2100Words in Sch. 2 para. 100 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 447(3)(j) (with Sch. 2)

Section 516

SCHEDULE 3U.K.F2101... SAYE option schemes

Textual Amendments

F2101Word in Sch. 3 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 103, 146 (with Sch. 8 paras. 147-157)

Part 1U.K.Introduction

[F2102Introduction to Schedule 3] SAYE option schemesU.K.

Textual Amendments

1[F2103(A1)For the purposes of the SAYE code an SAYE option scheme is a Schedule 3 SAYE option scheme if the requirements of Parts 2 to 7 of this Schedule are met in relation to the scheme.]U.K.

(3)The requirements consist of general requirements (see Part 2) and requirements as to—

  • the eligibility of individuals to participate in a scheme (see Part 3),

  • the shares to which schemes can apply (see Part 4),

  • the existence of a linked [F2104savings arrangement] (see Part 5),

  • the share options that may be granted under the scheme (see Part 6), and

  • the exchange of share options (see Part 7).

[F2105(4)Sub-paragraph (A1) is subject to Part 8 of this Schedule which—

(a)requires notice of a scheme to be given to Her Majesty's Revenue and Customs (“HMRC”) in order for the scheme to be a Schedule 3 SAYE option scheme (see paragraph 40A(1)),

(b)provides for a scheme in relation to which such notice is given to be a Schedule 3 SAYE option scheme (see paragraph 40A(4)), and

(c)gives power to HMRC to enquire into a scheme and to decide that the scheme should not be a Schedule 3 SAYE option scheme (see paragraphs 40F to 40I).]

Textual Amendments

F2104Words in Sch. 3 para. 1(3) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(2) (with Sch. 2)

SAYE option schemesU.K.

2(1)In the SAYE code an “SAYE option scheme” means (in accordance with section 516(4)) a scheme established by a company which provides—U.K.

(a)for share options to be granted to employees and directors, and

(b)for the shares acquired by the exercise of the share options to be paid for in the way mentioned in paragraph 24 (payments for shares to be linked to approved [F2106savings arrangements]).

(2)In the SAYE code, in relation to an SAYE option scheme—

  • “participant” means an individual who has been granted (but has not yet exercised) share options under the scheme (“the options”);

  • “participate” means obtain and exercise share options under the scheme;

  • “the scheme organiser” means the company which has established the scheme.

Textual Amendments

F2106Words in Sch. 3 para. 2(1)(b) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(3) (with Sch. 2)

Group schemesU.K.

3(1)An SAYE option scheme established by a company that controls one or more other companies (a “parent scheme company”) may extend to all or any of those other companies.U.K.

(2)In the SAYE code an SAYE option scheme established by a parent scheme company which so extends is called a “group scheme”.

(3)In relation to a group scheme a “constituent company” means—

(a)the parent scheme company, or

(b)any other company to which for the time being the scheme is expressed to extend.

(4)Paragraph 46 deals with jointly owned companies and companies controlled by them.

Part 2U.K.General requirements F2107...

Textual Amendments

F2107Words in Sch. 3 Pt. 2 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 106, 146 (with Sch. 8 paras. 147-157)

General requirements F2108...: introductionU.K.

Textual Amendments

4U.K.An SAYE option scheme must meet the requirements of—

  • paragraph 5 (general restriction on contents of scheme),

  • paragraph 6 (all-employee nature of scheme),

  • paragraph 7 (participation on similar terms), and

  • paragraph 8 (no preferential treatment for directors and senior employees).

General restriction on contents of schemeU.K.

[F21095(1)The purpose of the scheme must be to provide, in accordance with this Schedule, benefits for employees and directors in the form of share options.U.K.

(2)The scheme must not provide benefits to employees or directors otherwise than in accordance with this Schedule.

(3)For example, the scheme must not provide cash as an alternative to share options or shares which might otherwise be acquired by the exercise of share options.]

Textual Amendments

F2109Sch. 3 para. 5 substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 108, 146 (with Sch. 8 paras. 147-157)

All-employee nature of schemeU.K.

6(1)The scheme must provide that every person who meets the conditions in sub-paragraph (2) is eligible to participate in the scheme.U.K.

(2)A person (“E”) meets the conditions in this sub-paragraph if—

(a)E is an employee or a full-time director of the scheme organiser or (in the case of a group scheme) of a constituent company,

(b)E has been such an employee or director at all times during a qualifying period of not more than 5 years,

[F2110(c)E's earnings from the office or employment within paragraph (a) are (or would be if there were any) general earnings to which section 15 applies (earnings for year when employee UK resident), [F2111and]

F2112(ca). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(d)E is not ineligible under paragraph 11 (the “no material interest” requirement).

(3)The scheme must not contain any feature which has or is likely to have the effect of discouraging any description of persons who—

(a)meet the conditions in sub-paragraph (2), or

(b)met those conditions before ceasing to be persons within sub-paragraph (2)(a),

from actually participating in the scheme.

(4)Sub-paragraph (3) does not apply to any provision required or authorised by a provision of this Schedule.

Textual Amendments

F2110Sch. 3 para. 6(2)(c)(ca) substituted for Sch. 3 para. 6(2)(c) (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 42

F2111Word in Sch. 3 para. 6(2)(c) inserted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 41(1)(a) (with Sch. 46 para. 41(2))

F2112Sch. 3 para. 6(2)(ca) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 41(1)(b) (with Sch. 46 para. 41(2))

Participation on similar termsU.K.

7(1)The requirements of this paragraph are—U.K.

(a)that every person who meets the conditions in paragraph 6(2) (all-employee nature of scheme) must be eligible to participate in the scheme on similar terms, and

(b)that every person who participates in the scheme must actually do so on similar terms.

(2)The requirements of this paragraph are not infringed by the fact that the rights of those participating in the scheme to obtain and exercise share options vary according to—

(a)the levels of their remuneration,

(b)the length of their service, or

(c)any similar factors.

No preferential treatment for directors and senior employeesU.K.

8(1)The requirement of this paragraph is that, if the scheme organiser is a member of a group of companies, the scheme does not and is not likely to have the effect of conferring benefits wholly or mainly—U.K.

(a)on directors of companies in the group, or

(b)on employees of companies in the group who receive the higher or highest levels of remuneration.

(2)“A group of companies” means a company and any other companies of which it has control.

Part 3U.K.Eligibility of individuals to participate in scheme

Requirements relating to the eligibility of individuals: introductionU.K.

9U.K.An SAYE option scheme must meet the requirements of—

  • paragraph 10 (the employment requirement),

  • F2113...

Textual Amendments

F2113Words in Sch. 3 para. 9 omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 40

The employment requirementU.K.

10(1)The scheme must ensure that an individual is not eligible to participate in the scheme at a particular time unless the individual is then a director or employee of—U.K.

(a)the scheme organiser, or

(b)in the case of a group scheme, a constituent company.

(2)The requirement of this paragraph is not infringed by a provision of the scheme required or authorised by a provision of this Schedule.

The “no material interest” requirementU.K.

F211411U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2114Sch. 3 paras. 11-16 omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 41

Meaning of “material interest”U.K.

F211412U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2114Sch. 3 paras. 11-16 omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 41

Material interest: options and interests in SIPsU.K.

F211413U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2114Sch. 3 paras. 11-16 omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 41

Meaning of “associate”U.K.

F211414U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2114Sch. 3 paras. 11-16 omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 41

Meaning of “associate”: trustees of employee benefit trustU.K.

F211415U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2114Sch. 3 paras. 11-16 omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 41

Meaning of “associate”: trustees of discretionary trustU.K.

F211416U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2114Sch. 3 paras. 11-16 omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 41

Part 4U.K.Shares to which schemes can apply

Requirements relating to shares that may be subject to share options: introductionU.K.

17(1)An SAYE option scheme must meet the requirements of—U.K.

  • paragraph 18 (shares must be ordinary shares of certain companies),

  • paragraph 19 (requirements as to listing),

  • paragraph 20 (shares must be fully paid up and not redeemable), [F2115and]

  • F2116...

  • paragraph 22 (requirements as to other shareholdings).

[F2117(1A)Sub-paragraph (1) and the other paragraphs of this Part are subject to paragraph 37(6B).]

(2)In this Part “eligible shares” means shares which may be acquired by the exercise of share options under the scheme.

Textual Amendments

F2115Word in Sch. 3 para. 17(1) inserted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 60(a)

F2116Words in Sch. 3 para. 17(1) omitted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 60(b)

Shares must be ordinary shares of certain companiesU.K.

18U.K.Eligible shares must form part of the ordinary share capital of—

(a)the scheme organiser,

(b)a company which has control of the scheme organiser, or

(c)a company which either is, or has control of, a company which is a member of a consortium owning either the scheme organiser or a company having control of the scheme organiser.

Requirements as to listingU.K.

19(1)Eligible shares must be—U.K.

(a)shares of a class listed on a recognised stock exchange,

(b)shares in a company which is not under the control of another company, F2118...

[F2119(ba)shares in a company which is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2), or]

(c)shares in a company which is under the control of a listed company.

(2)A “listed company” is a company whose shares are listed on a recognised stock exchange, other than—

(a)a close company, or

(b)a company that would be a close company if resident in the United Kingdom.

[F2120(3)But a company is not a close company for the purposes of sub-paragraph (2) if it is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).]

Textual Amendments

Shares must be fully paid up and not redeemableU.K.

20U.K.Eligible shares must be—

(a)fully paid up, and

(b)not redeemable.

Only certain kinds of restriction allowedU.K.

F212121U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2121Sch. 3 para. 21 omitted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 61

Requirements as to other shareholdingsU.K.

22(1)The majority of the issued shares of the same class as the eligible shares must be—U.K.

(a)employee-control shares, or

(b)open market shares,

unless the eligible shares are shares in a company whose ordinary share capital consists of shares of one class only.

(2)Shares in a company are “employee-control shares” if—

(a)the persons holding the shares are, by virtue of their holding, together able to control the company, and

(b)those persons are or have been employees or directors of the company or of another company which is under the control of the company.

(3)Shares in a company are “open market shares” if the persons holding the shares are not—

(a)persons who acquired their shares as a result of a right conferred on them or an opportunity afforded to them as a director or employee of the scheme organiser or any other company, and not as a result of an offer to the public, or

(b)trustees holding shares on behalf of persons who acquired their beneficial interests in the shares as mentioned in paragraph (a), or

(c)in the case of shares which—

(i)are not of a class listed on a recognised stock exchange, and

(ii)are in a company which is under the control of a listed company (as defined by paragraph 19(2)),

companies which have control of the company whose shares are in question or of which that company is an associated company.

Part 5U.K.Requirement for linked savings [F2122arrangement]

Textual Amendments

F2122Word in Sch. 3 Pt. 5 heading substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(5)(a) (with Sch. 2)

Requirements as to linked savings [F2123arrangement] : introductionU.K.

Textual Amendments

F2123Word in Sch. 3 para. 23 heading substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(5)(a) (with Sch. 2)

23U.K.An SAYE option scheme must meet the requirements of—

  • paragraph 24 (payments for shares to be linked to approved [F2124savings arrangements]), and

  • paragraph 25 (requirements as to contributions to [F2124savings arrangements]).

Textual Amendments

Payments for shares to be linked to approved savings [F2125arrangements] U.K.

Textual Amendments

F2125Word in Sch. 3 para. 24 heading substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(6)(a) (with Sch. 2)

24(1)The scheme must provide for shares acquired by the exercise of share options granted under the scheme to be paid for with money not exceeding the amount of repayments made and any interest paid under a [F2126certified SAYE savings arrangement] which has been approved by [F165an officer of Revenue and Customs] for the purposes of this Schedule [F2127(“the approved savings arrangement”)].U.K.

F2128(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2126Words in Sch. 3 para. 24(1) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(6)(b) (with Sch. 2)

F2127Words in Sch. 3 para. 24(1) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(6)(c) (with Sch. 2)

Requirements as to contributions to savings [F2129arrangements] U.K.

Textual Amendments

F2129Word in Sch. 3 para. 25 heading substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(8)(a) (with Sch. 2)

25(1)The scheme must provide for a person’s contributions under the [F2130the approved savings arrangement] to be of an amount that will secure, as nearly as possible, repayment of an amount equal to the option price.U.K.

(2)The “option price” means the amount payable, on exercising share options granted under the scheme, in order to acquire the maximum number of shares that may be acquired under them (see paragraph 28).

(3)The scheme must neither—

(a)permit the aggregate amount of a person’s contributions under [F2131certified SAYE savings arrangements linked to [F2132Schedule 3] SAYE option schemes] to exceed [F2133£500] per month, nor

(b)impose a minimum on the amount of a person’s contributions which exceeds £10 per month.

(4)The Treasury may by order amend sub-paragraph (3) by substituting for any amount for the time being specified there an amount specified in the order.

Textual Amendments

F2130Words in Sch. 3 para. 25(1) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(8)(b) (with Sch. 2)

F2131Words in Sch. 3 para. 25(3)(a) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(8)(c) (with Sch. 2)

F2133Sum in Sch. 3 para. 25(3)(a) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax (Earnings and Pensions) Act 2003 (Amendment to SAYE Option Schemes Contributions Limit) Order 2014 (S.I. 2014/402), arts. 1(1), 2(2)

Repayments under a savings [F2134arrangement] : whether bonuses includedU.K.

Textual Amendments

F2134Word in Sch. 3 para. 26 heading substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(9)(a) (with Sch. 2)

26(1)For the purposes of this Schedule repayments under a [F2135certified SAYE savings arrangement] may be taken as including, or as not including, a bonus.U.K.

(2)The bonus may either be the maximum bonus under that [F2136arrangement] or a lesser bonus.

(3)An SAYE option scheme must require the question whether repayments are to be taken as including bonuses to be determined at the time when share options are granted.

Textual Amendments

F2135Words in Sch. 3 para. 26(1) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(9)(b) (with Sch. 2)

F2136Word in Sch. 3 para. 26(2) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(9)(c) (with Sch. 2)

Part 6U.K.Requirements etc. relating to share options

Requirements etc. relating to share options: introductionU.K.

27(1)An SAYE option scheme must meet the requirements of—U.K.

  • paragraph 28 (requirements as to price for acquisition of shares),

  • paragraph 29 (share options must not be transferable),

  • paragraph 30 (time for exercising options: general),

  • F2137...

  • paragraph 32 (exercise of options: death), [F2138and]

  • F2139...

  • paragraph 34 (exercise of options: scheme-related employment ends).

(2)An SAYE option scheme may make any provision authorised by—

  • paragraph 36 (exercise of options: employment in associated company at bonus date), and

  • paragraph 37 (exercise of options: company events).

Textual Amendments

F2137Words in Sch. 3 para. 27(1) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 8(a) (with Sch. 2 paras. 16, 17)

F2138Word in Sch. 3 para. 27(1) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 8(b) (with Sch. 2 paras. 16, 17)

F2139Words in Sch. 3 para. 27(1) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 8(c) (with Sch. 2 paras. 16, 17)

Requirements as to price for acquisition of sharesU.K.

28(1)The price at which shares may be acquired by the exercise of a share option granted under the scheme—U.K.

(a)must be stated at the time when the option is granted, and

(b)must not be manifestly less than 80% of the market value of shares of the same class[F2140—

(i)at that time, or

(ii)at such earlier time as may be determined in accordance with guidance issued by the Commissioners for Her Majesty's Revenue and Customs.]

This is subject to [F2141sub-paragraph (3)].

F2142(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The scheme may provide for one or more of the following—

(a)the price at which shares may be acquired by the exercise of a share option granted under the scheme,

(b)the number of shares which may be so acquired, or

(c)the description of shares which may be so acquired,

to be varied so far as necessary to take account of a variation in the share capital of which the shares form part.

[F2143(3A)If the scheme makes provision under sub-paragraph (3), the variation or variations made under that provision to take account of a variation in any share capital must (in particular) secure—

(a)that the total market value of the shares which may be acquired by the exercise of the share option is immediately after the variation or variations substantially the same as what it was immediately before the variation or variations, and

(b)that the total price at which those shares may be acquired is immediately after the variation or variations substantially the same as what it was immediately before the variation or variations.

(3B)Sub-paragraph (3) does not authorise any variation which would result in the requirements of the other paragraphs of this Schedule not being met in relation to the share option.]

F2144(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F2145(5)At the time a share option is granted—

(a)it must be stated whether or not the shares which may be acquired by the exercise of the option may be subject to any restriction, and

(b)if so, the details of the restriction must also be stated.

(6)For the purposes of this paragraph the market value of shares subject to a restriction is to be determined as if they were not subject to the restriction.]

Textual Amendments

F2140Words in Sch. 3 para. 28(1)(b) substituted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 3 para. 6(2)(a)

F2141Words in Sch. 3 para. 28(1) substituted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 3 para. 6(2)(b)

F2142Sch. 3 para. 28(2) omitted (15.9.2016) by virtue of Finance Act 2016 (c. 24), Sch. 3 para. 6(3)

F2143Sch. 3 para. 28(3A)(3B) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 111(2), 146 (with Sch. 8 paras. 147-157)

F2144Sch. 3 para. 28(4) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 111(3), 146 (with Sch. 8 paras. 147-157)

F2145Sch. 3 para. 28(5)(6) inserted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 62

Share options must not be transferableU.K.

29(1)The scheme must ensure that share options granted to a participant are not capable of being transferred by the participant.U.K.

(2)Paragraph 32 provides for the exercise of the options where the participant has died.

Time for exercising options: generalU.K.

30(1)The scheme must ensure that share options granted under it must not be capable of being exercised—U.K.

(a)before the bonus date, or

(b)later than 6 months after that date.

(2)However, in sub-paragraph (1)—

(a)paragraph (a) is subject to paragraphs [F214632,] 34 and 37 (exercise of options in the event of death, F2147... scheme-related employment ending or certain events occurring in relation to the company), and

(b)paragraph (b) is subject to paragraph 32.

(3)In the SAYE code “the bonus date” means the date on which repayments under [F2148the approved savings arrangement] are due.

(4)For this purpose repayments are to be regarded as due as follows—

(a)if the repayments are to be taken as including the maximum bonus (see paragraph 26(2)), on the earliest date on which that bonus is payable, and

(b)in any other case, on the earliest date on which a bonus is payable.

Textual Amendments

F2146Word in Sch. 3 para. 30(2)(a) substituted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 9(a) (with Sch. 2 paras. 16, 17)

F2147Words in Sch. 3 para. 30(2)(a) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 9(b) (with Sch. 2 paras. 16, 17)

F2148Words in Sch. 3 para. 30(3) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(10) (with Sch. 2)

Requirement to have a “specified age”U.K.

F214931U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2149Sch. 3 para. 31 omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 10 (with Sch. 2 paras. 16, 17)

Exercise of options: deathU.K.

32U.K.The scheme must provide that, if a participant dies before exercising the options, they may be exercised [F2150at any time] on or after the date of death but not later than—

(a)12 months after the date of death, in a case where the participant dies before the bonus date, or

(b)12 months after the bonus date, in a case where the participant dies on or within 6 months after that date.

Textual Amendments

Exercise of options: reaching specified age without retiringU.K.

F215133U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2151Sch. 3 para. 33 omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 11 (with Sch. 2 para. 17)

Exercise of options: scheme-related employment endsU.K.

34(1)The scheme must provide that, if a participant (“P”) no longer holds scheme-related employment (see paragraph 35), the options are exercisable as set out in sub-paragraphs (2) to (4).U.K.

(2)In a case where P ceases to hold the scheme-related employment because of—

(a)injury or disability or redundancy within the meaning of ERA 1996 [F2152 or ER(NI)O 1996 ], F2153...

(b)retirement F2154...,

[F2155(c)a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or

(d)if P holds office or is employed in a company which is an associated company (as defined in paragraph 35(4)) of the scheme organiser, that company ceasing to be an associated company of the scheme organiser by reason of a change of control (as determined in accordance with sections 450 and 451 of CTA 2010),]

the options may only be exercised within 6 months after the termination date.

(3)In a case where P ceases to hold the scheme-related employment for any other reason, share options granted more than 3 years before the termination date either—

(a)may not be exercised, or

(b)may only be exercised within 6 months after the termination date,

according to which of these alternatives is specified in the scheme.

(4)Subject to any provision made under sub-paragraph (5), in a case where P ceases to hold the scheme-related employment for any reason other than one within sub-paragraph (2)(a) [F2156to (d)], share options granted 3 years or less before the termination date may not be exercised at all.

(5)The scheme may [F2157make provision about the time when the options may be exercised] in a case where P ceases to hold the scheme-related employment only because—

F2158(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)it relates to a business or part of a business which is transferred to a person who is not an associated company of the scheme organiser [F2159where the transfer is not a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006].

F2160...

[F2161(5A)If the scheme makes provision by virtue of sub-paragraph (5), the provision must be either—

(a)that the options may be exercised within 6 months after the termination date, or

(b)that the options may be exercised within 6 months after the date (if any) when P ceases to hold the employment which (before the termination date) was the scheme-related employment for a reason within sub-paragraph (2)(a) [F2162to (d)].]

(6)This paragraph has effect subject to paragraph 30(1)(b) (options must not be capable of being exercised later than 6 months after bonus date).

(7)In this paragraph—

  • “scheme-related employment” means the office or employment by reference to which the person satisfies the condition in paragraph 10(1) (“the employment requirement”);

  • “the termination date” means the date when P ceases to hold the scheme-related employment (see paragraph 35).

Textual Amendments

F2152Words in Sch. 3 para. 34(2)(a) inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 11(2)

F2153Word in Sch. 3 para. 34(2) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 23(2)(a) (with Sch. 2 para. 23(4))

F2154Words in Sch. 3 para. 34(2)(b) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 12 (with Sch. 2 para. 17)

F2155Sch. 3 para. 34(2)(c)(d) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 23(2)(b) (with Sch. 2 para. 23(4))

F2156Words in Sch. 3 para. 34(4) substituted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 23(3) (with Sch. 2 para. 23(4))

F2157Words in Sch. 3 para. 34(5) substituted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 11(3)(a)

F2158Sch. 3 para. 34(5)(a) and word omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 113(a), 146 (with Sch. 8 paras. 147-157)

F2159Words in Sch. 3 para. 34(5)(b) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 113(b), 146 (with Sch. 8 paras. 147-157)

F2160Words in Sch. 3 para. 34(5) repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 11(3)(b), Sch. 43 Pt. 3(3)

F2161Sch. 3 para. 34(5A) inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 11(4)

F2162Words in Sch. 3 para. 34(5A)(b) substituted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 23(3) (with Sch. 2 para. 23(4))

Time when scheme-related employment endsU.K.

35(1)This paragraph applies for the purposes of paragraph 34 (exercise of options: scheme-related employment ends).U.K.

(2)Unless sub-paragraph (3) applies, a participant (“P”) is to be regarded as ceasing to hold scheme-related employment on the date when the office or employment in question terminates.

(3)If—

(a)P’s scheme-related employment terminates, but

(b)P continues to hold an office or employment in the scheme organiser or any associated company,

P is to be regarded as ceasing to hold the scheme-related employment on the date when P no longer holds any office or employment within paragraph (b), and not at any earlier time.

(4)For the purposes of sub-paragraph (3) one company is an “associated company” of another company if—

(a)one has control of the other, or

(b)both are under the control of the same person or persons;

and for this purpose the question of whether a person controls a company is to be determined in accordance with [F2163sections 450 and 451 of CTA 2010] (“control” in the context of close companies).

(5)Nothing in paragraph 34 or this paragraph applies where a person’s scheme-related employment terminates on that person’s death (see instead paragraph 32).

(6)In this paragraph “scheme-related employment” has the same meaning as in paragraph 34.

Textual Amendments

F2163Words in Sch. 3 para. 35(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 397(4) (with Sch. 2)

Exercise of options: employment in associated company at bonus dateU.K.

36U.K.The scheme may provide that if at the bonus date a participant holds an office or employment in a company which is—

(a)an associated company of the scheme organiser, but

(b)not a constituent company,

the options may be exercised within 6 months after that date.

Exercise of options: company eventsU.K.

37(1)The scheme may provide that share options relating to shares in a company may be exercised within 6 months after the relevant date for the purposes of sub-paragraph (2), (4) [F2164, (4ZA)] [F2165, (4A)] or (5).U.K.

(2)The relevant date for the purposes of this sub-paragraph is the date when—

(a)a person has obtained control of the company as a result of making an offer falling within sub-paragraph (3), and

(b)any condition subject to which the offer is made has been satisfied.

(3)An offer falls within this sub-paragraph if it is—

(a)a general offer to acquire the whole of the issued ordinary share capital of the company, which is made on a condition such that, if it is met, the person making the offer will have control of the company, or

(b)a general offer to acquire all the shares in the company which are of the same class as the shares in question obtained under the scheme.

[F2166(3A)In sub-paragraph (3)(a) the reference to the issued ordinary share capital of the company does not include any capital already held by the person making the offer or a person connected with that person and in sub-paragraph (3)(b) the reference to the shares in the company does not include any shares already held by the person making the offer or a person connected with that person.

(3B)For the purposes of sub-paragraph (3)(a) and (b) it does not matter if the general offer is made to different shareholders by different means.]

(4)The relevant date for the purposes of this sub-paragraph is the date when the court sanctions under [F2167section 899 of the Companies Act 2006 (court sanction for compromise or arrangement)] a compromise or arrangement [F2168applicable to or affecting—

(a)all the ordinary share capital of the company or all the shares of the same class as the shares to which the option relates, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in [F2169a Schedule 3] SAYE option scheme.]

[F2170(4ZA)The relevant date for the purposes of this sub-paragraph is the date when the court sanctions under section 901F of the Companies Act 2006 (court sanction for compromise or arrangement) a compromise or arrangement applicable to or affecting—

(a)all the ordinary share capital of the company or all the shares of the same class as the shares to which the option relates, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in a Schedule 3 SAYE option scheme.]

[F2171(4A)The relevant date for the purposes of this sub-paragraph is the date on which a non-UK company reorganisation arrangement applicable to or affecting—

(a)all the ordinary share capital of the company or all the shares of the same class as the shares to which the option relates, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employments or directorships or their participation in a Schedule 3 SAYE option scheme,

becomes binding on the shareholders covered by it.]

(5)The relevant date for the purposes of this sub-paragraph is the date when the company passes a resolution for voluntary winding up.

(6)The scheme may provide that share options relating to shares in a company may be exercised at any time when any person is bound or entitled to acquire shares in the company under [F2172sections 979 to 982 [F2173or 983 to 985] of the Companies Act 2006 (takeover offers: right of offeror to buy out minority shareholder [F2174etc])].

[F2175(6A)Sub-paragraphs (6B) to (6F) apply if the scheme makes provision under sub-paragraph (1) or (6).

(6B)The scheme may provide that if, in consequence of a relevant event, shares in the company to which a share option relates no longer meet the requirements of Part 4 of this Schedule, the share option may be exercised under the provision made under sub-paragraph (1) or (6) (as the case may be) no later than 20 days after the day on which the relevant event occurs, notwithstanding that the shares no longer meet the requirements of Part 4 of this Schedule.

(6C)In sub-paragraph (6B) “relevant event” means—

(a)a person obtaining control of the company as mentioned in sub-paragraph (2)(a);

(b)a person obtaining control of the company as a result of a compromise or arrangement sanctioned by the court as mentioned in sub-paragraph (4) [F2176or (4ZA)];

(c)a person obtaining control of the company as a result of a non-UK company reorganisation arrangement which has become binding on the shareholders covered by it as mentioned in sub-paragraph (4A);

(d)a person who is bound or entitled to acquire shares in the company as mentioned in sub-paragraph (6) obtaining control of the company.

(6D)Provision made under sub-paragraph (6B) may not authorise the exercise of a share option, as the case may be—

(a)at a time outside the 6 month period mentioned in sub-paragraph (1), or

(b)at a time not covered by sub-paragraph (6).

(6E)The scheme may provide that a share option relating to shares in a company which is exercised during the period of 20 days ending with—

(a)the relevant date for the purposes of sub-paragraph (2), (4) [F2177, (4ZA)] or (4A), or

(b)the date on which any person becomes bound or entitled to acquire shares in the company as mentioned in sub-paragraph (6),

is to be treated as if it had been exercised in accordance with the provision made under sub-paragraph (1) or (6) (as the case may be).

(6F)If the scheme makes provision under sub-paragraph (6E) it must also provide that if—

(a)a share option is exercised in reliance on that provision in anticipation of—

(i)an event mentioned in sub-paragraph (2), (4) [F2178, (4ZA)] or (4A) occurring, or

(ii)a person becoming bound or entitled to acquire shares in the company as mentioned in sub-paragraph (6), but

(b)as the case may be—

(i)the relevant date for the purposes of sub-paragraph (2), (4) [F2179, (4ZA)] or (4A) does not fall during the period of 20 days beginning with the date on which the share option is exercised, or

(ii)the person does not become bound or entitled to acquire shares in the company by the end of the period of 20 days beginning with the date on which the share option is exercised,

the exercise of the share option is to be treated as having had no effect.]

(7)For the purposes of this paragraph—

(a)“share options” means share options granted under the scheme; and

(b)a person is to be treated as obtaining control of a company if that person and others acting in concert together obtain control of it.

(8)This paragraph has effect subject to paragraph 30(1)(b) (options must not be capable of being exercised later than 6 months after bonus date).

Textual Amendments

F2165Words in Sch. 3 para. 37(1) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 114(2), 146 (with Sch. 8 paras. 147-157)

F2166Sch. 3 para. 37(3A)(3B) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 24(2) (with Sch. 2 para. 24(3))

F2167Words in Sch. 3 para. 37(4) substituted for Sch. 3 para. 37(4)(a)(b) (6.4.2008) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008 (S.I. 2008/954), arts. 1(1), 32(2) (with art. 4)

F2168Words in Sch. 3 para. 37(4) substituted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 24(4) (with Sch. 2 para. 24(5))

F2169Words in Sch. 3 para. 37(4)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 114(3), 146 (with Sch. 8 paras. 147-157)

F2171Sch. 3 para. 37(4A) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 114(4), 146 (with Sch. 8 paras. 147-157)

F2173Words in Sch. 3 para. 37(6) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 24(6)(a) (with Sch. 2 para. 24(7))

F2174Word in Sch. 3 para. 37(6) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 24(6)(b) (with Sch. 2 para. 24(7))

F2175Sch. 3 para. 37(6A)-(6F) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 114(5), 146 (with Sch. 8 paras. 147-157)

F2176Words in Sch. 3 para. 37(6C)(b) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 24(2)(c) (with ss. 2(2), 5(2))

F2177Word in Sch. 3 para. 37(6E)(a) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 24(2)(d) (with ss. 2(2), 5(2))

F2178Word in Sch. 3 para. 37(6F)(a)(i) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 24(2)(e) (with ss. 2(2), 5(2))

F2179Word in Sch. 3 para. 37(6F)(b)(i) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 24(2)(e) (with ss. 2(2), 5(2))

Part 7U.K.Exchange of share options

Exchange of options on company reorganisationU.K.

38(1)An SAYE option scheme may provide that if—U.K.

(a)there is a company reorganisation affecting a scheme company (that is, a company whose shares may be acquired by the exercise of share options obtained under the scheme: see paragraph 18), and

(b)a participant has obtained share options under the scheme which are to acquire shares of the scheme company (“the old options”),

the participant may agree with the acquiring company to release the old options in consideration of the participant being granted new share options.

(2)For the purposes of this paragraph there is a company reorganisation affecting a scheme company if another company (“the acquiring company”)—

(a)obtains control of the scheme company—

(i)as a result of making a general offer to acquire the whole of the issued ordinary share capital of the scheme company which is made on a condition such that, if it is met, the person making the offer will have control of that company, or

(ii)as a result of making a general offer to acquire all the shares in the scheme company which are of the same class as those subject to the old options;

[F2180(b)obtains control of the scheme company as a result of a compromise or arrangement sanctioned by the court under section 899 [F2181or 901F] of the Companies Act 2006 (court sanction for compromise or arrangement); F2182...

[F2183(ba)obtains control of the scheme company as a result of a non-UK company reorganisation arrangement which has become binding on the shareholders covered by it; or]

(c)becomes bound or entitled to acquire shares in the scheme company under sections 979 to 982 [F2184or 983 to 985] of that Act (takeover offers: right of offeror to buy out minority shareholder [F2185etc] ).]

[F2186(2A)In sub-paragraph (2)(a)(i) the reference to the issued ordinary share capital of the scheme company does not include any capital already held by the person making the offer or a person connected with that person and in sub-paragraph (2)(a)(ii) the reference to the shares in the scheme company does not include any shares already held by the person making the offer or a person connected with that person.

(2B)For the purposes of sub-paragraph (2)(a)(i) and (ii) it does not matter if the general offer is made to different shareholders by different means.]

(3)A scheme that makes provision under sub-paragraph (1) must require the agreement referred to in that sub-paragraph to be made—

(a)where control is obtained in the way set out in sub-paragraph (2)(a)(i) or (ii), within the period of 6 months beginning with the time when the acquiring company obtains control and any condition subject to which the offer is made is met,

(b)where control is obtained in the way set out in sub-paragraph (2)(b), within the period of 6 months beginning with the time when the court sanctions the compromise or arrangement, F2187...

[F2188(ba)where control is obtained in the way set out in sub-paragraph (2)(ba), within the period of 6 months beginning with the date on which the non-UK company reorganisation arrangement becomes binding on the shareholders covered by it, and]

(c)where sub-paragraph (2)(c) applies, within the period during which the acquiring company remains bound or entitled as mentioned in that provision.

Textual Amendments

F2182Word in Sch. 3 para. 38(2) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 115(2), 146 (with Sch. 8 paras. 147-157)

F2183Sch. 3 para. 38(2)(ba) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 115(2), 146 (with Sch. 8 paras. 147-157)

F2184Words in Sch. 3 para. 38(2)(c) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 25(2)(a) (with Sch. 2 para. 25(4))

F2185Word in Sch. 3 para. 38(2)(c) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 25(2)(b) (with Sch. 2 para. 25(4))

F2186Sch. 3 para. 38(2A)(2B) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 25(3) (with Sch. 2 para. 25(4))

F2187Word in Sch. 3 para. 38(3) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 115(3), 146 (with Sch. 8 paras. 147-157)

F2188Sch. 3 para. 38(3)(ba) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 115(3), 146 (with Sch. 8 paras. 147-157)

Requirements about share options granted in exchangeU.K.

39(1)This paragraph applies to a scheme that makes provision under paragraph 38 (exchange of options on company reorganisation).U.K.

(2)The scheme must require the new share options to relate to shares in a company which—

(a)is different from the company whose shares are subject to the old options, and

(b)is either the acquiring company itself or some other company within sub-paragraph (b) or (c) of paragraph 18 (shares must be ordinary shares of certain companies), namely—

(i)a company which has control of the scheme organiser, or

(ii)a company which is, or has control of a company which is, a member of a consortium owning either the scheme organiser or a company having control of the scheme organiser.

For this purpose the control in question may be through the medium of the acquiring company.

(3)The scheme must also require the new share options to be equivalent to the old options.

(4)For the new options to be regarded as equivalent to the old options—

(a)the shares to which they relate must meet the conditions in paragraphs 18 to 22 (types of share that may be used),

(b)they must be exercisable in the same manner as the old options and subject to the provisions of the scheme as it had effect immediately before the release of the old options,

(c)the total market value of the shares subject to the old options immediately before the release of those options by the participant must [F2189be substantially the same as] the total market value, immediately after the grant of the new options to the participant, of the shares subject to those options, and

(d)the total amount payable by the participant for the acquisition of shares under the new options must be [F2190substantially the same as] the total amount that would have been so payable under the old options.

(5)For the purposes of the SAYE code, new share options granted under the terms of a provision included in a scheme under paragraph 38 are to be treated as having been granted at the time when the corresponding old options were granted.

(6)This also applies for the purposes of the provisions of the scheme in their operation, after the grant of the new options, by virtue of a condition complying with sub-paragraph (4)(b).

[F2191(7)For the purposes of this paragraph the market value of shares subject to a restriction is to be determined as if they were not subject to the restriction.]

[F2192(8)For the purposes of this paragraph the market value of any shares is to be determined using a methodology agreed by Her Majesty's Revenue and Customs.]

Textual Amendments

F2191Sch. 3 para. 39(7) inserted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 63

[F2193PART 8U.K.Notification of schemes, annual returns and enquiries

Textual Amendments

F2193Sch. 3 Pt. 8 substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 117, 146 (with Sch. 8 paras. 147-157)

Notice of scheme to be given to HMRCU.K.

40A(1)For an SAYE option scheme to be a Schedule 3 SAYE option scheme, notice of the scheme must be given to Her Majesty's Revenue and Customs (“HMRC”).

(2)The notice must—

(a)be given by the scheme organiser,

(b)contain, or be accompanied by, such information as HMRC may require, and

(c)contain a declaration within sub-paragraph (3) made by such persons as HMRC may require.

(3)A declaration within this sub-paragraph is a declaration—

(a)that the requirements of Parts 2 to 7 of this Schedule are met in relation to the scheme, and

(b)if the declaration is made after the first date on which share options are granted under the scheme (“the first grant date”), that those requirements—

(i)were met in relation to those grants of share options, and

(ii)have otherwise been met in relation to the scheme at all times on or after the first grant date when share options granted under the scheme are outstanding.

(4)If notice is given under this paragraph in relation to an SAYE option scheme, for the purposes of the SAYE code the scheme is to be a Schedule 3 SAYE option scheme at all times on and after the relevant date (but not before that date).

(5)But if the notice is given after the initial notification deadline, the scheme is to be a Schedule 3 SAYE option scheme only from the beginning of the relevant tax year.

[F2194(5A)Sub-paragraph (5) does not apply if the scheme organiser satisfies HMRC (or, on an appeal under paragraph 40K, the tribunal) that there is a reasonable excuse for the failure to give notice on or before the initial notification deadline.

(5B)Paragraph 40C(9) (what constitutes a reasonable excuse) applies for the purposes of sub-paragraph (5A).

(5C)Where HMRC are required under sub-paragraph (5A) to consider whether there was a reasonable excuse, HMRC must notify the scheme organiser of their decision within the period of 45 days beginning with the day on which HMRC received the scheme organiser's request to consider the excuse.

(5D)Where HMRC are required to notify the scheme organiser as specified in sub-paragraph (5C) but do not do so—

(a)HMRC are to be treated as having decided that there was no reasonable excuse, and

(b)HMRC must notify the scheme organiser of the decision which they are treated as having made.]

(6)For the purposes of this Part—

  • “the initial notification deadline” is 6 July in the tax year following that in which the first grant date falls,

  • “outstanding”, in relation to a share option, means that the option—

    (a)

    has not been exercised, but

    (b)

    is capable of being exercised in accordance with the scheme (whether on the meeting of any condition or otherwise),

  • “the relevant date” is—

    (a)

    the date on which the declaration within sub-paragraph (3) is made, or

    (b)

    if that declaration is made after the first grant date, the first grant date, and

  • “the relevant tax year” is—

    (a)

    the tax year in which the notice under this paragraph is given, or

    (b)

    if that notice is given on or before 6 July in that tax year, the preceding tax year.

(7)Sub-paragraph (4) is subject to the following paragraphs of this Part.

Textual Amendments

F2194Sch. 3 para. 40A(5A)-(5D) inserted (with effect in accordance with Sch. 3 para. 4(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 4(2)

Annual returnsU.K.

40B(1)This paragraph applies if notice is given in relation to an SAYE option scheme under paragraph 40A.

(2)The scheme organiser must give to HMRC a return for the tax year in which the relevant date falls and for each subsequent tax year (subject to sub-paragraph (9)).

(3)If paragraph 40A(5) applies in relation to the scheme, in sub-paragraph (2) the reference to the tax year in which the relevant date falls is to be read as a reference to the relevant tax year.

(4)A return for a tax year must—

(a)contain, or be accompanied by, such information as HMRC may require, and

(b)be given on or before 6 July in the following tax year.

(5)The information which may be required under sub-paragraph (4)(a) includes (in particular) information to enable HMRC to determine the liability to tax, including capital gains tax, of—

(a)any person who has participated in the scheme, or

(b)any other person whose liability to tax the operation of the scheme is relevant to.

(6)If during a tax year—

(a)an alteration is made in a key feature of the scheme, or

(b)variations are made under a provision made under paragraph 28(3) to take account of a variation in any share capital,

the return for the tax year must contain a declaration within sub-paragraph (7) made by such persons as HMRC may require.

(7)A declaration within this sub-paragraph is a declaration, as the case may be—

(a)that the alteration has, or

(b)that the variations have,

not caused the requirements of Parts 2 to 7 of this Schedule not to be met in relation to the scheme.

(8)For the purposes of sub-paragraph (6)(a) a “key feature” of a scheme is a provision of the scheme which is necessary in order for the requirements of Parts 2 to 7 of this Schedule to be met in relation to the scheme.

(9)A return is not required for any tax year following that in which the termination condition is met in relation to the scheme.

(10)For the purposes of this Part “the termination condition” is met in relation to a scheme when—

(a)all share options granted under the scheme—

(i)have been exercised, or

(ii)are no longer capable of being exercised in accordance with the scheme (because, for example, they have lapsed or been cancelled), and

(b)no more share options will be granted under the scheme.

(11)If the scheme organiser becomes aware that—

(a)anything which should have been included in, or should have accompanied, a return for a tax year was not included in, or did not accompany, the return,

(b)anything which should not have been included in, or should not have accompanied, a return for a tax year was included in, or accompanied, the return, or

(c)any other error or inaccuracy has occurred in relation to a return for a tax year,

the scheme organiser must give an amended return correcting the position to HMRC without delay.

40C(1)This paragraph applies if the scheme organiser fails to give a return for a tax year (containing, or accompanied by, all required information and declarations) on or before the date mentioned in paragraph 40B(4)(b) (“the date for delivery”).U.K.

(2)The scheme organiser is liable for a penalty of £100.

(3)If the scheme organiser's failure continues after the end of the period of 3 months beginning with the date for delivery, the scheme organiser is liable for a further penalty of £300.

(4)If the scheme organiser's failure continues after the end of the period of 6 months beginning with the date for delivery, the scheme organiser is liable for a further penalty of £300.

(5)The scheme organiser is liable for a further penalty under this sub-paragraph if—

(a)the scheme organiser's failure continues after the end of the period of 9 months beginning with the date for delivery,

(b)HMRC decide that such a penalty should be payable, and

(c)HMRC give notice to the scheme organiser specifying the period in respect of which the penalty is payable.

(The scheme organiser may be liable for more than one penalty under this sub-paragraph.)

(6)The penalty under sub-paragraph (5) is £10 for each day that the failure continues during the period specified in the notice under sub-paragraph (5)(c).

(7)The period specified in the notice under sub-paragraph (5)(c)—

(a)may begin earlier than the date on which the notice is given, but

(b)may not begin until after the end of the period mentioned in sub-paragraph (5)(a) or, if relevant, the end of any period specified in any previous notice under sub-paragraph (5)(c) given in relation to the failure.

(8)Liability for a penalty under this paragraph does not arise if the scheme organiser satisfies HMRC (or, on an appeal under paragraph 40K, the tribunal) that there is a reasonable excuse for its failure.

(9)For the purposes of sub-paragraph (8)—

(a)an insufficiency of funds is not a reasonable excuse, unless attributable to events outside the scheme organiser's control,

(b)where the scheme organiser relies on any other person to do anything, that is not a reasonable excuse unless the scheme organiser took reasonable care to avoid the failure, and

(c)where the scheme organiser had a reasonable excuse for the failure but the excuse ceased, the scheme organiser is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Notices and returns to be given electronically etcU.K.

40D(1)A notice under paragraph 40A, and any information accompanying the notice, must be given electronically.

(2)A return under paragraph 40B, and any information accompanying the return, must be given electronically.

(3)But, if HMRC consider it appropriate to do so, HMRC may allow the scheme organiser to give a notice or return or any accompanying information in another way; and, if HMRC do so, the notice, return or information must be given in that other way.

(4)The Commissioners for Her Majesty's Revenue and Customs—

(a)must prescribe how notices, returns and accompanying information are to be given electronically;

(b)may make different provision for different cases or circumstances.

40E(1)This paragraph applies if a return under paragraph 40B, or any information accompanying such a return—U.K.

(a)is given otherwise than in accordance with paragraph 40D, or

(b)contains a material inaccuracy—

(i)which is careless or deliberate, or

(ii)which is not corrected as required by paragraph 40B(11).

(2)The scheme organiser is liable for a penalty of an amount decided by HMRC.

(3)The penalty must not exceed £5,000.

(4)For the purposes of sub-paragraph (1)(b)(i) an inaccuracy is careless if it is due to a failure by the scheme organiser to take reasonable care.

EnquiriesU.K.

40F(1)This paragraph applies if notice is given in relation to an SAYE option scheme under paragraph 40A.

(2)HMRC may enquire into the scheme if HMRC give notice to the scheme organiser of HMRC's intention to do so no later than—

(a)6 July in the tax year following the tax year in which the initial notification deadline falls, or

(b)if the notice under paragraph 40A is given after the initial notification deadline, 6 July in the second tax year following the relevant tax year.

(3)HMRC may enquire into the scheme if HMRC give notice to the scheme organiser of HMRC's intention to do so no later than 12 months after the date on which a declaration within paragraph 40B(7) is given to HMRC.

(4)Sub-paragraph (5) applies if (at any time) HMRC have reasonable grounds for believing that requirements of Parts 2 to 7 of this Schedule—

(a)are not met in relation to the scheme, or

(b)have not been met in relation to the scheme.

(5)HMRC may enquire into the scheme if HMRC give notice to the scheme organiser of HMRC's intention to do so.

(6)Notice may be given, and an enquiry may be conducted, under sub-paragraph (2), (3) or (5) even though the termination condition is met in relation to the scheme.

40G(1)An enquiry under paragraph 40F(2), (3) or (5) is completed when HMRC give the scheme organiser a notice (a “closure notice”) stating—U.K.

(a)that HMRC have completed the enquiry, and

(b)that—

(i)paragraph 40H is to apply,

(ii)paragraph 40I is to apply, or

(iii)neither paragraph 40H nor paragraph 40I is to apply.

(2)If the scheme organiser receives notice under paragraph 40F(2), (3) or (5), the scheme organiser may make an application to the tribunal for a direction requiring a closure notice for the enquiry to be given within a specified period.

(3)The application is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act).

(4)The tribunal must give a direction unless satisfied that HMRC have reasonable grounds for not giving the closure notice within the specified period.

40H(1)This paragraph applies if HMRC decide—U.K.

(a)that requirements of Parts 2 to 7 of this Schedule—

(i)are not met in relation to the scheme, or

(ii)have not been met in relation to the scheme, and

(b)that the situation is, or was, so serious that this paragraph should apply.

(2)If this paragraph applies—

(a)the scheme is not to be a Schedule 3 SAYE option scheme with effect from—

(i)such relevant time as is specified in the closure notice, or

(ii)if no relevant time is specified, the time of the giving of the closure notice, and

(b)the scheme organiser is liable for a penalty of an amount decided by HMRC.

(3)Sub-paragraph (4) applies in relation to a share option granted under the scheme if the option—

(a)is granted at a time before that mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be) when the scheme is a Schedule 3 SAYE option scheme, but

(b)is exercised at or after the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).

(4)For the purposes of section 519 (exemption in respect of exercise of share option) in its application to the option, the scheme is to be taken still to be a Schedule 3 SAYE option scheme at the time of the exercise of the option.

(5)The penalty under sub-paragraph (2)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of—

(a)the total income tax for which persons who have been granted share options under the scheme have not been liable, or will not be liable in the future, and

(b)the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future,

in consequence of the scheme having been a Schedule 3 SAYE option scheme at any relevant time before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).

(6)The liabilities covered by sub-paragraph (5) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraph (4).

(7)In this paragraph “relevant time” means any time before the giving of the closure notice when requirements of Parts 2 to 7 of this Schedule were not met in relation to the scheme.

40I(1)This paragraph applies if HMRC decide—U.K.

(a)that requirements of Parts 2 to 7 of this Schedule—

(i)are not met in relation to the scheme, or

(ii)have not been met in relation to the scheme, but

(b)that the situation is not, or was not, so serious that paragraph 40H should apply.

(2)If this paragraph applies, the scheme organiser—

(a)is liable for a penalty of an amount decided by HMRC, and

(b)must, no later than 90 days after the relevant day, secure that the requirements of Parts 2 to 7 of this Schedule are met in relation to the scheme.

(3)The penalty under sub-paragraph (2)(a) must not exceed £5,000.

(4)In sub-paragraph (2)(b) “the relevant day” means—

(a)the last day of the period in which notice of an appeal under paragraph 40K(2)(b) may be given, or

(b)if notice of such an appeal is given, the day on which the appeal is determined or withdrawn.

(5)Sub-paragraph (2)(b) does not apply if the termination condition was met in relation to the scheme before the closure notice was given or is met before the end of the 90 day period mentioned in sub-paragraph (2)(b).

(6)If the scheme organiser fails to comply with sub-paragraph (2)(b), HMRC may give the scheme organiser a notice stating that that is the case (a “default notice”).

(7)If the scheme organiser is given a default notice—

(a)the scheme is not to be a Schedule 3 SAYE option scheme with effect from—

(i)such relevant time as is specified in the default notice, or

(ii)if no relevant time is specified, the time of the giving of the default notice, and

(b)the scheme organiser is liable for a further penalty of an amount decided by HMRC.

(8)Sub-paragraph (9) applies in relation to a share option granted under the scheme if the option—

(a)is granted at a time before that mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be) when the scheme is a Schedule 3 SAYE option scheme, but

(b)is exercised at or after the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be).

(9)For the purposes of section 519 (exemption in respect of exercise of share option) in its application to the option, the scheme is to be taken still to be a Schedule 3 SAYE option scheme at the time of the exercise of the option.

(10)The penalty under sub-paragraph (7)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of—

(a)the total income tax for which persons who have been granted share options under the scheme have not been liable, or will not be liable in the future, and

(b)the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future,

in consequence of the scheme having been a Schedule 3 SAYE option scheme at any relevant time before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be).

(11)The liabilities covered by sub-paragraph (10) include liabilities for income tax or contributions which a person has not had, or will not have, in consequence of sub-paragraph (9).

(12)In this paragraph “relevant time” means any time before the giving of the default notice when requirements of Parts 2 to 7 of this Schedule were not met in relation to the scheme.

Assessment of penaltiesU.K.

40J(1)This paragraph applies if the scheme organiser is liable for a penalty under this Part.

(2)HMRC must assess the penalty and notify the scheme organiser of the assessment.

(3)Subject to sub-paragraphs (4) and (5), the assessment must be made no later than 12 months after the date on which the scheme organiser becomes liable for the penalty.

(4)In the case of a penalty under paragraph 40E(1)(b), the assessment must be made no later than—

(a)12 months after the date on which HMRC become aware of the inaccuracy, and

(b)6 years after the date on which the scheme organiser becomes liable for the penalty.

(5)In the case of a penalty under paragraph 40H(2)(b) or 40I(2)(a) or (7)(b) where notice of appeal is given under paragraph 40K(2) or (3), the assessment must be made no later than 12 months after the date on which the appeal is determined or withdrawn.

(6)A penalty payable under this Part must be paid—

(a)no later than 30 days after the date on which the notice under sub-paragraph (2) is given to the scheme organiser, or

(b)if notice of appeal is given against the penalty under paragraph 40K(1) or (4), no later than 30 days after the date on which the appeal is determined or withdrawn.

(7)The penalty may be enforced as if it were corporation tax or, if the scheme organiser is not within the charge to corporation tax, income tax charged in an assessment and due and payable.

(8)Sections 100 to 103 of TMA 1970 do not apply to a penalty under this Part.

AppealsU.K.

40K[F2195(A1)The scheme organiser may appeal against a decision of HMRC under paragraph 40A(5A) that there was no reasonable excuse for the failure to give notice on or before the initial notification deadline.]

(1)The scheme organiser may appeal against a decision of HMRC that the scheme organiser is liable for a penalty under paragraph 40C or 40E.

(2)The scheme organiser may appeal against—

(a)a decision of HMRC mentioned in paragraph 40H(1) or a decision of HMRC to specify, or not to specify, a relevant time in the closure notice;

(b)a decision of HMRC mentioned in paragraph 40I(1).

(3)The scheme organiser may appeal against a decision of HMRC—

(a)to give the scheme organiser a default notice under paragraph 40I;

(b)to specify, or not to specify, a relevant time in the default notice.

(4)The scheme organiser may appeal against a decision of HMRC as to the amount of a penalty payable by the scheme organiser under this Part.

(5)Notice of appeal must be given to HMRC no later than 30 days after the date on which—

[F2196(za)in the case of an appeal under sub-paragraph (A1), notice of HMRC's decision is given to the scheme organiser;]

(a)in the case of an appeal under sub-paragraph (1) or (4), the notice under paragraph 40J(2) is given to the scheme organiser;

(b)in the case of an appeal under sub-paragraph (2), the closure notice is given;

(c)in the case of an appeal under sub-paragraph (3), the default notice is given.

(6)On an appeal under sub-paragraph [F2197(A1),] (1) or (3)(a) which is notified to the tribunal, the tribunal may affirm or cancel the decision.

(7)On an appeal under sub-paragraph (2) or (3)(b) which is notified to the tribunal, the tribunal may—

(a)affirm or cancel the decision, or

(b)substitute for the decision another decision which HMRC had power to make.

(8)On an appeal under sub-paragraph (4) which is notified to the tribunal, the tribunal may—

(a)affirm the amount of the penalty decided, or

(b)substitute another amount for that amount.

(9)Subject to this paragraph and paragraph 40J, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to corporation tax or, if the scheme organiser is not within the charge to corporation tax, income tax.]

Textual Amendments

F2195Sch. 3 para. 40K(A1) inserted (with effect in accordance with Sch. 3 para. 4(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 4(3)(a)

F2196Sch. 3 para. 40K(5)(za) inserted (with effect in accordance with Sch. 3 para. 4(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 4(3)(b)

F2197Word in Sch. 3 para. 40K(6) inserted (with effect in accordance with Sch. 3 para. 4(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 4(3)(c)

Part 9U.K.Supplementary provisions

Power to require informationU.K.

45[F2198(1)An officer of Revenue and Customs may by notice require a person to provide the officer with any information—U.K.

(a)which the officer reasonably requires for the performance of any functions of Her Majesty's Revenue and Customs or an officer of Revenue and Customs under the SAYE code, and

(b)which the person to whom the notice is addressed has or can reasonably obtain.

(2)The power conferred by this paragraph extends, in particular, to—

(a)information to enable [F165an officer of Revenue and Customs] —

[F2199(i)to check anything contained in a notice under paragraph 40A or a return under paragraph 40B or to check any information accompanying such a notice or return, or”, and]

(ii)to determine the liability to tax, including capital gains tax, of any person who has participated in a scheme [F2200or any other person whose liability to tax the operation of a scheme is relevant to], and

(b)information about the administration of a scheme and any alteration of the terms of a scheme.

(3)The notice must require the information to be provided within a specified time, which must not end earlier than 3 months after the date when the notice is given.]

Textual Amendments

F2198Sch. 3 para. 45(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 118(2), 146 (with Sch. 8 paras. 147-157)

F2199Sch. 3 para. 45(2)(a)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 118(3)(a), 146 (with Sch. 8 paras. 147-157)

F2200Words in Sch. 3 para. 45(2)(a)(ii) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 118(3)(b), 146 (with Sch. 8 paras. 147-157)

Jointly owned companiesU.K.

46(1)This paragraph applies for the purposes of the provisions of the SAYE code relating to group schemes.U.K.

(2)Each joint owner of a jointly owned company is to be treated as controlling every company within sub-paragraph (3).

(3)The companies within this sub-paragraph are—

(a)the jointly owned company, and

(b)any company controlled by that company.

(4)However, no company within sub-paragraph (3) may be—

(a)a constituent company in more than one group scheme, or

(b)a constituent company in a particular group scheme if another company within that sub-paragraph is a constituent company in a different group scheme.

(5)In this paragraph a “jointly owned company” means a company which (apart from sub-paragraph (2)) is not controlled by any one person and—

(a)of which 50% of the issued share capital is owned by one person and 50% by another, or

(b)which is otherwise controlled by two persons taken together.

(6)In this paragraph “joint owner” means one of the persons mentioned in sub-paragraph (5)(a) or (b).

Meaning of “associated company”U.K.

47(1)For the purposes of the SAYE code, except in paragraph 35(3) (time when “scheme-related employment” ends), one company is an “associated company” of another company at a given time if, at that time or at any other time within one year previously—U.K.

(a)one has control of the other, or

(b)both are under the control of the same person or persons.

(2)For the purposes of sub-paragraph (1) the question whether a person controls a company is to be determined in accordance with [F2201sections 450 and 451 of CTA 2010].

Textual Amendments

F2201Words in Sch. 3 para. 47(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 397(5) (with Sch. 2)

[F2202Non-UK company reorganisation arrangementsU.K.

Textual Amendments

47A(1)For the purposes of the SAYE code a “non-UK company reorganisation arrangement” is an arrangement made in relation to a company under the law of a territory outside the United Kingdom—U.K.

(a)which gives effect to a reorganisation of the company's share capital by the consolidation of shares of different classes, or by the division of shares into shares of different classes, or by both of those methods, and

(b)which is approved by a resolution of members of the company.

(2)A resolution does not count for the purposes of sub-paragraph (1)(b) unless the members who vote in favour of approving the arrangement represent more than 50% of the total voting rights of all the members having the right to vote on the issue.]

Minor definitionsU.K.

48(1)In the SAYE code—U.K.

  • “ [F2203certified SAYE savings arrangement] ” has the meaning given in [F2204section 703(1) of ITTOIA 2005];

  • “company” means a body corporate;

  • “market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act.

(2)For the purposes of the SAYE code a company is a member of a consortium owning another company if it is one of a number of companies—

(a)which between them beneficially own not less than 75% of the other company’s ordinary share capital, and

(b)each of which beneficially owns not less than 5% of that capital.

[F2205(3)For the purposes of the SAYE code—

(a)shares are subject to a “restriction” if there is any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) of section 423 (restricted securities) would apply if the references in those subsections to the employment-related securities were to the shares, and

(b)the “restriction” is that provision.]

Textual Amendments

F2203Words in Sch. 3 para. 48(1) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(11)(a) (with Sch. 2)

F2204Words in Sch. 3 para. 48(1) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(11)(b) (with Sch. 2)

F2205Sch. 3 para. 48(3) inserted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 65

Index of defined expressionsU.K.

49U.K.In the SAYE code the following expressions are defined or otherwise explained by the provisions indicated below:

F2206. . .F2206. . .
associated companyparagraph 47(1)
the bonus dateparagraph 30(3)
[F2207certified SAYE savings arrangement]paragraph 48(1)
child [F2208section 721(6)]
close company [F2209section 989 of ITA 2007] F2210...
companyparagraph 48(1)
connected personsection 718
constituent companyparagraph 3(3)
controlsection 719 (and see paragraphs 35(4) and 47(2))
distribution [F2211section 989 of ITA 2007]
earningssection 62 and see section 721(7)
eligible shares (in Part 4 of this Schedule)paragraph 17(2)
employee and employmentsection 4
group schemeparagraph 3(2) (and see paragraph 46)
F2212. . .F2212. . .
F2213. . .F2213. . .
market valueparagraph 48(1)
member of a consortiumparagraph 48(2)
[F2214non-UK company reorganisation arrangement paragraph 47A ]
notice [F2215section 989 of ITA 2007]
the options (in relation to a participant)paragraph 2(2)
ordinary share capital [F2216section 989 of ITA 2007]
participantparagraph 2(2)
participateparagraph 2(2)
personal representatives [F2217section 989 of ITA 2007]
recognised stock exchange [F2218section 1005 of ITA 2007]
[F2219restriction (in relation to shares) paragraph 48(3)]
the SAYE codesection 516(3)
SAYE option schemesection 516(4)
[F2214Schedule 3 SAYE option scheme paragraph 1 and Part 8 of this Schedule]
the scheme organiserparagraph 2(2)
share optionsection 516(4)
sharessection 516(4)
F2220. . .F2220. . .
F2221. . .paragraph 31
tax [F2222section 989 of ITA 2007]
[F2223tribunal section 989 of ITA 2007]
F2224. . .F2224. . .

Textual Amendments

F2206Words in Sch. 3 para. 49 Table omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 120(a), 146 (with Sch. 8 paras. 147-157)

F2207Words in Sch. 3 para. 49 substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 618(12) (with Sch. 2)

F2208Words in Sch. 3 para. 49 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(a) (with Sch. 2)

F2209Words in Sch. 3 para. 49 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(b) (with Sch. 2)

F2210Words in Sch. 3 para. 49 Table omitted (with effect in accordance with Sch. 2 para. 43 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 42

F2211Words in Sch. 3 para. 49 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(c) (with Sch. 2)

F2213Sch. 3 para. 49 Table entry repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(d), Sch. 3 Pt. 1 (with Sch. 2)

F2214Words in Sch. 3 para. 49 Table inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 120(b), 146 (with Sch. 8 paras. 147-157)

F2215Words in Sch. 3 para. 49 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(e) (with Sch. 2)

F2216Words in Sch. 3 para. 49 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(f) (with Sch. 2)

F2217Words in Sch. 3 para. 49 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(g) (with Sch. 2)

F2218Words in Sch. 3 para. 49 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(h) (with Sch. 2)

F2219Words in Sch. 3 para. 49 Table inserted (with effect in accordance with Sch. 2 para. 67 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 66

F2221Words in Sch. 3 para. 49 Table omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 13 (with Sch. 2 paras. 16, 17)

F2222Words in Sch. 3 para. 49 Table substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 397(6) (with Sch. 2)

F2224Sch. 3 para. 49 Table entry repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 448(j), Sch. 3 Pt. 1 (with Sch. 2)

Section 521

SCHEDULE 4U.K.F2225... CSOP schemes

Textual Amendments

F2225Word in Sch. 4 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 164, 204 (with Sch. 8 paras. 205-215)

Part 1U.K.Introduction

[F2226Introduction to Schedule 4] CSOP schemesU.K.

Textual Amendments

1[F2227(A1)For the purposes of the CSOP code a CSOP scheme is a Schedule 4 CSOP scheme if the requirements of Parts 2 to 6 of this Schedule are met in relation to the scheme.]U.K.

(3)The requirements consist of general requirements (see Part 2) and requirements as to—

  • the eligibility of individuals to participate in a scheme (see Part 3),

  • the shares to which a scheme can apply (see Part 4),

  • the share options which may be granted under a scheme (see Part 5), and

  • the exchange of share options (see Part 6).

[F2228(4)Sub-paragraph (A1) is subject to Part 7 of this Schedule which—

(a)requires notice of a scheme to be given to Her Majesty's Revenue and Customs (“HMRC”) in order for the scheme to be a Schedule 4 CSOP scheme (see paragraph 28A(1)),

(b)provides for a scheme in relation to which such notice is given to be a Schedule 4 CSOP scheme (see paragraph 28A(4)), and

(c)gives power to HMRC to enquire into a scheme and to decide that the scheme should not be a Schedule 4 CSOP scheme (see paragraphs 28F to 28I).]

Textual Amendments

F2227Sch. 4 para. 1(A1) substituted for Sch. 4 para. 1(1)(2) (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 166(2), 204 (with Sch. 8 paras. 205-215)

F2228Sch. 4 para. 1(4) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 166(3), 204 (with Sch. 8 paras. 205-215)

CSOP schemesU.K.

2(1)In the CSOP code a “CSOP scheme” means (in accordance with section 521(4)) a scheme which—U.K.

(a)is established by a company,

(b)provides for share options to be granted to employees and directors, and

(c)is not an SAYE option scheme (within the meaning of the SAYE code: see section 516(4)).

(2)In the CSOP code, in relation to a CSOP scheme—

  • “participant” means an individual who has been granted (but has not yet exercised) share options under the scheme (“the options”);

  • “participate” means obtain and exercise share options under the scheme;

  • “the scheme organiser” means the company which has established the scheme.

Group schemesU.K.

3(1)A CSOP scheme established by a company that controls one or more other companies (a “parent scheme company”) may extend to all or any of those other companies.U.K.

(2)In the CSOP code a CSOP scheme established by a parent scheme company which so extends is called a “group scheme”.

(3)In relation to a group scheme a “constituent company” means—

(a)the parent scheme company, or

(b)any other company to which for the time being the scheme is expressed to extend.

(4)Paragraph 34 deals with jointly owned companies and companies controlled by them.

Part 2U.K.F2229General requirements ...

Textual Amendments

F2229Words in Sch. 4 Pt. 2 title omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 167, 204 (with Sch. 8 paras. 205-215)

General requirements F2230...: introductionU.K.

Textual Amendments

F2230Words in Sch. 4 para. 4 cross-heading omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 168, 204 (with Sch. 8 paras. 205-215)

4U.K.A CSOP scheme must meet the requirements of—

  • paragraph 5 (general restriction on contents of scheme), and

  • paragraph 6 (limit on value of shares subject to options).

General restriction on contents of schemeU.K.

[F22315(1)The purpose of the scheme must be to provide, in accordance with this Schedule, benefits for employees and directors in the form of share options.U.K.

(2)The scheme must not provide benefits to employees or directors otherwise than in accordance with this Schedule.

(3)For example, the scheme must not provide cash as an alternative to share options or shares which might otherwise be acquired by the exercise of share options.]

Textual Amendments

F2231Sch. 4 para. 5 substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 169, 204 (with Sch. 8 paras. 205-215)

Limit on value of shares subject to optionsU.K.

6(1)The scheme must provide that an individual may not be granted share options under it which would at the time when they are granted cause the aggregate market value of the shares which the individual may acquire by exercising share options granted under—U.K.

(a)the scheme, or

(b)any other [F2232Schedule 4] CSOP scheme established by the scheme organiser or an associated company of the scheme organiser,

to exceed or further exceed [F2233£60,000].

(2)For the purposes of sub-paragraph (1) share options that have already been exercised are to be left out of account.

(3)For the purposes of sub-paragraph (1) the market value of shares is to be calculated as at—

(a)the time when the options relating to them were granted, or

(b)if an agreement relating to them has been made under paragraph 22 (requirements as to price for acquisition of shares) the earlier time or times stated in the agreement.

[F2234(4)For the purposes of this paragraph the market value of shares subject to a restriction is to be determined as if they were not subject to the restriction.]

[F2235(5)The Treasury may by regulations amend sub-paragraph (1) by substituting a different sum of money for the sum for the time being specified there.]

Textual Amendments

F2233Sum in Sch. 4 para. 6(1) substituted (with effect in accordance with s. 16(6) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 16(2)(a) (with s. 16(9)(10))

F2234Sch. 4 para. 6(4) inserted (with effect in accordance with Sch. 2 para. 77 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 68

F2235Sch. 4 para. 6(5) inserted (with effect in accordance with s. 16(6) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 16(2)(b) (with s. 16(9)(10))

Part 3U.K.Eligibility of individuals to participate in scheme

Requirements relating to the eligibility of individuals: introductionU.K.

7U.K.A CSOP scheme must meet the requirements of—

  • paragraph 8 (the employment requirement), and

  • paragraph 9 (the “no material interest” requirement).

The employment requirementU.K.

8(1)The scheme must ensure that an individual is not eligible to be granted share options under the scheme at a particular time unless the individual is then a full-time director or a qualifying employee of—U.K.

(a)the scheme organiser, or

(b)in the case of a group scheme, a constituent company.

(2)A “qualifying employee”, in relation to a company, means an employee of the company other than one who is a director of—

(a)the company, or

(b)in the case of a group scheme, a constituent company.

The “no material interest” requirementU.K.

9(1)The scheme must ensure that an individual is not eligible to participate in the scheme on any date if the individual has on that date, or has had within the 12 months preceding that date, a material interest in a close company—U.K.

(a)whose shares may be acquired as a result of exercising share options granted under the scheme, or

(b)which has control of a company whose shares may be acquired as a result of exercising share options granted under the scheme, or

(c)which is a member of a consortium which owns a company within paragraph (b).

(2)For the purposes of this paragraph an individual is to be regarded as having a material interest in a company if—

(a)the individual, or

(b)the individual together with one or more of the individual’s associates, or

(c)any such associate, with or without any other such associates,

has a material interest in the company.

(3)This paragraph is supplemented—

(a)as regards the meaning of “material interest”, by paragraphs 10 and 11, and

(b)as regards the meaning of “associate”, by paragraph 12 (read with paragraphs 13 and 14).

(4)In this paragraph and paragraph 10 “close company” includes a company that would be a close company but for—

(a)[F2236section 442(a) of CTA 2010] (exclusion of companies not resident in the United Kingdom), or

(b)[F2237sections 446 and 447 of CTA 2010] (exclusion of certain quoted companies).

Textual Amendments

F2236Words in Sch. 4 para. 9(4)(a) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 398(2)(a) (with Sch. 2)

F2237Words in Sch. 4 para. 9(4)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 398(2)(b) (with Sch. 2)

Meaning of “material interest”U.K.

10(1)In paragraph 9 (the “no material interest” requirement) references to a “material interes” in a company are to—U.K.

(a)a material interest in the share capital of the company, or

(b)a material interest in its assets.

(2)A material interest in the share capital of a company means—

(a)beneficial ownership of, or

(b)the ability to control (directly or through the medium of other companies or by any other indirect means),

more than [F223830%] of the ordinary share capital of the company.

(3)A material interest in the assets of a company means—

(a)possession of, or

(b)an entitlement to acquire,

such rights as would, in the event of the winding up of the company or in any other circumstances, give an entitlement to receive more than [F223830%] of the assets that would then be available for distribution among the participators.

(4)In this paragraph “participator” has the meaning given by [F2239section 454 of CTA 2010].

(5)This paragraph is supplemented by paragraph 11 (material interest: options etc.).

Textual Amendments

F2238Word in Sch. 4 para. 10(2)(3) substituted (with effect in accordance with Sch. 2 para. 44(2)(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 44(1)

F2239Words in Sch. 4 para. 10(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 398(3) (with Sch. 2)

Material interest: options and interests in SIPsU.K.

11(1)For the purposes of paragraph 10 (meaning of “material interest”) a right to acquire shares (however arising) is to be treated as a right to control them.U.K.

(2)Sub-paragraph (3) also applies for the purposes of paragraph 10 in a case where—

(a)the shares to be attributed to an individual consist of or include shares which the individual or another person has a right to acquire, and

(b)the circumstances are such that, if that right were to be exercised, the shares acquired would be shares which were previously unissued and which the company would be contractually bound to issue in the event of the exercise of the right.

(3)In determining at any time prior to the exercise of the right whether the number of shares to be attributed to the individual exceeds [F224030%] of the ordinary share capital of the company, that ordinary share capital is to be treated as increased by the number of unissued shares referred to in sub-paragraph (2)(b).

(4)The references in sub-paragraphs (2) and (3) to the shares to be attributed to an individual are to the shares which—

(a)for the purposes of paragraph 10(2) (material interest in share capital), and

(b)in accordance with paragraph 9(2) (material interest can consist of or include that of individual’s associates),

fall to be brought into account in the individual’s case so that it can be determined whether their number exceeds [F224030%] of the company’s ordinary share capital.

(5)In applying paragraph 10 the following are to be disregarded—

(a)the interest of the trustees of any [F2241Schedule 2] SIP (within the meaning of the SIP code: see section 488(4)) in any shares which are held by them in accordance with the plan but which have not been appropriated to, or acquired on behalf of, an individual, and

(b)any rights exercisable by the trustees as a result of that interest.

Textual Amendments

F2240Word in Sch. 4 para. 11(3)(4) substituted (with effect in accordance with Sch. 2 para. 44(2)(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 44(1)

Meaning of “associate”U.K.

12(1)In paragraph 9(2) (the “no material interest” requirement) “associate”, in relation to an individual, means—U.K.

(a)any relative or partner of that individual,

(b)the trustee or trustees of any settlement in relation to which that individual, or any of the individual’s relatives (living or dead), is or was a settlor, or

(c)where that individual is interested in any shares or obligations of the company mentioned in paragraph 9(2) which are subject to any trust or are part of the estate of a deceased person—

(i)the trustee or trustees of the settlement concerned, or

(ii)the personal representatives of the deceased,

as the case may be.

(2)Sub-paragraph (1)(c) needs to be read with paragraphs 13 and 14 (which relate to employee benefit trusts and discretionary trusts).

(3)In this paragraph—

  • “relative” means—

    (a)

    spouse [F2242or civil partner],

    (b)

    parent, child or remoter relation in the direct line, or

    (c)

    brother or sister;

  • “settlor” and “settlement” have the same meaning as in [F2243Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act)].

Textual Amendments

F2242Words in Sch. 4 para. 12(3) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 172

F2243Words in Sch. 4 para. 12(3) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 619 (with Sch. 2)

Meaning of “associate”: trustees of employee benefit trustU.K.

13(1)This paragraph applies for the purposes of paragraph 12(1)(c) (meaning of “associate”: trustees of settlement) where the individual is interested as a beneficiary of an employee benefit trust in shares or obligations of the company mentioned in paragraph 9(2).U.K.

(2)The trustees of the employee benefit trust are not to be regarded as associates of the individual as a result only of the individual’s being so interested if neither—

(a)the individual, nor

(b)the individual together with one or more of the individual’s associates, nor

(c)any such associate, with or without any other such associates,

has at any time after 13th March 1989 been the beneficial owner of, or been able (directly or through the medium of other companies or by any other indirect means) to control, more than [F224430%] of the ordinary share capital of the company.

(3)In sub-paragraph (2)(b) and (c) “associate” has the meaning given by paragraph 12(1), but does not include the trustees of an employee benefit trust as a result only of the individual’s having an interest in shares or obligations of the trust.

(4)Chapter 11 of Part 7 of this Act (which deals with the attribution of interests in companies to beneficiaries of employee benefit trusts) applies for the purposes of sub-paragraph (2).

(5)In this paragraph “employee benefit trust” has the same meaning as in that Chapter (see sections 550 and 551).

Textual Amendments

F2244Word in Sch. 4 para. 13(2) substituted (with effect in accordance with Sch. 2 para. 44(2)(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 44(1)

Meaning of “associate”: trustees of discretionary trustU.K.

14(1)This paragraph applies for the purposes of paragraph 12(1)(c) (meaning of “associate”: trustees of settlement) where—U.K.

(a)the individual (“the beneficiary”) is one of the objects of a discretionary trust,

(b)the property subject to the trust has at any time consisted of, or included, shares or obligations of the company mentioned in paragraph 9(2),

(c)the beneficiary has ceased to be eligible to benefit under the trust as a result of—

(i)an irrevocable disclaimer or release executed by the beneficiary, or

(ii)the irrevocable exercise by the trustees of a power to exclude the beneficiary from the objects of the trust,

(d)immediately after the beneficiary ceased to be so eligible, no associate of the beneficiary was interested in the shares or obligations of the company that were subject to the trust, and

(e)during the period of 12 months ending with the date on which the beneficiary ceased to be so eligible, neither the beneficiary nor any associate of the beneficiary received any benefit under the trust.

(2)The beneficiary is not, as a result only of the matters referred to in sub-paragraph (1)(a) and (b), to be regarded as having been interested in the shares or obligations of the company at any time during that period of 12 months.

(3)In sub-paragraph (1) “associate” has the meaning given by paragraph 12(1) but with the omission of paragraph (c).

Part 4U.K.Shares to which schemes can apply

Requirements relating to shares that may be subject to share options: introductionU.K.

15(1)A CSOP scheme must meet the requirements of—U.K.

  • paragraph 16 (shares must be ordinary shares of certain companies),

  • paragraph 17 (requirements as to listing) [F2245, and]

  • paragraph 18 (shares must be fully paid up and not redeemable) F2246...

  • F2247...

  • F2246...

[F2248(1A)Sub-paragraph (1) and the other paragraphs of this Part are subject to paragraph 25A(7B).]

(2)In this Part “eligible shares” means shares which may be acquired by the exercise of share options under the scheme.

Textual Amendments

F2245Word in Sch. 4 para. 15(1) inserted (with effect in accordance with s. 16(7) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 16(3)(a) (with s. 16(9)(10))

F2246Words in Sch. 4 para. 15(1) omitted (with effect in accordance with s. 16(7) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 16(3)(b) (with s. 16(9)(10))

F2247Words in Sch. 4 para. 15 omitted (with effect in accordance with Sch. 2 para. 77 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 70(b)

Shares must be ordinary shares of certain companiesU.K.

16U.K.Eligible shares must form part of the ordinary share capital of—

(a)the scheme organiser,

(b)a company which has control of the scheme organiser, or

(c)a company which either is, or has control of, a company which is a member of a consortium owning either the scheme organiser or a company having control of the scheme organiser.

Requirements as to listingU.K.

17(1)Eligible shares must be —U.K.

(a)shares of a class listed on a recognised stock exchange, F2249...

(b)shares in a company which is not under the control of another company, F2250...[F2251, or

(ba)shares in a company which is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).]

F2252(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2253(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2250Word in Sch. 4 para. 17(1)(b) omitted (24.9.2010 with effect in accordance with s. 39(3)-(9) of the amending Act) by virtue of Finance Act 2010 (c. 13), s. 39(2)(a)(ii)(3)(a)

F2252Sch. 4 para. 17(1)(c) omitted (24.9.2010 with effect in accordance with s. 39(3)-(9) of the amending Act) by virtue of Finance Act 2010 (c. 13), s. 39(1)(3)(a)

F2253Sch. 4 para. 17(2) omitted (24.9.2010 with effect in accordance with s. 39(3)-(9) of the amending Act) by virtue of Finance Act 2010 (c. 13), s. 39(2)(a)(iii)(3)(a)

Shares must be fully paid up and not redeemableU.K.

18U.K.Eligible shares must be—

(a)fully paid up, and

(b)not redeemable.

Only certain kinds of restriction allowedU.K.

F225419U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2254Sch. 4 para. 19 omitted (with effect in accordance with Sch. 2 para. 77 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 71

Requirements as to other shareholdingsU.K.

F225520U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2255Sch. 4 para. 20 omitted (with effect in accordance with s. 16(7) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 16(4) (with s. 16(9)(10))

Part 5U.K.Requirements etc. relating to share options

Requirements etc. relating to share options: introductionU.K.

21(1)A CSOP scheme must meet the requirements of—U.K.

  • [F2256paragraph 21A (general requirements as to terms of option),]

  • paragraph 22 (requirements as to price for acquisition of shares), and

  • paragraph 23 (share options may not be transferred).

(2)A CSOP scheme may make any provision authorised by—

  • paragraph 24 (exercise of options: ceasing to be director or employee), F2257...

  • paragraph 25 (exercise of options: death) [F2258, or

  • paragraph 25A (exercise of options: company events)]

Textual Amendments

F2257Word in Sch. 4 para. 21(2) omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 28(a)

F2258Words in Sch. 4 para. 21(2) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 28(b)

[F2259General requirements as to terms of optionU.K.

Textual Amendments

21A(1)The following terms of a share option which is granted under the scheme must be stated at the time the option is granted—U.K.

(a)the price at which shares may be acquired by the exercise of the option,

(b)the number and description of the shares which may be acquired by the exercise of the option,

(c)the restrictions to which those shares may be subject,

(d)the times at which the option may be exercised (in whole or in part), and

(e)the circumstances under which the option will lapse or be cancelled (in whole or in part), including any conditions to which the exercise of the option is subject (in whole or in part).

(2)Terms stated as required by sub-paragraph (1) may be varied after the grant of the option, but—

(a)in the case of the price, only as provided for in paragraph 22,

(b)in the case of the number or description of shares, only as provided for in paragraph 22 or by way of a mechanism which is stated at the time the option is granted, and

(c)in any other case, only by way of a mechanism which is stated at the time the option is granted.

(3)Any mechanism stated for the purposes of sub-paragraph (2)(b) or (c) must be applied in a way that is fair and reasonable.

(4)Terms stated as required by sub-paragraph (1), and any mechanism stated for the purposes of sub-paragraph (2)(b) or (c), must be notified to the participant as soon as practicable after the grant of the option.]

Requirements as to price for acquisition of sharesU.K.

22(1)The price at which shares may be acquired by the exercise of a share option granted under the scheme—U.K.

F2260(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)must not be manifestly less than the market value of shares of the same class [F2261—

(i)at the time when the option is granted, or

(ii)at such earlier time as may be determined in accordance with guidance issued by the Commissioners for Her Majesty's Revenue and Customs.]

This is subject to [F2262sub-paragraph (3)].

F2263(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The scheme may provide for one or more of the following—

(a)the price at which shares may be acquired by the exercise of a share option granted under the scheme,

(b)the number of shares which may be so acquired, or

(c)the description of shares which may be so acquired,

to be varied so far as necessary to take account of a variation in the share capital of which the shares form part.

[F2264(3A)If the scheme makes provision under sub-paragraph (3), the variation or variations made under that provision to take account of a variation in any share capital must (in particular) secure—

(a)that the total market value of the shares which may be acquired by the exercise of the share option is immediately after the variation or variations substantially the same as what it was immediately before the variation or variations, and

(b)that the total price at which those shares may be acquired is immediately after the variation or variations substantially the same as what it was immediately before the variation or variations.

(3B)Sub-paragraph (3) does not authorise any variation which would result in the requirements of the other paragraphs of this Schedule not being met in relation to the share option.]

F2265(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2266[F2267(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)For the purposes of this paragraph the market value of shares subject to a restriction is to be determined as if they were not subject to the restriction.]

Textual Amendments

F2260Sch. 4 para. 22(1)(a) and word omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 174(2)(a), 204 (with Sch. 8 paras. 205-215)

F2261Words in Sch. 4 para. 22(1)(b) substituted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 3 para. 7(2)(a)

F2262Words in Sch. 4 para. 22(1)(b) substituted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 3 para. 7(2)(b)

F2263Sch. 4 para. 22(2) omitted (15.9.2016) by virtue of Finance Act 2016 (c. 24), Sch. 3 para. 7(3)

F2264Sch. 4 para. 22(3A)(3B) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 174(3), 204 (with Sch. 8 paras. 205-215)

F2265Sch. 4 para. 22(4) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 174(4), 204 (with Sch. 8 paras. 205-215)

F2266Sch. 4 para. 22(5) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 174(5), 204 (with Sch. 8 paras. 205-215)

F2267Sch. 4 para. 22(5)(6) inserted (with effect in accordance with Sch. 2 para. 77 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 72

Share options must not be transferableU.K.

23(1)The scheme must ensure that share options granted to a participant are not capable of being transferred by the participant.U.K.

(2)Paragraph 25 provides for the exercise of the options where the participant has died.

Exercise of options: ceasing to be director or employeeU.K.

24(1)The scheme may provide that an individual may exercise share options under it after ceasing to be a full-time director or qualifying employee.U.K.

(2)“Qualifying employee” has the same meaning as in paragraph 8 (the employment requirement).

Exercise of options: deathU.K.

25[F2268(1)] The scheme may provide that, if a participant dies before exercising the options, they may be exercised on or after the date of death F2269.... U.K.

[F2270(2)Provision made under sub-paragraph (1) must permit the exercise of the options at any time on or after the date of death but not later than 12 months after that date.]

Textual Amendments

F2268Sch. 4 para. 25 renumbered as Sch. 4 para. 25(1) (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 175(2), 204 (with Sch. 8 paras. 205-215)

F2269Words in Sch. 4 para. 25(1) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 175(3), 204 (with Sch. 8 paras. 205-215)

F2270Sch. 4 para. 25(2) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 175(4), 204 (with Sch. 8 paras. 205-215)

[F2271Exercise of options: company eventsU.K.

Textual Amendments

F2271Sch. 4 para. 25A and cross-heading inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 29

25A(1)The scheme may provide that share options relating to shares in a company may be exercised within 6 months after the relevant date for the purposes of sub-paragraph (2)[F2272, (6) [F2273, (6ZA)] or (6A)].U.K.

(2)The relevant date for the purposes of this sub-paragraph is the date when—

(a)a person has obtained control of the company as a result of making an offer falling within sub-paragraph (3), and

(b)any condition subject to which the offer is made has been satisfied.

(3)An offer falls within this sub-paragraph if it is—

(a)a general offer to acquire the whole of the issued ordinary share capital of the company which is made on a condition such that, if it is met, the person making the offer will have control of the company, or

(b)a general offer to acquire all the shares in the company which are of the same class as the shares to which the option relates.

(4)In sub-paragraph (3)(a) the reference to the issued ordinary share capital of the company does not include any capital already held by the person making the offer or a person connected with that person and in sub-paragraph (3)(b) the reference to the shares in the company does not include any shares already held by the person making the offer or a person connected with that person.

(5)For the purposes of sub-paragraph (3)(a) and (b) it does not matter if the general offer is made to different shareholders by different means.

(6)The relevant date for the purposes of this sub-paragraph is the date when the court sanctions under section 899 of the Companies Act 2006 (court sanction for compromise or arrangement) a compromise or arrangement applicable to or affecting—

(a)all the ordinary share capital of the company or all the shares of the same class as the shares to which the option relates, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in [F2274a Schedule 4] CSOP scheme.

[F2275(6ZA)The relevant date for the purposes of this sub-paragraph is the date when the court sanctions under section 901F of the Companies Act 2006 (court sanction for compromise or arrangement) a compromise or arrangement applicable to or affecting—

(a)all the ordinary share capital of the company or all the shares of the same class as the shares to which the option relates, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or directorships or their participation in a Schedule 4 CSOP scheme.]

[F2276(6A)The relevant date for the purposes of this sub-paragraph is the date on which a non-UK company reorganisation arrangement applicable to or affecting—

(a)all the ordinary share capital of the company or all the shares of the same class as the shares to which the option relates, or

(b)all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employments or directorships or their participation in a Schedule 4 CSOP scheme,

becomes binding on the shareholders covered by it.]

(7)The scheme may provide that share options relating to shares in a company may be exercised at any time when any person is bound or entitled to acquire shares in the company under sections 979 to 982 or 983 to 985 of the Companies Act 2006 (takeover offers: right of offeror to buy out minority shareholder etc).

[F2277(7A)Sub-paragraphs (7B) to (7F) apply if the scheme makes provision under sub-paragraph (1) or (7).

(7B)The scheme may provide that if, in consequence of a relevant event, shares in the company to which a share option relates no longer meet the requirements of Part 4 of this Schedule, the share option may be exercised under the provision made under sub-paragraph (1) or (7) (as the case may be) no later than 20 days after the day on which the relevant event occurs, notwithstanding that the shares no longer meet the requirements of Part 4 of this Schedule.

(7C)In sub-paragraph (7B) “relevant event” means—

(a)a person obtaining control of the company as mentioned in sub-paragraph (2)(a);

(b)a person obtaining control of the company as a result of a compromise or arrangement sanctioned by the court as mentioned in sub-paragraph (6) [F2278or (6ZA)];

(c)a person obtaining control of the company as a result of a non-UK company reorganisation arrangement which has become binding on the shareholders covered by it as mentioned in sub-paragraph (6A);

(d)a person who is bound or entitled to acquire shares in the company as mentioned in sub-paragraph (7) obtaining control of the company.

(7D)Provision made under sub-paragraph (7B) may not authorise the exercise of a share option, as the case may be—

(a)at a time outside the 6 month period mentioned in sub-paragraph (1), or

(b)at a time not covered by sub-paragraph (7).

(7E)The scheme may provide that a share option relating to shares in a company which is exercised during the period of 20 days ending with—

(a)the relevant date for the purposes of sub-paragraph (2), (6) [F2279, (6ZA)] or (6A), or

(b)the date on which any person becomes bound or entitled to acquire shares in the company as mentioned in sub-paragraph (7),

is to be treated as if it had been exercised in accordance with the provision made under sub-paragraph (1) or (7) (as the case may be).

(7F)If the scheme makes provision under sub-paragraph (7E) it must also provide that if—

(a)a share option is exercised in reliance on that provision in anticipation of—

(i)an event mentioned in sub-paragraph (2), (6) [F2280, (6ZA)] or (6A) occurring, or

(ii)a person becoming bound or entitled to acquire shares in the company as mentioned in sub-paragraph (7), but

(b)as the case may be—

(i)the relevant date for the purposes of sub-paragraph (2), (6) [F2281, (6ZA)] or (6A) does not fall during the period of 20 days beginning with the date on which the share option is exercised, or

(ii)the person does not become bound or entitled to acquire shares in the company by the end of the period of 20 days beginning with the date on which the share option is exercised,

the exercise of the share option is to be treated as having had no effect.]

(8)For the purposes of this paragraph a person is to be treated as obtaining control of a company if that person and others acting in concert together obtain control of it.]

Textual Amendments

F2272Words in Sch. 4 para. 25A(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 176(2), 204 (with Sch. 8 paras. 205-215)

F2273Word in Sch. 4 para. 25A(1) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 25(2)(a) (with ss. 2(2), 5(2))

F2274Words in Sch. 4 para. 25A(6)(b) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 176(3), 204 (with Sch. 8 paras. 205-215)

F2276Sch. 4 para. 25A(6A) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 176(4), 204 (with Sch. 8 paras. 205-215)

F2277Sch. 4 paras. 25A(7A)-(7F) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 176(5), 204 (with Sch. 8 paras. 205-215)

F2278Words in Sch. 4 para. 25A(7C)(b) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 25(2)(c) (with ss. 2(2), 5(2))

F2279Word in Sch. 4 para. 25A(7E)(a) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 25(2)(d) (with ss. 2(2), 5(2))

F2280Word in Sch. 4 para. 25A(7F)(a)(i) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 25(2)(e) (with ss. 2(2), 5(2))

F2281Word in Sch. 4 para. 25A(7F)(b)(i) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 25(2)(e) (with ss. 2(2), 5(2))

Part 6U.K.Exchange of share options

Exchange of options on company reorganisationU.K.

26(1)A CSOP scheme may provide that if—U.K.

(a)there is a company reorganisation affecting a scheme company (that is, a company whose shares may be acquired by the exercise of share options obtained under the scheme: see paragraph 16), and

(b)a participant has obtained share options under the scheme which are to acquire shares of the scheme company (“the old options”),

the participant may agree with the acquiring company to release the old options in consideration of the participant being granted new share options.

(2)For the purposes of this paragraph there is a company reorganisation affecting a scheme company if another company (“the acquiring company”)—

(a)obtains control of the scheme company—

(i)as a result of making a general offer to acquire the whole of the issued ordinary share capital of the scheme company which is made on a condition such that, if it is met, the person making the offer will have control of that company, or

(ii)as a result of making a general offer to acquire all the shares in the scheme company which are of the same class as those subject to the old options;

[F2282(b)obtains control of the scheme company as a result of a compromise or arrangement sanctioned by the court under section 899 [F2283or 901F] of the Companies Act 2006 (court sanction for compromise or arrangement);]

[F2284(ba)obtains control of the scheme company as a result of a non-UK company reorganisation arrangement which has become binding on the shareholders covered by it; or]

[F2285(c)becomes bound or entitled to acquire shares in the scheme company under sections 979 to 982 [F2286or 983 to 985] of the Companies Act 2006 (takeover offers: right of offeror to buy out minority shareholder [F2287etc]).]

[F2288(2A)In sub-paragraph (2)(a)(i) the reference to the issued ordinary share capital of the scheme company does not include any capital already held by the person making the offer or a person connected with that person and in sub-paragraph (2)(a)(ii) the reference to the shares in the scheme company does not include any shares already held by the person making the offer or a person connected with that person.

(2B)For the purposes of sub-paragraph (2)(a)(i) and (ii) it does not matter if the general offer is made to different shareholders by different means.]

(3)A scheme that makes provision under sub-paragraph (1) must require the agreement referred to in that sub-paragraph to be made—

(a)where control is obtained in the way set out in sub-paragraph (2)(a)(i) or (ii), within the period of 6 months beginning with the time when the acquiring company obtains control and any condition subject to which the offer is made is met,

(b)where control is obtained in the way set out in sub-paragraph (2)(b), within the period of 6 months beginning with the time when the court sanctions the compromise or arrangement, F2289...

[F2290(ba)where control is obtained in the way set out in sub-paragraph (2)(ba), within the period of 6 months beginning with the date on which the non-UK company reorganisation arrangement becomes binding on the shareholders covered by it, and]

(c)where sub-paragraph (2)(c) applies, within the period during which the acquiring company remains bound or entitled as mentioned in that provision.

Textual Amendments

F2284Sch. 4 para. 26(2)(ba) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 177(2), 204 (with Sch. 8 paras. 205-215)

F2286Words in Sch. 4 para. 26(2)(c) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 30(2)(a) (with Sch. 2 para. 30(4))

F2287Word in Sch. 4 para. 26(2)(c) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 30(2)(b) (with Sch. 2 para. 30(4))

F2288Sch. 4 para. 26(2A)(2B) inserted (17.7.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 30(3) (with Sch. 2 para. 30(4))

F2289Word in Sch. 4 para. 26(3) omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 177(3), 204 (with Sch. 8 paras. 205-215)

F2290Sch. 4 para. 26(3)(ba) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 177(3), 204 (with Sch. 8 paras. 205-215)

Requirements about share options granted in exchangeU.K.

27(1)This paragraph applies to a scheme that makes provision under paragraph 26 (exchange of options on company reorganisation).U.K.

(2)The scheme must require the new share options to relate to shares in a company which—

(a)is different from the company whose shares are subject to the old options, and

(b)is either the acquiring company itself or some other company within sub-paragraph (b) or (c) of paragraph 16 (shares must be ordinary shares of certain companies), namely—

(i)a company which has control of the scheme organiser, or

(ii)a company which is, or has control of a company which is, a member of a consortium owning either the scheme organiser or a company having control of the scheme organiser.

For this purpose the control in question may be through the medium of the acquiring company.

(3)The scheme must also require the new share options to be equivalent to the old options.

(4)For the new options to be regarded as equivalent to the old options—

(a)the shares to which they relate must meet the conditions in paragraphs 16 to [F229118] (types of share that may be used),

(b)they must be exercisable in the same manner as the old options and subject to the provisions of the scheme as it had effect immediately before the release of the old options,

(c)the total market value of the shares subject to the old options immediately before the release of those options by the participant must [F2292be substantially the same as] the total market value, immediately after the grant of the new options to the participant, of the shares subject to those options, and

(d)the total amount payable by the participant for the acquisition of shares under the new options must be [F2293substantially the same as] the total amount that would have been so payable under the old options.

(5)For the purposes of the CSOP code, new share options granted under the terms of a provision included in a scheme under paragraph 26 are to be treated as having been granted at the time when the corresponding old options were granted.

(6)This also applies for the purposes of the provisions of the scheme in their operation, after the grant of the new options, by virtue of a condition complying with sub-paragraph (4)(b).

[F2294(7)For the purposes of this paragraph the market value of shares subject to a restriction is to be determined as if they were not subject to the restriction.]

[F2295(8)For the purposes of this paragraph the market value of any shares is to be determined using a methodology agreed by Her Majesty's Revenue and Customs.]

Textual Amendments

F2291Word in Sch. 4 para. 27(4)(a) substituted (with effect in accordance with s. 16(8) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 16(5) (with s. 16(9)(10))

F2294Sch. 4 para. 27(7) inserted (with effect in accordance with Sch. 2 para. 77 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 73

Modifications etc. (not altering text)

C142Sch. 4 para. 27(5) excluded (24.9.2010 with effect in accordance with s. 39(3)-(9) of the amending Act) by Finance Act 2010 (c. 13), s. 39(8)

[F2296PART 7U.K.Notification of schemes, annual returns and enquiries

Textual Amendments

F2296Sch. 4 Pt. 7 substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 179, 204 (with Sch. 8 paras. 205-215)

Notice of scheme to be given to HMRCU.K.

28A(1)For a CSOP scheme to be a Schedule 4 CSOP scheme, notice of the scheme must be given to Her Majesty's Revenue and Customs (“HMRC”).U.K.

(2)The notice must—

(a)be given by the scheme organiser,

(b)contain, or be accompanied by, such information as HMRC may require, and

(c)contain a declaration within sub-paragraph (3) made by such persons as HMRC may require.

(3)A declaration within this sub-paragraph is a declaration—

(a)that the requirements of Parts 2 to 6 of this Schedule are met in relation to the scheme, and

(b)if the declaration is made after the first date on which share options are granted under the scheme (“the first grant date”), that those requirements—

(i)were met in relation to those grants of share options, and

(ii)have otherwise been met in relation to the scheme at all times on or after the first grant date when share options granted under the scheme are outstanding.

(4)If notice is given under this paragraph in relation to a CSOP scheme, for the purposes of the CSOP code the scheme is to be a Schedule 4 CSOP scheme at all times on and after the relevant date (but not before that date).

(5)But if the notice is given after the initial notification deadline, the scheme is to be a Schedule 4 CSOP scheme only from the beginning of the relevant tax year.

[F2297(5A)Sub-paragraph (5) does not apply if the scheme organiser satisfies HMRC (or, on an appeal under paragraph 28K, the tribunal) that there is a reasonable excuse for the failure to give notice on or before the initial notification deadline.

(5B)Paragraph 28C(9) (what constitutes a reasonable excuse) applies for the purposes of sub-paragraph (5A).

(5C)Where HMRC are required under sub-paragraph (5A) to consider whether there was a reasonable excuse, HMRC must notify the scheme organiser of their decision within the period of 45 days beginning with the day on which HMRC received the scheme organiser's request to consider the excuse.

(5D)Where HMRC are required to notify the scheme organiser as specified in sub-paragraph (5C) but do not do so—

(a)HMRC are to be treated as having decided that there was no reasonable excuse, and

(b)HMRC must notify the scheme organiser of the decision which they are treated as having made.]

(6)For the purposes of this Part—

  • “the initial notification deadline” is 6 July in the tax year following that in which the first grant date falls,

  • “outstanding”, in relation to a share option, means that the option—

    (a)

    has not been exercised, but

    (b)

    is capable of being exercised in accordance with the scheme (whether on the meeting of any condition or otherwise),

  • “the relevant date” is—

    (a)

    the date on which the declaration within sub-paragraph (3) is made, or

    (b)

    if that declaration is made after the first grant date, the first grant date, and

  • “the relevant tax year” is—

    (a)

    the tax year in which the notice under this paragraph is given, or

    (b)

    if that notice is given on or before 6 July in that tax year, the preceding tax year.

(7)Sub-paragraph (4) is subject to the following paragraphs of this Part.

Textual Amendments

F2297Sch. 4 para. 28A(5A)-(5D) inserted (with effect in accordance with Sch. 3 para. 5(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 5(2)

Annual returnsU.K.

28B(1)This paragraph applies if notice is given in relation to a CSOP scheme under paragraph 28A.U.K.

(2)The scheme organiser must give to HMRC a return for the tax year in which the relevant date falls and for each subsequent tax year (subject to sub-paragraph (9)).

(3)If paragraph 28A(5) applies in relation to the scheme, in sub-paragraph (2) the reference to the tax year in which the relevant date falls is to be read as a reference to the relevant tax year.

(4)A return for a tax year must—

(a)contain, or be accompanied by, such information as HMRC may require, and

(b)be given on or before 6 July in the following tax year.

(5)The information which may be required under sub-paragraph (4)(a) includes (in particular) information to enable HMRC to determine the liability to tax, including capital gains tax, of—

(a)any person who has participated in the scheme, or

(b)any other person whose liability to tax the operation of the scheme is relevant to.

(6)If during a tax year—

(a)an alteration is made in a key feature of the scheme, or

(b)variations are made under a provision made under paragraph 22(3) to take account of a variation in any share capital,

the return for the tax year must contain a declaration within sub-paragraph (7) made by such persons as HMRC may require.

(7)A declaration within this sub-paragraph is a declaration, as the case may be—

(a)that the alteration has, or

(b)that the variations have,

not caused the requirements of Parts 2 to 6 of this Schedule not to be met in relation to the scheme.

(8)For the purposes of sub-paragraph (6)(a) a “key feature” of a scheme is a provision of the scheme which is necessary in order for the requirements of Parts 2 to 6 of this Schedule to be met in relation to the scheme.

(9)A return is not required for any tax year following that in which the termination condition is met in relation to the scheme.

(10)For the purposes of this Part “the termination condition” is met in relation to a scheme when—

(a)all share options granted under the scheme—

(i)have been exercised, or

(ii)are no longer capable of being exercised in accordance with the scheme (because, for example, they have lapsed or been cancelled), and

(b)no more share options will be granted under the scheme.

(11)If the scheme organiser becomes aware that—

(a)anything which should have been included in, or should have accompanied, a return for a tax year was not included in, or did not accompany, the return,

(b)anything which should not have been included in, or should not have accompanied, a return for a tax year was included in, or accompanied, the return, or

(c)any other error or inaccuracy has occurred in relation to a return for a tax year,

the scheme organiser must give an amended return correcting the position to HMRC without delay.

28C(1)This paragraph applies if the scheme organiser fails to give a return for a tax year (containing, or accompanied by, all required information and declarations) on or before the date mentioned in paragraph 28B(4)(b) (“the date for delivery”).U.K.

(2)The scheme organiser is liable for a penalty of £100.

(3)If the scheme organiser's failure continues after the end of the period of 3 months beginning with the date for delivery, the scheme organiser is liable for a further penalty of £300.

(4)If the scheme organiser's failure continues after the end of the period of 6 months beginning with the date for delivery, the scheme organiser is liable for a further penalty of £300.

(5)The scheme organiser is liable for a further penalty under this sub-paragraph if—

(a)the scheme organiser's failure continues after the end of the period of 9 months beginning with the date for delivery,

(b)HMRC decide that such a penalty should be payable, and

(c)HMRC give notice to the scheme organiser specifying the period in respect of which the penalty is payable.

(The scheme organiser may be liable for more than one penalty under this sub-paragraph.)

(6)The penalty under sub-paragraph (5) is £10 for each day that the failure continues during the period specified in the notice under sub-paragraph (5)(c).

(7)The period specified in the notice under sub-paragraph (5)(c)—

(a)may begin earlier than the date on which the notice is given, but

(b)may not begin until after the end of the period mentioned in sub-paragraph (5)(a) or, if relevant, the end of any period specified in any previous notice under sub-paragraph (5)(c) given in relation to the failure.

(8)Liability for a penalty under this paragraph does not arise if the scheme organiser satisfies HMRC (or, on an appeal under paragraph 28K, the tribunal) that there is a reasonable excuse for its failure.

(9)For the purposes of sub-paragraph (8)—

(a)an insufficiency of funds is not a reasonable excuse, unless attributable to events outside the scheme organiser's control,

(b)where the scheme organiser relies on any other person to do anything, that is not a reasonable excuse unless the scheme organiser took reasonable care to avoid the failure, and

(c)where the scheme organiser had a reasonable excuse for the failure but the excuse ceased, the scheme organiser is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Notices and returns to be given electronically etcU.K.

28D(1)A notice under paragraph 28A, and any information accompanying the notice, must be given electronically.U.K.

(2)A return under paragraph 28B, and any information accompanying the return, must be given electronically.

(3)But, if HMRC consider it appropriate to do so, HMRC may allow the scheme organiser to give a notice or return or any accompanying information in another way; and, if HMRC do so, the notice, return or information must be given in that other way.

(4)The Commissioners for Her Majesty's Revenue and Customs—

(a)must prescribe how notices, returns and accompanying information are to be given electronically;

(b)may make different provision for different cases or circumstances.

28E(1)This paragraph applies if a return under paragraph 28B, or any information accompanying such a return—U.K.

(a)is given otherwise than in accordance with paragraph 28D, or

(b)contains a material inaccuracy—

(i)which is careless or deliberate, or

(ii)which is not corrected as required by paragraph 28B(11).

(2)The scheme organiser is liable for a penalty of an amount decided by HMRC.

(3)The penalty must not exceed £5,000.

(4)For the purposes of sub-paragraph (1)(b)(i) an inaccuracy is careless if it is due to a failure by the scheme organiser to take reasonable care.

EnquiriesU.K.

28F(1)This paragraph applies if notice is given in relation to a CSOP scheme under paragraph 28A.U.K.

(2)HMRC may enquire into the scheme if HMRC give notice to the scheme organiser of HMRC's intention to do so no later than—

(a)6 July in the tax year following that in which the initial notification deadline falls, or

(b)if the notice under paragraph 28A is given after the initial notification deadline, 6 July in the second tax year following the relevant tax year.

(3)HMRC may enquire into the scheme if HMRC give notice to the scheme organiser of HMRC's intention to do so no later than 12 months after the date on which a declaration within paragraph 28B(7) is given to HMRC.

(4)Sub-paragraph (5) applies if (at any time) HMRC have reasonable grounds for believing that requirements of Parts 2 to 6 of this Schedule—

(a)are not met in relation to the scheme, or

(b)have not been met in relation to the scheme.

(5)HMRC may enquire into the scheme if HMRC give notice to the scheme organiser of HMRC's intention to do so.

(6)Notice may be given, and an enquiry may be conducted, under sub-paragraph (2), (3) or (5) even though the termination condition is met in relation to the scheme.

28G(1)An enquiry under paragraph 28F(2), (3) or (5) is completed when HMRC give the scheme organiser a notice (a “closure notice”) stating—U.K.

(a)that HMRC have completed the enquiry, and

(b)that—

(i)paragraph 28H is to apply,

(ii)paragraph 28I is to apply, or

(iii)neither paragraph 28H nor paragraph 28I is to apply.

(2)If the scheme organiser receives notice under paragraph 28F(2), (3) or (5), the scheme organiser may make an application to the tribunal for a direction requiring a closure notice for the enquiry to be given within a specified period.

(3)The application is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act).

(4)The tribunal must give a direction unless satisfied that HMRC have reasonable grounds for not giving the closure notice within the specified period.

28H(1)This paragraph applies if HMRC decide—U.K.

(a)that requirements of Parts 2 to 6 of this Schedule—

(i)are not met in relation to the scheme, or

(ii)have not been met in relation to the scheme, and

(b)that the situation is, or was, so serious that this paragraph should apply.

(2)If this paragraph applies—

(a)the scheme is not to be a Schedule 4 CSOP scheme with effect from—

(i)such relevant time as is specified in the closure notice, or

(ii)if no relevant time is specified, the time of the giving of the closure notice, and

(b)the scheme organiser is liable for a penalty of an amount decided by HMRC.

(3)The penalty under sub-paragraph (2)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of—

(a)the total income tax for which persons who have been granted share options under the scheme have not been liable, or will not be liable in the future, and

(b)the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future,

in consequence of the scheme having been a Schedule 4 CSOP scheme at any relevant time before the time mentioned in sub-paragraph (2)(a)(i) or (ii) (as the case may be).

(4)In this paragraph “relevant time” means any time before the giving of the closure notice when requirements of Parts 2 to 6 of this Schedule were not met in relation to the scheme.

28I(1)This paragraph applies if HMRC decide—U.K.

(a)that requirements of Parts 2 to 6 of this Schedule—

(i)are not met in relation to the scheme, or

(ii)have not been met in relation to the scheme, but

(b)that the situation is not, or was not, so serious that paragraph 28H should apply.

(2)If this paragraph applies, the scheme organiser—

(a)is liable for a penalty of an amount decided by HMRC, and

(b)must, no later than 90 days after the relevant day, secure that the requirements of Parts 2 to 6 of this Schedule are met in relation to the scheme.

(3)The penalty under sub-paragraph (2)(a) must not exceed £5,000.

(4)In sub-paragraph (2)(b) “the relevant day” means—

(a)the last day of the period in which notice of an appeal under paragraph 28K(2)(b) may be given, or

(b)if notice of such an appeal is given, the day on which the appeal is determined or withdrawn.

(5)Sub-paragraph (2)(b) does not apply if the termination condition was met in relation to the scheme before the closure notice was given or is met before the end of the 90 day period mentioned in sub-paragraph (2)(b).

(6)If the scheme organiser fails to comply with sub-paragraph (2)(b), HMRC may give the scheme organiser a notice stating that that is the case (a “default notice”).

(7)If the scheme organiser is given a default notice—

(a)the scheme is not to be a Schedule 4 CSOP scheme with effect from—

(i)such relevant time as is specified in the default notice, or

(ii)if no relevant time is specified, the time of the giving of the default notice, and

(b)the scheme organiser is liable for a further penalty of an amount decided by HMRC.

(8)The penalty under sub-paragraph (7)(b) must not exceed an amount equal to twice HMRC's reasonable estimate of—

(a)the total income tax for which persons who have been granted share options under the scheme have not been liable, or will not be liable in the future, and

(b)the total contributions under Part 1 of SSCBA 1992 or SSCB(NI)A 1992 for which any persons have not been liable, or will not be liable in the future,

in consequence of the scheme having been a Schedule 4 CSOP scheme at any relevant time before the time mentioned in sub-paragraph (7)(a)(i) or (ii) (as the case may be).

(9)In this paragraph “relevant time” means any time before the giving of the default notice when requirements of Parts 2 to 6 of this Schedule were not met in relation to the scheme.

Assessment of penaltiesU.K.

28J(1)This paragraph applies if the scheme organiser is liable for a penalty under this Part.U.K.

(2)HMRC must assess the penalty and notify the scheme organiser of the assessment.

(3)Subject to sub-paragraphs (4) and (5), the assessment must be made no later than 12 months after the date on which the scheme organiser becomes liable for the penalty.

(4)In the case of a penalty under paragraph 28E(1)(b), the assessment must be made no later than—

(a)12 months after the date on which HMRC become aware of the inaccuracy, and

(b)6 years after the date on which the scheme organiser becomes liable for the penalty.

(5)In the case of a penalty under paragraph 28H(2)(b) or 28I(2)(a) or (7)(b) where notice of appeal is given under paragraph 28K(2) or (3), the assessment must be made no later than 12 months after the date on which the appeal is determined or withdrawn.

(6)A penalty payable under this Part must be paid—

(a)no later than 30 days after the date on which the notice under sub-paragraph (2) is given to the scheme organiser, or

(b)if notice of appeal is given against the penalty under paragraph 28K(1) or (4), no later than 30 days after the date on which the appeal is determined or withdrawn.

(7)The penalty may be enforced as if it were corporation tax or, if the scheme organiser is not within the charge to corporation tax, income tax charged in an assessment and due and payable.

(8)Sections 100 to 103 of TMA 1970 do not apply to a penalty under this Part.

AppealsU.K.

28K[F2298(A1)The scheme organiser may appeal against a decision of HMRC under paragraph 28A(5A) that there was no reasonable excuse for the failure to give notice on or before the initial notification deadline.]U.K.

(1)The scheme organiser may appeal against a decision of HMRC that the scheme organiser is liable for a penalty under paragraph 28C or 28E.

(2)The scheme organiser may appeal against—

(a)a decision of HMRC mentioned in paragraph 28H(1) or a decision of HMRC to specify, or not to specify, a relevant time in the closure notice;

(b)a decision of HMRC mentioned in paragraph 28I(1).

(3)The scheme organiser may appeal against a decision of HMRC—

(a)to give the scheme organiser a default notice under paragraph 28I;

(b)to specify, or not to specify, a relevant time in the default notice.

(4)The scheme organiser may appeal against a decision of HMRC as to the amount of a penalty payable by the scheme organiser under this Part.

(5)Notice of appeal must be given to HMRC no later than 30 days after the date on which—

[F2299(za)in the case of an appeal under sub-paragraph (A1), notice of HMRC's decision is given to the scheme organiser;]

(a)in the case of an appeal under sub-paragraph (1) or (4), the notice under paragraph 28J(2) is given to the scheme organiser;

(b)in the case of an appeal under sub-paragraph (2), the closure notice is given;

(c)in the case of an appeal under sub-paragraph (3), the default notice is given.

(6)On an appeal under sub-paragraph [F2300(A1),] (1) or (3)(a) which is notified to the tribunal, the tribunal may affirm or cancel the decision.

(7)On an appeal under sub-paragraph (2) or (3)(b) which is notified to the tribunal, the tribunal may—

(a)affirm or cancel the decision, or

(b)substitute for the decision another decision which HMRC had power to make.

(8)On an appeal under sub-paragraph (4) which is notified to the tribunal, the tribunal may—

(a)affirm the amount of the penalty decided, or

(b)substitute another amount for that amount.

(9)Subject to this paragraph and paragraph 28J, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to corporation tax or, if the scheme organiser is not within the charge to corporation tax, income tax.]

Textual Amendments

F2298Sch. 4 para. 28K(A1) inserted (with effect in accordance with Sch. 3 para. 5(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 5(3)(a)

F2299Sch. 4 para. 28K(5)(za) inserted (with effect in accordance with Sch. 3 para. 5(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 5(3)(b)

F2300Word in Sch. 4 para. 28K(6) inserted (with effect in accordance with Sch. 3 para. 5(4) of the amending Act) by Finance Act 2016 (c. 24), Sch. 3 para. 5(3)(c)

Part 8U.K.Supplementary provisions

Power to require informationU.K.

33[F2301(1)An officer of Revenue and Customs may by notice require a person to provide the officer with any information—U.K.

(a)which the officer reasonably requires for the performance of any functions of Her Majesty's Revenue and Customs or an officer of Revenue and Customs under the CSOP code, and

(b)which the person to whom the notice is addressed has or can reasonably obtain.]

(2)The power conferred by this paragraph extends, in particular, to—

(a)information to enable [F165an officer of Revenue and Customs]—

[F2302(i)to check anything contained in a notice under paragraph 28A or a return under paragraph 28B or to check any information accompanying such a notice or return, or”, and]

(ii)to determine the liability to tax, including capital gains tax, of any person who has participated in a scheme [F2303or any other person whose liability to tax the operation of a scheme is relevant to], and

(b)information about the administration of a scheme and any alteration of the terms of a scheme.

(3)The notice must require the information to be provided within a specified time, which must not end earlier than 3 months after the date when the notice is given.

Textual Amendments

F2301Sch. 4 para. 33(1) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 180(2), 204 (with Sch. 8 paras. 205-215)

F2302Sch. 4 para. 33(2)(a)(i) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 180(3)(a), 204 (with Sch. 8 paras. 205-215)

F2303Words in Sch. 4 para. 33(2)(a)(ii) inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 180(3)(b), 204 (with Sch. 8 paras. 205-215)

Jointly owned companiesU.K.

34(1)This paragraph applies for the purposes of the provisions of the CSOP code relating to group schemes.U.K.

(2)Each joint owner of a jointly owned company is to be treated as controlling every company within sub-paragraph (3).

(3)The companies within this sub-paragraph are—

(a)the jointly owned company, and

(b)any company controlled by that company.

(4)However, no company within sub-paragraph (3) may be—

(a)a constituent company in more than one group scheme, or

(b)a constituent company in a particular group scheme if another company within that sub-paragraph is a constituent company in a different group scheme.

(5)In this paragraph a “jointly owned company” means a company which (apart from sub-paragraph (2)) is not controlled by any one person and—

(a)of which 50% of the issued share capital is owned by one person and 50% by another, or

(b)which is otherwise controlled by two persons taken together.

(6)In this paragraph “joint owner” means one of the persons mentioned in sub-paragraph (5)(a) or (b).

Meaning of “associated company”U.K.

35(1)For the purposes of the CSOP code one company is an “associated company” of another company at a given time if, at that time or at any other time within one year previously—U.K.

(a)one has control of the other, or

(b)both are under the control of the same person or persons.

(2)For the purposes of sub-paragraph (1) the question whether a person controls a company is to be determined in accordance with [F2304sections 450 and 451 of CTA 2010].

Textual Amendments

F2304Words in Sch. 4 para. 35(2) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 398(4) (with Sch. 2)

[F2305Non-UK company reorganisation arrangementsU.K.

Textual Amendments

35ZA(1)For the purposes of the CSOP code a “non-UK company reorganisation arrangement” is an arrangement made in relation to a company under the law of a territory outside the United Kingdom—U.K.

(a)which gives effect to a reorganisation of the company's share capital by the consolidation of shares of different classes, or by the division of shares into shares of different classes, or by both of those methods, and

(b)which is approved by a resolution of members of the company.

(2)A resolution does not count for the purposes of sub-paragraph (1)(b) unless the members who vote in favour of approving the arrangement represent more than 50% of the total voting rights of all the members having the right to vote on the issue.]

[F2306Retirement age]U.K.

Textual Amendments

F2306 Sch. 4 para. 35A and cross-heading inserted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 21 para. 15(2)

F230735AU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2307Sch. 4 para. 35A omitted (17.7.2013) by virtue of Finance Act 2013 (c. 29), Sch. 2 para. 15 (with Sch. 2 para. 17)

Minor definitionsU.K.

36(1)In the CSOP code—U.K.

  • “company” means a body corporate;

  • “market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act.

(2)For the purposes of the CSOP code a company is a member of a consortium owning another company if it is one of a number of companies—

(a)which between them beneficially own not less than 75% of the other company’s ordinary share capital, and

(b)each of which beneficially owns not less than 5% of that capital.

[F2308(3)For the purposes of the CSOP code—

(a)shares are subject to a “restriction” if there is any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) of section 423 (restricted securities) would apply if the references in those subsections to the employment-related securities were to the shares, and

(b)the “restriction” is that provision.]

Textual Amendments

F2308Sch. 4 para. 36(3) inserted (with effect in accordance with Sch. 2 para. 77 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 75

Index of defined expressionsU.K.

37U.K.In the CSOP code the following expressions are defined or otherwise explained by the provisions indicated below:

F2309. . .F2309. . .
associated companyparagraph 35(1)
child [F2310section 721(6)]
close company [F2311section 989 of ITA 2007], (and see paragraph 9(4))
companyparagraph 36(1)
connected personsection 718
constituent companyparagraph 3(3)
controlsection 719 (and see paragraph 35(2))
the CSOP codesection 521(3)
CSOP schemesection 521(4)
distribution [F2312section 989 of ITA 2007]
eligible shares (in Part 4 of this Schedule)paragraph 15(2)
employee and employmentsection 4
group schemeparagraph 3(2) (and see paragraph 34)
F2313. . .F2313. . .
market valueparagraph 36(1)
member of a consortiumparagraph 36(2)
[F2314non-UK company reorganisation arrangement paragraph 35ZA]
notice [F2315section 989 of ITA 2007]
the options (in relation to a participant)paragraph 2(2)
ordinary share capital [F2316section 989 of ITA 2007]
participantparagraph 2(2)
participateparagraph 2(2)
personal representatives [F2317section 989 of ITA 2007]
recognised stock exchange [F2318section 1005 of ITA 2007]
[F2319restriction (in relation to shares) paragraph 36(3)]
[F2314Schedule 4 CSOP scheme paragraph 1 and Part 7 of this Schedule]
the scheme organiserparagraph 2(2)
share optionsection 521(4)
sharessection 521(4)
[F2320tribunal section 989 of ITA 2007]
F2321. . .F2321. . .
F2322. . .F2322. . .

Textual Amendments

F2309Words in Sch. 4 para. 37 omitted (6.4.2014) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 182(a), 204 (with Sch. 8 paras. 205-215)

F2310Words in Sch. 4 para. 37 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(a) (with Sch. 2)

F2311Words in Sch. 4 para. 37 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(b) (with Sch. 2)

F2312Words in Sch. 4 para. 37 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(c) (with Sch. 2)

F2314Words in Sch. 4 para. 37 inserted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 182(b), 204 (with Sch. 8 paras. 205-215)

F2315Words in Sch. 4 para. 37 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(d) (with Sch. 2)

F2316Words in Sch. 4 para. 37 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(e) (with Sch. 2)

F2317Words in Sch. 4 para. 37 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(f) (with Sch. 2)

F2318Words in Sch. 4 para. 37 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(g) (with Sch. 2)

F2319Words in Sch. 4 para. 37 inserted (with effect in accordance with Sch. 2 para. 77 of the amending Act) by Finance Act 2013 (c. 29), Sch. 2 para. 76

F2322Words in Sch. 4 para. 37 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 449(h), Sch. 3 Pt. 1 (with Sch. 2)

Section 527

SCHEDULE 5U.K.Enterprise management incentives

Part 1U.K.Introduction

Enterprise management incentives: qualifying optionsU.K.

1(1)This Schedule makes provision for establishing what is a qualifying option for the purposes of the EMI code.U.K.

(2)In the EMI code a “qualifying option” means (in accordance with section 527(4)) a share option—

(a)in relation to which the requirements of this Schedule are met at the time when the option is granted, and

(b)which is notified to [F165an officer of Revenue and Customs] in accordance with Part 7.

(3)The requirements of this Schedule are—

(a)the general requirements in Part 2,

(b)that the company whose shares are the subject of the option (“the relevant company”) is a qualifying company (see Part 3),

(c)that the individual to whom it is granted is an eligible employee in relation to that company (see Part 4),

(d)that the option is granted to the employee by reason of the employee’s employment—

(i)with that company, or

(ii)if that company is a parent company, with that company or another member of the group, and

(e)the requirements of Part 5 as to the terms of the option, the types of shares that may be subject to it, and other matters.

(4)In the EMI code, as it applies to a share option, “the appropriate time” means the time when the option is granted.

Textual Amendments

Meaning of “the relevant company” and “the employer company”U.K.

2U.K.In the EMI code, in relation to a share option—

  • “the relevant company” means (in accordance with paragraph 1(3)(b)) the company whose shares are subject to the option;

  • “the employer company” means the company by reference to which the requirement in paragraph 1(3)(d) (the employment requirement) is met.

Part 2U.K.General requirements

General requirements: introductionU.K.

3U.K.A share option is not a qualifying option unless the requirements of this Part of this Schedule as to the following are met at the appropriate time—

  • the purpose for which the option is granted (see paragraph 4),

  • the maximum entitlement of an employee (see paragraphs 5 and 6),

  • the maximum value of the relevant company’s shares in respect of which unexercised options can exist (see paragraph 7).

Purpose of granting the optionU.K.

4U.K.To be a qualifying option a share option must be granted for commercial reasons in order to recruit or retain an employee in a company, and not as part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.

Maximum entitlement of employee: financial limit on unexercised optionsU.K.

5(1)An employee may not hold unexercised qualifying options which—U.K.

(a)are in respect of shares with a total value of more than [F2323£250,000] , and

(b)were granted by reason of the employee’s employment—

(i)with one company, or

(ii)with two or more companies which are members of the same group of companies.

(2)A share option cannot be a qualifying option if the limit in sub-paragraph (1) is already exceeded at the time when it is granted.

(3)If the grant of a share option causes that limit to be exceeded, the option cannot be a qualifying option so far as it relates to the excess.

(4)Where, at the time when a share option is granted to an employee (“E”), E holds unexercised CSOP options granted by reason of E’s employment—

(a)with the employer company, or

(b)if it is a member of a group of companies, with any member of that group,

those options are to be treated for the purposes of this paragraph as if they were unexercised qualifying options.

(5)A “CSOP option” is an option to acquire shares under a scheme [F2324which is a Schedule 4 CSOP scheme (see Schedule 4)].

(6)For the purposes of this paragraph—

(a)“the value” of shares in respect of which a particular share option is or has been granted means the market value, at the time when the option is or was granted, of issued shares of the same class as those that may be acquired by exercise of the option; and

(b)a share option is to be treated as granted in respect of the maximum number of shares that may be acquired under it.

[F2325(7)For the purposes of this paragraph the market value of restricted shares is to be determined as if they were not.

(8)Shares are “restricted shares” if there is any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) of section 423 (restricted securities) would apply if the references in those subsections to the employment-related securities were to the shares.]

Textual Amendments

F2324Words in Sch. 5 para. 5(5) substituted (6.4.2014) by Finance Act 2014 (c. 26), Sch. 8 paras. 203, 204 (with Sch. 8 paras. 205-215)

F2325Sch. 5 para. 5(7)(8) substituted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 45(2)(4); S.I. 2003/1997, art. 2

Maximum entitlement of employee: further limit of 3 yearsU.K.

6(1)Sub-paragraph (2) applies if an employee (“E”) has already been granted, by reason of E’s employment with one company, qualifying options in respect of shares with a total value of [F2326£250,000] .U.K.

(2)Any further option granted by reason of E’s employment—

(a)with that company, or

(b)if it is a member of a group of companies, with any member of that group,

within the 3-year restriction period cannot be a qualifying option.

(3)Sub-paragraph (4) applies if an employee (“E”) has already been granted, by reason of E’s employment with two or more companies which are members of the same group of companies, qualifying options in respect of shares with a total value of [F2327£250,000] .

(4)Any further option granted, by reason of E’s employment with any member of that group, within the 3-year restriction period cannot be a qualifying option.

(5)Sub-paragraph (2) or (4) applies whether or not the qualifying options already granted have been exercised or released.

(6)In those sub-paragraphs “the 3-year restriction period” means the period of three years after the date of the grant of the last qualifying option.

(7)Paragraph 5(6) to (8) (determination of value of shares) apply for the purposes of this paragraph as they apply for the purposes of paragraph 5.

Textual Amendments

Maximum value of options in respect of relevant company’s sharesU.K.

7(1)The total value of shares in the relevant company in respect of which unexercised qualifying options exist must not exceed £3 million.U.K.

(2)A share option cannot be a qualifying option if the limit in sub-paragraph (1) is already exceeded at the time when it is granted.

(3)If the grant of a share option causes that limit to be exceeded, the option cannot be a qualifying option so far as it relates to the excess.

(4)If the grant of two or more options at the same time causes that limit to be exceeded, sub-paragraph (5) applies.

(5)For the purpose of determining which part of each option relates to the excess, the amount of the excess is to be divided pro rata among the options according to the value of the shares in respect of which each option was granted.

(6)Paragraph 5(6) to (8) (determination of value of shares) apply for the purposes of this paragraph as they apply for the purposes of paragraph 5.

Part 3U.K.Qualifying companies

Qualifying companies: introductionU.K.

8U.K.A “qualifying company” is a company in relation to which the requirements of this Part of this Schedule as to the following are met at the appropriate time—

  • independence (see paragraph 9),

  • having only qualifying subsidiaries (see paragraphs 10 and 11),

  • [F2328property managing subsidiaries (see paragraphs 11A and 11B),]

  • gross assets (see paragraph 12), F2329...

  • [F2330number of employees (see paragraph 12A), F2331...]

  • trading activities (see paragraphs 13 and 14, read with paragraphs 15 to 23)[F2332, and

  • UK permanent establishment (see paragraph 14A).]

Textual Amendments

F2328Words in Sch. 5 para. 8 inserted (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(2)

F2329Word in Sch. 5 para. 8 omitted (with effect in accordance with s. 33(6) of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 33(2)

F2330Words in Sch. 5 para. 8 inserted (with effect in accordance with s. 33(6) of the amending Act) by Finance Act 2008 (c. 9), s. 33(2)

F2331Word in Sch. 5 para. 8 omitted (with effect in accordance with s. 6(5) of the amending Act) by virtue of Finance (No. 3) Act 2010 (c. 33), s. 6(2)

F2332Words in Sch. 5 para. 8 inserted (with effect in accordance with s. 6(5) of the amending Act) by Finance (No. 3) Act 2010 (c. 33), s. 6(2)

The independence requirementU.K.

9(1)The independence requirement consists of two conditions.U.K.

(2)The first condition is that the company is not—

(a)a 51% subsidiary of another company, or

(b)a company which is under the control of—

(i)another company, or

(ii)another company and any other person connected with that other company,

without being a 51% subsidiary of that other company.

(3)The second condition is that no arrangements are in existence by virtue of which the company could become such a subsidiary or fall under such control.

(4)Arrangements with a view to a qualifying exchange of shares (see paragraph 40) do not count for the purposes of the second condition.

[F2333(5)But the independence requirement is treated as met if the company is subject to an employee-ownership trust (within the meaning of paragraph 27(4) to (6) of Schedule 2).]

Textual Amendments

F2333Sch. 5 para. 9(5) inserted (1.10.2014) by Finance Act 2014 (c. 26), Sch. 37 para. 22(1)(2); S.I. 2014/2461, art. 2

The qualifying subsidiaries requirementU.K.

10(1)A company that has one or more subsidiaries is not a qualifying company unless every subsidiary of the company is a qualifying subsidiary (see paragraph 11).U.K.

[F2334(2)In this paragraph “subsidiary” means any company which the company controls, either on its own or together with any person connected with it.

(3)For the purpose of sub-paragraph (2), the question whether a person controls a company is to be determined in accordance with [F2335sections 450 and 451 of CTA 2010] (“control” in the context of close companies).]

Textual Amendments

F2334Sch. 5 para. 10(2)(3) substituted for Sch. 5 para. 10(2) (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(3)

F2335Words in Sch. 5 para. 10(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(2) (with Sch. 2)

Meaning of “qualifying subsidiary”U.K.

11(1)A company (“the subsidiary”) is a qualifying subsidiary of a company (“the holding company”) if the following conditions are met.U.K.

(2)The conditions are—

F2336(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2336(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2336(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F2337(ca)that the subsidiary is a 51% subsidiary of the holding company;]

(d)that no person other than the holding company [F2338or another of its subsidiaries] has control of the subsidiary; and

(e)that no arrangements are in existence by virtue of which [F2339either of the conditions in paragraphs (ca) and] (d) would cease to be met.

F2340(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Sub-paragraph (5) applies at a time when the subsidiary or another company is being wound up.

(5)The subsidiary is not to be regarded as having ceased, on account of the winding up, to be a company in relation to which the conditions in sub-paragraph (2) are met if—

(a)the conditions in that sub-paragraph would be met apart from the winding up, and

(b)the winding up is for commercial reasons and is not part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.

(6)Sub-paragraph (7) applies at a time when arrangements are in existence for the disposal by—

(a)the holding company, or

(b)another subsidiary of the holding company,

of all of its interest in the subsidiary.

(7)The subsidiary is not to be regarded as having ceased, on account of those arrangements, to be a company in relation to which the conditions in sub-paragraph (2) are met if the disposal is to be for commercial reasons and is not to be part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.

[F2341(8)Sub-paragraph (9) applies at a time when the subsidiary or another company is in administration or receivership.

(9)The subsidiary is not to be regarded, by reason only of anything done as a consequence of the company concerned being in administration or receivership, as having ceased to be a company in relation to which the conditions in sub-paragraph (2) are met if—

(a)the entry into administration or receivership, and

(b)everything done as a consequence of the company concerned being in administration or receivership,

is for commercial reasons and is not part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.

(10)[F2342Section 252 of ITA 2007] (meaning of being in administration or receivership) applies for the purposes of sub-paragraphs (8) and (9) as it applies for the purposes of [F2343Part 5 of ITA 2007] (enterprise investment scheme).]

Textual Amendments

F2336Sch. 5 para. 11(2)(a)-(c) repealed (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(4)(a), Sch. 42 Pt. 2(13)

F2337Sch. 5 para. 11(2)(ca) inserted (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(4)(b)

F2338Words in Sch. 5 para. 11(2)(d) inserted (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(4)(c)

F2339Words in Sch. 5 para. 11(2)(e) substituted (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(4)(d)

F2340Sch. 5 para. 11(3) repealed (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(4)(e), Sch. 42 Pt. 2(13)

F2341Sch. 5 para. 11(8)-(10) inserted (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(4)(f)

F2342Words in Sch. 5 para. 11(10) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(2)(a) (with Sch. 2)

F2343Words in Sch. 5 para. 11(10) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(2)(b) (with Sch. 2)

[F2344The property managing subsidiaries requirementU.K.

Textual Amendments

F2344Sch. 5 paras. 11A, 11B and cross-headings inserted (with effect in accordance with s. 96(6) of the amending Act) by Finance Act 2004 (c. 12), s. 96(5)

11A(1)A company is not a qualifying company if it has a property managing subsidiary which is not a qualifying 90% subsidiary of the company (see paragraph 11B).U.K.

(2)“Property managing subsidiary” means a qualifying subsidiary of a company whose business consists wholly or mainly in the holding or managing of land or any property deriving its value from land.

[F2345(3)In sub-paragraph (2) “property deriving its value from land” has the meaning given by section 188(3) of ITA 2007.]

Textual Amendments

F2345Sch. 5 para. 11A(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(3) (with Sch. 2)

Meaning of “qualifying 90% subsidiary”U.K.

11B(1)A company (“the subsidiary”) is a qualifying 90% subsidiary of a company (“the holding company”) if the following conditions are met.U.K.

(2)The conditions are—

(a)that the holding company possesses not less than 90% of the issued share capital of, and not less than 90% of the voting power in, the subsidiary;

(b)that the holding company would—

(i)in the event of a winding up of the subsidiary, or

(ii)in any other circumstances,

be beneficially entitled to not less than 90% of the assets of the subsidiary which would then be available for distribution to the shareholders of the subsidiary;

(c)that the holding company is beneficially entitled to not less than 90% of any profits of the subsidiary which are available for distribution to the shareholders of the subsidiary;

(d)that no person other than the holding company has control of the subsidiary; and

(e)that no arrangements are in existence by virtue of which any of the conditions in paragraphs (a) to (d) would cease to be met.

(3)Sub-paragraphs (4) to (10) of paragraph 11 (but not sub-paragraph (6)(b)) apply in relation to the conditions in sub-paragraph (2) above as they apply in relation to the conditions in sub-paragraph (2) of that paragraph.]

The gross assets requirementU.K.

12(1)The gross assets requirement in the case of a single company is that the value of the company’s gross assets does not exceed £30 million.U.K.

(2)The gross assets requirement in the case of a parent company is that the value of the group assets does not exceed £30 million.

(3)The “value of the group assets” means the aggregate of the values of the gross assets of each of the members of the group, disregarding any that consist in rights against, or shares in or securities of, another member of the group.

[F2346The number of employees requirementU.K.

Textual Amendments

F2346Sch. 5 para. 12A and cross-heading inserted (with effect in accordance with s. 33(6) of the amending Act) by Finance Act 2008 (c. 9), s. 33(3)

12A(1)The number of employees requirement in the case of a single company is that the full-time equivalent employee number for it is less than 250.U.K.

(2)The number of employees requirement in the case of a parent company is that the sum of—

(a)the full-time equivalent employee number for it, and

(b)the full-time equivalent employee numbers for each of its qualifying subsidiaries,

is less than 250.

(3)The full-time equivalent employee number for a company is calculated as follows—

Step 1

Find the number of full-time employees of the company.

Step 2

Add, for each employee of the company who is not a full-time employee, such fraction as is just and reasonable.

The result is the full-time equivalent employee number.

(4)In this paragraph references to an employee—

(a)include a director, but

(b)do not include—

(i)an employee on maternity [F2347, paternity [F2348, shared parental [F2349, parental bereavement or neonatal care]]] leave, or

(ii)a student on vocational training.]

Textual Amendments

F2347Words in Sch. 5 para. 12A(4)(b)(i) substituted (1.12.2014) by Children and Families Act 2014 (c. 6), s. 139(6), Sch. 7 para. 63(2); S.I. 2014/1640, art. 5(2)(aa)

F2348Words in Sch. 5 para. 12A(4)(b)(i) substituted (18.1.2020) by Parental Bereavement (Leave and Pay) Act 2018 (c. 24), s. 2(2), Sch. para. 61(1)(a); S.I. 2020/45, reg. 2

F2349Words in Sch. 5 para. 12A(4)(b)(i) substituted (17.1.2025) by Neonatal Care (Leave and Pay) Act 2023 (c. 20), s. 3(3), Sch. para. 48(2); S.I. 2025/41, reg. 2

The trading activities requirement: single companyU.K.

13(1)The trading activities requirement in the case of a single company is that the company—U.K.

(a)disregarding any purposes within sub-paragraph (2), exists wholly for the purpose of carrying on one or more qualifying trades, and

(b)is carrying on a qualifying trade or preparing to do so.

(2)The purposes referred to in sub-paragraph (1)(a) are—

(a)the holding and managing of property used by the company for one or more qualifying trades carried on by it, and

(b)any purposes having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities.

(3)This paragraph is supplemented by paragraph 15 (meaning of “qualifying trade”) read with paragraphs 16 to 23 (excluded activities).

The trading activities requirement: parent companyU.K.

14(1)The trading activities requirement in the case of a parent company is that—U.K.

(a)at least one group company—

(i)disregarding any purposes within sub-paragraph (4), exists wholly for the purpose of carrying on one or more qualifying trades, and

(ii)is carrying on a qualifying trade or preparing to do so, and

(b)the business of the group does not consist (either wholly or as to a substantial part) in the carrying on of non-qualifying activities.

(2)The “business of the group” means what would be the business of the group if the activities of the group companies taken together were regarded as one business.

(3)For the purpose of determining the business of a group, activities of a group company are to be disregarded to the extent that they consist in—

(a)the holding of shares in or securities of, or the making of loans to, another group company,

(b)the holding and managing of property used by a group company for the purposes of one or more qualifying trades carried on by a group company, or

(c)incidental activities of a company which meets the trading activities requirement for a single company (see paragraph 13).

(4)The purposes referred to in sub-paragraph (1)(a)(i) are—

(a)the carrying on of any activities within sub-paragraph (3), and

(b)any purposes having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities.

(5)In this paragraph—

(a)“group company” means any member of the group;

(b)“incidental activities” means activities carried on in pursuance of purposes having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities;

(c)“non-qualifying activities” means—

(i)excluded activities, or

(ii)activities carried on otherwise than in the course of a trade.

(6)This paragraph is supplemented by paragraph 15 (meaning of “qualifying trade”) read with paragraphs 16 to 23 (excluded activities).

[F2350 The UK permanent establishment requirement U.K.

Textual Amendments

F2350Sch. 5 para. 14A and cross-heading inserted (with effect in accordance with s. 6(5) of the amending Act) by Finance (No. 3) Act 2010 (c. 33), s. 6(3)

14A(1)The UK permanent establishment requirement is met if condition A or B is met.U.K.

(2)Condition A is that the company has a permanent establishment in the United Kingdom.

(3)Condition B is that—

(a)the company is a parent company, and

(b)any other member of the group—

(i)meets the conditions in paragraph 14(1)(a) (trading activities requirement), and

(ii)has a permanent establishment in the United Kingdom.]

Meaning of “qualifying trade”U.K.

15(1)A trade is a qualifying trade if—U.K.

F2351(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)it is conducted on a commercial basis and with a view to the realisation of profits, and

(c)it does not consist (either wholly or as to a substantial part) in the carrying on of excluded activities.

(2)The carrying on of activities of research and development from which it is intended that a connected qualifying trade will be derived or benefit counts as the carrying on of a qualifying trade.

(3)But preparing to carry on such activities does not count as preparing to carry on a qualifying trade.

(4)In sub-paragraph (2) “connected qualifying trade” means a qualifying trade carried on—

(a)by the company carrying on the activities of research and development, or

(b)if that company is a member of a group, by any other member of the group.

Textual Amendments

F2351Sch. 5 para. 15(1)(a) omitted (with effect in accordance with s. 6(5) of the amending Act) by virtue of Finance (No. 3) Act 2010 (c. 33), s. 6(4)

Excluded activitiesU.K.

16U.K.The following are excluded activities—

(a)dealing in land, in commodities or futures or in shares, securities or other financial instruments;

(b)dealing in goods otherwise than in the course of an ordinary trade of wholesale or retail distribution (see also paragraph 17);

(c)banking, insurance, money-lending, debt-factoring, hire-purchase financing or other financial activities;

(d)leasing, including letting ships on charter or other assets on hire (see also paragraph 18);

(e)receiving royalties or licence fees (see also paragraph 19);

(f)providing legal or accountancy services;

(g)property development (see also paragraph 20);

(h)farming or market gardening;

(i)holding, managing or occupying woodlands, any other forestry activities or timber production;

[F2352(ia)shipbuilding (see also paragraph 20A);

(ib)producing coal (see also paragraph 20B);

(ic)producing steel (see also paragraph 20C);]

(j)operating or managing hotels or comparable establishments, or managing property used as a hotel or comparable establishment (see also paragraph 21);

(k)operating or managing nursing homes or residential care homes, or managing property used as a nursing home or residential care home (see also paragraph 22);

(l)any activities which are excluded activities under paragraph 23.

Textual Amendments

F2352Sch. 5 para. 16(ia)-(ic) inserted (with effect in accordance with s. 33(6) of the amending Act) by Finance Act 2008 (c. 9), s. 33(4)

Excluded activities: wholesale and retail distributionU.K.

17(1)This paragraph supplements paragraph 16(b).U.K.

(2)A trade of wholesale distribution is one in which the goods are offered for sale and sold to persons—

(a)for resale by them, or

(b)for processing and resale by them,

to members of the general public for their use or consumption.

(3)A trade of retail distribution is one in which the goods are offered for sale and sold to members of the general public for their use or consumption.

(4)A trade is not an ordinary trade of wholesale or retail distribution if—

(a)it consists, to a substantial extent—

(i)in dealing in goods of a kind which are collected or held as an investment, or

(ii)in that activity and any other excluded activity taken together, and

(b)a substantial proportion of those goods are held by the company for a period which is significantly longer than the period for which a vendor would reasonably be expected to hold them while endeavouring to dispose of them at their market value.

(5)In determining whether a trade carried on by any person (“P”) is an ordinary trade of wholesale or retail distribution, consideration must be given to the extent to which it has the following features—

(a)the goods are bought by P in quantities larger than those in which P sells them;

(b)the goods are bought and sold by P in different markets;

(c)P employs staff and incurs expenses in the trade in addition—

(i)to the cost of the goods, and

(ii)in the case of a trade carried on by a company, to any remuneration paid to any person connected with it;

(d)there are purchases or sales from or to persons who are connected with P;

(e)purchases are matched with forward sales or vice versa;

(f)the goods are held by P for longer than is normal for goods of the kind in question;

(g)the trade is carried on otherwise than at a place or places commonly used for wholesale or retail trade;

(h)P does not take physical possession of the goods.

(6)The features in sub-paragraph (5)(a) to (c) are indications that the trade is such an ordinary trade.

(7)Those in sub-paragraph (5)(d) to (h) are indications to the contrary.

Excluded activities: leasing of certain shipsU.K.

18(1)This paragraph supplements paragraph 16(d) so far as it relates to the leasing of ships other than [F2353offshore installations] or pleasure craft.U.K.

(2)In the following provisions “ship” accordingly means a ship other than an [F2354offshore installation] or a pleasure craft.

(3)If the requirements of sub-paragraph (4) are met, a trade is not to be regarded as consisting in the carrying on of excluded activities within paragraph 16(d) as a result only of its consisting in the letting of ships on charter.

(4)The requirements of this sub-paragraph are that—

(a)every ship let on charter by the company carrying on the trade is beneficially owned by the company;

(b)every ship beneficially owned by the company is registered in the United Kingdom;

(c)the company is solely responsible for arranging the marketing of the services of its ships; and

(d)the conditions mentioned in sub-paragraph (5) are satisfied in relation to every letting of a ship on charter by the company.

(5)The conditions are that—

(a)the letting is for a period not exceeding 12 months and no provision is made at any time (in the charterparty or otherwise) for extending it beyond that period otherwise than at the option of the charterer;

(b)during the period of the letting there is no provision in force (as a result of being contained in the charterparty or otherwise) for the grant of a new letting to end, otherwise than at the option of the charterer, more than 12 months after that provision is made;

(c)the letting is by way of a bargain made at arm’s length between the company and a person who is not connected with it;

(d)under the terms of the charter the company is responsible as principal—

(i)for taking, throughout the period of the charter, management decisions in relation to the ship, other than those of a kind generally regarded by persons engaged in trade of the kind in question as matters of husbandry, and

(ii)for defraying all expenses in connection with the ship throughout that period, or substantially all such expenses, other than those directly incidental to a particular voyage or to the employment of the ship during that period; and

(e)no arrangements exist as a result of which a person other than the company may be appointed to be responsible for the matters mentioned in paragraph (d) on behalf of the company.

(6)If in the case of a letting by the company carrying on the trade (“the letting company”) the charterer is also a company and—

(a)the charterer is a qualifying subsidiary of the letting company, or

(b)the letting company is a qualifying subsidiary of the charterer, or

(c)both companies are qualifying subsidiaries of a third company,

sub-paragraph (5) has effect with the omission of paragraph (c).

(7)Where any of the requirements in sub-paragraph (4) is not met in relation to any lettings, the trade is not, as a result, to be treated as consisting in the carrying on of excluded activities if those lettings and any other excluded activities do not, taken together, amount to a substantial part of the trade.

(8)In this paragraph—

  • F2355. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • “pleasure craft” means any ship of a kind primarily used for sport or recreation.

Textual Amendments

F2353Words in Sch. 5 para. 18(1) substituted (with effect in accordance with Sch. 27 para. 17(6)(7) of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 17(2)

F2354Words in Sch. 5 para. 18(2) substituted (with effect in accordance with Sch. 27 para. 17(6)(7) of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 17(3)

F2355Words in Sch. 5 para. 18(8) repealed (with effect in accordance with Sch. 27 para. 17(6)(7) of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 17(4), Sch. 42 Pt. 2(19)

Excluded activities: receipt of royalties or licence feesU.K.

19(1)This paragraph supplements paragraph 16(e) (receipt of royalties or licence fees).U.K.

(2)If the requirement of sub-paragraph (3) is met, a trade is not to be regarded as consisting in the carrying of excluded activities within paragraph 16(e) as a result only of its consisting to a substantial extent in the receiving of royalties or licence fees.

(3)The requirement of this sub-paragraph is that the royalties or licence fees (or all of them except for a part that is not substantial in terms of value) are attributable to the exploitation of relevant intangible assets.

(4)For this purpose a “relevant intangible asset” is an intangible asset the whole or greater part of which (in terms of value) has been created—

[F2356(a)by the relevant company, or

(b)by a company which was a qualifying subsidiary of the relevant company throughout a period during which it created the whole or greater part (in terms of value) of the intangible asset.]

(5)In the case of an intangible asset which is intellectual property, any reference in sub-paragraph (4) to the creation of the asset by a company is to its creation in circumstances in which the right to exploit it vests in the company (either alone or jointly with others).

(6)In sub-paragraph (5) “intellectual property” means—

(a)any patent, trade mark, registered design, copyright, design right, performer’s right or plant breeder’s right; or

(b)any rights under the law of a country or territory outside the United Kingdom which correspond or are similar to those falling within paragraph (a).

(7)In this paragraph “intangible asset” means any asset which falls to be treated as an intangible asset in accordance with generally accepted accounting practice.

[F2357(8)If—

(a)the relevant company acquired all the shares (“old shares”) in another company (“the old company”) at a time when the only shares issued in the relevant company were subscriber shares, and

(b)the consideration for the old shares consisted wholly of the issue of shares in the relevant company,

references in sub-paragraph (4) to the relevant company include the old company.]

Textual Amendments

F2356Sch. 5 para. 19(4)(a)(b) substituted (with effect in accordance with s. 61(2)-(6) of the amending Act) by Finance Act 2007 (c. 11), s. 61(1)(a)

F2357Sch. 5 para. 19(8) inserted (with effect in accordance with s. 61(2)-(6) of the amending Act) by Finance Act 2007 (c. 11), s. 61(1)(b)

Excluded activities: property developmentU.K.

20(1)This paragraph supplements paragraph 16(g).U.K.

(2)“Property development” means the development of land—

(a)by a company which has, or at any time has had, an interest in the land, and

(b)with the sole or main object of realising a gain from the disposal of an interest in the land when it is developed.

(3)For this purpose “interest in land” means—

(a)any estate, interest or right in or over land, including any right affecting the use or disposition of land, or

(b)any right to obtain such an estate, interest or right from another which is conditional on the other’s ability to grant it.

(4)References in this paragraph to an interest in land do not, however, include—

(a)the interest of a creditor (other than a creditor in respect of a rentcharge) whose debt is secured by way of mortgage, an agreement for a mortgage or a charge of any kind over land, or

(b)in the case of land in Scotland, the interest of a creditor in a charge or security of any kind over land.

[F2358Excluded activities: shipbuildingU.K.

Textual Amendments

F2358Sch. 5 paras. 20A-20C and cross-heading inserted (with effect in accordance with s. 33(6) of the amending Act) by Finance Act 2008 (c. 9), s. 33(5)

20AU.K.In paragraph 16(ia) “shipbuilding” has the same meaning as in the Framework on state aid to shipbuilding (2003/C 317/06), published in the Official Journal on 30 December 2003.

Excluded activities: producing coalU.K.

20B(1)This paragraph supplements paragraph 16(ib).U.K.

(2)“Coal” has the meaning given by Article 2 of Council Regulation (EC) No. 1407/2002 (state aid to coal industry).

(3)The production of coal includes the extraction of it.

Excluded activities: producing steelU.K.

20CU.K.In paragraph 16(ic) “steel” means any of the steel products listed in Annex 1 to the Guidelines on national regional aid (2006/C 54/08), published in the Official Journal on 4 March 2006.]

Excluded activities: hotels and comparable establishmentsU.K.

21(1)This paragraph supplements paragraph 16(j).U.K.

(2)A “comparable establishment” means a guest house, hostel or other establishment offering overnight accommodation.

(3)An establishment offers overnight accommodation if the main purpose of maintaining it is the provision of facilities for such accommodation (with or without catering services).

(4)The activities of a person are not to be taken to fall within paragraph 16(j) unless that person has an estate or interest in, or is in occupation of, the hotel or comparable establishment in question.

Excluded activities: nursing homes and residential care homesU.K.

22(1)This paragraph supplements paragraph 16(k).U.K.

(2)“Nursing home” means an establishment that exists wholly or mainly for the provision of nursing care—

(a)for persons suffering from sickness, injury or infirmity, or

(b)for women who are pregnant or have given birth to children.

(3)“Residential care home” means an establishment that exists wholly or mainly for the provision of residential accommodation, together with board and personal care, for persons in need of personal care by reason of—

(a)old age,

(b)mental or physical disability,

(c)past or present dependence on alcohol or drugs,

(d)any past illness, or

(e)past or present mental disorder.

(4)The activities of a person are not to be taken to fall within paragraph 16(k) unless that person has an estate or interest in, or is in occupation of, the nursing home or residential care home in question.

Excluded activities: provision of facilities for another businessU.K.

23(1)This paragraph applies where a company (“the service provider”) provides services or facilities for a business carried on by another person.U.K.

(2)Providing those services or facilities is an excluded activity if—

(a)the business consists to a substantial extent in carrying on excluded activities within any of sub-paragraphs (a) to (k) of paragraph 16, and

(b)a controlling interest in the business is held by a person (other than a company of which the service provider is a subsidiary) who also has a controlling interest in the business carried on by the service provider.

(3)Sub-paragraphs (4) to (6) explain what is meant by a controlling interest in a business for the purposes of sub-paragraph (2)(b).

(4)In the case of a business carried on by a company, a person (“P”) has a controlling interest in the business if—

(a)P controls the company,

(b)the company is a close company and P, or an associate of P's, is a director of the company and either—

(i)is the beneficial owner of more than 30% of the ordinary share capital of the company, or

(ii)is able (directly or through the medium of other companies or by any other indirect means) to control more than 30% of that share capital, or

(c)not less than half of the business could, in accordance with [F2359section 942 of CTA 2010 (options for purposes of ownership condition)], be regarded as belonging to him for the purposes of [F2360section 941 of that Act (trade transfers without change of ownership: ownership condition)].

(5)In any other case, a person has a controlling interest in a business if that person is entitled to not less than half—

(a)of the assets used for the business, or

(b)of the income arising from it.

(6)For the purposes of sub-paragraph (4)(a) the question whether a person controls a company is to be determined in accordance with [F2361sections 450 and 451 of CTA 2010] (“control” in the context of close companies).

(7)For the purposes of this paragraph any rights or powers of a person who is an associate of another person are to be attributed to that other person.

(8)In this paragraph—

  • “associate” has the meaning given [F2362by section 448 of CTA 2010] (expressions relating to close companies), except that in [F2363that section as it applies] for the purposes of this paragraph “relative” does not include a brother or sister;

  • “business” includes any trade, profession or vocation;

  • “director” is to be construed in accordance with [F2364section 452 of CTA 2010] (expressions relating to close companies).

Textual Amendments

F2359Words in Sch. 5 para. 23(4)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(a)(i) (with Sch. 2)

F2360Words in Sch. 5 para. 23(4)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(a)(ii) (with Sch. 2)

F2361Words in Sch. 5 para. 23(6) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(b) (with Sch. 2)

F2362Words in Sch. 5 para. 23(8) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(c)(i) (with Sch. 2)

F2363Words in Sch. 5 para. 23(8) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(c)(ii) (with Sch. 2)

F2364Words in Sch. 5 para. 23(8) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(d) (with Sch. 2)

Part 4U.K.Eligible employees

Eligible employees: introductionU.K.

24U.K.An individual is an “eligible employee” in relation to the relevant company if the requirements of this Part of this Schedule as to the following are met at the appropriate time—

  • employment (see paragraph 25),

  • commitment of working time (see paragraphs 26 and 27), and

  • having no material interest (see paragraphs 28 to 33).

The employment requirementU.K.

25U.K.To be an eligible employee in relation to the relevant company an individual must be an employee—

(a)of that company, or

(b)if that company is a parent company, of that company or a qualifying subsidiary of that company.

The requirement as to commitment of working timeU.K.

26(1)For an individual (“the employee”) to be an eligible employee in relation to the relevant company the average amount per week of the employee’s committed time must equal or exceed the statutory threshold, that is—U.K.

(a)25 hours a week, or

(b)if less, 75% of the employee’s working time (see paragraph 27).

(2)The employee’s “committed time” means the time that the employee is required, as an employee in relevant employment, to spend—

(a)on the business of the relevant company, or

(b)if the relevant company is a parent company, on the business of the group.

(3)It includes any time which the employee would have been required to spend as mentioned in sub-paragraph (2) but for—

(a)injury, ill-health or disability,

(b)pregnancy, childbirth, maternity or paternity leave [F2365, shared parental leave] [F2366, [F2367carer’s leave,] parental bereavement leave] [F2368, neonatal care leave] or parental leave,

(c)reasonable holiday entitlement, or

(d)not being required to work during a period of notice of termination of employment.

(4)In this paragraph “relevant employment” means employment—

(a)by the relevant company, or

(b)where the relevant company is a parent company, by any member of the group.

Textual Amendments

F2368Words in Sch. 5 para. 26(3)(b) inserted (17.1.2025) by Neonatal Care (Leave and Pay) Act 2023 (c. 20), s. 3(3), Sch. para. 48(3); S.I. 2025/41, reg. 2

Modifications etc. (not altering text)

C143Sch. 5 para. 26 modified (temp.) (with effect in accordance with s. 107(5) of the affecting Act) by 2020 c. 14, s. 107(1)(2) (as substituted by Finance Act 2021 (c. 26), s. 24)

Meaning of “working time”U.K.

27(1)In paragraph 26 “working time” means—U.K.

(a)time spent on remunerative work as an employee or self-employed person, or

(b)time which would have been so spent but for any of the reasons set out in paragraph 26(3)(a) to (d).

(2)In sub-paragraph (1)(a) “remunerative work”, in the context of work undertaken as an employee, means work the earnings from which—

(a)are general earnings to which section 15 [F2369applies (earnings for year when employee UK resident)], or

(b)would be general earnings within paragraph (a) if the employee were [F2370UK resident (and none of sections 809B, 809D and 809E of ITA 2007 (remittance basis) applied to the employee).]

(3)In sub-paragraph (1)(a) “remunerative work”, in the context of work undertaken as a self-employed person, means work which is undertaken with a view to profit and the profits (if any) from which—

(a)are (or would be) chargeable to tax [F2371as the profits of a trade, profession or vocation carried on wholly or partly in the United Kingdom], or

(b)would be so chargeable if the employee were resident F2372... in the United Kingdom.

Textual Amendments

F2369Words in Sch. 5 para. 27(2)(a) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 43(a)

F2370Words in Sch. 5 para. 27(2)(b) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 43(b)

F2371Words in Sch. 5 para. 27(3)(a) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 620(2) (with Sch. 2)

F2372Words in Sch. 5 para. 27(3)(b) omitted (with effect in accordance with Sch. 46 para. 72 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 46 para. 42

Modifications etc. (not altering text)

C144Sch. 5 para. 27 modified (temp.) (with effect in accordance with s. 107(5) of the affecting Act) by 2020 c. 14, s. 107(1)(3) (as substituted by Finance Act 2021 (c. 26), s. 24)

The “no material interest” requirementU.K.

28(1)An individual is not an eligible employee in relation to the relevant company if the individual has a material interest—U.K.

(a)in that company, or

(b)if that company is a parent company, in any member of the group.

(2)For the purposes of this paragraph an individual is to be regarded as having a material interest in a company if—

(a)the individual,

(b)the individual together with one or more of the individual’s associates, or

(c)any such associate, with or without any other such associates,

has a material interest in the company.

(3)This paragraph is supplemented—

(a)as regards the meaning of “material interest”, by paragraphs 29 and 30; and

(b)as regards the meaning of “associate” by paragraph 31 (read with paragraphs 32 and 33).

Meaning of “material interest”U.K.

29(1)In paragraph 28 (the “no material interest” requirement) references to a “material interest” in a company are to—U.K.

(a)a material interest in the share capital of the company, or

(b)where it is a close company, a material interest in its assets.

(2)A material interest in the share capital of a company means—

(a)beneficial ownership of, or

(b)the ability to control (directly or through the medium of other companies or by any other indirect means),

more than 30% of the ordinary share capital of the company.

(3)A material interest in the assets of a close company means—

(a)possession of, or

(b)an entitlement to acquire,

such rights as would, in the event of the winding up of the company or in any other circumstances, give an entitlement to receive more than 30% of the assets that would then be available for distribution among the participators.

(4)In this paragraph—

  • “close company” includes a company that would be a close company but for—

    (a)

    [F2373section 442(a) of CTA 2010] (exclusion of companies not resident in the United Kingdom), or

    (b)

    [F2374sections 446 and 447 of CTA 2010] (exclusion of certain quoted companies);

  • “participator” has the meaning given by [F2375section 454 of CTA 2010] (expressions relating to close companies).

(5)This paragraph is supplemented by paragraph 30 (options and interests in SIPs).

Textual Amendments

F2373Words in Sch. 5 para. 29(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(5)(a)(i) (with Sch. 2)

F2374Words in Sch. 5 para. 29(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(5)(a)(ii) (with Sch. 2)

F2375Words in Sch. 5 para. 29(4) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(5)(b) (with Sch. 2)

Material interest: options and interests in SIPsU.K.

30(1)This paragraph applies for the purposes of paragraph 29 (meaning of “material interest”).U.K.

(2)A right to acquire shares (however arising) is to be treated as a right to control them.

(3)However, shares that an individual may acquire under a qualifying option are to be left out of account until such time as they are actually acquired.

(4)Sub-paragraph (5) applies in a case where—

(a)the shares to be attributed to an individual consist of or include shares which the individual or another person has a right to acquire, and

(b)the circumstances are such that, if that right were to be exercised, the shares acquired would be shares which were previously unissued and which the company would be contractually bound to issue in the event of the exercise of the right.

(5)In determining at any time prior to the exercise of the right whether the number of shares to be attributed to the individual exceeds 30% of the ordinary share capital of the company, that ordinary share capital is to be treated as increased by the number of unissued shares referred to in sub-paragraph (4)(b).

(6)The references in sub-paragraphs (4) and (5) to the shares to be attributed to an individual are to the shares which—

(a)for the purposes of paragraph 29(2) (material interest in share capital), and

(b)in accordance with paragraph 28(2) (material interest can consist of or include that of individual’s associates),

fall to be brought into account in the individual’s case so that it can be determined whether their number exceeds 30% of the company’s ordinary share capital.

(7)In applying paragraph 29 the following are to be disregarded—

(a)the interest of the trustees of any [F2376Schedule 2 SIP (see Schedule 2)] in any shares which are held by them in accordance with the plan but which have not been appropriated to, or acquired on behalf of, an individual, and

(b)any rights exercisable by the trustees as a result of that interest.

Textual Amendments

Meaning of “associate”U.K.

31(1)In paragraph 28(2) (the “no material interest” requirement) “associate”, in relation to an individual, means—U.K.

(a)any relative or partner of that individual,

(b)the trustee or trustees of any settlement in relation to which that individual, or any of that individual’s relatives (living or dead), is or was a settlor, and

(c)where that individual is interested in any shares or obligations of the company mentioned in paragraph 28(2) which are subject to any trust, or are part of the estate of a deceased person—

(i)the trustee or trustees of the settlement concerned, or

(ii)the personal representatives of the deceased,

as the case may be.

(2)Sub-paragraph (1)(c) needs to be read with paragraphs 32 and 33 (which relate to employee benefit trusts and discretionary trusts).

(3)In this paragraph—

  • “relative” means—

    (a)

    spouse [F2377or civil partner], or

    (b)

    parent, child or remoter relation in the direct line;

  • “settlor” and “settlement” have the same meaning as in [F2378Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act)].

Textual Amendments

F2377Words in Sch. 5 para. 31(3) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 173

F2378Words in Sch. 5 para. 31(3) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 620(3) (with Sch. 2)

Meaning of “associate”: trustees of employee benefit trustU.K.

32(1)This paragraph applies for the purposes of paragraph 31(1)(c) (meaning of “associate”: trustees of settlement) where the individual is interested as a beneficiary of an employee benefit trust in shares or obligations of the company mentioned in paragraph 28(2).U.K.

(2)The trustees of the employee benefit trust are not to be regarded as associates of the beneficiary by reason only of the individual’s being so interested if neither—

(a)the individual, nor

(b)the individual together with one or more of the individual’s associates, nor

(c)any such associate, with or without any other such associates,

has at any time after 13th March 1989 been the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control, more than 30% of the ordinary share capital of the company.

(3)In sub-paragraph (2)(b) and (c) “associate” has the meaning given by paragraph 31(1), but does not include the trustees of an employee benefit trust as a result only of the individual’s having an interest in shares or obligations of the trust.

(4)Chapter 11 of Part 7 of this Act (which deals with the attribution of interests in companies to beneficiaries of employee benefit trusts) applies for the purposes of sub-paragraph (2).

(5)In this paragraph “employee benefit trust” has the same meaning as in that Chapter (see sections 550 and 551).

Meaning of “associate”: trustees of discretionary trustU.K.

33(1)This paragraph applies for the purposes of paragraph 31(1)(c) (meaning of “associate”: trustees of settlement) where—U.K.

(a)the individual (“the beneficiary”) is one of the objects of a discretionary trust,

(b)the property subject to the trust has at any time consisted of or included shares or obligations of the company mentioned in paragraph 28(2),

(c)the beneficiary has ceased to be eligible to benefit under the trust as a result of—

(i)an irrevocable disclaimer or release executed by the beneficiary, or

(ii)the irrevocable exercise by the trustees of a power to exclude the beneficiary from the objects of the trust,

(d)immediately after the beneficiary ceased to be so eligible, no associate of the beneficiary was interested in the shares or obligations of the company which were subject to the trust, and

(e)during the period of 12 months ending with the date on which the beneficiary ceased to be so eligible, neither the beneficiary nor any associate of the beneficiary received any benefit under the trust.

(2)The beneficiary is not, as a result only of the matters mentioned in sub-paragraph (1)(a) and (b), to be regarded as having been interested in the shares or obligations of the company at any time during that period of 12 months.

(3)In sub-paragraph (1) “associate” has the meaning given by paragraph 31, but with the omission of sub-paragraph (1)(c) of that paragraph (trusts and estates).

Part 5U.K.Requirements relating to options

Requirements relating to options: introductionU.K.

34U.K.A share option is not a qualifying option unless the requirements of this Part of this Schedule as to the following are met at the appropriate time—

  • the type of shares that may be acquired (see paragraph 35),

  • when the option is capable of being exercised (see paragraph 36),

  • the terms being agreed in writing (see paragraph 37), and

  • the non-assignability of rights (see paragraph 38).

Type of shares that may be acquiredU.K.

35(1)The option must confer a right to acquire shares that—U.K.

(a)form part of the ordinary share capital of the relevant company,

(b)are fully paid up, and

(c)are not redeemable.

(2)Shares are not fully paid up for the purposes of sub-paragraph (1)(b) if there is any undertaking to pay cash to the relevant company at a future date.

(3)For the purposes of sub-paragraph (1)(c) “redeemable” shares include shares that may become redeemable at a future date.

Option to be capable of exercise within 10 yearsU.K.

36(1)The option must be capable of being exercised within the period of 10 years beginning with the date on which it is granted.U.K.

(2)Where the exercise of the option is dependent on the fulfilment of conditions, the option is to be taken to be capable of being exercised within the period mentioned in sub-paragraph (1) if the conditions may be fulfilled within that period.

Terms of option to be agreed in writingU.K.

37(1)The option must take the form of a written agreement between the person granting the option and the employee which meets the following requirements.U.K.

(2)The agreement must state—

(a)the date on which the option is granted;

(b)that it is granted under the provisions of this Schedule;

(c)the number, or maximum number, of shares that may be acquired;

(d)the price (if any) payable by the employee to acquire them, or the method by which that price is to be determined; and

(e)when and how the option may be exercised.

(3)The agreement must set out any conditions, such as performance conditions, affecting the terms or extent of the employee’s entitlement.

F2379(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2380(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2379Sch. 5 para. 37(4) omitted (with effect in accordance with s. 17(5)-(9) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 17(2)

F2380Sch. 5 para. 37(5) omitted (with effect in accordance with s. 17(5)-(9) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 17(2)

Non-assignability of rightsU.K.

38U.K.The terms on which the option is granted—

(a)must prohibit the person to whom it is granted from transferring any of that person’s rights under it, and

(b)if they permit it to be exercised after that person’s death, must not permit it to be exercised more than one year after the date of the death.

Part 6U.K.Company reorganisations

Company reorganisations: introductionU.K.

39(1)This Part applies in connection with company reorganisations.U.K.

(2)For the purposes of this Part there is a “company reorganisation” where a company (“the acquiring company”)—

(a)obtains control of a company whose shares are subject to an outstanding qualifying option—

(i)as a result of making a general offer to acquire the whole of the issued share capital of that company which is made on a condition such that, if it is met, the person making the offer will have control of the company, or

(ii)as a result of making a general offer to acquire all the shares in the company which are of the same class as those to which the option relates;

[F2381(b)obtains control of such a company as a result of a compromise or arrangement sanctioned by the court under section 899 [F2382or 901F] of the Companies Act 2006 (court sanction for compromise or arrangement);]

[F2383(c)becomes bound or entitled to acquire shares in the scheme company under sections 979 to 982 [F2384or 983 to 985] of the Companies Act 2006 (takeover offers: right of offeror to buy out minority shareholder).]

(d)obtains all the shares of a company whose shares are subject to an outstanding qualifying option as a result of a qualifying exchange of shares (see paragraph 40).

(3)In sub-paragraph (2) “outstanding qualifying option” means a qualifying option that has yet to be exercised.

[F2385(4)In sub-paragraph (2)(a)(i) the reference to the issued share capital of the company does not include any capital already held by the person making the offer or a person connected with that person and in sub-paragraph (2)(a)(ii) the reference to the shares in the company does not include any shares already held by the person making the offer or a person connected with that person.

(5)For the purposes of sub-paragraph (2)(a)(i) and (ii) it does not matter if the general offer is made to different shareholders by different means.]

Textual Amendments

F2384Words in Sch. 5 para. 39(2)(c) inserted (retrospective to 17.7.2013) by Finance Act 2016 (c. 24), Sch. 3 para. 8(1)(2)

F2385Sch. 5 para. 39(4)(5) inserted (31.10.2013) by Finance Act 2013 (c. 29), Sch. 2 para. 31(1)(2); S.I. 2013/2796, art. 2

Meaning of “qualifying exchange of shares”U.K.

40(1)For the purposes of the EMI code there is a “qualifying exchange of shares” where—U.K.

(a)arrangements are made in accordance with which a company (“the new company”) acquires all the shares (“old shares”) in another company (“the old company”), and

(b)the following conditions are met.

(2)The conditions are that—

(a)the consideration for the old shares consists wholly of the issue of shares (“new shares”) in the new company;

(b)new shares are issued in consideration of old shares only at times when there are no issued shares in the new company other than—

(i)subscriber shares, and

(ii)new shares previously issued in consideration of old shares;

(c)the consideration for new shares of each description consists wholly of old shares of the corresponding description;

(d)new shares of each description are issued to holders of old shares of the corresponding description in respect of, and in proportion to, their holdings; and

(e)by virtue of the CGT capital reorganisation provisions, the exchange of shares is not treated as involving a disposal of the old shares or an acquisition of the new shares.

(3)For the purposes of this paragraph old shares and new shares are of a corresponding description if, on the assumption that they were shares in the same company, they would be of the same class and carry the same rights.

(4)In this paragraph—

(a)references to “shares”, except in the expression “subscriber shares”, include securities; and

(b)“the CGT capital reorganisation provisions” means section 127 of TCGA 1992, as applied by section 135(3) of that Act (exchange of securities).

Grant of replacement optionU.K.

41(1)This paragraph applies if both of the following conditions are met in connection with a company reorganisation.U.K.

(2)The first condition is that the holder of a qualifying option, by agreement with the acquiring company, releases the holder’s rights under that option (“the old option”) in consideration of the granting to him of rights (“the new option”) which are equivalent but relate to shares in the acquiring company.

(3)The second condition is that the requirements of the following paragraphs are met—

  • paragraph 42 (period within which replacement option must be granted), and

  • paragraph 43 (further requirements to be met as to replacement option).

(4)If this paragraph applies, the new option is to be treated for the purposes of the EMI code as a “replacement option”.

(5)Except where the contrary is indicated—

(a)references in the EMI code to a qualifying option include a replacement option, and

(b)a replacement option is to be treated for the purposes of the EMI code as if it had been granted on the date on which the old option was granted.

(6)For the purposes of any of paragraphs 5 to 7 or section 536(1)(e), the total value of the shares in the acquiring company that are subject to the replacement option is to be taken to be equal to—

(a)the total value (as calculated in accordance with paragraph 5(6) to (8)) of the shares that were subject to the old option immediately before the release of rights under that option, or

(b)if the replacement option has been partially exercised, the proportion of that total value which corresponds to the proportion which the number of shares that remain subject to the option bears to the number of shares that were subject to it at the time when it was granted as a new option (see sub-paragraph (2) above).

(7)In the EMI code references to “the old option” or “the new option” are to be construed in accordance with this paragraph.

Period within which replacement option must be grantedU.K.

42(1)To qualify as a replacement option the new option must be granted within the required period (see sub-paragraphs (2) to (4)).U.K.

(2)If the company reorganisation falls within paragraph 39(2)(a), the required period is the period of 6 months after the date on which—

(a)the person making the offer has obtained control of the company, and

(b)any condition subject to which the offer is made is met.

(3)If the company reorganisation falls within paragraph 39(2)(b) or (d), the required period is the period of 6 months after the date on which the acquiring company obtains control of the company whose shares are subject to the old option.

(4)If the company reorganisation falls within paragraph 39(2)(c), the required period is the period during which the acquiring company remains bound or entitled as mentioned in that provision.

Further requirements to be met as to replacement optionU.K.

43(1)For the new option to qualify as a replacement option the following requirements must also be met.U.K.

(2)The new option must be granted to the holder of the old option by reason of the holder’s employment—

(a)with the acquiring company, or

(b)if that company is a parent company, with that company or another member of the group.

(3)The requirements of—

(a)paragraph 4 (purpose of granting option),

(b)paragraph 7 (maximum value of options in respect of relevant company) (as it has effect under sub-paragraph (4)), and

(c)Part 5 (requirements as to options),

must be met in relation to the new option at the time of the release of rights under the old option (“the relevant time”).

(4)For the purposes of paragraph 7 (as applied by sub-paragraph (3)(b)) the total value of the shares in the acquiring company that are subject to the new option is to be taken to be equal to the total value (as calculated in accordance with paragraph 5(6) to (8)) of the shares that were subject to the old option immediately before the relevant time.

(5)In addition to the requirements mentioned in sub-paragraph (3)—

(a)the independence requirement and the trading activities requirement must be met in relation to the acquiring company at the relevant time, and

(b)the individual to whom the new option is granted must be an eligible employee in relation to the acquiring company at that time.

(6)The total market value, immediately before the relevant time, of the shares which were subject to the old option must be equal to the total market value, immediately after the grant of the new option, of the shares in respect of which that option is granted.

(7)The total amount payable by the employee for the acquisition of the shares under the new option must be equal to the total amount that would have been payable for the acquisition of shares under the old option.

Part 7U.K.Notification of option to inland revenue

Notice of option to be given to Inland Revenue U.K.

44(1)For a share option to be a qualifying option, notice of the option must be given to [F165an officer of Revenue and Customs] [F2386on or before 6 July following the end of the tax year in which the option was granted].U.K.

(2)The notice must—

(a)be given by the employer company, F2387...

F2387(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The notice must contain, or be supported by, such information as [F165an officer of Revenue and Customs] may require for the purpose of determining whether the requirements of this Schedule are met.

(4)The notice must also contain a declaration within [F2388sub-paragraph (5)].

(5)A declaration within this sub-paragraph is a declaration by a director, or the secretary, of the employer company—

(a)that in the opinion of that person the requirements of this Schedule are met in relation to the option, F2389... [F2390and]

(b)that the information provided is, to the best of that person’s knowledge, correct and complete F2391...

F2391(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2392(5A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2393(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)Any reference in this Part of this Schedule to the requirements (or any of the requirements) of this Schedule being met in relation to a share option is a reference to the requirements or requirement being met in relation to it at the appropriate time.

[F2394(8)The notice, and any information supporting it, must be given electronically.

(9)But, if an officer of Revenue and Customs considers it appropriate to do so, the officer may allow the employer company to give the notice or any supporting information in another way; and, if the officer does so, the notice or information must be given in that other way.

(10)The Commissioners for Her Majesty's Revenue and Customs—

(a)must prescribe how notices and supporting information are to be given electronically;

(b)may make different provision for different cases or circumstances.]

Textual Amendments

F2386Words in Sch. 5 para. 44(1) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2024 (c. 3), s. 13(2)

F2387Sch. 5 para. 44(2)(b) and word omitted (with effect in accordance with Sch. 8 para. 223 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 217(2), 222

F2388Words in Sch. 5 para. 44(4) substituted (with effect in accordance with Sch. 8 para. 223 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 217(3), 222

F2389Word in Sch. 5 para. 44(5) omitted (with effect in accordance with Sch. 8 para. 223 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 8 paras. 217(4)(a), 222

F2390Word in Sch. 5 para. 44(5) inserted (with effect in accordance with s. 17(5)-(9) of the amending Act) by Finance (No. 2) Act 2023 (c. 30), s. 17(3)(a)(i)

F2391Sch. 5 para. 44(5)(c) and word omitted (with effect in accordance with s. 17(5)-(9) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 17(3)(a)(ii)

F2392Sch. 5 para. 44(5A) omitted (with effect in accordance with s. 17(5)-(9) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 17(3)(b)

F2393Sch. 5 para. 44(6) omitted (with effect in accordance with s. 17(5)-(9) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 17(3)(b)

F2394Sch. 5 para. 44(8)-(10) inserted (with effect in accordance with Sch. 8 para. 223 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 217(6), 222

Correction of notice by Inland Revenue U.K.

45(1)[F165An officer of Revenue and Customs] may amend a notice given under paragraph 44 so as to correct obvious errors or omissions in the notice.U.K.

(2)A correction under this paragraph must be made by a notice given to the employer company.

(3)No correction may be made under this paragraph more than 9 months after the day on which the notice under paragraph 44 was given to [F165an officer of Revenue and Customs].

(4)A correction under this paragraph is of no effect if the employer company, within 3 months after the date of issue of the notice of correction, gives notice to [F165an officer of Revenue and Customs] rejecting the correction.

Textual Amendments

Notice of enquiryU.K.

46(1)This paragraph applies where notice of a share option is given under paragraph 44.U.K.

(2)[F165An officer of Revenue and Customs] may enquire into the option if [F2395the officer] [F2396gives] notice to the employer company of [F2397the officer's] intention to do so in accordance with this paragraph.

(3)[F165An officer of Revenue and Customs] may enquire into whether the requirement of paragraph 26 (commitment of working time) is met in relation to the option by the individual to whom it has been granted if [F2398the officer] [F2396gives] that individual notice of [F2397the officer's] intention to do so in accordance with this paragraph.

(4)[F165An officer of Revenue and Customs] must give a copy of a notice under sub-paragraph (3) to the employer company.

(5)Unless given by virtue of sub-paragraph (6), a notice of enquiry may not be given more than 12 months after the [F2399date] mentioned in paragraph 44(1) (the [F2400date by] which a notice under that paragraph must be given).

(6)A notice of enquiry may be given at any time if [F165an officer of Revenue and Customs] [F2401discovers] that any of the information provided in or in connection with the notice under paragraph 44 was false or misleading in a material respect.

(7)An option that has been the subject of one notice of enquiry under sub-paragraph (2) or (3) may not be the subject of another notice under that sub-paragraph, unless the notice is given by virtue of sub-paragraph (6).

(8)In this paragraph a “notice of enquiry” means a notice given under sub-paragraph (2) or (3).

Textual Amendments

F2399Word in Sch. 5 para. 46(5) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2024 (c. 3), s. 13(3)(a)

F2400Words in Sch. 5 para. 46(5) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2024 (c. 3), s. 13(3)(b)

Completion of enquiry: closure noticesU.K.

47(1)An enquiry under paragraph 46(2) is completed when [F165an officer of Revenue and Customs] [F2402gives] the employer company a notice—U.K.

(a)informing the company that [F2403the officer] [F2402has] completed [F2404the] enquiry, and

(b)stating [F2405the officer's] decision as to whether the requirements of this Schedule are met in relation to the option.

(2)If [F165an officer of Revenue and Customs] [F2406concludes] that the requirements of this Schedule are not so met, [F2403the officer] must also give notice of that decision to the person to whom the option has been granted.

(3)An enquiry under paragraph 46(3) is completed when [F165an officer of Revenue and Customs] [F2407gives] the individual concerned and the employer company a notice—

(a)informing the recipients that [F2403the officer] [F2407has] completed [F2408the] enquiry, and

(b)stating [F2409the officer's] decision as to whether the requirement of paragraph 26 (commitment of working time) is met by that individual in relation to the option.

(4)References in the EMI code to a “closure notice” are to a notice under sub-paragraph (1) or (3).

(5)A closure notice takes effect when it is issued.

Textual Amendments

Completion of enquiry: application for closure notice to be givenU.K.

48(1)An application may be made [F2410to the tribunal] under this paragraph for a direction requiring [F165an officer of Revenue and Customs] to give a closure notice within a specified period.U.K.

(2)The application may be made—

(a)by the employer company, or

(b)in a case within paragraph 46(3), by the individual concerned.

F2411(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F2412(4)Any such application is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act).]

(5)[F2413The tribunal] must give a direction unless F2414... satisfied that [F165an officer of Revenue and Customs] [F2415has] reasonable grounds for not giving a closure notice within a specified period.

Textual Amendments

Effect of enquiryU.K.

49(1)If [F165an officer of Revenue and Customs] [F2416does] not give a notice of enquiry, the requirements of this Schedule are taken to be met in relation to the option.U.K.

(2)If [F165an officer of Revenue and Customs] [F2416does] give a notice of enquiry, [F2417the officer's] decision stated in the closure notice is conclusive as to whether the requirements of this Schedule are met in relation to the option.

(3)But this is subject—

(a)if [F2417the officer's] decision is that the requirements are not met, to the outcome of any appeal against that decision under paragraph 50;

(b)if their decision is that the requirements are met, to the outcome of any subsequent enquiry under paragraph 46(6) (enquiry arising from discovery of false or misleading information).

(4)This paragraph does not affect the provisions of sections 532 to 539 (which relate to disqualifying events).

Textual Amendments

AppealsU.K.

50(1)The employer company may appeal against a decision of [F165an officer of Revenue and Customs] —U.K.

(a)that notice of the grant of the option was not given in accordance with paragraph 44, or

(b)that the requirements of this Schedule are not met in relation to the option.

(2)An individual may appeal against a decision of [F165an officer of Revenue and Customs] that the individual does not meet the requirement of paragraph 26 (commitment of working time).

(3)Notice of the appeal must be given to [F165an officer of Revenue and Customs] within 30 days after the date when the closure notice is given to the appellant.

F2418(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Part 8U.K.Supplementary provisions

Power to require informationU.K.

51(1)[F165An officer of Revenue and Customs] may by notice require a person to provide [F2419the officer] with information—U.K.

(a)which [F2419the officer] reasonably [F2420requires] for the performance of [F2421the officer's] functions under the EMI code, and

(b)which the person to whom the notice is addressed has or can reasonably obtain.

(2)The power conferred by this paragraph extends, in particular, to information to enable [F165an officer of Revenue and Customs] —

(a)to decide whether a share option is a qualifying option, or

(b)to determine the liability to tax, including capital gains tax, of any person who has been granted a qualifying option.

(3)The notice must require the information to be provided within a specified period, which must not end earlier than 3 months after the date when the notice is given.

Textual Amendments

Annual returnsU.K.

[F242252(1)This paragraph applies in relation to a company whose shares are (or have been) subject to qualifying options.U.K.

(2)The company must give to Her Majesty's Revenue and Customs (“HMRC”) a return for each tax year falling (wholly or partly) in the company's qualifying option period.

(3)The company's “qualifying option period” is the period—

(a)beginning when the first qualifying option to which the company's shares are subject is granted, and

(b)ending when the termination condition is met.

(4)“The termination condition” is met when the company's shares—

(a)are no longer subject to qualifying options, and

(b)will no longer become subject to qualifying options.

(5)The return for a tax year must—

(a)contain, or be accompanied by, such information as HMRC may require, and

(b)be given on or before 6 July in the following tax year.

(6)The information which may be required under sub-paragraph (5)(a) includes (in particular) information to enable HMRC to determine the liability to tax, including capital gains tax, of any person who has been granted a qualifying option to which the company's shares are subject.

(7)If the company becomes aware that—

(a)anything which should have been included in, or should have accompanied, a return for a tax year was not included in, or did not accompany, the return,

(b)anything which should not have been included in, or should not have accompanied, a return for a tax year was included in, or accompanied, the return, or

(c)any other error or inaccuracy has occurred in relation to a return for a tax year,

the company must give an amended return correcting the position to HMRC without delay.]

Textual Amendments

F2422 Sch. 5 paras. 52, 52A substituted for Sch. 5 para. 52 (with effect in accordance with Sch. 8 para. 224 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 218, 222

[F242252A(1)A return under paragraph 52, and any information accompanying the return, must be given electronically.U.K.

(2)But, if HMRC consider it appropriate to do so, HMRC may allow a company to give a return or any accompanying information in another way; and, if HMRC do so, the return or information must be given in that other way.

(3)The Commissioners for Her Majesty's Revenue and Customs—

(a)must prescribe how returns and accompanying information are to be given electronically;

(b)may make different provision for different cases or circumstances.]

Textual Amendments

F2422 Sch. 5 paras. 52, 52A substituted for Sch. 5 para. 52 (with effect in accordance with Sch. 8 para. 224 of the amending Act) by Finance Act 2014 (c. 26), Sch. 8 paras. 218, 222

Compliance with time limitsU.K.

53(1)For the purposes of this Part and Part 7 a person [F2423(“P”)] is not to be regarded as having failed to do anything required to be done within a particular period of time if—U.K.

(a)[F2424P] had a reasonable excuse for not doing it within that period, and

(b)if the excuse ceased to exist, [F2424P] did it without unreasonable delay after the excuse ceased to exist.

(2)Where sub-paragraph (1)(b) applies, any further time limit running from the end of the period concerned is instead to run from the time when the thing in question was actually done.

[F2425(3)For the purposes of sub-paragraph (1)—

(a)an insufficiency of funds is not a reasonable excuse, unless attributable to events outside P's control, and

(b)where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure.]

Textual Amendments

Power to amend by Treasury orderU.K.

54(1)The Treasury may by order amend the EMI code—U.K.

(a)to make such amendments of paragraphs 13 to 23 (the trading activities requirement and related provisions) as they consider expedient;

(b)to substitute different sums of money for those for the time being specified in—

(i)paragraphs 5(1) and 6(1) and (3) (maximum entitlement of employee);

(ii)paragraph 12(1) and (2) (the gross assets requirement).

(2)An order under sub-paragraph (1)(b) which amends paragraphs 5(1) and 6(1) and (3) may amend section 536(1)(e) (other disqualifying events) so as to substitute the same sum for the one that is for the time being specified there.

Meaning of “market value” of sharesU.K.

55(1)For the purposes of the EMI code the “market value” of shares has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act.U.K.

(2)Sub-paragraph (1) is subject to paragraph 5(7) (valuation of shares subject to restriction or risk of forfeiture) as it applies for the purposes of any provision of the EMI code.

Determination of market value of sharesU.K.

56(1)This paragraph applies to the determination of the market value of shares for the purposes of the EMI code.U.K.

(2)Unless—

(a)it is agreed between the employer company and [F165an officer of Revenue and Customs], or

(b)a reference is made under sub-paragraph (4),

the market value of shares is to be determined by [F165an officer of Revenue and Customs].

(3)Where the market value of shares on any date needs to be determined for the purposes of the EMI code, [F165an officer of Revenue and Customs] and the employer company may agree that it is to be determined by reference to a date or dates, or to the average of the values on a number of dates, stated in the agreement.

(4)At any time before notice of [F165an officer of Revenue and Customs] determination has been given to the employer company, [F2426the company may apply to the tribunal for the question of the market value of the shares to be determined].

F2427(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F2428(6)Any such application is to be subject to the relevant provisions of Part 5 of TMA 1970 (see, in particular, section 48(2)(b) of that Act).]

Textual Amendments

Appeal against determination of market value of sharesU.K.

57(1)The employer company may appeal against any determination by [F165an officer of Revenue and Customs] under paragraph 56.U.K.

(2)Notice of appeal must be given to [F165an officer of Revenue and Customs] within 30 days after the date when notice of their determination is given to the employer company.

F2429(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F2430PenaltiesU.K.

Textual Amendments

F243157AU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2431Sch. 5 para. 57A omitted (with effect in accordance with s. 17(5)-(9) of the amending Act) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 17(4)

57B(1)This paragraph applies if a company fails to give a return for a tax year (containing, or accompanied by, all required information) on or before the date mentioned in paragraph 52(5)(b) (“the date for delivery”).U.K.

(2)The company is liable for a penalty of £100.

(3)If the company's failure continues after the end of the period of 3 months beginning with the date for delivery, the company is liable for a further penalty of £300.

(4)If the company's failure continues after the end of the period of 6 months beginning with the date for delivery, the company is liable for a further penalty of £300.

(5)The company is liable for a further penalty under this sub-paragraph if—

(a)the company's failure continues after the end of the period of 9 months beginning with the date for delivery,

(b)HMRC decide that such a penalty should be payable, and

(c)HMRC give notice to the company specifying the period in respect of which the penalty is payable.

(The company may be liable for more than one penalty under this sub-paragraph.)

(6)The penalty under sub-paragraph (5) is £10 for each day that the failure continues during the period specified in the notice under sub-paragraph (5)(c).

(7)The period specified in the notice under sub-paragraph (5)(c)—

(a)may begin earlier than the date on which the notice is given, but

(b)may not begin until after the end of the period mentioned in sub-paragraph (5)(a) or, if relevant, the end of any period specified in any previous notice under sub-paragraph (5)(c) given in relation to the failure.

57C(1)This paragraph applies if a return under paragraph 52, or any information accompanying such a return—U.K.

(a)is given otherwise than in accordance with paragraph 52A, or

(b)contains a material inaccuracy—

(i)which is careless or deliberate, or

(ii)which is not corrected as required by paragraph 52(7).

(2)The company is liable for a penalty of an amount decided by HMRC.

(3)The penalty must not exceed £5,000.

(4)For the purposes of sub-paragraph (1)(b)(i) an inaccuracy is careless if it is due to a failure by the company to take reasonable care.

57D(1)This paragraph applies if a company is liable for a penalty under this Part.U.K.

(2)HMRC must assess the penalty and notify the company of the assessment.

(3)Subject to sub-paragraph (4), the assessment must be made no later than 12 months after the date on which the company becomes liable for the penalty.

(4)In the case of a penalty under paragraph 57C(1)(b), the assessment must be made no later than—

(a)12 months after the date on which HMRC become aware of the inaccuracy, and

(b)6 years after the date on which the company becomes liable for the penalty.

(5)A penalty payable under this Part must be paid—

(a)no later than 30 days after the date on which the notice under sub-paragraph (2) is given to the company, or

(b)if notice of appeal is given against the penalty under paragraph 57E(1) or (2), no later than 30 days after the date on which the appeal is determined or withdrawn.

(6)The penalty may be enforced as if it were corporation tax or, if the company is not within the charge to corporation tax, income tax charged in an assessment and due and payable.

(7)Sections 100 to 103 of TMA 1970 do not apply to a penalty under this Part.

57E(1)A company may appeal against a decision of HMRC that the company is liable for a penalty under this Part.U.K.

(2)A company may appeal against a decision of HMRC as to the amount of a penalty payable by the company under this Part.

(3)Notice of appeal must be given to HMRC no later than 30 days after the date on which the notice under paragraph 57D(2) is given to the company.

(4)On an appeal under sub-paragraph (1) which is notified to the tribunal, the tribunal may affirm or cancel the decision.

(5)On an appeal under sub-paragraph (2) which is notified to the tribunal, the tribunal may—

(a)affirm the amount of the penalty decided, or

(b)substitute another amount for that amount.

(6)Subject to this paragraph and paragraph 57D, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this paragraph as they have effect in relation to an appeal against an assessment to corporation tax or, if the company is not within the charge to corporation tax, income tax.]

Minor definitionsU.K.

58U.K.In the EMI code—

  • “arrangements” includes any scheme, agreement or understanding, whether it is legally enforceable or not;

  • “company” means a body corporate;

  • “group of companies” means a parent company and its 51% subsidiaries;

  • “the group”, in relation to a parent company, means that company and its 51% subsidiaries;

  • “parent company” means a company that has one or more 51% subsidiaries and “single company” means a company that does not;

  • “research and development” has the meaning given by [F2432section 1006 of ITA 2007];

  • “shares” includes stock.

Textual Amendments

F2432Words in Sch. 5 para. 58 substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(3) (with Sch. 2)

Index of defined expressionsU.K.

59U.K.In the EMI code the following expressions are defined or otherwise explained by the provisions indicated below:

the appropriate timeparagraph 1(4)
arrangementsparagraph 58(1)
child [F2433section 721(6)]
close company [F2434section 989 of ITA 2007], (and see paragraph 29(4))
closure noticeparagraph 47(4)
companyparagraph 58
company reorganisation (in Part 6 of this Schedule)paragraph 39(2)
connected personsection 718
controlsection 719 (and see paragraphs 10(2) and 23(6))
disqualifying eventsee sections 532 to 539
distribution [F2435section 989 of ITA 2007]
earningssection 62 and see section 721(7)
the EMI codesection 527(3)
employee and employmentsection 4
eligible employeeparagraph 24
employer companyparagraph 2
excluded activitiesparagraph 16
farming [F2436section 996 of ITA 2007]
F2437. . .F2437. . .
generally accepted accounting practice [F2438section 997 of ITA 2007]
group of companiesparagraph 58
the groupparagraph 58
F2439. . .F2439...
market valueparagraph 55 (and see paragraph 5(7))
met (in Part 7 of this Schedule)paragraph 44(7)
new optionparagraph 41(7)
notice [F2440section 989 of ITA 2007]
[F2441offshore installation] [F2442sections 1001 and 1002 of ITA 2007]
old optionparagraph 41(7)
ordinary share capital [F2443section 989 of ITA 2007]
original optionsection 529(3)
parent companyparagraph 58
personal representative [F2444section 989 of ITA 2007]
qualifying companyparagraph 8
qualifying optionsection 527(4) (and see paragraph 41(5))
qualifying subsidiaryparagraph 11
qualifying tradeparagraph 15
relevant companyparagraph 2
replacement optionsection 527(4)
the requirements of this Schedulesection 527(4)
research and developmentparagraph 58
share optionsection 527(4)
sharesparagraph 58 (and see paragraph 40(4)(a))
single companyparagraph 58
F2445. . .F2445. . .
51% subsidiary [F2446section 989 of ITA 2007]
tax [F2447section 989 of ITA 2007]
tax year [F2448section 4(2) of ITA 2007 (as applied by section 989 of that Act)]
trade [F2449section 989 of ITA 2007]
[F2450tribunal section 989 of ITA 2007]
United Kingdom [F2451section 1013 of ITA 2007]

Textual Amendments

F2433Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(a) (with Sch. 2)

F2434Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(b) (with Sch. 2)

F2435Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(c) (with Sch. 2)

F2436Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(d) (with Sch. 2)

F2438Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(e) (with Sch. 2)

F2440Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(f) (with Sch. 2)

F2441Words in Sch. 5 para. 59 inserted (with effect in accordance with Sch. 27 para. 17(6)(7) of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 17(5)

F2442Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(g) (with Sch. 2)

F2443Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(h) (with Sch. 2)

F2444Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(i) (with Sch. 2)

F2446Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(j) (with Sch. 2)

F2447Words in Sch. 5 para. 59 substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(6) (with Sch. 2)

F2448Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(l) (with Sch. 2)

F2449Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(m) (with Sch. 2)

F2451Words in Sch. 5 para. 59 Table substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 450(4)(n) (with Sch. 2)

Section 722

SCHEDULE 6U.K.Consequential Amendments

Part 1U.K.Income and Corporation Taxes Act 1988

1U.K.The Income and Corporation Taxes Act 1988 (c. 1) is amended as follows.

F24522U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2452Sch. 6 para. 2 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

3U.K.In section 4(1) (construction of references in Income Tax Acts to deduction of tax) for “in pursuance of section 203” substitute “ under PAYE regulations ”.

F24534U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2453Sch. 6 para. 4 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F24545U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2454Sch. 6 para. 5 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

6U.K.Omit section 19 (Schedule E).

7U.K.In section 21A(2) (computation of amount chargeable)—

(a)for “sections 588 and 589” substitute “ section 588 ”;

(b)for “sections 589A and 589B” substitute “ section 589A ”;

(c)for “1989 (deductions in respect of certain emoluments)” substitute “ 1989 (Schedule D: computation) ”.

8U.K.Omit section 58 (foreign pensions).

F24559U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F245610U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F245711U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2457Sch. 6 para. 11 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 12 (with Sch. 9 paras. 1-9, 22)

F245812U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2458Sch. 6 para. 12 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F245913U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2459Sch. 6 para. 13 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

14U.K.Omit sections 131 to 134 (miscellaneous provisions relating to the Schedule E charge).

15U.K.Omit sections 135 to 137 (provisions relating to gains by directors and employees from share options).

16(1)Amend section 138 (share acquisitions by directors and employees) as follows.U.K.

(2)In subsection (1)(b) for “Schedule E” substitute “ the employment income Parts of ITEPA 2003 ”.

(3)In subsection (4)(b) for “Case I of Schedule E” substitute “ section 15 or 21 of ITEPA 2003 (earnings of employee resident and ordinarily resident in the UK) ”.

17U.K.Omit section 140 (further interpretation of sections 135 to 139).

18U.K.Omit sections 140A to 140H (further provisions relating to share acquisitions by directors and employees).

19U.K.Omit sections 141 to 144 (vouchers and credit-tokens).

20U.K.Omit section 144A (payments received free of tax).

21U.K.Omit sections 145 to 147 (living accommodation).

22U.K.Omit sections 148 to 151A (payments on retirement, sick pay and certain social security benefits).

F246023U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2460Sch. 6 para. 23 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 12 (with Sch. 9 paras. 1-9, 22)

24U.K.Omit sections 153 to 159AC and sections 160 to 168G (employees earning £8,500 or more and directors: expenses and benefits in kind).

25U.K.Omit section 185 (approved share option schemes).

26(1)Amend section 186 (approved profit sharing schemes) as follows.U.K.

(2)In subsection (3)—

(a)omit “the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the entitlement arises on”, and

(b)at the end add “ counts as employment income of the participant for the year of assessment in which the entitlement arises ”.

(3)In subsection (4)—

(a)omit “the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the disposal takes place on”, and

(b)at the end add “ counts as employment income of the participant for the year of assessment in which the disposal takes place ”.

(4)In subsection (5)(a), for the words from “chargeable to income tax” to “those shares” substitute “entitled to a capital receipt (within the meaning of subsection (3) above) which is referable to those shares and—

(i)an amount calculated by reference to that capital receipt counts as his employment income by virtue of subsection (3) above, or

(ii)if the entitlement to the capital receipt arose before 6th April 2003, he was chargeable to income tax by virtue of that subsection (as it had effect before that date) in respect of that capital receipt,”.

27U.K.In section 187 (interpretation of sections 185 and 186 and Schedules 9 and 10) omit subsections (1) to (4), (6) and (7), except so far as relating to profit sharing schemes.

28U.K.Omit the following provisions (which give relief from income tax on various kinds of income)—

(a)section 187A;

(b)sections 189 to 198;

(c)sections 199 to 202.

29U.K.Omit sections 202A and 202B (assessment on receipts basis).

30U.K.Omit sections 203 to 204 (pay as you earn).

31U.K.Omit sections 205 and 206 (assessments).

32U.K.Omit section 206A (PAYE settlement agreements).

33U.K.Omit section 207 (disputes as to domicile or ordinary residence).

F246134U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F246235U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2462Sch. 6 para. 35 omitted (with effect in accordance with Sch. 1 para. 7 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 1 para. 6(l)

36U.K.After section 266 insert—

“266ALife assurance premiums paid by employer

(1)This section applies if—

(a)pursuant to a non-approved retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and

(b)the payment is made under such an insurance or contract as is mentioned in section 266.

This section applies whether or not the accrual of the relevant benefits is dependent on any contingency.

(2)Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if—

(a)the payment had been made by him, and

(b)the insurance or contract under which the payment is made had been made with him.

(3)For the purposes of subsection (1)(a)—

(a)a retirement benefits scheme is “non-approved” unless it is—

(i)an approved scheme,

(ii)a relevant statutory scheme, or

(iii)a scheme set up by a government outside the United Kingdom for the benefit of its employees or primarily for their benefit, and

(b)benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.

(4)Sections 611, 611A and 612 apply for the purposes of this section as they apply for the purposes of Chapter 1 of Part 14.

(5)Section 388 of ITEPA 2003 (apportionment of payments in respect of more than one employee) applies in relation to a sum within subsection (1) as it applies in relation to a sum within section 386 of that Act (charge on payments to non-approved retirement benefits schemes).

(6)This section does not apply in any case where either of the following provisions of ITEPA 2003 provides for section 386 of that Act not to apply—

(a)section 389 (employments where earnings charged on remittance basis), and

(b)section 390 (non-domiciled employees with foreign employers).”

F246337U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2463Sch. 6 para. 37 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 2 (with Sch. 2)

F246438U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2464Sch. 6 para. 38 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 2 (with Sch. 2)

39U.K.Omit section 313 (taxation of consideration for certain restrictive undertakings).

F246540U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

41U.K.Omit sections 315 to 318 (pensions etc. paid in respect of military or war service etc.).

42U.K.Omit section 319 (crown servants: foreign service allowance).

43U.K.Omit section 321 (consuls and other official agents).

F246644U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F246745U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2467Sch. 6 para. 45 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

46U.K.Omit section 330 (compensation for National-Socialist persecution).

47(1)Amend section 332 (expenditure and houses of ministers of religion) as follows.U.K.

(2)Omit subsections (1) and (2).

F2468(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Omit subsections (3A), (3B) and (4).

Textual Amendments

F2468Sch. 6 para. 47(3) repealed (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 3 (with Sch. 2)

F246948U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2469Sch. 6 para. 48 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

F247049U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F247150U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2471Sch. 6 para. 50 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

F247251U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2472Sch. 6 para. 51 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

52U.K.In section 376(2) (qualifying borrowers and qualifying lenders) for the words from “an office or employment” to “Schedule E” substitute “ an office or employment which would, but for some special exemption or immunity from tax, be a taxable employment under Part 2 of ITEPA 2003 (as defined by section 66(3) of that Act) ”.

F247353U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

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Textual Amendments

F247555U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2475Sch. 6 para. 55 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

F247656U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F247757U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F247858U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2478Sch. 6 para. 58 repealed (with effect in accordance with s. 77 of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(7)

F247959U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2479Sch. 6 para. 59 repealed (with effect in accordance with s. 77 of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(7)

F248060U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2480Sch. 6 para. 60 repealed (with effect in accordance with s. 77 of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(7)

F248161U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2481Sch. 6 para. 61 repealed (with effect in accordance with s. 77 of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(7)

F248262U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2482Sch. 6 paras. 62-64 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F248263U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2482Sch. 6 paras. 62-64 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F248264U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2482Sch. 6 paras. 62-64 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F248365U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F248466U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F248567U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2485Sch. 6 para. 67 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

68U.K.Omit section 589 (qualifying courses of training etc.).

F248669U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2486Sch. 6 para. 69 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F248770U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2487Sch. 6 para. 70 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

71U.K.In section 591D (provisions supplementary to section 591C) omit subsection (6).

F248872U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2488Sch. 6 para. 72 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F248973U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2489Sch. 6 para. 73 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

74U.K.Omit sections 595 and 596 (payments by employer to retirement benefits scheme).

75U.K.Omit sections 596A to 596C (benefits under non-approved retirement benefits schemes).

76U.K.Omit section 597 (charge to tax: pensions).

77U.K.In section 599A (charge to tax: payments out of surplus funds) omit subsections (5), (6) and (8).

78U.K.Omit section 600 (charge to tax: unauthorised payments to or for employees).

F249079U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2490Sch. 6 para. 79 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

80F2491(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F2491(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2491(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2491(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2491(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Omit subsection (3)(b)(iv) and the word “and” preceding it.

Textual Amendments

F2491Sch. 6 para. 80(1)-(5) repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

81U.K.In section 608 (charge to tax on annuities paid out of superannuation funds approved before 6th April 1980) omit subsection (4).

F249282U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2492Sch. 6 para. 82 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

83U.K.In section 613 (Parliamentary pension funds) omit subsections (1) to (3).

84U.K.In section 614(3) (exemptions and reliefs in respect of income tax from investments etc. of certain pension schemes) for “paragraph (b), (c), (d) or (f) of subsection (2) of section 615” substitute “ section 648, 649, 650 or 651 of ITEPA 2003 ”.

85U.K.In section 615 (exemption from tax in respect of certain pensions) omit subsections (1), (2), (4), (5) and (8).

86U.K.Omit section 616 (other overseas pensions).

F249387U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2493Sch. 6 para. 87 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

88U.K.Omit section 617A (tax credits under Part 1 of Tax Credits Act 2002 (c. 21)).

F249489U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2494Sch. 6 para. 89 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F249590U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2495Sch. 6 para. 90 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

91(1)Section 643 (employer’s contributions and personal pension income etc.) is amended as follows.U.K.

(2)Omit subsection (1).

(3)In subsection (5) omit “shall be assessable to tax under Schedule E (and section 203 shall apply accordingly) and”.

F249692U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2496Sch. 6 paras. 92-95 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F249693U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2496Sch. 6 paras. 92-95 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F249694U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2496Sch. 6 paras. 92-95 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F249695U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2496Sch. 6 paras. 92-95 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

96U.K.Omit sections 647 to 648A (personal pensions: unauthorised payments, contributions under unapproved arrangements and annuities).

F249797U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2497Sch. 6 para. 97 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F249898U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2498Sch. 6 para. 98 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F249999U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2499Sch. 6 para. 99 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

F2500100U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2500Sch. 6 para. 100 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

F2501101U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2501Sch. 6 paras. 101, 102 repealed (other than for corporation tax purposes) (1.4.2010) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 9 (with Sch. 9 paras. 1-9, 22) and Sch. 6 paras. 101, 102 repealed (for corporation tax purposes with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

F2501102U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2501Sch. 6 paras. 101, 102 repealed (other than for corporation tax purposes) (1.4.2010) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 9 (with Sch. 9 paras. 1-9, 22) and Sch. 6 paras. 101, 102 repealed (for corporation tax purposes with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 2 (with Sch. 2)

F2502103U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2502Sch. 6 para. 103 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 1 (with Sch. 9 paras. 1-9, 22)

104U.K.In section 824(4A) (repayment supplement: individuals and others) for “section 203” substitute “ PAYE regulations ”.

F2503105U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2503Sch. 6 para. 105 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

106U.K.In section 830 (territorial sea and designated areas) omit subsection (5).

107U.K.In section 831(3) (interpretation of ICTA) before the entry relating to “the Management Act” insert—

““ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;”.

F2504108U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2504Sch. 6 para. 108 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

F2505109U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2505Sch. 6 para. 109 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

110U.K.Omit Schedules 6 and 6A (taxation of directors and others: cars and vans).

111U.K.Omit Schedules 7 and 7A (taxation of benefit of loans).

112(1)Amend Schedule 9 (approved share option schemes and profit sharing schemes) as follows.U.K.

(2)Omit Parts 1, 2 and 6 except so far as relating to profit sharing schemes.

(3)Omit Parts 3 and 4.

113(1)Amend Schedule 10 (further provisions relating to profit sharing schemes) as follows.U.K.

(2)In paragraphs 3(1) and 6(4) for “charging an individual to income tax under Schedule E” substitute “ under which an amount counts as employment income of an individual ”.

(3)In paragraph 7—

(a)in sub-paragraph (1), for “a participant in the scheme is chargeable to income tax under Schedule E” substitute “ an amount counts as employment income of the participant ”,

(b)in sub-paragraph (6), for the words from “section 203” to “Schedule E” substitute “ section 684 of ITEPA 2003 (PAYE regulations) and PAYE regulations as PAYE income payable to the recipient ”, and

(c)in sub-paragraph (7)(b)—

(i)omit second “to”, and

(ii)for “the participant is chargeable” substitute “ is charged on the participant ”.

114U.K.Omit Schedule 11 (payments and other benefits in connection with termination of employment etc.).

115U.K.Omit Schedule 11A (removal benefits and expenses).

116U.K.Omit Schedule 12 (foreign earnings).

117U.K.Omit Schedule 12AA (mileage allowances).

118U.K.Omit Schedule 12A (ordinary commuting and private travel).

119U.K.In Schedule 14 (modification of section 266 in certain cases), in paragraph 5 for “section 595” substitute “ section 386 of ITEPA 2003 (payments to non-approved retirement benefits schemes) ”.

F2506120U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2507121U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2507Sch. 6 para. 121 repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 3 Pt. 1 (with Sch. 2)

Part 2U.K.Other enactments

Finance Act 1969 (c. 32)U.K.

122(1)Section 58 of the Finance Act 1969 (disclosure of information for statistical purposes by Board of Inland Revenue) is amended as follows.U.K.

(2)In subsection (1)(a)—

(a)for “section 203 of the Taxes Act 1988 (pay as you earn)” substitute “ PAYE regulations ”;

(b)for “emoluments to which that section applies” substitute “ earnings or amounts treated as earnings from an employment ”.

(3)In subsection (1)(b) for “emoluments” substitute “ earnings or amounts treated as earnings ”.

(4)After subsection (1) insert—

“(1A)In subsection (1) “earnings or amounts treated as earnings” means earnings or amounts treated as earnings which constitute employment income (see section 7(2)(a) or (b) of the Income Tax (Earnings and Pensions) Act 2003).”

Taxes Management Act 1970 (c. 9)U.K.

123U.K.The Taxes Management Act 1970 is amended as follows.

124U.K.In section 7(4) and (5) (notice of liability to income tax and capital gains tax) for “section 203 of the principal Act” substitute “ PAYE regulations ”.

125(1)Amend section 9 (returns to include self-assessment) as follows.U.K.

(2)In subsection (1) for “, 547(5) or 599A(5) of the principal Act” substitute “ or 547(5) of the principal Act or section 626 of ITEPA 2003 ”.

F2508(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2508Sch. 6 para. 125(3) repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

126(1)Amend section 15 (return of employee’s emoluments etc.) as follows.U.K.

(2)For the sidenote to the section substitute “ Return of employees' earnings etc. ”

(3)In subsection (3)(a) for “employment to which Chapter II of Part V of the principal Act applies” substitute “ employment which, for the purposes of the benefits code in ITEPA 2003, is a taxable employment under Part 2 of that Act (see section 66) but is not an excluded employment (see section 63 of that Act) ”.

(4)In subsection (8)(a) for “the relevant sections, that is to say, sections 141, 142, 143, 144A, 145, 146 and 154 to 165 of the principal Act” substitute “ the relevant provisions, that is to say, Chapters 4 to 10 of Part 3 and sections 222 and 223 of ITEPA 2003 ”.

(5)In subsection (9)(a) for “the relevant sections” substitute “ the relevant provisions ”.

(6)In subsection (11)—

(a)for “the relevant sections”, in each place, substitute “ the relevant provisions ”; and

(b)in paragraph (a)(ii) for “section 141(3), 142(2), 145(3) or 156(8) of the principal Act” substitute “ section 328(1), 362, 363, 364 or 365 of ITEPA 2003 ”.

(7)In subsection (13)—

(a)in the definition of “employee”, for “whose emoluments fall to be assessed under Schedule E” substitute “ whose earnings are within the charge to tax under ITEPA 2003 ”; and

(b)for the definition of “the relevant sections” substitute—

““the relevant provisions” has the meaning given by section (8)(a) above.”

127U.K.For section 16A substitute—

“16AAgency workers

(1)This section applies where—

(a)any services which an individual provides or is obliged to provide under an agency contract are treated under section 44(2) of ITEPA 2003 as the duties of an office or employment held by him with the agency, or

(b)any remuneration receivable under or in consequence of arrangements falling within section 45 of that Act is treated as earnings from an office or employment held by an individual with the agency.

(2)Where this section applies—

(a)section 15 above shall apply as if the individual were employed by the agency, and

(b)section 16 above shall not apply to any payments made to the individual under or in consequence of the agency contract or the arrangements.

(3)In this section “agency contract” and “remuneration” have the same meaning as in Chapter 7 of Part 2 of ITEPA 2003.”

128U.K.In section 42(3) (procedure for making claims etc.) for “section 203 of the principal Act” substitute “ PAYE regulations ”.

F2509129U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

130U.K.In section 59A (payments on account of income tax)—

(a)in subsection (8)(b) for “section 203 of the principal Act” substitute “ PAYE regulations ”; and

(b)in subsection (10) for “Regulations under section 203 of the principal Act (PAYE)” substitute “ PAYE regulations ”.

131(1)Amend section 59B (payment of income tax and capital gains tax) as follows.U.K.

(2)In subsection (1) for “, 547(5) or 599A(5) of the principal Act” substitute “ or 547(5) of the principal Act or section 626 of ITEPA 2003 ”.

(3)In subsection (2)(a) for “section 203 of the principal Act” substitute “ PAYE regulations ”.

(4)In subsection (8) for “Regulations under section 203 of the principal Act (PAYE)” substitute “ PAYE regulations ”.

132U.K.In section 62(1A)(a) (priority of claim for tax)—

(a)for “emoluments” substitute “ taxable earnings (as defined by section 10 of ITEPA 2003) ”;

(b)for “section 203 of the principal Act (pay as you earn)” substitute “ PAYE regulations ”.

133U.K.In section 63(3)(a) (recovery of tax in Scotland) for “section 203 of the principal Act (pay as you earn)” substitute “ PAYE regulations ”.

134U.K.In section 64(1A)(a) (priority of claim for tax in Scotland)—

(a)for “emoluments” substitute “ taxable earnings (as defined by section 10 of ITEPA 2003) ”;

(b)for “section 203 of the principal Act (pay as you earn)” substitute “ PAYE regulations ”.

135(1)Amend section 70 (evidence) as follows.U.K.

F2510(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In subsection (4) for “emoluments” in both places where it occurs substitute “ earnings or amounts treated as earnings ”.

(4)After subsection (4) insert—

“(5)In subsection (4) “earnings or amounts treated as earnings” means earnings or amounts treated as earnings which constitute employment income (see section 7(2)(a) or (b) of ITEPA 2003).”

Textual Amendments

F2510Sch. 6 para. 135(2) omitted (21.7.2008) by virtue of Finance Act 2008 (c. 9), Sch. 44 para. 11(f)

136U.K.In section 91(3)(c) (effect on interest of reliefs) for “section 203 of the principal Act” substitute “ PAYE regulations ”.

137(1)Amend the Table in section 98 (special returns, etc.) as follows.U.K.

(2)Omit from the first column of the Table the entries relating to—

(a)regulations under section 202 of ICTA;

(b)paragraph 117 of Schedule 8 to FA 2000;

(c)paragraph 64 of Schedule 14 to FA 2000.

(3)At the end of the first column of the Table insert the following entries—

“Regulations under section 589 of ITEPA 2003.
Regulations under section 715 of ITEPA 2003.
Paragraph 93 of Schedule 2 to ITEPA 2003.
Paragraph 45 of Schedule 3 to ITEPA 2003.
Paragraph 33 of Schedule 4 to ITEPA 2003.
Paragraph 51 of Schedule 5 to ITEPA 2003.”

(4)Omit from the second column of the Table the entries relating to—

(a)section 136(6) of ICTA;

(b)section 140G of ICTA;

(c)regulations under section 202 of ICTA;

(d)regulations under section 203 of ICTA;

(e)section 313(5) of ICTA;

(f)section 85(1) and (2) of FA 1988;

(g)paragraph 65 of Schedule 14 to FA 2000.

(5)At the end of the second column of the Table insert the following entries—

“ Sections 432 and 433 of ITEPA 2003.
 Section 445 of ITEPA 2003.
 Sections 465 and 466 of ITEPA 2003.
 Section 486 of ITEPA 2003.
 Regulations under section 589 of ITEPA 2003.
 Regulations under section 715 of ITEPA 2003.
 PAYE regulations.
 Paragraph 52 of Schedule 5 to ITEPA 2003.”

138U.K.In section 98A(1) (special penalties in the case of certain returns) for “Regulations under section 203(2) (PAYE) or” substitute “ PAYE regulations or regulations under section ”.

139U.K.In section 118 (interpretation) after the entry relating to “inspector” insert—

““ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003,”.

140U.K.In section 119(4) (construction of the Act) after “1992 Act” insert “ and ITEPA 2003 ”.

141U.K.In paragraph 4(1A) of Schedule 1A (claims etc. not included in returns) for “section 203 of the principal Act” substitute “ PAYE regulations ”.

F2511142U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

143U.K.In Schedule 3A (electronic lodgement of tax returns etc.) in paragraph 2(4) (returns to which the Schedule applies) after “the principal Act” insert “ or under ITEPA 2003 ”.

Finance Act 1973 (c. 51)U.K.

F2512144U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2512Sch. 6 paras. 144-147 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 12 (with Sch. 9 paras. 1-9, 22)

F2512145U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2512Sch. 6 paras. 144-147 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 12 (with Sch. 9 paras. 1-9, 22)

F2512146U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2512Sch. 6 paras. 144-147 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 12 (with Sch. 9 paras. 1-9, 22)

Finance Act 1974 (c. 30)U.K.

F2512147U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2512Sch. 6 paras. 144-147 repealed (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 10 Pt. 12 (with Sch. 9 paras. 1-9, 22)

Interpretation Act 1978 (c. 30)U.K.

148U.K.In Schedule 1 to the Interpretation Act 1978 (words and expressions defined) after the definition of “Parliamentary election” insert—

““PAYE income” has the meaning given by section 683 of the Income Tax (Earnings and Pensions) Act 2003.

“PAYE regulations” means regulations under section 684 of that Act.”

Education (Scotland) Act 1980 (c. 44)U.K.

149U.K.In section 73B of the Education (Scotland) Act 1980 (grants and loans: Scotland)—

(a)in subsection (3)(g) for “regulations under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”; and

(b)in subsection (4) for “income assessable to income tax under Schedule E” substitute “ PAYE income ”.

Inheritance Tax Act 1984 (c. 51)U.K.

150U.K.The Inheritance Tax Act 1984 is amended as follows.

151(1)Amend the following provisions as provided in sub-paragraph (2)—U.K.

(a)section 13(4)(c) (dispositions by close companies for benefit of employees),

(b)section 72(4A) (property leaving employee trusts and newspaper trusts), and

(c)section 86(3)(c) (trusts for benefit of employees).

(2)In each of those provisions, for “an employee share ownership plan approved under Schedule 8 to the Finance Act 2000” substitute “ a share incentive plan approved under Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 ”.

152U.K.In section 14(1) (waiver of remuneration), for “would be assessable to income tax under Schedule E” substitute “ would be earnings, or would be treated as earnings, and would constitute employment income (see section 7(2)(a) or (b) of the Income Tax (Earnings and Pensions) Act 2003) ”.

Bankruptcy (Scotland) Act 1985 (c. 66)U.K.

F2513153U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Insolvency Act 1986 (c. 45)U.K.

154U.K.In paragraph 1 of Schedule 6 to the Insolvency Act 1986 (the categories of preferential debts)—

(a)for “emoluments” substitute “ taxable earnings (as defined by section 10 of the Income Tax (Earnings and Pensions) Act 2003) ”; and

(b)for “section 203 of the Income and Corporation Taxes Act 1988 (pay as you earn)” substitute “ PAYE regulations ”.

Finance Act 1988 (c. 39)U.K.

155(1)Section 73 of the Finance Act 1988 (consideration for certain restrictive undertakings) is amended as follows.U.K.

(2)In subsection (2) for “any sum to which section 313 of that Act applies” substitute “ any payment which is treated as earnings of an employee by virtue of section 225 of the Income Tax (Earnings and Pensions) Act 2003 (payments for restrictive undertakings) ”.

(3)In subsection (3) for “Any sum to which section 313 of the Taxes Act 1988 applies” substitute “ Any payment which is treated as earnings of an employee by virtue of section 225 of the Income Tax (Earnings and Pensions) Act 2003 ”.

Finance Act 1989 (c. 26)U.K.

156U.K.The Finance Act 1989 is amended as follows.

157U.K.For section 43 substitute—

“43Schedule D: computation

(1)In calculating profits or gains of a trade to be charged under Schedule D for a period of account, no deduction is allowed for an amount charged in the accounts in respect of employees' remuneration, unless the remuneration is paid before the end of the period of 9 months immediately following the end of the period of account.

(2)For the purposes of subsection (1) above an amount charged in the accounts in respect of employees' remuneration includes an amount—

(a)for which provision is made in the accounts, or

(b)which is held by an intermediary,

with a view to its becoming employees' remuneration.

(3)Subsection (1) above applies whether the amount is in respect of particular employments or in respect of employments generally.

(4)If the remuneration is paid after the end of the period of 9 months mentioned in subsection (1) above, any deduction allowed in respect of it is allowed for the period of account in which it is paid and not for any other period of account.

(5)If the profits of the trade are calculated before the end of the period of 9 months mentioned in subsection (1) above—

(a)it must be assumed, in making the calculation, that any remuneration which is unpaid when the calculation is made will not be paid before the end of that period, but

(b)if the remuneration is subsequently paid before the end of that period, the calculation is adjusted if a claim to adjust it is made to an officer of the Board within 2 years beginning with the end of the period of account.

(6)For the purposes of this section, remuneration is paid when it—

(a)is treated as received by an employee for the purposes of the Income Tax (Earnings and Pensions) Act 2003 by section 18, 19, 31 or 32 of that Act (receipt of money and non-money earnings), or

(b)would be so treated if it were not exempt income.

(7)In this section—

  • “employee” includes an office-holder and “employment” correspondingly includes an office, and

  • “remuneration” means an amount which is or is treated as earnings for the purposes of the Income Tax (Earnings and Pensions) Act 2003.”

158U.K.For section 44 substitute—

“44Investment and insurance companies: computation

(1)In calculating the profits of an investment company for a period of account, no deduction is allowed for an amount charged in the accounts in respect of employees' remuneration, unless the remuneration is paid before the end of the period of 9 months immediately following the end of the period of account.

(2)For the purposes of subsection (1) above an amount charged in the accounts in respect of employees' remuneration includes an amount—

(a)for which provision is made in the accounts, or

(b)which is held by an intermediary,

with a view to its becoming employees' remuneration.

(3)Subsection (1) above applies whether the amount is in respect of particular employments or in respect of employments generally.

(4)If the remuneration is paid after the end of the period of 9 months mentioned in subsection (1) above, any deduction allowed in respect of it is allowed for the period of account in which it is paid and not for any other period of account.

(5)If the profits of the trade are calculated before the end of the period of 9 months mentioned in subsection (1) above—

(a)it must be assumed, in making the calculation, that any remuneration which is unpaid when the calculation is made will not be paid before the end of that period, but

(b)if the remuneration is subsequently paid before the end of that period, the calculation is adjusted if a claim to adjust it is made to an officer of the Board by or on behalf of the company within 2 years beginning with the end of the period of account.

(6)For the purposes of this section, remuneration is paid when it—

(a)is treated as received by an employee for the purposes of the Income Tax (Earnings and Pensions) Act 2003 by section 18, 19, 31 or 32 of that Act (receipt of money and non-money earnings), or

(b)would be so treated if it were not exempt income.

(7)Where the profits of a company carrying on life assurance business are not charged under Case I of Schedule D, this section shall apply in calculating the profits as it applies in calculating the profits of an investment company; and in any such case—

(a)subsection (4) above shall have effect subject to section 86 below, and

(b)in construing section 86 below the remuneration shall be treated as expenses for the accounting period.

(8)In this section—

  • “employee” includes an office-holder and “employment” correspondingly includes an office,

  • “investment company” has the same meaning as in Part 4 of the Taxes Act 1988, and

  • “remuneration” means an amount which is or is treated as earnings for the purposes of Parts 2 to 7 of the Income Tax (Earnings and Pensions) Act 2003.”

159U.K.In section 53(2)(f) (amendments consequential on the substitution of a new section 167 of ICTA) for “sections 332(2)(c) and 418(3)(a)” substitute “ section 418(3)(a) ”.

160(1)Amend section 69 (chargeable events in relation to employee share ownership trusts) as follows.U.K.

(2)In subsection (3AA)—

(a)in paragraph (a) for “an employee share ownership” substitute “ a share incentive ”, and

(b)in paragraph (b) for “Schedule 8 to the Finance Act 2000” substitute “ Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In the definition of “market value” in subsection (3AC), for “in Schedule 8 to the Finance Act 2000” substitute “ it has for the purposes of the SIP code (see paragraph 92 of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003) ”.

(4)In subsection (4ZA)(b)—

(a)for “a savings-related share option scheme within the meaning of Schedule 9 to the Taxes Act 1988” substitute “ an SAYE option scheme within the meaning of the SAYE code (see section 516(4) of the Income Tax (Earnings and Pensions) Act 2003) ”, and

(b)in sub-paragraph (ii) for “that Schedule” substitute “ Schedule 3 to that Act ”.

F2514161U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2514Sch. 6 para. 161 repealed (6.4.2006) by Finance Act 2004 (c. 12), Sch. 42 Pt. 3 (with Sch. 36)

162U.K.In section 178(2) (setting of rates of interest)—

(a)in paragraph (m) omit the words “160,”,

(b)at the end of the first paragraph (p) omit the word “and”,

(c)renumber the second paragraph (p) as paragraph (q), and

(d)at the end of paragraph (r) insert “, and

(s)Chapter 7 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003.”.

163(1)Amend Schedule 5 (employee share ownership trusts) as follows.U.K.

(2)In paragraph 4(2A) (beneficiaries)—

(a)for “a savings-related share option scheme within the meaning of Schedule 9 to the Taxes Act 1988” substitute “ an SAYE option scheme ”, and

(b)in paragraph (b), for “that Schedule” substitute “ Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In paragraph 9(2ZA)(b) (transfers of securities on qualifying terms)—

(a)for “a savings-related share option scheme within the meaning of Schedule 9 to the Taxes Act 1988” substitute “ an SAYE option scheme ”, and

(b)in sub-paragraph (ii), for “that Schedule” substitute “ Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 ”.

(4)In paragraph 10 (other features)—

(a)for “savings-related share option schemes approved under Schedule 9 to the Taxes Act 1988” substitute “ SAYE option schemes approved under Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 ”; and

(b)for “that Schedule” substitute “ Schedule 9 to the Taxes Act 1988 ”.

(5)After paragraph 17 insert—

“18For the purposes of this Schedule “SAYE option scheme” has the same meaning as in the SAYE code (see section 516 of the Income Tax (Earnings and Pensions) Act 2003 (approved SAYE option schemes)).”

Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19))U.K.

164U.K.In paragraph 1 of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (the categories of preferential debts)—

(a)in sub-paragraph (1), for “emoluments” substitute “ taxable earnings (as defined by section 10 of the Income Tax (Earnings and Pensions) Act 2003) ”; and

(b)in sub-paragraph (2), for “section 203 of the Income and Corporation Taxes Act 1988 (pay as you earn)” substitute “ regulations made under section 684 of that Act (PAYE regulations) ”.

Finance Act 1990 (c. 29)U.K.

165U.K.The Finance Act 1990 is amended as follows.

F2515166U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2515Sch. 6 para. 166 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

167(1)Amend paragraph 4 of Schedule 14 (amendments of sections 322 and 323 of ICTA) as follows.U.K.

(2)In sub-paragraph (1) for “sections 322(1)(a) and (2) and 323(1)” substitute “ section 322(1)(a) ”.

(3)Omit sub-paragraph (2).

Finance Act 1991 (c. 31)U.K.

168(1)Amend section 38 of the Finance Act 1991 (employee share schemes: non-discrimination) as follows.U.K.

(2)Omit subsection (2).

(3)In subsection (6) for “Subsections (2) and” substitute “ Subsection ”.

Social Security Contributions and Benefits Act 1992 (c. 4)U.K.

169U.K.The Social Security Contributions and Benefits Act 1992 is amended as follows.

170U.K.In section 1 (outline of contributory system), in subsection (2)(bb) for “emoluments” substitute “ general earnings ”.

171U.K.In section 2 (categories of earners), in subsection (1)(a) for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings ”.

172(1)Amend section 4 (payments treated as remuneration and earnings) as follows.U.K.

(2)For subsection (4)(a) substitute—

“(a)the amount of any gain calculated under section 479 or 480 of ITEPA 2003 in respect of which an amount counts as employment income of the earner under section 476 or 477 of that Act (charge on exercise, assignment or release of share option);”.

(3)In subsection (4)(b) for “section 313 of the 1988 Act” substitute “ section 225 or 226 of ITEPA 2003 ”.

(4)In subsection (6)(a) for “Schedule E” substitute “ the employment income Parts of ITEPA 2003 ”.

173U.K.In section 7(1)(b) (meaning of “secondary contributor”) for “emoluments” in both places where it occurs substitute “ general earnings ”.

174(1)Amend section 10 (Class 1A National Insurance contributions: benefits in kind etc.) as follows.U.K.

(2)For subsection (1)(a) substitute—

“(a)for any tax year an earner is chargeable to income tax under ITEPA 2003 on an amount of general earnings received by him from any employment (“the relevant employment”),”.

(3)For subsection (1)(b) substitute—

“(b)the relevant employment is both—

(i)employed earner’s employment, and

(ii)an employment, other than an excluded employment, within the meaning of the benefits code (see Chapter 2 of Part 3 of ITEPA 2003),”.

(4)In subsection (1)(c) for “emolument” substitute “ general earnings ”.

(5)In subsection (1) in the words after paragraph (c) for “emolument” substitute “ general earnings ”.

(6)In subsection (2)(b) for “emolument” substitute “ general earnings ”.

(7)In subsection (4)—

(a)for “emolument” substitute “ general earnings ”;

(b)for “it” substitute “ them ”.

(8)In subsection (6) for “emolument as is taken” substitute “ general earnings as are taken ”.

(9)For subsection (7) substitute—

“(7)In calculating for the purposes of this section the amount of general earnings received by an earner from an employment, a deduction under any of the excluded provisions is to be disregarded.

This subsection does not apply in relation to a deduction if subsection (7A) applies in relation to it.

(7A)Where—

(a)a deduction in respect of a matter is allowed under an excluded provision, and

(b)the amount deductible is at least equal to the whole of any corresponding amount which would (but for this section) fall by reference to that matter to be included in the general earnings mentioned in subsection (7),

the whole of the corresponding amount shall be treated as not included.

(7B)For the purposes of subsections (7) and (7A) “excluded provision” means—

(a)any provision of Chapter 2 of Part 5 of ITEPA 2003 (deductions for employee’s expenses), other than section 352 (limited deduction for agency fees paid by entertainers), and

(b)any provision of Chapter 5 of Part 5 of ITEPA 2003 (deductions for earnings representing benefits or reimbursed expenses).”

(10)For subsection (8)(a) substitute—

“(a)modify the effect of subsections (7) and (7A) above by amending subsection (7B) so as to include any enactment contained in the Income Tax Acts within the meaning of “excluded provision”; or”.

(11)In subsection (8)(b)—

(a)for “subsection (7)” substitute “ subsections (7) to (7B) ”;

(b)for “under Schedule E” substitute “ on employment income ”.

(12)In subsection (9)(a) for “emoluments” substitute “ general earnings ”.

(13)Omit subsection (10).

175(1)Amend section 10ZA (liability of third party provider of benefits in kind) as follows.U.K.

(2)In subsection (1)(a) for “an emolument” substitute “ general earnings ”.

(3)Amend subsection (1)(b) as follows—

(a)for “the emolument, in so far as it is one in respect of which” substitute “ the general earnings, in so far as they are ones in respect of which ”;

(b)for “consists” substitute “ consist ”.

(4)In subsection (2), in the words after paragraph (b) for “an emolument” substitute “ general earnings ”.

(5)In subsection (6) for “section 168(4) of the Income and Corporation Taxes Act 1988” substitute “ section 721(5) of ITEPA 2003 ”.

176(1)Amend section 10ZB (non-cash vouchers provided by third parties) as follows.U.K.

(2)In subsection (2)(a) for the words from “employment” to the end of the paragraph substitute “ employment which is an excluded employment for the purposes of the benefits code, and ”.

(3)In subsection (2)(b) for “if that Chapter did apply to that employment” substitute “ if that employment were not an excluded employment ”.

(4)In subsection (2), in the words following paragraph (b) for “as if that employment were employment to which that Chapter applied” substitute “ as if that employment were not an excluded employment ”.

(5)In subsection (3) for “section 141 of the Income and Corporation Taxes Act 1988” substitute “ section 84 of ITEPA 2003 ”.

177(1)Amend section 10A (Class 1B National Insurance contributions) as follows.U.K.

(2)In subsection (1) for “emoluments” substitute “ general earnings ”.

(3)In subsection (2)(a) for “the emoluments included” substitute “ the general earnings included ”.

(4)In subsection (4) for “Emoluments are chargeable emoluments” substitute “ General earnings are chargeable emoluments ”.

(5)In subsection (5) for “emoluments” in both places where it occurs substitute “ general earnings ”.

178(1)Amend section 122(1) (interpretation of Parts 1 to 6 and supplementary provisions) as follows.U.K.

(2)Insert the following definitions in the appropriate places—

  • ““the benefits code” has the meaning given by section 63(1) of ITEPA 2003;”

““the employment income Parts of ITEPA 2003” means Parts 2 to 7 of that Act;”

““excluded employment” has the meaning given by section 63(4) of ITEPA 2003;”

““general earnings” has the meaning given by section 7 of ITEPA 2003 and accordingly sections 3 and 112 of this Act do not apply in relation to the word “earnings” when used in the expression “general earnings”;”

““ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;”.

(3)In the definition of “PAYE settlement agreement” for “section 206A of the Income and Corporation Taxes Act 1988” substitute “ Chapter 5 of Part 11 of ITEPA 2003 ”.

179U.K.In section 126(5)(a)(ii) (trade disputes) for “emoluments in pursuance of section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ taxable earnings (as defined by section 10 of the Income Tax (Earnings and Pensions) Act 2003) under PAYE regulations ”.

180(1)Amend section 150(2) (interpretation of Part 10) as follows.U.K.

(2)In paragraph (b) of the definition of “unemployability supplement or allowance”—

(a)in sub-paragraph (ii) for “section 315(1) of the Income and Corporation Taxes Act 1988” substitute “ section 641 of the Income Tax (Earnings and Pensions) Act 2003 ”;

(b)omit sub-paragraph (v).

(3)In paragraph (b) of the definition of “war disablement pension” for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988” substitute “ any of paragraphs (a) to (f) of section 641(1) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(4)In the definition of “war widow’s pension” for “subsection (2)(e) of the said section 315” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

181U.K.In section 163(1) (interpretation of Part 11), in paragraph (a) of the definition of “employee” for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

182U.K.In section 171(1) (interpretation of Part 12), in paragraph (a) of the definition of “employee” for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

183U.K.In section 171ZJ(2)(a) (Part 12ZA: supplementary) for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

184U.K.In section 171ZS(2)(a) (Part 12ZB: supplementary) for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

185U.K.In Schedule 1 (supplementary provisions relating to contributions of Classes 1, 1A, 1B, 2 and 3)—

(a)in paragraph 6(1)(a) for “regulations under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”;

(b)in paragraph 6(1)(b) for “regulations under that section” substitute “ PAYE regulations ”;

(c)in paragraph 6(7) for “regulations made under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”;

(d)in paragraph 7(1)(a) for “regulations made by [F165an officer of Revenue and Customs] under section 203(2) or” substitute “ PAYE regulations or regulations made under section ”; and

(e)in paragraph 7B(1) for “regulations under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”.

Textual Amendments

Social Security Administration Act 1992 (c. 5)U.K.

186U.K.The Social Security Administration Act 1992 is amended as follows.

187(1)Amend section 139(11) (definitions used in provisions relating to arrangements for council tax benefit) as follows.U.K.

(2)In paragraph (b) of the definition of “war disablement pension” for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988” substitute “ any of paragraphs (a) to (f) of section 641(1) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In the definition of “war widow’s pension” for “section 315(2)(e) of the Income and Corporation Taxes Act 1988” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

188(1)Amend section 159B(6) (effect of alterations affecting state pension credit) as follows.U.K.

(2)In paragraph (b) of the definition of “war disablement pension” for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988 (c. 1)” substitute “ any of paragraphs (a) to (f) of section 641(1) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In paragraph (b) of the definition of “war widow’s or widower’s pension” for “section 315(2)(e) of the Income and Corporation Taxes Act 1988” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

189(1)Amend section 162(5) (destination of national insurance contributions) as follows.U.K.

(2)In paragraph (c) for “emoluments” substitute “ general earnings ”.

(3)In paragraph (ca) for “emoluments” substitute “ general earnings ”.

Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)U.K.

190U.K.The Social Security Contributions and Benefits (Northern Ireland) Act 1992 is amended as follows.

191U.K.In section 1 (outline of contributory system), in subsection (2)(bb) for “emoluments” substitute “ general earnings ”.

192U.K.In section 2 (categories of earners), in subsection (1)(a) for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings ”.

193(1)Amend section 4 (payments treated as remuneration and earnings) as follows.U.K.

(2)For subsection (4)(a) substitute—

“(a)the amount of any gain calculated under section 479 or 480 of ITEPA 2003 in respect of which an amount counts as employment income of the earner under section 476 or 477 of that Act (charge on exercise, assignment or release of share option);”.

(3)In subsection (4)(b) for “section 313 of the 1988 Act” substitute “ section 225 or 226 of ITEPA 2003 ”.

(4)In subsection (6)(a) for “Schedule E” substitute “ the employment income Parts of ITEPA 2003 ”.

194U.K.In section 7(1)(b) (meaning of “secondary contributor”) for “emoluments” in both places where it occurs substitute “ general earnings ”.

195(1)Amend section 10 (Class 1A National Insurance contributions: benefits in kind etc.) as follows.U.K.

(2)For subsection (1)(a) substitute—

“(a)for any tax year an earner is chargeable to income tax under ITEPA 2003 on an amount of general earnings received by him from any employment (“the relevant employment”),”.

(3)For subsection (1)(b) substitute—

“(b)the relevant employment is both—

(i)employed earner’s employment, and

(ii)an employment, other than an excluded employment, for the purposes of the benefits code (see Chapter 2 of Part 3 of ITEPA 2003),”.

(4)In subsection (1)(c) for “emolument” substitute “ general earnings ”.

(5)In subsection (1), in the words after paragraph (c) for “emolument” substitute “ general earnings ”.

(6)In subsection (2)(b) for “emolument” substitute “ general earnings ”.

(7)In subsection (4)—

(a)for “emolument” substitute “ general earnings ”;

(b)for “it” substitute “ them ”.

(8)In subsection (6) for “emolument” substitute “ general earnings ”.

(9)For subsection (7) substitute—

“(7)In calculating for the purposes of this section the amount of general earnings received by an earner from an employment, a deduction under any of the excluded provisions is to be disregarded.

This subsection does not apply in relation to a deduction if subsection (7A) applies in relation to it.

(7A)Where—

(a)a deduction in respect of a matter is allowed under an excluded provision, and

(b)the amount deductible is at least equal to the whole of any corresponding amount which would (but for this section) fall by reference to that matter to be included in the general earnings mentioned in subsection (7),

the whole of the corresponding amount shall be treated as not included.

(7B)For the purposes of subsections (7) and (7A) “excluded provision” means—

(a)any provision of Chapter 2 of Part 5 of ITEPA 2003 (deductions for employee’s expenses) other than section 352 (limited deduction for agency fees paid by entertainers), and

(b)any provision of Chapter 5 of Part 5 of ITEPA 2003 (deductions for earnings representing benefits or reimbursed expenses).”

(10)For subsection (8)(a) substitute—

“(a)modify the effect of subsections (7) and (7A) above by amending subsection (7B) so as to include any enactment contained in the Income Tax Acts within the meaning of “excluded provision”; or”.

(11)In subsection (8)(b)—

(a)for “subsection (7)” substitute “ subsections (7) to (7B) ”;

(b)for “under Schedule E” substitute “ on employment income ”.

(12)In subsection (9)(a) for “emoluments” substitute “ general earnings ”.

(13)Omit subsection (10).

196(1)Amend section 10ZA (liability of third party provider of benefits in kind) as follows.U.K.

(2)In subsection (1)(a) for “an emolument” substitute “ general earnings ”.

(3)Amend subsection (1)(b) as follows—

(a)for “the emolument, in so far as it is one in respect of which” substitute “ the general earnings, in so far as they are ones in respect of which ”;

(b)for “consists” substitute “ consist ”.

(4)In subsection (2), in the words after paragraph (b) for “an emolument” substitute “ general earnings ”.

(5)In subsection (6) for “section 168(4) of the Income and Corporation Taxes Act 1988” substitute “ section 721(5) of ITEPA 2003 ”.

197(1)Amend section 10ZB (non-cash vouchers provided by third parties) as follows.U.K.

(2)In subsection (2)(a) for the words from “employment” to the end of the paragraph substitute “ employment which is an excluded employment for the purposes of the benefits code, and ”.

(3)In subsection (2)(b) for “if that Chapter did apply to that employment” substitute “ if that employment were not an excluded employment ”.

(4)In subsection (2), in the words following paragraph (b) for “as if that employment were employment to which that Chapter applied” substitute “ as if that employment were not an excluded employment ”.

(5)In subsection (3) for “section 141 of the Income and Corporation Taxes Act 1988” substitute “ section 84 of ITEPA 2003 ”.

198(1)Amend section 10A (Class 1B National Insurance contributions) as follows.U.K.

(2)In subsection (1) for “emoluments” substitute “ general earnings ”.

(3)In subsection (2)(a) for “the emoluments included” substitute “ the general earnings included ”.

(4)In subsection (4) for “Emoluments are chargeable emoluments” substitute “ General earnings are chargeable emoluments ”.

(5)In subsection (5) for “emoluments” in both places where it occurs substitute “ general earnings ”.

199(1)Amend section 121(1) (interpretation of Parts 1 to 6 and supplementary provisions) as follows.U.K.

(2)Insert the following definitions in the appropriate places—

  • ““the benefits code” has the meaning given by section 63(1) of ITEPA 2003;”

““the employment income Parts of ITEPA 2003” means Parts 2 to 7 of that Act;”

““excluded employment” has the meaning given by section 63(4) of ITEPA 2003;”

““general earnings” has the meaning given by section 7 of ITEPA 2003 and accordingly sections 3 and 112 of this Act do not apply in relation to the word “earnings” when used in the expression “general earnings”;”

““ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;”.

(3)In the definition of “PAYE settlement agreement” for “section 206A of the Income and Corporation Taxes Act 1988” substitute “ Chapter 5 of Part 11 of ITEPA 2003 ”.

200U.K.In section 125(5)(a)(ii) (trade disputes) for “emoluments in pursuance of section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ taxable earnings (as defined by section 10 of the Income Tax (Earnings and Pensions) Act 2003) under PAYE regulations ”.

201(1)Amend section 146(2) (interpretation of Part 10) as follows.U.K.

(2)In paragraph (b) of the definition of “unemployability supplement or allowance”—

(a)in sub-paragraph (ii) for “section 315(1) of the Income and Corporation Taxes Act 1988” substitute “ section 641 of the Income Tax (Earnings and Pensions) Act 2003 ”;

(b)omit sub-paragraph (v).

(3)In paragraph (b) of the definition of “war disablement pension”, for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988” substitute “ any of paragraphs (a) to (f) of section 641(1) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(4)In the definition of “war widow’s pension” for “subsection (2)(e) of the said section 315” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

202U.K.In section 159(1) (interpretation of Part 11), in paragraph (a) of the definition of “employee” for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

203U.K.In section 167(1) (interpretation of Part 12), in paragraph (a) of the definition of “employee” for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

204U.K.In Schedule 1 (supplementary provisions relating to contributions of Classes 1, 1A, 1B, 2 and 3)—

(a)in paragraph 6(1)(a) for “regulations under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”;

(b)in paragraph 6(1)(b) for “regulations under that section” substitute “ PAYE regulations ”;

(c)in paragraph 6(7) for “regulations made under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”;

(d)in paragraph 7(1)(a) for “regulations made by [F165an officer of Revenue and Customs] under section 203(2) or” substitute “ PAYE regulations or regulations made under section ”; and

(e)in paragraph 7B(1) for “regulations under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”.

Textual Amendments

Social Security Administration (Northern Ireland) Act 1992 (c. 8)U.K.

205(1)Section 139B(6) of the Social Security Administration (Northern Ireland) Act 1992 (effect of alterations affecting state pension credit) is amended as follows.U.K.

(2)b) of the definition of “war disablement pension” for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988 (c. 1)” substitute “ any of paragraphs (a) to (f) of section 641(1) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In paragraph (b) of the definition of “war widow’s or widower’s pension” for “section 315(2)(e) of the Income and Corporation Taxes Act 1988” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

206U.K.In section 142(5) of that Act (destination of national insurance contributions)—

(a)in paragraph (c) for “emoluments” substitute “ general earnings ”;

(b)in paragraph (ca) for “emoluments” substitute “ general earnings ”

Taxation of Chargeable Gains Act 1992 (c. 12)U.K.

207U.K.The Taxation of Chargeable Gains Act 1992 is amended as follows.

F2516208U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2516Sch. 6 para. 208 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 79(a)

209U.K.In section 11(1) (visiting forces, agents-general etc.)—

(a)for “section 323(1) of the Taxes Act” substitute “ section 303(1) of ITEPA 2003 ”; and

(b)for “subsection (2) of section 323 and subsections (4) to (8) of that section shall apply accordingly” substitute “ section 303(2) to (6) of that Act and section 323(2) of the Taxes Act ”.

210(1)Amend section 120 (increased expenditure by reference to tax charged in relation to shares etc.) as follows.U.K.

(2)For subsection (1) substitute—

“(1)Subsection (1A) applies where—

(a)a person (“the employee”) has acquired shares or an interest in shares as mentioned in section 447(1) of ITEPA 2003, and

(b)an amount counts as employment income of the employee under Chapter 4 of Part 7 of that Act in respect of the shares.

(1A)On the first disposal of the shares after the acquisition occurs, the employment income amount shall be treated for the purposes of section 38(1)(a) as consideration given by the person making the disposal for the acquisition of the shares.

(1B)For the purposes of subsections (1) and (1A)—

(a)the “employment income amount” means the amount counting as employment income of the employee under that Chapter in respect of the shares, and

(b)it is immaterial whether the disposal of the shares mentioned in subsection (1A) is made by the employee or another person.”

(3)In subsection (3)—

(a)for “is chargeable to tax by virtue of section 162(5) of the Taxes Act” substitute “ is treated as earnings under section 195(2) of ITEPA 2003 ”, and

(b)for “so chargeable” substitute “ so treated as earnings ”.

(4)In subsection (4)—

(a)for “chargeable to tax under section 135(1) or (6) of the Taxes Act” substitute “ counting as employment income under section 476 or 477 of ITEPA 2003 ”, and

(b)for “so chargeable to tax” substitute “ so counting as employment income ”.

(5)In subsection (5A)—

(a)for “is chargeable to tax under section 140A of the Taxes Act” substitute “ counts as employment income under Chapter 2 of Part 7 of ITEPA 2003 ”, and

(b)for “so chargeable” substitute “ so counting as employment income ”.

(6)In subsection (5B)—

(a)for “is chargeable to tax under section 140D of the Taxes Act” substitute “ counts as employment income under Chapter 3 of Part 7 of ITEPA 2003 ”, and

(b)for “so chargeable” substitute “ so counting as employment income ”.

(7)Omit subsection (6).

(8)For subsection (7) substitute—

“(7)Each of the provisions of this section mentioned in the first column of the following table is to be construed as if it were contained in the Chapter of ITEPA 2003 specified in the corresponding entry in the second column—

Provision of this sectionChapter of ITEPA 2003
subsections (1), (1A) and (1B)Chapter 4 of Part 7
subsection (3)Chapter 8 of Part 3
subsection (4)Chapter 5 of Part 7
subsection (5A)Chapter 2 of Part 7
subsection (5B)Chapter 3 of Part 7;

and subsection (5) of this section is to be construed as one with section 138 of the Taxes Act.”

(9)After subsection (7) insert—

“(7A)In relation to events that gave rise to amounts chargeable to income tax before 6th April 2003, this section is to be read as if any reference to an amount mentioned in the first column of the following table included a reference to an amount mentioned in the corresponding entry in the second column—

Amount mentioned in this sectionAmount chargeable before 6th April 2003
an amount counting as employment income under Chapter 4 of Part 7 of ITEPA 2003an amount chargeable to tax under Chapter 2 of Part 3 of the Finance Act 1988
an amount treated as earnings under section 195(2) of ITEPA 2003an amount chargeable to tax under section 162(5) of the Taxes Act
an amount counting as employment income under section 476 or 477 of ITEPA 2003an amount chargeable to tax under section 135(1) or (6) of the Taxes Act
an amount which counts as employment income under Chapter 2 of Part 7 of ITEPA 2003an amount chargeable to tax under section 140A of the Taxes Act
an amount which counts as employment income under Chapter 3 of Part 7 of ITEPA 2003an amount chargeable to tax under section 140D of the Taxes Act.”

(10)In subsection (8) for “section 140A of the Taxes Act” substitute “ Chapter 2 of Part 7 of ITEPA 2003 ”.

211(1)Amend section 149B (employee incentive schemes: conditional interests in shares) as follows.U.K.

(2)In subsection (1) for “section 140A of the Taxes Act” substitute “ Chapter 2 of Part 7 of ITEPA 2003 (conditional interests in shares) ”.

(3)In subsection (2) for “section 140B of the Taxes Act” substitute “ section 429 of ITEPA 2003 ”.

(4)In subsection (4)—

(a)for “section 140A of the Taxes Act” substitute “ Chapter 2 of Part 7 of ITEPA 2003 ”, and

(b)for “that section” substitute “ that Chapter ”.

212U.K.After section 149B insert—

“149CPriority share allocations

Section 17(1) shall not apply to an acquisition of shares if section 542 or 544 of ITEPA 2003 applies in relation to it.”

213U.K.In section 222(8D)(b) (relief on disposal of private residence), for “the same meanings as they have for the purposes of Chapter II of Part V of the Taxes Act” substitute “ the meanings given by Chapter 2 of Part 3 of ITEPA 2003 ”.

214U.K.In section 236A (employee share ownership plans), and in the sidenote and in the italic heading immediately before the section, for “employee share ownership” wherever it occurs substitute “ share incentive ”.

215U.K.In section 238(2)(a) (approved profit sharing and share option schemes), for “is chargeable to income tax” substitute “ counts as employment income (or was chargeable to income tax for the year 2002-03 or an earlier year of assessment ”.

216U.K.After section 238 insert—

“238AApproved share schemes and share incentives

(1)Schedule 7D (approved share schemes and share incentives) shall have effect.

(2)Schedule 7D relates—

(a)in Part 1, to approved share incentive plans (SIPs) (see section 488 of ITEPA 2003),

(b)in Part 2, to approved SAYE option schemes (see section 516 of that Act),

(c)in Part 3, to approved CSOP schemes (CSOPs) (see section 521 of that Act), and

(d)in Part 4, to enterprise management incentives (see section 527 of that Act).”

217U.K.After section 263 insert—

“263ZAFormer employees: employment-related liabilities

(1)This section applies if—

(a)a deduction of the amount of one or more deductible payments may be made under section 555 of ITEPA 2003 (former employee entitled to deduction from total income in respect of liabilities related to the former employment) when computing a former employee’s total income for a tax year, and

(b)the total amount which may be deducted exceeds the total income for that year.

(2)In this section “excess relief” means the amount of the difference between—

(a)the total amount which may be deducted, and

(b)the total income.

(3)The amount of the excess relief may be treated as an allowable loss accruing to the former employee for that tax year.

This subsection applies only if the former employee makes a claim for the purpose.

(4)But no relief is available under subsection (3) in respect of any amount of the excess relief that exceeds the maximum amount.

(5)For the purposes of this section the “maximum amount”, in relation to the excess relief for a tax year, means the amount on which the former employee would be chargeable to capital gains tax for that year if the following were disregarded—

(a)any relief available under this section,

(b)any allowable losses falling to be carried forward to that year from a previous year for the purposes of section 2(2),

(c)section 3(1) (the annual exempt amount),

(d)any relief against capital gains tax under section 72 of the Finance Act 1991 (deduction of trading losses), and

(e)any relief against capital gains tax under section 90(4) of the Finance Act 1995 (relief for post-cessation expenditure).

(6)A former employee may make a claim under subsection (3) and a claim under section 555(3) of ITEPA 2003 in the same notice.”

218U.K.In section 271 (other miscellaneous exemptions), for subsection (1)(c) substitute—

“(c)any gain accruing to a person from his acquisition and disposal of assets held by him as part of a fund—

(i)mentioned in section 614(2) of the Taxes Act,

(ii)to which section 615(3) of the Taxes Act applies, or

(iii)mentioned in section 648, 649, 650, 651 or 653 of ITEPA 2003;”.

219(1)Amend section 288(1) (interpretation) as follows.U.K.

(2)In the entry relating to “allowable loss” for “and 16” substitute “ , 16 and 263ZA ”.

(3)After the entry relating to “investment trust” insert—

““ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;”.

220(1)Amend Schedule 7C (relief for transfers to approved share plans) as follows.U.K.

(2)In paragraph 1(1) (introductory) for “an employee share ownership” substitute “ a share incentive ”.

(3)In paragraph 2 (conditions relating to the disposal)—

(a)in sub-paragraph (1) for “Schedule 8 to the Finance Act 2000” substitute “ Schedule 2 to ITEPA 2003 ”,

(b)in sub-paragraph (2)—

(i)for “Part VIII” substitute “ Part 4 ”,

(ii)for “used in plan” substitute “ awarded ”, and

(iii)for “61(a) and (c)” substitute “ 27(1)(a) and (c) and (2) ”,

(c)in sub-paragraph (4) for “of Schedule 8 to the Finance Act 2000” substitute “ given by paragraph 97 of Schedule 2 to ITEPA 2003 ”.

221U.K.After Schedule 7C insert—

Section 238A

“SCHEDULE 7DU.K.Approved share schemes and share incentives
Part 1U.K.Approved share incentive plans
IntroductoryU.K.

1(1)The provisions of this Part of this Schedule apply for capital gains tax purposes in relation to an approved share incentive plan (“the plan”).

(2)This Part of this Schedule forms part of the SIP code (see section 488 of ITEPA 2003 (approved share incentive plans)).

(3)Accordingly, expressions used in this Part of this Schedule and contained in the index at the end of Schedule 2 to that Act (approved share incentive plans) have the meaning indicated by the index.

(4)In particular, for the purposes of paragraphs 5 and 7 of this Schedule “market value” has the meaning given by paragraph 92 of Schedule 2 to that Act (determination of market value); and Part 8 of this Act has effect subject to this paragraph.

Gains accruing to trusteesU.K.

2(1)Any gain accruing to the trustees is not a chargeable gain if the shares—

(a)are shares in relation to which the requirements of Part 4 of Schedule 2 to ITEPA 2003 (approved share incentive plans: types of shares that may be awarded) are met, and

(b)are awarded to employees, or acquired on their behalf as dividend shares, in accordance with the plan within the relevant period.

(2)If any of the shares in the company in question are readily convertible assets at the time the shares are acquired by the trustees, the relevant period is the period of two years beginning with the date on which the shares were acquired by the trustees.

This is subject to sub-paragraph (4).

(3)If at the time of the acquisition of the shares by the trustees none of the shares in the company in question are readily convertible assets, the relevant period is—

(a)the period of five years beginning with the date on which the shares were acquired by the trustees, or

(b)if within that period any of the shares in that company become readily convertible assets, the period of two years beginning with the date on which they did so,

whichever ends first.

This is subject to sub-paragraph (4).

(4)If the shares are acquired by the trustees by virtue of a payment in respect of which a deduction is allowed under paragraph 9 of Schedule 4AA to the Taxes Act (deduction for contribution to plan trust), the relevant period is the period of ten years beginning with the date of acquisition.

(5)For the purposes of determining whether shares are awarded to a participant within the relevant period, shares acquired by the trustees at an earlier time are taken to be awarded to a participant before shares of the same class acquired by the trustees at a later time.

(6)Sub-paragraph (5) is subject to paragraph 78(1) of Schedule 2 to ITEPA 2003 (acquisition by trustees of shares from employee share ownership trust).

(7)For the purposes of this paragraph “readily convertible assets” has the meaning given by sections 701 and 702 of that Act (readily convertible assets).

This is subject to sub-paragraph (8).

(8)In determining for the purposes of this paragraph whether shares are readily convertible assets any market for the shares that—

(a)is created by virtue of the trustees acquiring shares for the purposes of the plan, and

(b)exists solely for the purposes of the plan,

shall be disregarded.

(9)In relation to shares acquired by the trustees before 11th May 2001 this paragraph has effect with the substitution—

(a)in sub-paragraph (2), of “If the shares are readily convertible assets at the time they” for the words before “are acquired”, and

(b)in sub-paragraph (3)—

(i)of “If at the time of their acquisition by the trustees the shares are not readily convertible assets” for the words before “the relevant period”, and

(ii)in paragraph (b), of “the shares in question” for “any of the shares in that company”.

Participant absolutely entitled as against trusteesU.K.

3(1)Sub-paragraph (2) applies to any shares awarded to a participant under the plan.

(2)The participant is treated for capital gains tax purposes as absolutely entitled to those shares as against the trustees.

(3)Sub-paragraph (2) applies notwithstanding anything in the plan or the trust instrument.

Different classes of sharesU.K.

4(1)For the purposes of Chapter 1 of Part 4 of this Act (shares, securities, options etc: general) a participant’s plan shares are treated, so long as they are subject to the plan, as of a different class from any shares (which would otherwise be treated as of the same class) that are not plan shares.

(2)For the purposes of that Chapter, any shares to which sub-paragraph (3) applies shall be treated as of a different class from any shares to which sub-paragraph (4) applies, even if they would otherwise fall to be treated as of the same class.

(3)This sub-paragraph applies to any shares transferred to the trustees of the plan trust by a qualifying transfer that have not been awarded to participants under the plan.

(4)This sub-paragraph applies to any shares held by the trustees that were not transferred to them by a qualifying transfer.

(5)In this paragraph “qualifying transfer” has the meaning given in paragraph 78(2) of Schedule 2 to ITEPA 2003 (acquisition by trustees of shares from employee share ownership trust).

(6)For the purposes of Chapter 1 of Part 4 of this Act any shares which—

(a)were acquired by the trustees by virtue of a payment in respect of which a deduction is allowed under paragraph 9 of Schedule 4AA to the Taxes Act (deduction for contribution to plan trust), and

(b)have not been awarded under the plan,

shall be treated as of a different class from any shares held by the trustees that were not so acquired by them, even if they would otherwise fall to be treated as of the same class.

No chargeable gain on shares ceasing to be subject to the planU.K.

5(1)Shares which cease to be subject to the plan are treated as having been disposed of and immediately reacquired by the participant at market value.

(2)Any gain accruing on that disposal is not a chargeable gain.

Deemed disposal by trustees on disposal of beneficial interestU.K.

6(1)If at any time the participant’s beneficial interest in any of his shares is disposed of, the shares in question shall be treated for the purposes of the SIP code as having been disposed of at that time by the trustees for the like consideration as was obtained for the disposal of the beneficial interest.

(2)For this purpose there is no disposal of the participant’s beneficial interest if and at the time when—

(a)in England and Wales or Northern Ireland, that interest becomes vested in any person on the insolvency of the participant or otherwise by operation of law, or

(b)in Scotland, that interest becomes vested in a judicial factor, in a trustee of the participant’s sequestrated estate or in a trustee for the benefit of the participant’s creditors.

(3)If a disposal of shares falling within this paragraph is not at arm’s length, the proceeds of the disposal shall be taken for the purposes of the SIP code to be equal to the market value of the shares at the time of the disposal.

Treatment of forfeited sharesU.K.

7(1)If any of the participant’s plan shares are forfeited, they are treated as having been disposed of by the participant and acquired by the trustees at market value at the date of forfeiture.

(2)Any gain accruing on that disposal is not a chargeable gain.

Disposal of rights under rights issueU.K.

8(1)Any gain accruing on the disposal of rights under paragraph 77 of Schedule 2 to ITEPA 2003 (power of trustees to raise funds to subscribe for rights issue) is not a chargeable gain.

(2)Sub-paragraph (1) does not apply to a disposal of rights unless similar rights are conferred in respect of all ordinary shares in the company.

Part 2U.K.Approved SAYE option schemes
IntroductoryU.K.

9(1)This Part of this Schedule forms part of the SAYE code (see section 516 of ITEPA 2003 (approved SAYE option schemes)).

(2)Accordingly, expressions used in this Part of this Schedule and contained in the index at the end of Schedule 3 to that Act (approved SAYE option schemes) have the meaning indicated by the index.

Market value rule not to applyU.K.

10(1)This paragraph applies where—

(a)a share option (“the option”) has been granted to an individual—

(i)in accordance with the provisions of an approved SAYE option scheme, and

(ii)by reason of the individual’s office or employment as a director or employee of a company,

(b)the individual exercises the option in accordance with the provisions of the SAYE option scheme at a time when the scheme is approved, and

(c)condition A or condition B in section 519(2) or (3) of ITEPA 2003 (no charge in respect of exercise of option) is met.

(2)The company mentioned in sub-paragraph (1)(a)(ii) may be—

(a)the company whose shares are the subject of the option, or

(b)some other company.

(3)If the option—

(a)was granted under the SAYE option scheme before the withdrawal of approval under paragraph 42 of Schedule 3 to ITEPA 2003, but

(b)is exercised after the withdrawal of approval,

then, for the purposes of sub-paragraph (1)(b) above in its application to the option, the scheme is to be treated as if it were still approved at the time of the exercise.

(4)Section 17(1) (disposals and acquisitions treated as made at market value) shall not apply in calculating the consideration for—

(a)the individual’s acquisition of shares by the exercise of the option, or

(b)any corresponding disposal of those shares to the individual.

(5)References in sub-paragraphs (1)(b) and (4) above to the individual include references to a person exercising the option in accordance with provision included in the scheme by virtue of paragraph 32 of Schedule 3 to ITEPA 2003 (exercise of options: death); and sub-paragraph (1)(c) above does not apply in relation to a person so exercising the option.

Part 3U.K.Approved CSOP schemes
IntroductoryU.K.

11(1)This Part of this Schedule forms part of the CSOP code (see section 521 of ITEPA 2003 (approved CSOP schemes)).

(2)Accordingly, expressions used in this Part of this Schedule and contained in the index at the end of Schedule 4 to that Act (approved CSOP schemes) have the meaning indicated by the index.

(3)This Part of this Schedule applies where—

(a)a share option (“the option”) has been granted to an individual—

(i)in accordance with the provisions of an approved CSOP scheme, and

(ii)by reason of the individual’s office or employment as a director or employee of a company, and

(b)shares (“the relevant shares”) are acquired by the exercise of the option.

(4)The company mentioned in sub-paragraph (3)(a)(ii) may be—

(a)the company whose shares are the subject of the option, or

(b)some other company.

Relief where income tax charged in respect of grant of optionU.K.

12(1)This paragraph applies where an amount (the “employment income amount”) counted as employment income of the individual under section 526 of ITEPA 2003 (charge where option granted at a discount) in respect of the option.

(2)For the purposes of section 38(1)(a) (acquisition and disposal costs etc.), that part of the employment income amount which is attributable to the relevant shares shall be treated as consideration given for the acquisition of the relevant shares.

(3)This paragraph also applies where the individual was chargeable to income tax on an amount in respect of the option under—

(a)subsection (6) of section 185 of ICTA (as it had effect before 1st January 1992),

(b)subsection (6A) of that section (as it had effect in relation to options obtained on or after 1st January 1992 but before 29th April 1996), or

(c)subsection (6) of that section (as it had effect in relation to options obtained on or after 29th April 1996);

and in such a case the “employment income amount” means the amount on which the individual was so chargeable.

(4)This paragraph applies whether or not—

(a)the exercise of the option is in accordance with the provisions of the CSOP scheme, or

(b)the CSOP scheme is approved at the time of the exercise.

Market value rule not to applyU.K.

13(1)This paragraph applies where—

(a)the individual exercises the option in accordance with the provisions of the CSOP scheme at a time when the scheme is approved, and

(b)the condition in section 524(2) of ITEPA 2003 (no charge in respect of exercise of option) is met.

(2)Section 17(1) (disposals and acquisitions treated as made at market value) shall not apply in calculating the consideration for—

(a)the individual’s acquisition of the relevant shares by the exercise of the option, or

(b)any corresponding disposal of the relevant shares to the individual.

(3)Sub-paragraph (2) also applies where the option is exercised at a time when the scheme is approved in accordance with provision included in the scheme by virtue of paragraph 25 of Schedule 4 to ITEPA 2003 (exercise of options: death); and references in that sub-paragraph to the individual are to be read accordingly.

Part 4U.K.Enterprise management incentives
IntroductoryU.K.

14(1)This Part of this Schedule forms part of the EMI code (see section 527 of ITEPA 2003 (enterprise management incentives: qualifying options)).

(2)Accordingly, expressions used in this Part of this Schedule and contained in the index at the end of Schedule 5 to that Act (enterprise management incentives) have the meaning indicated by the index.

(3)In this Part of this Schedule, “qualifying shares”—

(a)means shares acquired by the exercise of a qualifying option, subject to sub-paragraphs (4) and (5), and

(b)includes shares (“replacement shares”) which—

(i)are treated under section 127 (equation of original shares and new holding) as the same asset as a holding of qualifying shares, and

(ii)meet the requirements of paragraph 35 of Schedule 5 to ITEPA 2003 (type of shares that may be acquired).

(4)If a disqualifying event occurs in relation to a qualifying option (whether the original option or a replacement option), shares acquired by the exercise of that option are qualifying shares only if the option is exercised within 40 days of that event.

(5)References in this Part of this Schedule to “the original option”, where there has been one or more replacement options, are to the option that the replacement option (or, if there has been more than one, the first of them) replaced.

Taper relief on disposal of qualifying sharesU.K.

15For the purposes of computing taper relief on a disposal of qualifying shares, the shares are treated as if they had been acquired when the original option was granted.

Rights issues in respect of qualifying sharesU.K.

16Where—

(a)an individual holds qualifying shares, and

(b)there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a) (allotment in proportion to shareholdings), a reorganisation affecting that holding,

sections 127 to 130 (which relate to reorganisation or reduction of share capital) shall not apply in relation to that holding.”

Pension Schemes Act 1993 (c. 48)U.K.

222U.K.In section 181(1) of the Pension Schemes Act 1993 (general interpretation), in the definition of “employee” for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

Pension Schemes (Northern Ireland) Act 1993 (c. 49)U.K.

223U.K.In section 176(1) of the Pension Schemes (Northern Ireland) Act 1993 (general interpretation), in the definition of “employee” for “emoluments chargeable to income tax under Schedule E” substitute “ general earnings (as defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003) ”.

Finance Act 1994 (c. 9)U.K.

224(1)In the Finance Act 1994, paragraph 27 of Schedule 24 (provisions relating to the Railways Act 1993 — employee benefits: transport vouchers) is amended as follows.U.K.

(2)In sub-paragraph (3) for “Subsection (6) of section 141 of the Taxes Act 1988” substitute “ Section 86 of ITEPA 2003 (exception for certain transport vouchers) ”.

(3)In sub-paragraph (3)(c) for “paragraphs (a) to (d) of that subsection” substitute “ section 86(2)(a) to (d) of ITEPA 2003 ”.

(4)In sub-paragraph (12) after the definition of “the former transport voucher benefits for comparable employees” insert—

““ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003.”

(5)For sub-paragraph (13) substitute—

“(13)Subject to paragraph 1(1) and sub-paragraph (12) above, expressions used in this paragraph and in section 86 of ITEPA 2003 have the same meaning in this paragraph as in that section.

This does not apply in relation to the reference to a transport voucher in sub-paragraph (1) above.”

Finance Act 1995 (c. 4)U.K.

225U.K.The Finance Act 1995 is amended as follows.

F2517226U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2517Sch. 6 para. 226 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

227U.K.In section 137(7) (part-time workers: miscellaneous provisions) for “Subsections (2) to” substitute “ Subsection ”.

Jobseekers Act 1995 (c. 18)U.K.

228U.K.[F2518The Jobseekers Act 1995 is amended as follows.]

Textual Amendments

F2518Sch. 6 paras. 228-230 repealed (29.4.2013 for specified purposes, 1.7.2013 and 29.7.2013 for specified purposes, 28.10.2013 for specified purposes, 25.11.2013 for specified purposes, 24.2.2014 and 7.4.2014 for specified purposes, 23.6.2014 and further specified dates for specified purposes, 15.9.2014 and further specified dates for specified purposes, 26.11.2014 for specified purposes, 28.1.2015 for specified purposes, 16.2.2015 and further specified dates for specified purposes, 18.3.2015 and further specified dates for specified purposes, 21.9.2015 and further specified dates for specified purposes, 2.12.2015 for specified purposes, 27.1.2016 and 24.2.2016 for specified purposes, 23.3.2016 and 27.4.2016 for specified purposes, 1.2.2019 for specified purposes) by Welfare Reform Act 2012 (c. 5), s. 150(3), Sch. 14 Pt. 1; S.I. 2013/983, arts. 4(1)(c), 5, Sch. 1 (with arts. 6, 9(1), 22, Sch. 4) (as amended: (1.7.2013) by S.I. 2013/1511; (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (15.9.2014) by S.I. 2014/2321; (17.11.2014) by S.I. 2014/3067; (21.11.2014) by S.I. 2014/3094; (19.1.2015) by S.I. 2015/32 (as amended (10.2.2015) by S.I. 2015/101); (10.3.2015) by S.I. 2015/634; (20.7.2015) by S.I. 2015/1537; (23.11.2015) by S.I. 2015/1930; (6.4.2017) by S.I. 2017/483; (2.2.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; and (31.1.2019) by S.I. 2019/167); S.I. 2013/1511, art. 4 (as amended: (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2657, art. 4 (with art. 6) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2846, art. 4 (with art. 5) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/209, art. 4 (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2105) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/1583, art. 4 (as amended (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/2321, art. 4 (as amended: (17.11.2014) by S.I. 2014/3057; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/3094, art. 4 (with art. 6); S.I. 2015/33, art. 4 (with art. 6) (as amended: (11.2.2015) by S.I. 2015/101; (10.3.2015) by S.I. 2015/634; (6.4.2017) by S.I. 2017/483; (11.4.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37); and (31.1.2019) by S.I. 2019/167); S.I. 2015/101, art. 4 (as amended (10.3.2015) by S.I. 2015/534; (17.3.2015) by S.I. 2015/740; and (20.7.2015) by S.I. 2015/1537); S.I. 2015/634, art. 4 (with art. 6) (as amended: (17.3.2015) by S.I. 2015/740; (6.4.2017) by S.I. 2017/376; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37; and (31.1.2019) by S.I. 2019/167); S.I. 2015/1537, art. 4 (as modified (23.11.2015) by S.I. 2015/1930, art. 6); S.I. 2015/1930, art. 4; S.I. 2016/33, art. 4; S.I. 2016/407, art. 4; S.I. 2019/167, art. 4(5)-(7) (with art. 4(8)-(12))

229U.K.[F2518In section 15(2)(c)(i) (effect on other claimants) for “emoluments in pursuance of section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ taxable earnings (as defined by section 10 of the Income Tax (Earnings and Pensions) Act 2003) under PAYE regulations ”.]

Textual Amendments

F2518Sch. 6 paras. 228-230 repealed (29.4.2013 for specified purposes, 1.7.2013 and 29.7.2013 for specified purposes, 28.10.2013 for specified purposes, 25.11.2013 for specified purposes, 24.2.2014 and 7.4.2014 for specified purposes, 23.6.2014 and further specified dates for specified purposes, 15.9.2014 and further specified dates for specified purposes, 26.11.2014 for specified purposes, 28.1.2015 for specified purposes, 16.2.2015 and further specified dates for specified purposes, 18.3.2015 and further specified dates for specified purposes, 21.9.2015 and further specified dates for specified purposes, 2.12.2015 for specified purposes, 27.1.2016 and 24.2.2016 for specified purposes, 23.3.2016 and 27.4.2016 for specified purposes, 1.2.2019 for specified purposes) by Welfare Reform Act 2012 (c. 5), s. 150(3), Sch. 14 Pt. 1; S.I. 2013/983, arts. 4(1)(c), 5, Sch. 1 (with arts. 6, 9(1), 22, Sch. 4) (as amended: (1.7.2013) by S.I. 2013/1511; (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (15.9.2014) by S.I. 2014/2321; (17.11.2014) by S.I. 2014/3067; (21.11.2014) by S.I. 2014/3094; (19.1.2015) by S.I. 2015/32 (as amended (10.2.2015) by S.I. 2015/101); (10.3.2015) by S.I. 2015/634; (20.7.2015) by S.I. 2015/1537; (23.11.2015) by S.I. 2015/1930; (6.4.2017) by S.I. 2017/483; (2.2.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; and (31.1.2019) by S.I. 2019/167); S.I. 2013/1511, art. 4 (as amended: (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2657, art. 4 (with art. 6) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2846, art. 4 (with art. 5) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/209, art. 4 (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2105) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/1583, art. 4 (as amended (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/2321, art. 4 (as amended: (17.11.2014) by S.I. 2014/3057; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/3094, art. 4 (with art. 6); S.I. 2015/33, art. 4 (with art. 6) (as amended: (11.2.2015) by S.I. 2015/101; (10.3.2015) by S.I. 2015/634; (6.4.2017) by S.I. 2017/483; (11.4.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37); and (31.1.2019) by S.I. 2019/167); S.I. 2015/101, art. 4 (as amended (10.3.2015) by S.I. 2015/534; (17.3.2015) by S.I. 2015/740; and (20.7.2015) by S.I. 2015/1537); S.I. 2015/634, art. 4 (with art. 6) (as amended: (17.3.2015) by S.I. 2015/740; (6.4.2017) by S.I. 2017/376; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37; and (31.1.2019) by S.I. 2019/167); S.I. 2015/1537, art. 4 (as modified (23.11.2015) by S.I. 2015/1930, art. 6); S.I. 2015/1930, art. 4; S.I. 2016/33, art. 4; S.I. 2016/407, art. 4; S.I. 2019/167, art. 4(5)-(7) (with art. 4(8)-(12))

230U.K.[F2518In section 26(3) (the back to work bonus) for the words from “Subject to section 617” to “not to be taxable)” substitute “ Subject to section 677 of the Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to work bonus not to be taxable) ”.]

Textual Amendments

F2518Sch. 6 paras. 228-230 repealed (29.4.2013 for specified purposes, 1.7.2013 and 29.7.2013 for specified purposes, 28.10.2013 for specified purposes, 25.11.2013 for specified purposes, 24.2.2014 and 7.4.2014 for specified purposes, 23.6.2014 and further specified dates for specified purposes, 15.9.2014 and further specified dates for specified purposes, 26.11.2014 for specified purposes, 28.1.2015 for specified purposes, 16.2.2015 and further specified dates for specified purposes, 18.3.2015 and further specified dates for specified purposes, 21.9.2015 and further specified dates for specified purposes, 2.12.2015 for specified purposes, 27.1.2016 and 24.2.2016 for specified purposes, 23.3.2016 and 27.4.2016 for specified purposes, 1.2.2019 for specified purposes) by Welfare Reform Act 2012 (c. 5), s. 150(3), Sch. 14 Pt. 1; S.I. 2013/983, arts. 4(1)(c), 5, Sch. 1 (with arts. 6, 9(1), 22, Sch. 4) (as amended: (1.7.2013) by S.I. 2013/1511; (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (15.9.2014) by S.I. 2014/2321; (17.11.2014) by S.I. 2014/3067; (21.11.2014) by S.I. 2014/3094; (19.1.2015) by S.I. 2015/32 (as amended (10.2.2015) by S.I. 2015/101); (10.3.2015) by S.I. 2015/634; (20.7.2015) by S.I. 2015/1537; (23.11.2015) by S.I. 2015/1930; (6.4.2017) by S.I. 2017/483; (2.2.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; and (31.1.2019) by S.I. 2019/167); S.I. 2013/1511, art. 4 (as amended: (29.10.2013) by S.I. 2013/2657; (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2657, art. 4 (with art. 6) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2013/2846, art. 4 (with art. 5) (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/209, art. 4 (as amended: (16.6.2014) by S.I. 2014/1452; (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2105) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/1583, art. 4 (as amended (30.6.2014) by S.I. 2014/1661; (28.7.2014) by S.I. 2014/1923; (17.11.2014) by S.I. 2014/3067; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/2321, art. 4 (as amended: (17.11.2014) by S.I. 2014/3057; (19.1.2015) by S.I. 2015/32; (10.3.2015) by S.I. 2015/634; and (20.7.2015) by S.I. 2015/1537); S.I. 2014/3094, art. 4 (with art. 6); S.I. 2015/33, art. 4 (with art. 6) (as amended: (11.2.2015) by S.I. 2015/101; (10.3.2015) by S.I. 2015/634; (6.4.2017) by S.I. 2017/483; (11.4.2018) by S.I. 2018/138; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37); and (31.1.2019) by S.I. 2019/167); S.I. 2015/101, art. 4 (as amended (10.3.2015) by S.I. 2015/534; (17.3.2015) by S.I. 2015/740; and (20.7.2015) by S.I. 2015/1537); S.I. 2015/634, art. 4 (with art. 6) (as amended: (17.3.2015) by S.I. 2015/740; (6.4.2017) by S.I. 2017/376; (16.1.2019) by S.I. 2019/10; (15.1.2019) by S.I. 2019/37; and (31.1.2019) by S.I. 2019/167); S.I. 2015/1537, art. 4 (as modified (23.11.2015) by S.I. 2015/1930, art. 6); S.I. 2015/1930, art. 4; S.I. 2016/33, art. 4; S.I. 2016/407, art. 4; S.I. 2019/167, art. 4(5)-(7) (with art. 4(8)-(12))

Child Support Act 1995 (c. 34)U.K.

231U.K.For section 10(4) of the Child Support Act 1995 (child maintenance bonus) substitute—

“(4)Subsection (3) is subject to section 677 of the Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to work bonus not to be taxable).”

Child Support (Northern Ireland) Order 1995 (S.I. 1995/2702 (N.I. 13))U.K.

232U.K.For Article 4(4) of the Child Support (Northern Ireland) Order 1995 (child maintenance bonus) substitute—

“(4)Paragraph (3) is subject to section 677 of the Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to work bonus not to be taxable).”

Jobseekers (Northern Ireland) Order 1995 (S.I. 1995/2705 (N.I. 15))U.K.

233U.K.[F2519The Jobseekers (Northern Ireland) Order 1995 is amended as follows.]

Textual Amendments

F2519Sch. 6 paras. 233-235 repealed (27.9.2017 for specified purposes, 15.11.2017 and 13.12.2017 for specified purposes, 17.1.2018 and further specified dates for specified purposes, 16.5.2018 and further specified dates for specified purposes, 5.9.2018 and further specified dates for specified purposes, 1.2.2019 for specified purposes) by The Welfare Reform (Northern Ireland) Order 2015 (S.I. 2015/2006), art. 2(2), Sch. 12 Pt. 1; S.R. 2017/190, art. 6, Sch. 2 (with arts. 7, 8, 10-25, Sch. 3); S.R. 2017/216, art. 4 (with art. 5); S.R. 2018/1, art. 4 (with art. 5); S.R. 2018/97, art. 4 (with art. 5); S.R. 2018/138, art. 4 (with art. 5); S.R. 2019/7, art. 2(5)-(7) (with art. 2(8)-(12))

234U.K.[F2519In Article 17(2)(c)(i) (effect on other claimants) for “emoluments in pursuance of section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ taxable earnings (as defined by section 10 of the Income Tax (Earnings and Pensions) Act 2003 under regulations made under section 684 of that Act (PAYE regulations) ”.]

Textual Amendments

F2519Sch. 6 paras. 233-235 repealed (27.9.2017 for specified purposes, 15.11.2017 and 13.12.2017 for specified purposes, 17.1.2018 and further specified dates for specified purposes, 16.5.2018 and further specified dates for specified purposes, 5.9.2018 and further specified dates for specified purposes, 1.2.2019 for specified purposes) by The Welfare Reform (Northern Ireland) Order 2015 (S.I. 2015/2006), art. 2(2), Sch. 12 Pt. 1; S.R. 2017/190, art. 6, Sch. 2 (with arts. 7, 8, 10-25, Sch. 3); S.R. 2017/216, art. 4 (with art. 5); S.R. 2018/1, art. 4 (with art. 5); S.R. 2018/97, art. 4 (with art. 5); S.R. 2018/138, art. 4 (with art. 5); S.R. 2019/7, art. 2(5)-(7) (with art. 2(8)-(12))

235U.K.[F2519In Article 28(3) (the back to work bonus) for the words from “Subject to section 617” to “not to be taxable)” substitute “ Subject to section 677 of the Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to work bonus not to be taxable) ”.]

Textual Amendments

F2519Sch. 6 paras. 233-235 repealed (27.9.2017 for specified purposes, 15.11.2017 and 13.12.2017 for specified purposes, 17.1.2018 and further specified dates for specified purposes, 16.5.2018 and further specified dates for specified purposes, 5.9.2018 and further specified dates for specified purposes, 1.2.2019 for specified purposes) by The Welfare Reform (Northern Ireland) Order 2015 (S.I. 2015/2006), art. 2(2), Sch. 12 Pt. 1; S.R. 2017/190, art. 6, Sch. 2 (with arts. 7, 8, 10-25, Sch. 3); S.R. 2017/216, art. 4 (with art. 5); S.R. 2018/1, art. 4 (with art. 5); S.R. 2018/97, art. 4 (with art. 5); S.R. 2018/138, art. 4 (with art. 5); S.R. 2019/7, art. 2(5)-(7) (with art. 2(8)-(12))

Teaching and Higher Education Act 1998 (c. 30)U.K.

236U.K.In section 22 of the Teaching and Higher Education Act 1998 (new arrangements for giving financial support to students)—

(a)in subsection (5)(g) for “regulations under section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”; and

(b)in subsection (6)(a) for “income assessable to income tax under Schedule E” substitute “ PAYE income ”.

Scotland Act 1998 (c. 46)U.K.

237U.K.In section 79(3) of the Scotland Act 1998 (supplemental powers to modify enactments) for “section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”.

Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14))U.K.

238U.K.In Article 3 of the Education (Student Support) (Northern Ireland) Order 1998 (new arrangements for giving financial support to students)—

(a)in paragraph (5)(g) for “section 203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ section 684 of the Income Tax (Earnings and Pensions) Act 2003 (PAYE regulations) ”; and

(b)in paragraph (6)(a) for “income assessable to income tax under Schedule E” substitute “ PAYE income (as defined in section 683 of the Income Tax (Earnings and Pensions) Act 2003 ”.

Tax Credits Act 1999 (c. 10)U.K.

239U.K.The Tax Credits Act 1999 is amended as follows.

240U.K.In section 6(1) (payment of tax credit by employers etc.) for “income assessable to income tax under Schedule E” substitute “ PAYE income ”.

241U.K.In paragraph 10(1) of Schedule 2 (transfer of functions), in paragraph (b) of the subsection which, in any case where the overpayment was made in respect of tax credit, is treated as substituted for—

(a)subsection (8) of section 71 of the Social Security Administration Act 1992 (c. 5), and

(b)subsection (8) of section 69 of the Social Security Administration (Northern Ireland) Act 1992 (c. 8),

for “section 203(2)(a) of the Income and Corporation Taxes Act 1988 (PAYE)” substitute “ PAYE regulations ”.

Finance Act 2000 (c. 17)U.K.

242U.K.The Finance Act 2000 is amended as follows.

F2520243U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2521244U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2521Sch. 6 para. 244 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

F2522245U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2522Sch. 6 para. 245 repealed (with effect in accordance with Sch. 17 para. 5(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(12)

Capital Allowances Act 2001 (c. 2)U.K.

246U.K.The Capital Allowances Act 2001 is amended as follows.

247(1)Amend section 4 (capital expenditure) as follows.U.K.

(2)For subsection (2)(b) substitute—

“(b)any expenditure or sum that may be allowed as a deduction under a relevant provision from the taxable earnings from an employment or office held by the person.”

(3)After subsection (2) insert—

“(2A)In subsection (2)—

“relevant provision” means any of the following—

(a)section 262;

(b)section 232 of ITEPA 2003 (giving effect to mileage allowance relief);

(c)Chapters 2 to 6 of Part 5 of that Act (general deductions allowed from earnings); and

(d)sections 613(1), 619 and 639 of ICTA (contributions to pensions funds etc.), and

“taxable earnings” has the meaning given by section 10 of ITEPA 2003.”

(4)In subsection (3) for “emoluments” substitute “ earnings ”.

248(1)Amend section 20 (employments and offices) as follows.U.K.

(2)In subsection (2)—

(a)for “emoluments” substitute “ earnings ”; and

(b)for “do not fall within Case I or II of Schedule E” substitute “ fall within section 22 or 26 of ITEPA 2003 ”.

(3)In subsection (3)—

(a)for “those emoluments” substitute “ those earnings ”; and

(b)for “other emoluments” substitute “ other taxable earnings (as defined by section 10 of ITEPA 2003) ”.

249U.K.In section 61(2) (disposal events and disposal values), in entry 2(b) of the Table, for “Schedule E” substitute “ ITEPA 2003 ”.

250U.K.In section 63(1) (cases in which disposal value is nil) for “Schedule E” substitute “ ITEPA 2003 ”.

251U.K.In section 72(3) (disposal values), in entry 2(b) of the Table, for “Schedule E” substitute “ ITEPA 2003 ”.

252U.K.In section 88(c) (sales at under-value) for “Schedule E” substitute “ ITEPA 2003 ”.

253U.K.In section 262 (employments and offices)—

(a)in paragraph (a) for “an amount to be deducted from the emoluments of” substitute “ a deduction from the taxable earnings from ”; and

(b)in paragraph (b) for “an emolument” substitute “ earnings ”.

254U.K.In section 423(1) (disposal value for sections 421 and 422), in entry 2(b) of the Table, for “Schedule E” substitute “ ITEPA 2003 ”.

255U.K.At the end of Part 1 of Schedule 1 (abbreviations) insert—

“ITEPA 2003The Income Tax (Earnings and Pensions) Act 2003”.

F2523256U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2523Sch. 6 para. 256 repealed (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 3 Pt. 1 (with Sch. 2)

Finance Act 2001 (c. 9)U.K.

257U.K.For section 95 of the Finance Act 2001 (exemptions in relation to employee share ownership plans) substitute—

“95Exemptions in relation to approved share incentive plans

(1)This section forms part of the SIP code (see section 488 of the Income Tax (Earnings and Pensions) Act 2003 (approved share incentive plans)).

(2)Accordingly, expressions used in this section and contained in the index at the end of Schedule 2 to that Act (approved share incentive plans) have the meaning indicated by that index.

(3)Where, under an approved share incentive plan, partnership shares or dividend shares are transferred by the trustees to an employee—

(a)no ad valorem stamp duty is chargeable on any instrument by which the transfer is made, and

(b)no stamp duty reserve tax is chargeable on any agreement by the trustees to make the transfer.

(4)But subsection (3) does not apply to—

(a)any instrument executed (within the meaning of the Stamp Act 1891) before 6th April 2003, or

(b)any agreement to transfer shares made before that date.”

F2524258U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2524Sch. 6 para. 258 repealed (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

Social Security Contributions (Share Options) Act 2001 (c. 20)U.K.

259U.K.The Social Security Contributions (Share Options) Act 2001 is amended as follows.

260U.K.In section 2(3)(b) (effect of notice under section 1) for “section 135(3)(a) of the Income and Corporation Taxes Act 1988” substitute “ section 479 of the Income Tax (Earnings and Pensions) Act 2003 ”.

261(1)Amend section 3 (special provision for roll-overs) as follows.U.K.

(2)In subsection (4)(a) for “section 136(1) of the Income and Corporation Taxes Act 1988” substitute “ section 485(1) to (4) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In subsection (4)(b)(i) for “section 135(3)(a)” substitute “ section 479 ”.

(4)For subsection (6) substitute—

“(6)Subject to subsection (7), in relation to the replacement right or any subsequent right, section 485(1) to (3) of the Income Tax (Earnings and Pensions) Act 2003 (application of Chapter 5 of Part 7 where share option exchanged for another) shall be deemed to have effect (or, as the case may be, to have had effect) for the purposes of the determination mentioned in subsection (5) of this section—

(a)as if that section had effect (or, as the case may be, had had effect) in relation to that right to the extent only that it is a right to acquire additional shares; and

(b)as if the value of the consideration for the grant of the original right had been nil.”

(5)In subsection (7)(b) for “section 135 of the Income and Corporation Taxes Act 1988” substitute “ Chapter 5 of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 ”.

(6)In subsection (11)(a) for “section 135(3)(a) of the Income and Corporation Taxes Act 1988” substitute “ section 479 of the Income Tax (Earnings and Pensions) Act 2003 ”.

262U.K.In section 5(2)(c) (interpretation)—

(a)for “subsection (8) of section 135 of the Income and Corporation Taxes Act 1988 (c. 1)” substitute “ section 483(1) of the Income Tax (Earnings and Pensions) Act 2003 ”; and

(b)for “that section” substitute “ Chapter 5 of Part 7 of that Act ”.

State Pension Credit Act 2002 (c. 16)U.K.

263(1)Section 17(1) of the State Pension Credit Act 2002 (other interpretation provisions) is amended as follows.U.K.

(2)In paragraph (b) of the definition of “foreign war disablement pension” for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988 (c. 1)” substitute “ section 641 of the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In paragraph (b) of the definition of “foreign war widow’s or widower’s pension” for “section 315(2)(e) of the Income and Corporation Taxes Act 1988” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(4)In paragraph (b) of the definition of “war disablement pension”, for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988 (c. 1)” substitute “ any of paragraphs (a) to (f) of section 641(1) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(5)In paragraph (b) of the definition of “war widow’s or widower’s pension” for “section 315(2)(e) of the Income and Corporation Taxes Act 1988” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

Tax Credits Act 2002 (c. 21)U.K.

264U.K.The Tax Credits Act 2002 is amended as follows.

265(1)Amend section 25 (payments of working tax credit by employers) as follows.U.K.

(2)In subsection (1) for “Schedule E payments” substitute “ payments of, or on account of, PAYE income ”.

(3)In subsection (5) for “Schedule E payment” substitute “ payment of, or on account of, PAYE income ”.

(4)Omit subsection (6).

266U.K.In section 29(5) (recovery of overpayments) for “regulations under section 203(2)(a) of the Income and Corporation Taxes Act 1988 (c. 1) (PAYE)” substitute “ PAYE regulations ”.

State Pension Credit Act (Northern Ireland) 2002 (c. 14 (N.I.))U.K.

267(1)Section 17(1) of the State Pension Credit Act (Northern Ireland) 2002 (other interpretation provisions) is amended as follows.U.K.

(2)In paragraph (b) of the definition of “foreign war disablement pension” for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988 (c. 1)” substitute “ section 641 of the Income Tax (Earnings and Pensions) Act 2003 ”.

(3)In paragraph (b) of the definition of “foreign war widow’s or widower’s pension” for “section 315(2)(e) of the Income and Corporation Taxes Act 1988” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(4)In paragraph (b) of the definition of “war disablement pension”, for “subsection (1) of section 315 of the Income and Corporation Taxes Act 1988 (c. 1)” substitute “ any of paragraphs (a) to (f) of section 641(1) of the Income Tax (Earnings and Pensions) Act 2003 ”.

(5)In paragraph (b) of the definition of “war widow’s or widower’s pension” for “section 315(2)(e) of the Income and Corporation Taxes Act 1988” substitute “ section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions) Act 2003 ”.

Certain corresponding Northern Ireland provisionU.K.

268(1)This paragraph applies if provision is made for Northern Ireland which corresponds to section 171ZJ of the Social Security Contributions and Benefits Act 1992 (c. 4) (Part 12ZA — statutory paternity pay: supplementary) (which was inserted by section 2 of the Employment Act 2002 (c. 22)).U.K.

(2)In the Northern Ireland provision any reference to emoluments chargeable to income tax under Schedule E is to be construed as a reference to general earnings (as defined by section 7 of this Act).

269(1)This paragraph applies if provision is made for Northern Ireland which corresponds to section 171ZS of the Social Security Contributions and Benefits Act 1992 (Part 12ZA — statutory adoption pay: supplementary) (which was inserted by section 4 of the Employment Act 2002).U.K.

(2)In the Northern Ireland provision any reference to emoluments chargeable to income tax under Schedule E is to be construed as a reference to general earnings (as defined by section 7 of this Act).

Section 723

SCHEDULE 7U.K.Transitionals and savings

Part 1U.K.Continuity of the law

1U.K.The repeal of provisions and their enactment in a rewritten form in this Act does not affect the continuity of the law.

2U.K.Paragraph 1 does not apply to any change in the law made by this Act.

3U.K.Any subordinate legislation or other thing which—

(a)has been made or done, or has effect as if made or done, under or for the purposes of a repealed provision, and

(b)is in force or effective immediately before the commencement of the corresponding rewritten provision,

has effect after that commencement as if made or done under or for the purposes of the rewritten provision.

4U.K.Any reference (express or implied) in any enactment, instrument or document to—

(a)a rewritten provision, or

(b)things done or falling to be done under or for the purposes of a rewritten provision,

is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding repealed provision had effect, a reference to the repealed provision or (as the case may be) things done or falling to be done under or for the purposes of the repealed provision.

5U.K.Any reference (express or implied) in any enactment, instrument or document to—

(a)a repealed provision, or

(b)things done or falling to be done under or for the purposes of a repealed provision,

is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding rewritten provision has effect, a reference to the rewritten provision or (as the case may be) things done or falling to be done under or for the purposes of the rewritten provision.

6U.K.Paragraphs 1 to 5 have effect instead of section 17(2) of the Interpretation Act 1978 (c. 30) (but are without prejudice to any other provision of that Act).

7U.K.Paragraphs 4 and 5 apply only in so far as the context permits.

Part 2U.K.Employment income: charge to tax

Taxable earningsU.K.

8(1)The charging provisions of Chapters 4 and 5 of Part 2—U.K.

(a)apply for the purpose of determining taxable earnings from an employment in the tax year 2003-04 or any later tax year, and

(b)accordingly apply where (for the purposes of those Chapters) general earnings are received, or remitted to the United Kingdom, in that or any later tax year.

(2)But they apply to general earnings for a tax year before the tax year 2003-04, as well as to those for that or any later year.

This is subject to sub-paragraph (3).

(3)If—

(a)any general earnings within subsection (1) of section 22 (chargeable overseas earnings) or 26 (foreign earnings of resident employee) are for a tax year before 1989-90,

(b)the earnings are remitted to the United Kingdom in the tax year 2003-04 or any later tax year (“the remittance year”), and

(c)either—

(i)the employee is not resident in the United Kingdom in the remittance year, or

(ii)the employment is not held in the remittance year,

subsection (2) of section 22 or 26 does not apply to the earnings.

(4)Section 30 (treatment of earnings for year in which employment not held) does not apply where any of the tax years mentioned in subsection (2) or (3) of that section is a tax year before the tax year 1989-90.

Relief for delayed remittancesU.K.

F25259U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2525Sch. 7 paras. 9-12 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 44

F252510U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2525Sch. 7 paras. 9-12 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 44

F252511U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2525Sch. 7 paras. 9-12 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 44

Disputes as to domicile or ordinary residenceU.K.

F252512U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2525Sch. 7 paras. 9-12 omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 44

Application of provisions to agency workersU.K.

13U.K.In relation to times before 6th April 2003, Chapter 7 of Part 2 applies with the following modifications—

(a)references to “employment income of the worker” are to be read as references to “income of the worker chargeable to tax under Schedule E”,

(b)references to “earnings” are to be read as references to “emoluments”, and

(c)references to “this Chapter” are to be read as references to “section 134 of ICTA”.

14U.K.Section 44(2) does not apply in relation to—

(a)payments made before 6th April 1998 other than payments made in respect of services provided on or after that date, or

(b)payments made on or after that date in respect of services provided before that date,

if in providing the services the worker is or would be a sub-contractor within the meaning of section 560 of ICTA (sub-contractors in the construction industry).

Part 3U.K.Employment income: earnings and benefits etc. treated as earning

F2526...U.K.

Textual Amendments

F2526Sch. 7 para. 15 and cross-heading omitted (with effect in accordance with s. 12(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 12(4)(b)

F252615U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F252716U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2527Sch. 7 para. 16 omitted (with effect in accordance with s. 12(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 12(4)(b)

Taxable benefits: the benefits codeU.K.

17(1)In relation to times before 6th April 2003, references in the benefits code to “employment”, “employed”, “employee” and “employer” are to be read in accordance with this paragraph.U.K.

(2)In relation to [F2528Chapters 3, 6, 7 and 10 of the benefits code (provisions not applicable before the tax year 2016-17 to lower-paid employments)], the references mentioned in sub-paragraph (1) are to be read in accordance with section 66 (meaning of employment and related expressions) but as if in subsection (1)(a) there were substituted “an employment to which Chapter 2 of Part 5 of ICTA applies” for “a taxable employment under Part 2”.

(3)In relation to any other Chapters of the benefits code, the references mentioned in sub-paragraph (1) are to be read in accordance with section 66 but as if in subsection (1)(a) there were substituted “an employment the emoluments of which fall to be assessed under Schedule E” for “a taxable employment under Part 2”.

F2529(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)This paragraph is subject to paragraphs 18(2), 24, 27(3), 29(4) and 31(2) of this Schedule.

Textual Amendments

F2528Words in Sch. 7 para. 17(2) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 22(2)(a)

F2529Sch. 7 para. 17(4) omitted (with effect in accordance with s. 13(4) of the amending Act) by virtue of Finance Act 2015 (c. 11), Sch. 1 para. 22(2)(b)

F2530...U.K.

Textual Amendments

F2530Sch. 7 para. 19 and cross-heading omitted (with effect in accordance with s. 12(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 12(4)(b)

F253118U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2531Sch. 7 para. 18 omitted (with effect in accordance with Sch. 39 para. 50(3) of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 39 para. 50(2)(b)

F253019U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F253220U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2532Sch. 7 para. 20 omitted (with effect in accordance with s. 12(5) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 12(4)(b)

Taxable benefits: living accommodationU.K.

21(1)Section 107 (special rule for calculating cost of providing accommodation) does not apply if the employee first occupied the living accommodation before 31st March 1983.U.K.

(2)Nothing in this paragraph affects the operation of section 107 as applied by section 398(2)(b) or 415(2)(b).

Taxable benefits: cars, vans and related benefitsU.K.

22(1)In relation to a capital sum contributed by the employee before 6th April 2003, section 132 (cars: capital contributions by employee) applies with the following modifications.U.K.

(2)In subsection (1)(b) substitute “under sections 168A to 168C of ICTA in determining the price of the car as regards a year” for “in calculating the cash equivalent of the benefit of the car”.

(3)In subsection (2)—

(a)omit paragraph (a), and

(b)in paragraph (b) substitute “ the tax years after the tax year in which the contribution was made which are ” for “subsequent”.

23(1)In relation to a capital sum contributed by the employee before 6th April 2003, section 147 (classic cars: 15 years of age or more) applies with the following modifications.U.K.

(2)In subsection (5)(b) substitute “under section 168F(3) of ICTA in determining the price of the car as regards a year” for “in determining the market value of the car”.

(3)In subsection (6)—

(a)omit paragraph (a), and

(b)in paragraph (b) substitute “ the tax years after the tax year in which the contribution was made which are ” for “subsequent”.

F253324U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2533Sch. 7 para. 24 repealed (22.7.2004) by Finance Act 2004 (c. 12), Sch. 42 Pt. 2(9)

Taxable benefits: loansU.K.

25(1)Chapter 7 of Part 3 applies to a loan made at any time, including one made before 29th July 1976 (the date on which FA 1976 was passed).U.K.

(2)But section 188 (loan released or written off: amount treated as earnings) does not apply to benefits received in pursuance of arrangements made at any time with a view to protecting the holder of shares acquired before 6th April 1976 from a fall in their market value.

26(1)This paragraph relates to the operation of section 183 (alternative method of calculation) in relation to section 177(2) (exceptions for loans at fixed rate of interest) in the case of a loan made before 6th April 2003.U.K.

(2)Where section 183 applies, then for the purpose of calculating under section 177(2) the amount of interest that would have been payable on the loan at the official rate of interest for the year in which the loan was made, in step 3 in section 183(3) for “the number of days in the tax year” substitute “ 365 ”.

27(1)Subject to paragraph 25(2), where a loan is made before 6th April 2003, section 188 (loan released or written off: amount treated as earnings) applies with the following modifications.U.K.

(2)References to the employment in relation to which a loan is an employment-related loan are to be read, in relation to times before 6th April 2003, as references to the employment referred to in section 174 (employment-related loans) as modified by paragraph 17.

(3)In relation to times before 6th April 2003—

(a)in subsection (2)(c), substitute “an employment to which Chapter 2 of Part 5 of ICTA applies” for [F2534“not lower-paid employment as a minister of religion”], and

(b)in subsection (3)(a), substitute “ an employment to which Chapter 2 of Part 5 of ICTA does not apply ” for [F2535“lower-paid employment as a minister of religion”].

Textual Amendments

F2534Words in Sch. 7 para. 27(3)(a) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 22(3)(a)

F2535Words in Sch. 7 para. 27(3)(b) substituted (with effect in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 22(3)(b)

Taxable benefits: notional loans in respect of acquisitions of sharesU.K.

28U.K.Chapter 8 of Part 3 does not apply in relation to acquisitions on or before 6th April 1976.

29(1)This paragraph relates to the operation of Chapter 8 of Part 3 in relation to an acquisition made before 6th April 2003.U.K.

(2)If—

(a)the acquisition gave rise to a notional loan under section 162(1) of ICTA, and

(b)the notional loan has not terminated under section 162(4) of ICTA before 6th April 2003,

the condition in section 193(1) (notional loan where acquisition for less than market value) is taken to be met and section 193(3) and (4) apply accordingly.

(3)In such a case, the amount initially outstanding of the notional loan for the purposes of Chapter 8 of Part 3 is taken to be the amount initially outstanding calculated under section 162 of ICTA in relation to the tax year 2002-03.

(4)In such a case, section 195(3)(c) (discharge of notional loan: amount treated as earnings) applies, in relation to times before 6th April 2003, with the substitution of “an employment to which Chapter 2 of Part 5 of ICTA applies” for “not an excluded employment”.

Taxable benefits: disposals of shares for more than market valueU.K.

F253630U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2536Sch. 7 para. 30 repealed (with effect in accordance with Sch. 22 para. 46(26)(a) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 46(2), Sch. 43 Pt. 3(4)

F253731U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2537Sch. 7 para. 31 repealed (with effect in accordance with Sch. 22 para. 46(26)(a) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 46(2), Sch. 43 Pt. 3(4)

Taxable benefits: residual liability to chargeU.K.

32(1)This paragraph applies in relation to Chapter 10 of Part 3.U.K.

(2)In section 206, the references in subsection (4) and step 2 in subsection (5) to the cost of a benefit determined under section 205 are to be read as including a reference to the cost of a benefit determined under section 156(5) of ICTA.

(3)Sections 212, 213 and 215 do not have effect in relation to any payment if—

(a)it is made in respect of a scholarship awarded before 15th March 1983,

(b)the first payment in respect of the scholarship was made before 6th April 1984, and

(c)in relation to payments made after 5th April 1989, the person holding the scholarship (“the scholar”) is receiving full-time instruction at the university, college, school or other educational establishment at which the scholar was receiving such instruction on—

(i)15th March 1983, in a case where the first payment in respect of the scholarship was made before that date, or

(ii)the date on which the first such payment was made, in any other case.

(4)For the purposes of sub-paragraph (3)(c), a payment made before 6th April 1989 in respect of any period beginning on or after that date is treated as made at the beginning of that period.

Part 4U.K.Employment income: exemptions

Incidental overnight expenses and benefitsU.K.

33U.K.In determining whether section 240(1) or (2) or 268 applies—

(a)in the case of a period of absence which began before 6th April 2003 and ends on or after that date, or

(b)in the case of a period of absence which begins on or after that date and incidentally to which goods, services or money are obtained using a non-cash voucher in relation to which section 141(6C) of ICTA applies,

the question whether for the purposes of section 241 the exemption provisions total exceeds the permitted amount is to be determined as if this Act had applied at any relevant time before that date.

34U.K.In determining—

(a)whether section 141(6C) and (6D), 142(3C) and (3D), 155(1B) and (1C) or section 200A of ICTA applies in the case of a period of absence which began before 6th April 2003 and ends on or after that date, or

(b)whether section 141(6C) and (6D) applies in the case of a period of absence which begins on or after that date,

the question whether the authorised maximum (as defined in section 200A(4) of ICTA) is exceeded in relation to the absence is to be determined as if in section 200A(5) after the words “exceeded by” there were inserted the words “the aggregate of the exemption provisions total in respect of the period (as defined in section 241 of ITEPA 2003) and”.

Removal benefits and expensesU.K.

35(1)Section 287 (limit on exemption for removal benefits and expenses) applies with the modification in sub-paragraph (2) where—U.K.

(a)a benefit is provided on or after 6th April 2003 in connection with a change of an employee’s residence, or

(b)expenses are incurred on or after that day in connection with such a change,

and any such benefits have been provided or expenses incurred before that date in connection with that change.

(2)In subsection (2) before paragraph (a) insert—

“(aa)the total value to the employee immediately before 6th April 2003, as defined in paragraph 24(2) of Schedule 11A to ICTA,”.

36U.K.A direction under paragraph 6(2) of Schedule 11A to ICTA (directions as to meaning of “the relevant day”) by virtue of which a day on or after 6th April 2003 was directed to be the relevant day in relation to a change of residence—

(a)is not affected by any repeals made by this Act, but

(b)continues in force as respects any benefit provided or expenses incurred on or after that date as if it were a direction given under section 274(2) (directions as to the limitation day), directing that day to be the limitation day.

Retraining coursesU.K.

37(1)The repeal of sections 588(5)(a) and 589(3) and (4) of ICTA does not affect—U.K.

(a)the operation of section 588(5) of ICTA by virtue of paragraph (a) of that provision where liability for a tax year before 2003-04 is determined,

(b)the operation of section 588(5) of ICTA by virtue of paragraph (b) of that provision where liability is determined on the assumption that the person undertaking the course fell within section 588(1) of ICTA in such a tax year, or

(c)the operation of section 588(6) F2538... of ICTA as they apply by virtue of sub-paragraph (2).

(2)In any case where there has been such a determination as is mentioned in sub-paragraph (1)(a) or (b), section 588(6) [F2539applies as if it] referred to a failure to comply with any provision of section 589(3) or (4) of ICTA instead of a failure to meet such a condition as is mentioned in section 312(1)(b)(i) or (ii) of this Act.

Textual Amendments

Suggestion awardsU.K.

38(1)This paragraph applies for the purpose of determining the extent, if any, to which section 321(2) (exemption of suggestion awards) applies in respect of a financial benefit award for a suggestion (“the later award”) in a case where such an award (“the earlier award”) has been made for the same suggestion on a previous occasion or occasions before the tax year 2003-04.U.K.

(2)For the purposes of the application of section 322(3) in relation to the later award, “the residue of the suggestion maximum” means the suggestion maximum, as defined in section 322(4), less the aggregate of—

(a)the total of the amounts exempted from income tax under section 321 in respect of financial benefit awards for the same suggestion made on previous occasions, and

(b)the total of the earlier awards.

Part 5U.K.Employment income: deductions

Earnings charged on remittanceU.K.

39U.K.In relation to expenses incurred before the tax year 2003-04, section 353 (deductions from earnings charged on remittance) applies as if the condition in subsection (3) of that section were that the expenses would have been deductible under section 193, 194, 195 or 198(1) of ICTA from emoluments of the office or employment if those emoluments had been chargeable under Case I of Schedule E for the tax year in which the expenses were incurred.

Non-domiciled employee’s travel costs and expenses: “qualifying arrival date”U.K.

40U.K.In relation to any time before 6th April 2003, section 375 (meaning of “qualifying arrival date”) has effect as if the references in subsections (1)(a) and (4) to the person receiving earnings for duties performed in the United Kingdom included a reference to the person receiving emoluments for such duties.

Part 6U.K.Employment income: income which is not earnings or [F2540related to securities]

Textual Amendments

F2540Words in Sch. 7 Pt. 6 heading substituted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(3)

Benefits from non-approved pension schemesU.K.

F254141U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Payments and benefits on termination of employment etc.U.K.

42U.K.Section 403 (charge on payment or other benefit) does not apply in relation to payments or other benefits received on or after 6th April 2003 that were brought into charge to tax before 6th April 1998.

43(1)This paragraph applies for the purpose of determining how the £30,000 threshold referred to in sections 403 and 404 operates where—U.K.

(a)payments or other benefits to which Chapter 3 of Part 6 apply are received, and

(b)payments or benefits to which section 148 of ICTA applied were received in respect of the same person—

(i)in respect of the same employment, or

(ii)in respect of different employments with the same employer or associated employers.

(2)For the purposes of section 403(4) and (5), section 415 (valuation of benefits) does not apply to the payments and benefits referred to in sub-paragraph (1)(b), and their aggregate amount is to be taken to be their aggregate amount immediately before 6th April 2003.

(3)The references in sections 403(4) and (5) and 404(3)(b) to payments or benefits to which Chapter 3 of Part 6 applies include references to the payments and benefits referred to in sub-paragraph (1)(b).

(4)Section 404(2) (when employers are associated) applies for the purposes of this paragraph.

Part 7U.K.Employment income: [F2542income related to securities]

Textual Amendments

F2542Words in Sch. 7 Pt. 7 heading substituted (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(4)

[F2543Pre-6th April 2003 acquisitionsU.K.

Textual Amendments

F2543Sch. 7 para. 43A and cross-heading inserted (16.4.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(5)(26)(b)

43A(1)This paragraph relates to the operation of section 421E (exclusions from Chapters 2 to 4 of Part 7: residence) in relation to an acquisition made before 6th April 2003.U.K.

(2)Section 421E(1) has effect with the substitution of “ the employee was not chargeable under Case I of Schedule E in respect of the employment ” for the words from “the earnings”.

(3)Section 421E(2) has effect with the substitution of “ the emoluments of the employment did not fall to be charged to income tax under Schedule E ” for the words from “the earnings”.]

Conditional interests in sharesU.K.

44U.K.Chapter 2 of Part 7 [F2544, as originally enacted,] does not apply in relation to interests acquired before 17th March 1998.

Textual Amendments

F2544Words in Sch. 7 para. 44 inserted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(6)(26)(c); S.I. 2003/1997, art. 2

45(1)This paragraph relates to the operation of section 425 (cases where Chapter 2 of Part 7 does not apply) [F2545, as originally enacted.] U.K.

(2)Section 425(1) applies in relation to any acquisition made before 6th April 2003 with the substitution of “if the person was not chargeable under Case I of Schedule E in respect of the office or employment in question” for the words from “if the earnings” onwards.

Textual Amendments

F2545Words in Sch. 7 para. 45(1) inserted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(7)(26)(c); S.I. 2003/1997, art. 2

46(1)This paragraph relates to the operation of section 428 (amount of charge where interest in shares ceases to be only conditional or on disposal) [F2546, as originally enacted,] in relation to an acquisition made before 6th April 2003.U.K.

(2)For the purposes of section 428(1) each of the following is a “deductible amount”—

(a)any amounts on which the employee has become chargeable to tax under Schedule E in respect of the acquisition of the employee’s interest; and

(b)any amount on which the employee has become chargeable to tax in respect of the shares under section 78 or 79 of FA 1988 (unapproved employee share schemes) by reference to an event that occurred before 6th April 2003.

Textual Amendments

F2546Words in Sch. 7 para. 46(1) inserted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(8)(26)(c); S.I. 2003/1997, art. 2

F254747U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2547Sch. 7 para. 47 repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(9), Sch. 43 Pt. 3(4)

F254848U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2548Sch. 7 para. 48 repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(9), Sch. 43 Pt. 3(4)

Convertible sharesU.K.

49U.K.Chapter 3 of Part 7 does not apply in relation to [F2549securities] acquired before 17th March 1998.

Textual Amendments

F2549Word in Sch. 7 para. 49 substituted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(10)(26)(c); S.I. 2003/1997, art. 2

F255050U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F255051U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F255052U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F255153U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2551Sch. 7 para. 53 repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(12), Sch. 43 Pt. 3(4)

Post-acquisition benefits from sharesU.K.

54U.K.Chapter 4 of Part 7[F2552, both as originally enacted and as substituted by [F2553FA] 2003,] does not apply in relation to shares or an interest in shares acquired before 26th October 1987, except to the extent provided by paragraph 55 (read with paragraph 56).

Textual Amendments

F2552Words in Sch. 7 para. 54 inserted (16.4.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(13)(26)(b)

F2553Word in Sch. 7 para. 54 substituted (21.7.2009) by Finance Act 2009 (c. 10), s. 126(5)(b)

55(1)Chapter 4 of Part 7 [F2554, as originally enacted,] applies in relation to shares or an interest in shares acquired before 26th October 1987 if the company was not a dependent subsidiary on that date.U.K.

(2)But it so applies—

F2555(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)subject to paragraph 56.

Textual Amendments

F2554Words in Sch. 7 para. 55 inserted (16.4.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(14)(a)(26)(b)

F2555Sch. 7 para. 55(2)(a) repealed (16.4.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(14)(b)(26)(b), Sch. 43 Pt. 3(4)

56U.K.The removal or variation of a restriction applying to shares or an interest in shares acquired before 26th October 1987 is not a chargeable event for the purposes of section 449 [F2556, as originally enacted,] if paragraph 7 of Schedule 8 to FA 1973 (requirement for disposal to nominees at price not exceeding market value on termination of employment) would have applied to it.

Textual Amendments

F2556Words in Sch. 7 para. 56 inserted (16.4.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(15)(26)(b)

F255757U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2557Sch. 7 para. 57 omitted (with effect in accordance with s. 50(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 50(2)(b)

58(1)This paragraph relates to the operation of section 448 (cases where Chapter 4 of Part 7 does not apply) [F2558, as originally enacted].U.K.

(2)Section 448(1) applies in relation to any acquisition made before 6th April 2003 with the substitution of “if the person was not chargeable under Case I of Schedule E in respect of the office or employment in question” for the words “if the earnings” onwards.

(3)Section 448(3) and (4) do not apply in relation to any acquisition made before 16th January 1991.

Textual Amendments

F2558Words in Sch. 7 para. 58(1) inserted (16.4.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(16)(26)(b)

F255959U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F256060U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2560Sch. 7 para. 60 repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(18), Sch. 43 Pt. 3(4)

F256161U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2561Sch. 7 para. 61 repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(18), Sch. 43 Pt. 3(4)

[F2562Securities disposed of for more than market valueU.K.

Textual Amendments

F2562Sch. 7 para. 61A and cross-heading inserted (with effect in accordance with Sch. 22 para. 46(26)(a) of the amending Act) by Finance Act 2003 (c. 14), Sch. 22 para. 46(19)

61AU.K.Chapter 3D of Part 7 does not apply in relation to securities, or an interest in securities, acquired on or before 6th April 1976.]

Share optionsU.K.

F256362U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F256463(1)This paragraph relates to the operation of section 474 (exclusions from Chapter 5 of Part 7: residence) in relation to an acquisition made before 6th April 2003.U.K.

(2)Section 474(1) has effect with the substitution of “ the employee was not chargeable under Case I of Schedule E in respect of the employment ” for the words from “the earnings”.]

Textual Amendments

F2564Sch. 7 para. 63 substituted (16.4.2003 for specified purposes, otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(21)(26)(d); S.I. 2003/1997, art. 2

64(1)This paragraph relates to the operation of section 478 (amount of charges) in relation to a [F2565securities] option [F2566acquired] before 6th April 2003.U.K.

(2)For the purposes of section 478(1), any amount charged to tax under Schedule E in respect of the [F2567acquisition] of the [F2565securities] option is a deductible amount.

Textual Amendments

F2565Word in Sch. 7 para. 64 substituted (16.4.2003 for specified purposes, otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(22)(a)(26)(d); S.I. 2003/1997, art. 2

F2566Word in Sch. 7 para. 64 substituted (16.4.2003 for specified purposes, otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(22)(b)(26)(d); S.I. 2003/1997, art. 2

F2567Word in Sch. 7 para. 64 substituted (16.4.2003 for specified purposes, otherwise 1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(22)(c)(26)(d); S.I. 2003/1997, art. 2

65(1)This paragraph relates to the operation of section [F2568478 in relation to an event that is a chargeable event by virtue of section 477(3)(a) or (b) (acquisition of securities pursuant to an option and assignment and release of option) in the case of a share option acquired] before 6th April 2003.U.K.

(2)For the purposes of section [F2569478(1)], if an amount was chargeable to tax under section 185(6) of ICTA (charge where option under approved share option scheme granted at a discount) in respect of the share option, so much of that amount as is attributable to the shares in question is a deductible [F2569amount].

Textual Amendments

F2568Words in Sch. 7 para. 65(1) substituted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(23)(a)(26)(c); S.I. 2003/1997, art. 2

F2569Word in Sch. 7 para. 65(2) substituted (1.9.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(23)(b)(26)(c); S.I. 2003/1997, art. 2

F257066U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F257167U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2571Sch. 7 para. 67 repealed (10.7.2003) by Finance Act 2003 (c. 14), Sch. 22 para. 46(25), Sch. 43 Pt. 3(4)

Approved share incentive plansU.K.

68(1)This paragraph applies where, immediately before 6th April 2003, an employee share ownership plan was approved under Schedule 8 to FA 2000 (employee share ownership plans).U.K.

(2)On and after that date the plan is to be treated as a share incentive plan (or “SIP”) approved by [F165an officer of Revenue and Customs] under Schedule 2 to this Act.

(3)Sub-paragraph (2) has effect even if the provisions of the plan do not wholly conform with the provisions of Schedule 2 to this Act, but it has effect without prejudice to—

(a)paragraphs 83 and 84 of that Schedule (withdrawal of approval),

(b)paragraphs 89 and 90 of that Schedule (termination of plan), and

(c)any alteration of the plan.

(4)For the purposes of paragraph 84(1)(a) of Schedule 2, as it applies to the plan, nothing is to be regarded as a disqualifying event because of a contravention of any of the requirements of that Schedule if the requirement in question does not correspond to any of the requirements of Schedule 8 to FA 2000.

(5)Nothing in this Act affects the validity of—

(a)any provision of the plan which was included in it at any time before 6th April 2003 in accordance with the provisions of Schedule 8 to FA 2000 as then in force, or

(b)any award of shares under the plan which was made at any such time in accordance with the provisions of that Schedule as then in force.

(6)In this paragraph—

  • “award of shares” means the appropriation of shares to, or the acquisition of shares on behalf of, a person;

  • “employee share ownership plan” has the meaning given by paragraph 1(1) of Schedule 8 to FA 2000.

Textual Amendments

69(1)Any reference in any enactment, instrument or document—U.K.

(a)to an employee share ownership plan, or

(b)to an employee share ownership plan approved under Schedule 8 to FA 2000,

is to be read as including, in relation to times after 5th April 2003, a reference to a share incentive plan or to a share incentive plan approved under Schedule 2 to this Act.

(2)Any reference in any enactment, instrument or document—

(a)to a share incentive plan (or SIP), or

(b)to a share incentive plan (or SIP) approved under Schedule 2 to this Act,

is to be read as including, in relation to times before 6th April 2003, a reference to an employee share ownership plan or to an employee share ownership plan approved under Schedule 8 to FA 2000.

(3)Accordingly any reference in the SIP code to shares awarded under an approved SIP is to be read as including, in relation to times before 6th April 2003, a reference to shares awarded under a plan approved under Schedule 8 to FA 2000.

(4)Any reference in a plan within paragraph 68(1) to a person chargeable to tax under Case I of Schedule E is to be read as including, in relation to times after 5th April 2003, a reference to a person whose earnings fall within paragraph 8(2) of Schedule 2 to this Act.

(5)This paragraph—

(a)is without prejudice to Part 1 of this Schedule, and

(b)applies only in so far as the context permits.

(6)In this paragraph—

  • “awarded” means appropriated to, or acquired on behalf of, a person;

  • “employee share ownership plan” has the same meaning as in paragraph 68.

70U.K.Nothing in paragraph 91(4) of Schedule 2 to this Act (jointly owned companies) prevents a company being a constituent company in a group plan (within the meaning of that Schedule) if it was a participating company in that plan (within the meaning of Schedule 8 to FA 2000) immediately before 24th July 2002.

Approved SAYE option schemesU.K.

71(1)This paragraph applies where, immediately before 6th April 2003, a savings-related share option scheme was approved under Schedule 9 to ICTA (approved share option schemes and profit-sharing schemes).U.K.

(2)On and after that date the scheme is to be treated as an SAYE option scheme approved by [F165an officer of Revenue and Customs] under Schedule 3 to this Act.

(3)Sub-paragraph (2) has effect even if the provisions of the scheme do not wholly conform with the provisions of Schedule 3 to this Act, but it has effect without prejudice to—

(a)paragraphs 42 and 43 of that Schedule (withdrawal or loss of approval), and

(b)any approved alteration of the scheme.

(4)For the purposes of paragraph 42 of Schedule 3, as it applies to the scheme, nothing is to be regarded as a disqualifying event if it would not have resulted in any of the former approval requirements ceasing to be met.

The “former approval requirements” means the requirements of Schedule 9 to ICTA by reference to which the scheme was approved.

(5)Nothing in this Act affects the validity of—

(a)any provision of the scheme which was included in it at any time before 6th April 2003 in accordance with the provisions of Schedule 9 to ICTA as then in force, or

(b)any rights obtained under the scheme which were obtained at any such time in accordance with the provisions of that Schedule as then in force.

(6)In this paragraph “savings-related share option scheme” has the meaning given by paragraph 1(1) of Schedule 9 to ICTA.

Textual Amendments

72(1)Any reference in the SAYE code to a share option granted in accordance with the provisions of an approved SAYE option scheme is to be read as including, in relation to times before 6th April 2003, a reference to a right to acquire shares obtained in accordance with the provisions of a savings-related share option scheme approved under Schedule 9 to ICTA.U.K.

(2)Any reference in a scheme within paragraph 71(1) to a person chargeable to tax under Case I of Schedule E is to be read as including, in relation to times after 5th April 2003, a reference to a person whose earnings fall within paragraph 6(2)(c) of Schedule 3 to this Act.

(3)This paragraph—

(a)is without prejudice to Part 1 of this Schedule, and

(b)applies only in so far as the context permits.

(4)In this paragraph “savings-related share option scheme” has the same meaning as in paragraph 71.

Approved CSOP schemesU.K.

73(1)This paragraph applies where, immediately before 6th April 2003, a discretionary share option scheme was approved under Schedule 9 to ICTA (approved share option schemes and profit-sharing schemes).U.K.

(2)On and after that date the scheme is to be treated as a CSOP scheme approved by [F165an officer of Revenue and Customs] under Schedule 4 to this Act.

(3)Sub-paragraph (2) has effect even if the provisions of the scheme do not wholly conform with the provisions of Schedule 4 to this Act, but they are without prejudice to—

(a)paragraphs 30 and 31 of that Schedule (withdrawal or loss of approval), and

(b)any approved alteration of the scheme.

(4)For the purposes of paragraph 30 of Schedule 4, as it applies to the scheme, nothing is to be regarded as a disqualifying event if it would not have resulted in any of the former approval requirements ceasing to be met.

The “former approval requirements” means the requirements of Schedule 9 to ICTA by reference to which the scheme was approved.

(5)Nothing in this Act affects the validity of—

(a)any provision of the scheme which was included in it at any time before 6th April 2003 in accordance with the provisions of Schedule 9 to ICTA as then in force, or

(b)any rights obtained under the scheme which were obtained at any such time in accordance with the provisions of that Schedule as then in force.

(6)In this paragraph “discretionary share option scheme” means a share option scheme other than a savings-related share option scheme (as defined by paragraph 1(1) of Schedule 9 to ICTA).

Textual Amendments

74(1)Any reference in the CSOP code to a share option granted in accordance with the provisions of an approved CSOP scheme is to be read as including, in relation to times before 6th April 2003, a reference to a right to acquire shares obtained in accordance with the provisions of a discretionary share option scheme approved under Schedule 9 to ICTA.U.K.

(2)This paragraph—

(a)is without prejudice to Part 1 of this Schedule,

(b)applies only in so far as the context permits, and

(c)has effect subject to paragraph 75.

(3)In this paragraph “discretionary share option scheme” has the same meaning as in paragraph 73.

75(1)This paragraph has effect where, immediately before 6th April 2003, a discretionary share option scheme which was approved before 29th April 1996—U.K.

(a)is approved under Schedule 9 to ICTA, and

(b)has effect subject to the modifications made by paragraphs 2 and 3 of Schedule 16 to FA 1996 (scheme to have effect, despite anything included in it to the contrary, as if it contained provisions required by paragraphs 28 and 29 of Schedule 9 to ICTA: limit of £30,000 on value of shares subject to outstanding options and requirements as to price for acquisition of shares).

(2)On and after 6th April 2003 the scheme is to continue to have effect as if it provided—

(a)that an individual may not be granted share options under it which would at the time when they are granted cause the aggregate market value of the shares which the individual may acquire by exercising share options granted under—

(i)the scheme, or

(ii)any other approved CSOP scheme established by the scheme organiser or an associated company of the scheme organiser,

to exceed or further exceed £30,000 (leaving out of account share options that have already been exercised), and

(b)that the price at which shares may be acquired by the exercise of a share option granted under the scheme must not be manifestly less than the market value of shares of the same class at that time (or, if [F111the Commissioners for Her Majesty’s Revenue and Customs] and the scheme organiser agree in writing, at an earlier time or times stated in the agreement).

(3)For the purposes of sub-paragraph (2)(a), the market value of shares is to be calculated as at—

(a)the time when the options relating to them were granted, or

(b)if an agreement relating to them has been made under paragraph 22 of Schedule 4 (requirements as to price for acquisition of shares) the earlier time or times stated in the agreement.

(4)Sub-paragraph (2) is subject to any amendment to the scheme made after 28th April 1996 (whether before or after 6th April 2003).

(5)In this paragraph “discretionary share option scheme” has the same meaning as in paragraph 73.

(6)Other expressions used in this paragraph and contained in the index at the end of Schedule 4 (index of expressions defined in the CSOP code) have the meaning indicated by that index.

Textual Amendments

76(1)This paragraph applies to any right obtained by an individual—U.K.

(a)under a discretionary share option scheme approved under Schedule 9 to ICTA, and

(b)during the period beginning with 17th July 1995 and ending with 28th April 1996,

if, by virtue of section 115 of FA 1996 (transitional provisions which gave retrospective effect to certain amendments relating to discretionary share option schemes), the right was, immediately before 6th April 2003, treated for the purposes of sections 185 to 187 of and Schedule 9 to ICTA as having been obtained otherwise than in accordance with the provisions of a discretionary share option scheme approved under that Schedule.

(2)For the purposes of the CSOP code, the right is to be treated as having been granted otherwise than in accordance with the provisions of an approved CSOP scheme.

(3)In this paragraph “discretionary share option scheme” has the same meaning as in paragraph 73.

Enterprise management incentivesU.K.

77(1)This paragraph applies where, immediately before 6th April 2003, a share option was a qualifying option for the purposes of Schedule 14 to FA 2000 (enterprise management incentives).U.K.

(2)On and after that date the share option is to be treated as a qualifying option for the purposes of the EMI code.

(3)Sub-paragraph (2) has effect even if the requirements that had to be met in order for the share option, or any share option replaced by it, to be a qualifying option for the purposes of Schedule 14 to FA 2000 differed to any extent from those set out in Schedule 5.

(4)In this paragraph “share option” means a right to acquire shares.

78(1)In section 535 (disqualifying events relating to employee), subsections (2) to (6) apply to the tax year 2003-04 and later tax years (in accordance with section 723(1)).U.K.

(2)In Schedule 14 to FA 2000 (enterprise management incentives), paragraph 52 (disqualifying events: actual relevant working time) continues to apply in relation to April 2003 for the purpose of calculating, in accordance with sub-paragraphs (3) to (5) of that paragraph, whether a disqualifying event is to be taken to have occurred at the end of the tax year 2002-03.

(3)If a disqualifying event is to be taken to have so occurred, it (like anything else which under that Schedule is a disqualifying event immediately before 6th April 2003) is a disqualifying event for the purposes of Schedule 5 to this Act.

79(1)Section 536 (other disqualifying events) has effect in relation to any alteration made to the share capital of a company before 11th May 2001 with the following modification.U.K.

(2)In subsection (1), for paragraphs (b) and (c) substitute—

“(b)any alteration to the share capital of the relevant company to which section 537 applies and is made without the prior approval of [F165an officer of Revenue and Customs] ;”.

Textual Amendments

80(1)Section 537 (alteration of share capital for purposes of section 536) has effect in relation to any alteration made to the share capital of a company before 11th May 2001 with the following modifications.U.K.

(2)In subsection (1), omit “and (c)”.

(3)In subsection (2), substitute “ This section ” for “This subsection”.

(4)Omit subsection (3).

81U.K.In a case where the qualifying option was granted before 6th April 2003, section 540(2) (no charge on acquisition of shares as taxable benefit) applies in relation to the time when the option was granted with the substitution of “the employee was chargeable to tax under Case I of Schedule E” for the words from “the earnings” onwards.

82(1)This paragraph relates to the operation of section 541(2) (effects on tax charges where shares cease to be conditional only or are converted) in relation to an FA 2000 option which was exercised before 6th April 2003.U.K.

(2)The references to a qualifying option include an FA 2000 option which was so exercised; but in relation to such an option sub-paragraph (3) applies instead of section 541(3).

(3)For the purposes of section 541(2) “the amount of relief on the exercise of the option” means the difference between—

(a)the amount on which tax would have been chargeable under section 135 of ICTA (charge on exercise etc. of option) in respect of the exercise of the option apart from Schedule 14 to FA 2000 (enterprise management incentives), and

(b)the amount (if any) in fact so chargeable in accordance with that Schedule.

(4)In this paragraph an “FA 2000 option” means a qualifying option for the purposes of Schedule 14 to FA 2000.

83U.K.In Schedule 5 (enterprise management incentives), paragraph 41(6) (like other provisions of that paragraph) applies to replacement options whenever granted.

Employee benefit trustsU.K.

84U.K.In relation to times before 6th April 2003, section 549(5) (definition of “employee” for purposes of Chapter 11 of Part 7) is to be read as referring to a person holding an office or employment whose emoluments were chargeable under Schedule E.

Part 8U.K.Approved profit sharing schemes

Trustees' duty to provide informationU.K.

85U.K.Any obligation imposed in accordance with paragraph 34(b) of Schedule 9 to ICTA (trustees' duties to provide information) on the trustees of a profit sharing scheme approved under that Schedule is to be construed as an obligation, where an amount counts as employment income of a participant by reason of the occurrence of any event, to inform the participant of any facts relevant to determining the participant’s resulting liability to tax.

Share incentive plansU.K.

86(1)Where the trustees of an approved share incentive plan acquire shares from the trustees of an approved profit sharing scheme, the disposal and the acquisition by the trustees are treated for capital gains tax purposes as being made for such consideration as to secure that neither a gain nor a loss accrues on the disposal.U.K.

(2)In such a case the relevant period for the purposes of paragraph 2 of Schedule 7D to TCGA 1992 is determined as if the shares had been acquired by the trustees of the share incentive plan at the time they were acquired by the trustees of the other trust.

F2572...

(3)In this paragraph—

  • “approved profit sharing scheme” means a profit sharing scheme approved under Schedule 9 to ICTA, and

  • “approved share incentive plan” means a share incentive plan approved under Schedule 2 to this Act.

Textual Amendments

F2572Words in Sch. 7 para. 86(2) omitted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 52

Other share schemes: eligibility of individuals and material interestsU.K.

87(1)In applying any of the provisions specified in sub-paragraph (2) (which deal with the meaning of “material interest” for the purpose of determining eligibility to participate in share schemes, etc.) the following are to be disregarded—U.K.

(a)the interest of the trustees of any profit sharing scheme approved under Schedule 9 to ICTA in any shares which are held by them in accordance with the plan but which have not been appropriated to an individual, and

(b)any rights exercisable by the trustees as a result of that interest.

(2)The provisions referred to in sub-paragraph (1) are—

(a)paragraph 20 of Schedule 2 (approved share incentive plans);

(b)paragraph 12 of Schedule 3 (approved SAYE option schemes);

(c)paragraph 10 of Schedule 4 (approved CSOP schemes);

(d)paragraph 29 of Schedule 5 (enterprise management incentives).

Part 9U.K.Social security income

Disabled person’s and working families' tax creditsU.K.

88(1)This paragraph applies if, on 6th April 2003, the repeals made by TCA 2002 of the provisions listed in sub-paragraph (3) have not come fully into force.U.K.

(2)Until the repeal of those provisions has come fully into force, Table B in section 677(1) of this Act is to be read as if it included references to disabled person’s tax credit and working families' tax credit.

(3)The provisions referred to in this paragraph are—

(a)in SSCBA 1992, section 128 (working families' tax credit) and section 129 (disabled person’s tax credit), and

(b)in SSCB(NI)A 1992, section 127 (working families' tax credit) and section 128 (disabled person’s tax credit).

Part 10U.K.PAYE

PAYE regulationsU.K.

89(1)In relation to any time before the commencement of the repeals in Part 7 of Schedule 20 to FA 1999, section 684(2) (PAYE regulations) has effect with the following modification.U.K.

(2)At the end of item 5 insert “ including the proving of the contents or transmission of anything that the regulations allow to be transmitted to any person in electronic form or by electronic means ”.

Part 11U.K.Consequences for corporation tax

90(1)This paragraph applies where—U.K.

(a)a company is charged to corporation tax by reference to an accounting period which begins before and ends on or after 6th April 2003, and

(b)because of a change in the law made by this Act, the income tax law relating to the accounting period is different from what it would have been if that change had not been made.

(2)If the company so elects, this Act applies with such modifications as may be necessary to secure that the income tax law relating to the accounting period is the same as it would have been if the change in the law had not been made.

(3)An election under this paragraph must be made by notice given to [F165an officer of Revenue and Customs] no later than the end of the period of two years beginning with the day following the last day of the accounting period.

(4)In this paragraph “income tax law” has the same meaning as in section 9 of ICTA.

Textual Amendments

91(1)This paragraph applies in relation to corporation tax charged by reference to an accounting period which begins before and ends on or after 6th April 2003.U.K.

(2)In its application for the purposes of corporation tax, any provision of this Schedule is to be read as if—

(a)any reference to the tax year 2003-04 were a reference to that accounting period, and

(b)any reference to 6th April 2003 were a reference to the first day of that accounting period.

92(1)The provisions of this Act mentioned in sub-paragraph (2) do not have effect for corporation tax purposes for so much of any accounting period as falls before 6th April 2003.U.K.

(2)The provisions are—

(a)in Schedule 6 (consequential amendments)—

(i)paragraph 11 (which replaces references in section 84A of ICTA to share option schemes approved under Schedule 9 to that Act with references to SAYE option schemes and CSOP schemes approved under this Act), and

(ii)paragraphs 12 and 109 (which insert Schedule 4AA to ICTA (share incentive plans: corporation tax deductions)), and

(b)the repeal by Schedule 8 (repeals) of—

(i)Part 12 of Schedule 8 to FA 2000 (corporation tax deductions in relation to employee share option plans), and

(ii)so much of any other provision of Schedule 8 to that Act as is necessary for the operation of Part 12.

(3)This paragraph has effect as an exception to the provision made by section 723(1)(b) (commencement of this Act for purposes of corporation tax).

Section 724

SCHEDULE 8U.K.Repeals and revocations

Part 1 U.K.Acts of Parliament

Short title and chapterExtent of repeal
Taxes Management Act 1970 (c. 9)

In section 98, the entries in the first column of the Table relating to—

(a)

regulations under section 202 of ICTA;

(b)

paragraph 117 of Schedule 8 to FA 2000;

(c)

paragraph 64 of Schedule 14 to that Act.

 

In section 98, the entries in the second column of the Table relating to—

(a)

section 136(6) of ICTA;

(b)

section 140G of ICTA;

(c)

regulations under section 202 of ICTA;

(d)

regulations under section 203 of ICTA;

(e)

section 313(5) of ICTA;

(f)

section 85(1) and (2) of FA 1988;

(g)

paragraph 65 of Schedule 14 to FA 2000.

Income and Corporation Taxes Act 1988 (c. 1)Section 19.
 Section 58.
 In section 65(2), the words “Subject to section 330,”.
 Sections 131 to 137.
 Sections 140 to 151A.
 Sections 153 to 159AC.
 Sections 160 to 168G.
 Section 185.
 

In section 186—

(a)

in subsection (3), the words “the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the entitlement arises on”;

(b)

in subsection (4), the words “the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the disposal takes place on”.

 In section 187, subsections (1) to (4), (6) and (7), except so far as relating to profit sharing schemes.
 Section 187A.
 Sections 189 to 198.
 Sections 199 to 207.
 Section 313.
 Sections 315 to 319.
 Section 321.
 Section 322(2).
 

In section 323—

(a)

subsection (1);

(b)

in subsection (6), paragraph (b) and the word “and” preceding it;

(c)

subsection (7).

 Section 330.
 Section 332(1), (2), (3A), (3B) and (4).
 

In section 577—

(a)

in subsection (1), paragraph (b) and the word “and” preceding it;

(b)

in subsection (3), the words from “but where-” to the end.

 Section 579(1).
 Section 580(3).
 

In section 585—

(a)

in subsection (1), the words “, or under Case III of Schedule E,”;

(b)

in subsection (9), paragraph (b) and the word “and” preceding it.

 In section 588, in subsection (5), paragraph (a) and the word “or” preceding paragraph (b).
 Section 589.
 Section 589A(2) to (6), (10).
 

In section 589B—

(a)

subsections (1) to (4A);

(b)

in subsection (5), the words “this section or”.

 Section 591D(6).
 Section 595.
 Section 596.
 Sections 596A to 596C.
 Section 597.
 Section 599A(5), (6) and (8).
 Section 600.
 In section 607(3)(b), sub-paragraph (iv) and the word “and” preceding it.
 Section 608(4).
 Section 613(1) to (3).
 Section 615(1), (2), (4), (5) and (8).
 Section 616.
 Section 617(1) and (2).
 Section 617A.
 In section 638(13), the definition of “employee share ownership plan”.
 

In section 643—

(a)

subsection (1);

(b)

in subsection (5), the words “shall be assessable to tax under Schedule E (and section 203 shall apply accordingly) and”.

 Sections 647 to 648A.
 Section 830(5).
 Schedules 6, 6A, 7 and 7A.
 

In Schedule 9—

(a)

Parts 1, 2 and 6, except so far as relating to profit sharing schemes;

(b)

Parts 3 and 4.

 In Schedule 10, in paragraph 7(7)(b), the second “to”.
 Schedules 11, 11A, 12, 12AA and 12A.
 In Schedule 29, paragraph 6.
Social Security Act 1988 (c. 7)In Schedule 4, paragraph 1.
Finance Act 1988 (c. 39)Section 46.
 Section 47(1).
 Section 48(1).
 Section 49(1).
 Section 57.
 Section 68.
 Section 69.
 Section 73(1).
 Sections 77 to 88.
 

In section 89—

(a)

in paragraph (a), the words “section 185(3)(a) (approved share option schemes) and”;

(b)

paragraph (b).

 Section 128.
 In Schedule 3, paragraph 4.
 In Schedule 13, paragraph 3.
Finance Act 1989 (c. 26)Sections 36 to 42.
 Section 45.
 Sections 50 to 52.
 Section 53, except subsection (2)(f) so far as relating to section 418(3) of ICTA.
 Section 62.
 Sections 64 and 66.
 

In section 178(2)—

(a)

in paragraph (m), the words “160,”;

(b)

at the end of the first paragraph (p), the word “and”.

 Section 179(1)(g) and (5).
 

In Schedule 6—

(a)

paragraphs 7 to 9;

(b)

paragraph 13;

(c)

in paragraph 18(1), the words “8(2)(b)”;

(d)

paragraph 18(5) to (7).

 In Schedule 12, paragraph 8.
Companies Act 1989 (c. 40)In Schedule 18, paragraph 46.
Finance Act 1990 (c. 29)Section 21.
 Section 77.
 Section 79.
 In Schedule 14, paragraph 4(2).
Oversea Superannuation Act 1991 (c. 16)Section 2.
Disability Living Allowance and Disability Working Allowance Act 1991 (c. 21)In Schedule 2, paragraph 18.
Finance Act 1991 (c. 31)Section 38(2).
 Sections 39 to 40.
 Section 44.
 Section 69.
 In Schedule 6, paragraphs 1 and 3.
Social Security Contributions and Benefits Act 1992 (c. 4)Section 10(10).
 In section 150(2), in paragraph (b) of the definition of “unemployability supplement or allowance”, sub-paragraph (v).
Social Security (Consequential Provisions) Act 1992 (c. 6)In Schedule 2, paragraph 93.
Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)Section 10(10).
 In section 146(2), in paragraph (b) of the definition of “unemployability supplement or allowance”, sub-paragraph (v).
Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9)In Schedule 2, paragraph 33.
Taxation of Chargeable Gains Act 1992 (c. 12)Section 120(6).
 In Schedule 10, paragraphs 14(9) to (12) and 16(3) to (5).
Finance (No. 2) Act 1992 (c. 48)Section 37.
 Section 54.
Finance Act 1993 (c. 34)Section 68.
 Sections 73 to 76.
 Section 105(1) and (2).
 Section 124.
 Schedules 3, 4 and 5.
Finance Act 1994 (c. 9)Sections 88 and 89.
 Section 108(1) to (6) and (7)(b).
 Sections 109 and 110.
 Sections 125 to 132.
 Section 139.
Vehicle Excise and Registration Act 1994 (c. 22)In Schedule 3, paragraph 22.
Finance Act 1995 (c. 4)Sections 43 to 45.
 Sections 91 to 93.
 Section 108.
 Section 111.
 Section 137(2), (3) and (8).
 Section 141.
Jobseekers Act 1995 (c. 18)In Schedule 2, paragraphs 12, 14 and 16.
Child Support Act 1995 (c. 34)In Schedule 3, paragraph 1.
Finance Act 1996 (c. 8)Sections 106 to 110.
 Sections 113 to 115.
 Section 120(11)(b).
 Section 152.
 In Schedule 7, paragraph 5.
 Schedule 16.
 In Schedule 20, paragraphs 6 to 10, 41 and 42.
Finance Act 1997 (c. 16)Sections 62 and 63.
 In Schedule 18, in Part 6(3), Note 3(b).
Finance Act 1998 (c. 36)Sections 49 to 53.
 Section 55(1).
 Section 58.
 Sections 60 and 61.
 Sections 63 to 69.
 Section 93.
 Schedules 9 and 10.
Tax Credits Act 1999 (c. 10)In Schedule 1, paragraph 6(c).
Finance Act 1999 (c. 16)Sections 42 to 45.
 Sections 48 to 51.
 In Schedule 5, paragraphs 1 to 3.
 In Schedule 10, paragraphs 4, 5, 6 and 8.
Welfare Reform and Pensions Act 1999 (c. 30)In Schedule 8, paragraph 1(2).
 In Schedule 12, paragraph 75.
Care Standards Act 2000 (c. 14)In Schedule 4, paragraph 13.
Finance Act 2000 (c. 17)Section 38(5) and (7).
 Section 47.
 Sections 56 to 60.
 Section 62.
 Schedules 8, 10 and 11.
 Schedule 12, except paragraphs 17 and 18.
 Schedule 14.
Capital Allowances Act 2001 (c. 2)In Schedule 2, paragraphs 24, 25, 51(1) and 107.
Finance Act 2001 (c. 9)Section 57(1) and (2).
 Section 58.
 Sections 60 to 62.
 

In Schedule 12—

(a)

Part 1;

(b)

in Part 2, paragraphs 1 to 10 and 12 to 16.

 Schedules 13 and 14.
 In Schedule 22, in paragraph 16(5), the definition of “PAYE regulations”.
Social Security Contributions (Share Options) Act 2001 (c. 20)Section 4.
International Development Act 2002 (c. 1)In Schedule 3, paragraph 10.
State Pension Credit Act 2002 (c. 16)In Schedule 2, paragraph 28.
Tax Credits Act 2002 (c. 21)Section 25(6).
 In Schedule 3, paragraph 14.
Finance Act 2002 (c. 23)Sections 33 to 37.
 Section 38(2) and (3).
 Section 39.
 Section 41.
 In section 103(4)(f), the words “in Schedule 14, paragraph 22(4),”.
 Schedule 6.
 In Schedule 13, in paragraph 27(1), the definition of “PAYE regulations”.
Employee Share Schemes Act 2002 (c. 34)The whole Act.

Part 2 U.K.Subordinate legislation

Reference and titleExtent of revocation
Disability Living Allowance and Disability Working Allowance (Northern Ireland Consequential Amendments) Order 1991 (S.I. 1991/2874)Article 5.
Income Tax (Car Benefits) (Replacement Accessories) Regulations 1994 (S.I. 1994/777)The whole Regulations.
Income Tax (Replacement Cars) Regulations 1994 (S.I. 1994/778)The whole Regulations.
Income Tax (Employments) (Notional Payments) Regulations 1994 (S.I. 1994/1212)

In regulation 2—

(a)

in paragraph (1), all definitions except that of “the principal Regulations”;

(b)

paragraph (2).

 Regulations 3 to 8A.
Income Tax (Employments) (Notional Payments) (Amendment) Regulations 1996 (S.I. 1996/2969)The whole Regulations.
Income Tax (Employments) (Notional Payments) (Amendment) Regulations 1998 (S.I. 1998/1891)Regulations 4 to 6.
Income Tax (Car Benefits) (Reduction of Value of Appropriate Percentage) Regulations 2001 (S.I. 2001/1123)Regulation 8.
Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629)Article 107.
Enterprise Management Incentives (Gross Asset Requirement) Order 2001 (S.I. 2001/3799)The whole Order.

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\ No newline at end of file diff --git a/raw/uk/patents-act-1977 b/raw/uk/patents-act-1977 new file mode 100644 index 0000000..501fd81 --- /dev/null +++ b/raw/uk/patents-act-1977 @@ -0,0 +1,110 @@ + + + +Patents Act 1977 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +

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  • s. 56(4)(a)(iiia) and word added by S.I. 2006/1056 Sch. para. 2(b) (This amendment comes into force on the day on which 2005 asp 13, s. 20 comes into force, see art. 1(2)(b))

Legislation Crest

Patents Act 1977

1977 CHAPTER 37

An Act to establish a new law of patents applicable to future patents and applications for patents; to amend the law of patents applicable to existing patents and applications for patents; to give effect to certain international conventions on patents; and for connected purposes.

[29th July 1977]

Extent Information

E1This Act does not extend to the Channel Islands or the Colonies for extent provision see s. 132(2)

Modifications etc. (not altering text)

C1Act extended (with modifications) (2.1.1993) by S.I. 1992/3091, reg.5

Act extended (8.2.1997) by S.I. 1996/3120, reg. 5

Act applied (8.2.1997) by S.I. 1997/64, rule 9

Act extended (1.3.2002) by The Patents and Plant Variety Rights (Compulsory Licensing) Regulations 2002 (S.I. 2002/247), reg. 26(1) (subject to reg. 26(2)(3))

C4Act: power to amend conferred (24.5.2024 for specified purposes, 1.1.2025 in so far as not already in force) by Digital Markets, Competition and Consumers Act 2024 (c. 13), ss. 138(2)-(7), 339(2)(c); S.I. 2024/1226, regs. 1(2), 2(1)(2) (with Sch. para. 10, 20)

Part IU.K. New Domestic Law

PatentabilityU.K.

1 Patentable inventions.U.K.

(1)A patent may be granted only for an invention in respect of which the following conditions are satisfied, that is to say—

(a)the invention is new;

(b)it involves an inventive step;

(c)it is capable of industrial application;

(d)the grant of a patent for it is not excluded by subsections (2) and (3) [F1 or section 4A] below;

and references in this Act to a patentable invention shall be construed accordingly.

(2)It is hereby declared that the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of—

(a)a discovery, scientific theory or mathematical method;

(b)a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever;

(c)a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer;

(d)the presentation of information;

but the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such.

[F2(3)A patent shall not be granted for an invention the commercial exploitation of which would be contrary to public policy or morality.

(4)For the purposes of subsection (3) above exploitation shall not be regarded as contrary to public policy or morality only because it is prohibited by any law in force in the United Kingdom or any part of it.]

(5)The Secretary of State may by order vary the provisions of subsection (2) above for the purpose of maintaining them in conformity with developments in science and technology; and no such order shall be made unless a draft of the order has been laid before, and approved by resolution of, each House of Parliament.

Textual Amendments

F1Words in s. 1(1)(d) inserted (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 2; S.I. 2007/3396, art. 2(l)

F2S. 1(3)(4) substituted (28.7.2000) by S.I. 2000/2037, reg. 3

2 Novelty.U.K.

(1)An invention shall be taken to be new if it does not form part of the state of the art.

(2)The state of the art in the case of an invention shall be taken to comprise all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way.

(3)The state of the art in the case of an invention to which an application for a patent or a patent relates shall be taken also to comprise matter contained in an application for another patent which was published on or after the priority date of that invention, if the following conditions are satisfied, that is to say—

(a)that matter was contained in the application for that other patent both as filed and as published; and

(b)the priority date of that matter is earlier than that of the invention.

(4)For the purposes of this section the disclosure of matter constituting an invention shall be disregarded in the case of a patent or an application for a patent if occurring later than the beginning of the period of six months immediately preceding the date of filing the application for the patent and either—

(a)the disclosure was due to, or made in consequence of, the matter having been obtained unlawfully or in breach of confidence by any person—

(i)from the inventor or from any other person to whom the matter was made available in confidence by the inventor or who obtained it from the inventor because he or the inventor believed that he was entitled to obtain it; or

(ii)from any other person to whom the matter was made available in confidence by any person mentioned in sub-paragraph (i) above or in this sub-paragraph or who obtained it from any person so mentioned because he or the person from whom he obtained it believed that he was entitled to obtain it;

(b)the disclosure was made in breach of confidence by any person who obtained the matter in confidence from the inventor or from any other person to whom it was made available, or who obtained it, from the inventor; or

(c)the disclosure was due to, or made in consequence of the inventor displaying the invention at an international exhibition and the applicant states, on filing the application, that the invention has been so displayed and also, within the prescribed period, files written evidence in support of the statement complying with any prescribed conditions.

(5)In this section references to the inventor include references to any proprietor of the invention for the time being.

F3(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

3 Inventive step.U.K.

An invention shall be taken to involve an inventive step if it is not obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art by virtue only of section 2(2) above (and disregarding section 2(3) above).

4 Industrial application.U.K.

(1)F4..., an invention shall be taken to be capable of industrial application if it can be made or used in any kind of industry, including agriculture.

F5(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F74AMethods of treatment or diagnosisU.K.

(1)A patent shall not be granted for the invention of—

(a)a method of treatment of the human or animal body by surgery or therapy, or

(b)a method of diagnosis practised on the human or animal body.

(2)Subsection (1) above does not apply to an invention consisting of a substance or composition for use in any such method.

(3)In the case of an invention consisting of a substance or composition for use in any such method, the fact that the substance or composition forms part of the state of the art shall not prevent the invention from being taken to be new if the use of the substance or composition in any such method does not form part of the state of the art.

(4)In the case of an invention consisting of a substance or composition for a specific use in any such method, the fact that the substance or composition forms part of the state of the art shall not prevent the invention from being taken to be new if that specific use does not form part of the state of the art.]

Textual Amendments

5 Priority date.U.K.

(1)For the purposes of this Act the priority date of an invention to which an application for a patent relates and also of any matter (whether or not the same as the invention) contained in any such application is, except as provided by the following provisions of this Act, the date of filing the application.

(2)If in or in connection with an application for a patent (the application in suit) a declaration is made, whether by the applicant or any predecessor in title of his, complying with the relevant requirements of rules and specifying one or more earlier relevant applications for the purposes of this section made by the applicant or a predecessor in title of his and [F8the application in suit has a date of filing during the period allowed under subsection (2A)(a) or (b) below], then—

(a)if an invention to which the application in suit relates is supported by matter disclosed in the earlier relevant application or applications, the priority date of that invention shall instead of being the date of filing the application in suit be the date of filing the relevant application in which that matter was disclosed, or, if it was disclosed in more than one relevant application, the earliest of them;

(b)the priority date of any matter contained in the application in suit which was also disclosed in the earlier relevant application or applications shall be the date of filing the relevant application in which that matter was disclosed or, if it was disclosed in more than one relevant application, the earliest of them.

[F9(2A)The periods are—

(a)the period of twelve months immediately following the date of filing of the earlier specified relevant application, or if there is more than one, of the earliest of them; and

(b)where the comptroller has given permission under subsection (2B) below for a late declaration to be made under subsection (2) above, the period commencing immediately after the end of the period allowed under paragraph (a) above and ending at the end of the prescribed period.

(2B)The applicant may make a request to the comptroller for permission to make a late declaration under subsection (2) above.

(2C)The comptroller shall grant a request made under subsection (2B) above if, and only if—

(a)the request complies with the relevant requirements of rules; and

(b)the comptroller is satisfied that the applicant’s failure to file the application in suit within the period allowed under subsection (2A)(a) above was unintentional.]

(3)Where an invention or other matter contained in the application in suit was also disclosed in two earlier relevant applications filed by the same applicant as in the case of the application in suit or a predecessor in title of his and the second of those relevant applications was specified in or in connection with the application in suit, the second of those relevant applications shall, so far as concerns that invention or matter, be disregarded unless—

(a)it was filed in or in respect of the same country as the first; and

(b)not later than the date of filing the second, the first (whether or not so specified) was unconditionally withdrawn, or was abandoned or refused, without—

(i)having been made available to the public (whether in the United Kingdom or elsewhere);

(ii)leaving any rights outstanding; and

(iii)having served to establish a priority date in relation to another application, wherever made.

(4)The foregoing provisions of this section shall apply for determining the priority date of an invention for which a patent has been granted as they apply for determining the priority date of an invention to which an application for that patent relates.

(5)In this section “relevant application” means any of the following applications which has a date of filing, namely—

(a)an application for a patent under this Act;

[F10(aa)an application in or for a country (other than the United Kingdom) which is a member of the World Trade Organisation for protection in respect of an invention which, in accordance with the law of that country or a treaty or international obligation to which it is a party, is equivalent to an application for a patent under this Act;]

(b)an application in or for a convention country (specified under section 90 below) for protection in respect of an invention or an application which, in accordance with the law of a convention country or a treaty or international convention to which a convention country is a party, is equivalent to [F11an application for a patent under this Act].

F12(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Modifications etc. (not altering text)

C5S. 5 extended (24.5.2000) by S.I. 2000/1114, art. 2

6 Disclosure of matter, etc., between earlier and later applications.U.K.

(1)It is hereby declared for the avoidance of doubt that where an application (the application in suit) is made for a patent and a declaration is made in accordance with section 5(2) above in or in connection with that application specifying an earlier relevant application, the application in suit and any patent granted in pursuance of it shall not be invalidated by reason only of relevant intervening acts.

(2)In this section—

  • “relevant application” has the same meaning as in section 5 above; and

  • “relevant intervening acts” means acts done in relation to matter disclosed in an earlier relevant application between the dates of the earlier relevant application and the application in suit, as for example, filing another application for the invention for which the earlier relevant application was made, making information available to the public about that invention or that matter or working that invention, but disregarding any application, or the disclosure to the public of matter contained in any application, which is itself to be disregarded for the purposes of section 5(3) above.

Right to apply for and obtain a patent and be mentioned as inventorU.K.

7 Right to apply for and obtain a patent.U.K.

(1)Any person may make an application for a patent either alone or jointly with another.

(2)A patent for an invention may be granted—

(a)primarily to the inventor or joint inventors;

(b)in preference to the foregoing, to any person or persons who, by virtue of any enactment or rule of law, or any foreign law or treaty or international convention, or by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it (other than equitable interests) in the United Kingdom;

(c)in any event, to the successor or successors in title of any person or persons mentioned in paragraph (a) or (b) above or any person so mentioned and the successor or successors in title of another person so mentioned;

and to no other person.

(3)In this Act “inventor” in relation to an invention means the actual deviser of the invention and “joint inventor” shall be construed accordingly.

(4)Except so far as the contrary is established, a person who makes an application for a patent shall be taken to be the person who is entitled under subsection (2) above to be granted a patent and two or more persons who make such an application jointly shall be taken to be the persons so entitled.

8 Determination before grant of questions about entitlement to patents, etc.U.K.

(1)At any time before a patent has been granted for an invention (whether or not an application has been made for it)—

(a)any person may refer to the comptroller the question whether he is entitled to be granted (alone or with any other persons) a patent for that invention or has or would have any right in or under any patent so granted or any application for such a patent; or

(b)any of two or more co-proprietors of an application for a patent for that invention may so refer the question whether any right in or under the application should be transferred or granted to any other person;

and the comptroller shall determine the question and may make such order as he thinks fit to give effect to the determination.

(2)Where a person refers a question relating to an invention under subsection (1)(a) above to the comptroller after an application for a patent for the invention has been filed and before a patent is granted in pursuance of the application, then, unless the application is refused or withdrawn before the reference is disposed of by the comptroller, the comptroller may, without prejudice to the generality of subsection (1) above and subject to subsection (6) below.—

(a)order that the application shall proceed in the name of that person, either solely or jointly with that of any other applicant, instead of in the name of the applicant or any specified applicant;

(b)where the reference was made by two or more persons, order that the application shall proceed in all their names jointly;

(c)refuse to grant a patent in pursuance of the application or order the application to be amended so as to exclude any of the matter in respect of which the question was referred;

(d)make an order transferring or granting any licence or other right in or under the application and give directions to any person for carrying out the provisions of any such order.

(3)Where a question is referred to the comptroller under subsection (1)(a) above and—

(a)the comptroller orders an application for a patent for the invention to which the question relates to be so amended;

(b)any such application is refused under subsection 2(c) above before the comptroller has disposed of the reference (whether the reference was made before or after the publication of the application); or

(c)any such application is refused under any other provision of this Act or is withdrawn before the comptroller has disposed of the reference [F13(whether the application is refused or withdrawn before or after its publication) ] ;

the comptroller may order that any person by whom the reference was made may within the prescribed period make a new application for a patent for the whole or part of any matter comprised in the earlier application or, as the case may be, for all or any of the matter excluded from the earlier application, subject in either case to section 76 below, and in either case that, if such a new application is made, it shall be treated as having been filed on the date of filing the earlier application.

(4)Where a person refers a question under subsection (1)(b) above relating to an application, any order under subsection (1) above may contain directions to any person for transferring or granting any right in or under the application.

(5)If any person to whom directions have been given under subsection (2)(d) or (4) above fails to do anything necessary for carrying out any such directions within 14 days after the date of the directions, the comptroller may, on application made to him by any person in whose favour or on whose reference the directions were given, authorise him to do that thing on behalf of the person to whom the directions were given.

(6)Where on a reference under this section it is alleged that, by virtue of any transaction, instrument or event relating to an invention or an application for a patent, any person other than the inventor or the applicant for the patent has become entitled to be granted (whether alone or with any other persons) a patent for the invention or has or would have any right in or under any patent so granted or any application for any such patent, an order shall not be made under subsection (2)(a), (b) or (d) above on the reference unless notice of the reference is given to the applicant and any such person, except any of them who is a party to the reference.

(7)If it appears to the comptroller on a reference of a question under this section that the question involves matters which would more properly be determined by the court, he may decline to deal with it and, without prejudice to the court’s jurisdiction to determine any such question and make a declaration, or any declaratory jurisdiction of the court in Scotland, the court shall have jurisdiction to do so.

(8)No directions shall be given under this section so as to affect the mutual rights or obligations of trustees or of the personal representatives of deceased persons, or their right or obligations as such.

Textual Amendments

F13Words in s. 8(3)(c) substituted (1.1.2005) by Patents Act 2004 (c. 16), ss. 6(1), 17(1); S.I. 2004/3205, art. 2(b) (with art. 9)

9 Determination after grant of questions referred before grant.U.K.

If a question with respect to a patent or application is referred by any person to the comptroller under section 8 above, whether before or after the making of an application for the patent, and is not determined before the time when the application is first in order for a grant of a patent in pursuance of the application, that fact shall not prevent the grant of a patent, but on its grant that person shall be treated as having referred to the comptroller under section 37 below any question mentioned in that section which the comptroller thinks appropriate.

10 Handling of application by joint applicants.U.K.

If any dispute arises between joint applicants for a patent whether or in what manner the application should be proceeded with, the comptroller may, on a request made by any of the parties, give such directions as he thinks fit for enabling the application to proceed in the name of one or more of the parties alone or for regulating the manner in which it shall be proceeded with, or for both those purposes, according as the case may require.

11 Effect of transfer of application under s. 8 or 10.U.K.

(1)Where an order is made or directions are given under section 8 or 10 above that an application for a patent shall proceed in the name of one or some of the original applicants (whether or not it is also to proceed in the name of some other person), any licences or other rights in or under the application shall, subject to the provisions of the order and any directions under either of those sections, continue in force and be treated as granted by the persons in whose name the application is to proceed.

(2)Where an order is made or directions are given under section 8 above that an application for a patent shall proceed in the name of one or more persons none of whom was an original applicant (on the ground that the original applicant or applicants was or were not entitled to be granted the patent), any licences or other rights in or under the application shall, subject to the provisions of the order and any directions under that section and subject to subsection (3) below, lapse on the registration of that person or those persons as the applicant or applicants or, where the application has not been published, on the making of the order.

(3)If before registration of a reference under section 8 above resulting in the making of any order mentioned in subsection (2) above—

(a)the original applicant or any of the applicants, acting in good faith, worked the invention in question in the United Kingdom or made effective and serious preparations to do so; or

(b)a licensee of the applicant, acting in good faith, worked the invention in the United Kingdom or made effective and serious preparations to do so;

that or those original applicant or applicants or the licensee shall, on making a request within the prescribed period to the person in whose name the application is to proceed, be entitled to be granted a licence (but not an exclusive licence) to continue working or, as the case may be, to work the invention.

[F14(3A)If, before registration of a reference under section 8 above resulting in the making of an order under subsection (3) of that section, the condition in subsection (3)(a) or (b) above is met, the original applicant or any of the applicants or the licensee shall, on making a request within the prescribed period to the new applicant, be entitled to be granted a licence (but not an exclusive licence) to continue working or, as the case may be, to work the invention so far as it is the subject of the new application.]

(4)[F15A licence under subsection (3) or (3A) above ] shall be granted for a reasonable period and on reasonable terms.

(5)Where an order is made as mentioned in subsection (2) [F16or (3A)] above, the person in whose name the application is to proceed [F17or, as the case may be, who makes the new application ] or any person claiming that he is entitled to be granted any such licence may refer to the comptroller the question whether the latter is so entitled and whether any such period is or terms are reasonable, and the comptroller shall determine the question and may, if he considers it appropriate, order the grant of such a licence.

Textual Amendments

F14S. 11(3A) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 6(2), 17(1); S.I. 2004/3205, art. 2(b) (with art. 9)

F15Words in s. 11(4) substituted (1.1.2005) by Patents Act 2004 (c. 16), ss. 6(3), 17(1); S.I. 2004/3205, art. 2(b) (with art. 9)

F16Words in s. 11(5) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 6(4)(a), 17(1); S.I. 2004/3205, art. 2(b) (with art. 9)

F17Words in s. 11(5) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 6(4)(b), 17(1); S.I. 2004/3205, art. 2(b) (with art. 9)

12 Determination of questions about entitlement to foreign and convention patents, etc.U.K.

(1)At any time before a patent is granted for an invention in pursuance of an application made under the law of any country other than the United Kingdom or under any treaty or international convention (whether or not that application has been made)—

(a)any person may refer to the comptroller the question whether he is entitled to be granted (alone or with any other persons) any such patent for that invention or has or would have any right in or under any such patent or an application for such a patent; or

(b)any of two or more co-proprietors of an application for such a patent for that invention may so refer the question whether any right in or under the application should be transferred or granted to any other person;

and the comptroller shall determine the question so far as he is able to and may make such order as he thinks fit to give effect to the determination.

(2)If it appears to the comptroller on a reference of a question under this section that the question involves matters which would more properly be determined by the court, he may decline to deal with it and, without prejudice to the court’s jurisdiction to determine any such question and make a declaration, or any declaratory jurisdiction of the court in Scotland, the court shall have jurisdiction to do so.

(3)Subsection (1) above, in its application to a European patent and an application for any such patent, shall have effect subject to section 82 below.

(4)Section 10 above, except so much of it as enables the comptroller to regulate the manner in which an application is to proceed, shall apply to disputes between joint applicants for any such patent as is mentioned in subsection (1) above as it applies to joint applicants for a patent under this Act.

(5)Section 11 above shall apply in relation to—

(a)any orders made under subsection (1) above and any directions given under section 10 above by virtue of subsection (4) above; and

(b)any orders made and directions given by the relevant convention court with respect to a question corresponding to any question which may be determined under subsection (1) above;

as it applies to orders made and directions given apart from this section under section 8 or 10 above.

(6)In the following cases, that is to say—

(a)where an application for a European patent (UK) is refused or withdrawn, or the designation of the United Kingdom in the application is withdrawn [F18whether before or ] , after publication of the application but before a question relating to the right to the patent has been referred to the comptroller under subsection (1) above or before proceedings relating to that right have begun before the relevant convention court;

(b)where an application has been made for a European patent (UK) and on a reference under subsection (1) above or any such proceedings as are mentioned in paragraph (a) above the comptroller, the court or the relevant convention court determines by a final decision (whether before or after publication of the application) that a person other than the applicant has the right to the patent, but that person requests the European Patent Office that the application for the patent should be refused; or

(c)where an international application for a patent (UK) is withdrawn, or the designation of the United Kingdom in the application is withdrawn, whether before or after the making of any reference under subsection (1) above [F19or the] publication of the application;

the comptroller may order that any person (other than the applicant) appearing to him to be entitled to be granted a patent under this Act may within the prescribed period make an application for such a patent for the whole or part of any matter comprised in the earlier application (subject, however, to section 76 below) and that if the application for a patent under this Act is filed, it shall be treated as having been filed on the date of filing the earlier application.

(7)In this section—

(a)references to a patent and an application for a patent include respectively references to protection in respect of an invention and an application which, in accordance with the law of any country other than the United Kingdom or any treaty or international convention, is equivalent to an application for a patent or for such protection; and

(b)a decision shall be taken to be final for the purposes of this section when the time for appealing from it has expired without an appeal being brought or, where an appeal is brought, when it is finally disposed of.

Textual Amendments

F18Words in s. 12(6)(a) inserted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 5(a); S.I. 2004/3205, art. 2(k) (with art. 9)

F19Words in s. 12(6)(c) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 5(b); S.I. 2004/3205, art. 2(k) (with art. 9)

13 Mention of inventor.U.K.

(1)The inventor or joint inventors of an invention shall have a right to be mentioned as such in any patent granted for the invention and shall also have a right to be so mentioned if possible in any published application for a patent for the invention and, if not so mentioned, a right to be so mentioned in accordance with rules in a prescribed document.

(2)Unless he has already given the Patent Office the information hereinafter mentioned, an applicant for a patent shall within the prescribed period file with the Patent Office a statement—

(a)identifying the person or persons whom he believes to be the inventor or inventors; and

(b)where the applicant is not the sole inventor or the applicants are not the joint inventors, indicating the derivation of his or their right to be granted the patent;

and, if he fails to do so, the application shall be taken to be withdrawn.

(3)Where a person has been mentioned as sole or joint inventor in pursuance of this section, any other person who alleges that the former ought not to have been so mentioned may at any time apply to the comptroller for a certificate to that effect, and the comptroller may issue such a certificate; and if he does so, he shall accordingly rectify any undistributed copies of the patent and of any documents prescribed for the purposes of subsection (1) above.

ApplicationsU.K.

14 Making of application.U.K.

(1)Every application for a patent—

(a)shall be made in the prescribed form and shall be filed at the Patent Office in the prescribed manner; [F20and]

(b)[F20shall be accompanied by the fee prescribed for the purposes of this subsection (hereafter in this Act referred to as the filing fee).]

[F21(1A)Where an application for a patent is made, the fee prescribed for the purposes of this subsection (“the application fee”) shall be paid not later than the end of the period prescribed for the purposes of section 15(10)(c) below.]

(2)Every application for a patent shall contain—

(a)a request for the grant of a patent;

(b)a specification containing a description of the invention, a claim or claims and any drawing referred to in the description or any claim; and

(c)an abstract;

but the foregoing provision shall not prevent an application being initiated by documents complying with section 15(1) below.

(3)The specification of an application shall disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art.

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F22

(5)The claim or claims shall—

(a)define the matter for which the applicant seeks protection;

(b)be clear and concise;

(c)be supported by the description; and

(d)relate to one invention or to a group of inventions which are so linked as to form a single inventive concept.

(6)Without prejudice to the generality of subsection (5)(d) above, rules may provide for treating two or more inventions as being so linked as to form a single inventive concept for the purposes of this Act.

(7)The purpose of the abstract is to give technical information and on publication it shall not form part of the state of the art by virtue of section 2(3) above, and the comptroller may determine whether the abstract adequately fulfils its purpose and, if it does not, may reframe it so that it does.

(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F22

(9)An application for a patent may be withdrawn at any time before the patent is granted and any withdrawal of such an application may not be revoked.

[F23(10)Subsection (9) above does not affect the power of the comptroller under section 117(1) below to correct an error or mistake in a withdrawal of an application for a patent.]

Textual Amendments

F20S. 14(1)(b) and preceding word ceased to have effect (1.1.2005) by virtue of The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 4(2) (with arts. 20-23)

[F2415 Date of filing application.U.K.

(1)Subject to the following provisions of this Act, the date of filing an application for a patent shall be taken to be the earliest date on which documents filed at the Patent Office to initiate the application satisfy the following conditions—

(a)the documents indicate that a patent is sought;

(b)the documents identify the person applying for a patent or contain information sufficient to enable that person to be contacted by the Patent Office; and

(c)the documents contain either—

(i)something which is or appears to be a description of the invention for which a patent is sought; or

(ii)a reference, complying with the relevant requirements of rules, to an earlier relevant application made by the applicant or a predecessor in title of his.

(2)It is immaterial for the purposes of subsection (1)(c)(i) above—

(a)whether the thing is in, or is accompanied by a translation into, a language accepted by the Patent Office in accordance with rules;

(b)whether the thing otherwise complies with the other provisions of this Act and with any relevant rules.

(3)Where documents filed at the Patent Office to initiate an application for a patent satisfy one or more of the conditions specified in subsection (1) above, but do not satisfy all those conditions, the comptroller shall as soon as practicable after the filing of those documents notify the applicant of what else must be filed in order for the application to have a date of filing.

(4)Where documents filed at the Patent Office to initiate an application for a patent satisfy all the conditions specified in subsection (1) above, the comptroller shall as soon as practicable after the filing of the last of those documents notify the applicant of—

(a)the date of filing the application, and

(b)the requirements that must be complied with, and the periods within which they are required by this Act or rules to be complied with, if the application is not to be treated as having been withdrawn.

(5)Subsection (6) below applies where—

(a)an application has a date of filing by virtue of subsection (1) above;

(b)within the prescribed period the applicant files at the Patent Office—

(i)a drawing, or

(ii)part of the description of the invention for which a patent is sought, and

(c)that drawing or that part of the description was missing from the application at the date of filing.

(6)Unless the applicant withdraws the drawing or the part of the description filed under subsection (5)(b) above (“the missing part”) before the end of the prescribed period—

(a)the missing part shall be treated as included in the application; and

(b)the date of filing the application shall be the date on which the missing part is filed at the Patent Office.

(7)Subsection (6)(b) above does not apply if—

(a)on or before the date which is the date of filing the application by virtue of subsection (1) above a declaration is made under section 5(2) above in or in connection with the application;

(b)the applicant makes a request for subsection (6)(b) above not to apply; and

(c)the request complies with the relevant requirements of rules and is made within the prescribed period.

(8)Subsections (6) and (7) above do not affect the power of the comptroller under section 117(1) below to correct an error or mistake.

(9)Where, after an application for a patent has been filed and before the patent is granted—

(a)a new application is filed by the original applicant or his successor in title in accordance with rules in respect of any part of the matter contained in the earlier application, and

(b)the conditions mentioned in subsection (1) above are satisfied in relation to the new application (without the new application contravening section 76 below),

the new application shall be treated as having, as its date of filing, the date of filing the earlier application.

(10)Where an application has a date of filing by virtue of this section, the application shall be treated as having been withdrawn if any of the following applies—

(a)the applicant fails to file at the Patent Office, before the end of the prescribed period, one or more claims and the abstract;

(b)where a reference to an earlier relevant application has been filed as mentioned in subsection (1)(c)(ii) above—

(i)the applicant fails to file at the Patent Office, before the end of the prescribed period, a description of the invention for which the patent is sought;

(ii)the applicant fails to file at the Patent Office, before the end of the prescribed period, a copy of the application referred to, complying with the relevant requirements of rules;

(c)the applicant fails to pay the application fee before the end of the prescribed period;

(d)the applicant fails, before the end of the prescribed period, to make a request for a search under section 17 below and pay the search fee.

(11)In this section “relevant application” has the meaning given by section 5(5) above.

Textual Amendments

F24Ss. 15, 15A substituted for s. 15 (1.1.2005) by The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 5 (with arts. 20-23)

15APreliminary examinationU.K.

(1)The comptroller shall refer an application for a patent to an examiner for a preliminary examination if—

(a)the application has a date of filing;

(b)the application has not been withdrawn or treated as withdrawn; and

(c)the application fee has been paid.

(2)On a preliminary examination of an application the examiner shall—

(a)determine whether the application complies with those requirements of this Act and the rules which are designated by the rules as formal requirements for the purposes of this Act; and

(b)determine whether any requirements under section 13(2) or 15(10) above remain to be complied with.

(3)The examiner shall report to the comptroller his determinations under subsection (2) above.

(4)If on the preliminary examination of an application it is found that—

(a)any drawing referred to in the application, or

(b)part of the description of the invention for which the patent is sought,

is missing from the application, then the examiner shall include this finding in his report under subsection (3) above .

(5)Subsections (6) to (8) below apply if a report is made to the comptroller under subsection (3) above that not all the formal requirements have been complied with.

(6)The comptroller shall specify a period during which the applicant shall have the opportunity—

(a)to make observations on the report, and

(b)to amend the application so as to comply with those requirements (subject to section 76 below).

(7)The comptroller may refuse the application if the applicant fails to amend the application as mentioned in subsection (6)(b) above before the end of the period specified by the comptroller under that subsection.

(8)Subsection (7) above does not apply if—

(a)the applicant makes observations as mentioned in subsection (6)(a) above before the end of the period specified by the comptroller under that subsection, and

(b)as a result of the observations, the comptroller is satisfied that the formal requirements have been complied with.

(9)If a report is made to the comptroller under subsection (3) above—

(a)that any requirement of section 13(2) or 15(10) above has not been complied with; or

(b)that a drawing or part of the description of the invention has been found to be missing,

then the comptroller shall notify the applicant accordingly.]

Textual Amendments

F24Ss. 15, 15A substituted for s. 15 (1.1.2005) by The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 5 (with arts. 20-23)

16 Publication of application.U.K.

(1)Subject to section 22 below [F25and to any prescribed restrictions], where an application has a date of filing, then, as soon as possible after the end of the prescribed period, the comptroller shall, unless the application is withdrawn or refused before preparations for its publication have been completed by the Patent Office, publish it as filed (including not only the original claims but also any amendments of those claims and new claims subsisting immediately before the completion of those preparations) and he may, if so requested by the applicant, publish it as aforesaid during that period, and in either event shall advertise the fact and date of its publication in the journal.

(2)The comptroller may omit from the specification of a published application for a patent any matter—

(a)which in his opinion disparages any person in a way likely to damage him, or

(b)the publication or exploitation of which would in his opinion be generally expected to encourage offensive, immoral or anti-social behaviour.

Textual Amendments

F25Words in s. 16(1) inserted (1.10.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 6; S.I. 2005/2471, art. 2(g)

Examination and searchU.K.

17[F26Search.]U.K.

[F27(1)The comptroller shall refer an application for a patent to an examiner for a search if, and only if—

(a)the comptroller has referred the application to an examiner for a preliminary examination under section 15A(1) above;

(b)the application has not been withdrawn or treated as withdrawn;

(c)before the end of the prescribed period—

(i)the applicant makes a request to the Patent Office in the prescribed form for a search; and

(ii)the fee prescribed for the search (“the search fee”) is paid;

(d)the application includes—

(i)a description of the invention for which a patent is sought; and

(ii)one or more claims; and

(e)the description and each of the claims comply with the requirements of rules as to language.]

(2)[F28On a preliminary examination of an application the examiner shall determine whether the application complies with those requirements of this Act and the rules which are designated by the rules as formal requirements for the purposes of this Act and shall report his determination to the comptroller.]

(3)[F28If it is reported to the comptroller under subsection (2) above that not all the formal requirements are complied with, he shall give the applicant an opportunity to make observations on the report and to amend the application within a specified period (subject to section 15(5) above) so as to comply with those requirements (subject, however, to section 76 below), and if the applicant fails to do so the comptroller may refuse the application. ]

(4)Subject to subsections (5) and (6) below, on a search requested under this section, the examiner shall make such investigation as in his opinion is reasonably practicable and necessary for him to identify the documents which he thinks will be needed to decide, on a substantive examination under section 18 below, whether the invention for which a patent is sought is new and involves an inventive step.

(5)On any such search the examiner shall determine whether or not the search would serve any useful purpose on the application as for the time being constituted and—

(a)if he determines that it would serve such a purpose in relation to the whole or part of the application, he shall proceed to conduct the search so far as it would serve such a purpose and shall report on the results of the search to the comptroller; and

(b)if he determines that the search would not serve such a purpose in relation to the whole or part of the application, he shall report accordingly to the comptroller;

and in either event the applicant shall be informed of the examiner’s report.

(6)If it appears to the examiner, either before or on conducting a search under this section, that an application relates to two or more inventions, but that they are not so linked as to form a single inventive concept, he shall initially only conduct a search in relation to the first invention specified in the claims of the application, but may proceed to conduct a search in relation to another invention so specified if the applicant pays the search fee in respect of the application so far as it relates to that other invention.

(7)After a search has been requested under this section for an application the comptroller may at any time refer the application to an examiner for a supplementary search, and [F29subsections (4) and (5) above] shall apply in relation to a supplementary search as [F29they apply] in relation to any other search under this section.

[F30(8)A reference for a supplementary search in consequence of—

(a)an amendment of the application made by the applicant under section 18(3) or 19(1) below, or

(b)a correction of the application, or of a document filed in connection with the application, under section 117 below,

shall be made only on payment of the prescribed fee, unless the comptroller directs otherwise.]

Textual Amendments

F28S. 17(2)(3) ceased to have effect (1.1.2005) by virtue of The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 6(4) (with arts. 20-23)

18 Substantive examination and grant or refusal of patent.U.K.

(1)Where the conditions imposed by section 17(1) above for the comptroller to refer an application to an examiner for a F31... search are satisfied and at the time of the request under that subsection or within the prescribed period—

(a)a request is made by the applicant to the Patent Office in the prescribed form for a substantive examination; and

(b)the prescribed fee is paid for the examination;

the comptroller shall refer the application to an examiner for a substantive examination; and if no such request is made or the prescribed fee is not paid within that period, the application shall be treated as having been withdrawn at the end of that period.

[F32(1A)If the examiner forms the view that a supplementary search under section 17 above is required for which a fee is payable, he shall inform the comptroller, who may decide that the substantive examination should not proceed until the fee is paid; and if he so decides, then unless within such period as he may allow—

(a)the fee is paid, or

(b)the application is amended so as to render the supplementary search unnecessary,

he may refuse the application.]

(2)On a substantive examination of an application the examiner shall investigate, to such extent as he considers necessary in view of any examination [F33carried out under section 15A above] and search carried out under section 17 above, whether the application complies with the requirements of this Act and the rules and shall determine that question and report his determination to the comptroller.

(3)If the examiner reports that any of those requirements are not complied with, the comptroller shall give the applicant an opportunity within a specified period to make observations on the report and to amend the application so as to comply with those requirements (subject, however, to section 76 below), and if the applicant fails to satisfy the comptroller that those requirements are complied with, or to amend the application so as to comply with them, the comptroller may refuse the application.

(4)If the examiner reports that the application, whether as originally filed or as amended in pursuance of [F34section 15A] above, this section or section 19 below, complies with those requirements at any time before the end of the prescribed period, the comptroller shall notify the applicant of that fact and, subject to subsection (5) and sections 19 and 22 below and on payment within the prescribed period of any fee prescribed for the grant, grant him a patent.

(5)Where two or more applications for a patent for the same invention having the same priority date are filed by the same applicant or his successor in title, the comptroller may on that ground refuse to grant a patent in pursuance of more than one of the applications.

Textual Amendments

F31Words in s. 18(1) omitted (1.1.2005) by virtue of The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 7(2) (with arts. 20-23)

19 General power to amend application before grant.U.K.

(1)At any time before a patent is granted in pursuance of an application the applicant may, in accordance with the prescribed conditions and subject to section 76 below, amend the application of his own volition.

(2)The comptroller may, without an application being made to him for the purpose, amend the specification and abstract contained in an application for a patent so as to acknowledge a registered trade mark.

Modifications etc. (not altering text)

C6S. 19(2) extended by Patents, Designs and Marks Act 1986 (c. 39, SIF 67A) s. 2(3), Sch. 2 Pt. I para. 1(2)(e)(i)

S. 19(2) amended (31.10.1994) by 1994 c. 26, s. 106(1), Sch. 4 para. 1(2); S.I. 1994/2550, art. 2

20 Failure of application.U.K.

(1)If it is not determined that an application for a patent complies before the end of the prescribed period with all the requirements of this Act and the rules, the application shall be treated as having been refused by the comptroller at the end of that period, and section 97 below shall apply accordingly.

(2)If at the end of that period an appeal to the court is pending in respect of the application or the time within which such an appeal could be brought has not expired, that period—

(a)where such an appeal is pending, or is brought within the said time or before the expiration of any extension of that time granted (in the case of a first extension) on an application made within that time or (in the case of a subsequent extension) on an application made before the expiration of the last previous extension, shall be extended until such date as the court may determine;

(b)where no such appeal is pending or is so brought, shall continue until the end of the said time or, if any extension of that time is so granted, until the expiration of the extension or last extension so granted.

[F3520AReinstatement of applicationsU.K.

(1)Subsection (2) below applies where an application for a patent is refused, or is treated as having been refused or withdrawn, as a direct consequence of a failure by the applicant to comply with a requirement of this Act or rules within a period which is—

(a)set out in this Act or rules, or

(b)specified by the comptroller.

(2)Subject to subsection (3) below, the comptroller shall reinstate the application if, and only if—

(a)the applicant requests him to do so;

(b)the request complies with the relevant requirements of rules; and

(c)he is satisfied that the failure to comply referred to in subsection (1) above was unintentional.

(3)The comptroller shall not reinstate the application if—

(a)an extension remains available under this Act or rules for the period referred to in subsection (1) above; or

(b)the period referred to in subsection (1) above is set out or specified—

(i)in relation to any proceedings before the comptroller;

(ii)for the purposes of section 5(2A)(b) above; or

(iii)for the purposes of a request under this section or section 117B below.

(4)Where the application was made by two or more persons jointly, a request under subsection (2) above may, with the leave of the comptroller, be made by one or more of those persons without joining the others.

(5)If the application has been published under section 16 above, then the comptroller shall publish notice of a request under subsection (2) above in the prescribed manner.

(6)The reinstatement of an application under this section shall be by order.

(7)If an application is reinstated under this section the applicant shall comply with the requirement referred to in subsection (1) above within the further period specified by the comptroller in the order reinstating the application.

(8)The further period specified under subsection (7) above shall not be less than two months.

(9)If the applicant fails to comply with subsection (7) above the application shall be treated as having been withdrawn on the expiry of the period specified under that subsection.

Textual Amendments

20BEffect of reinstatement under section 20AU.K.

(1)The effect of reinstatement under section 20A of an application for a patent is as follows.

(2)Anything done under or in relation to the application during the period between termination and reinstatement shall be treated as valid.

(3)If the application has been published under section 16 above before its termination anything done during that period which would have constituted an infringement of the rights conferred by publication of the application if the termination had not occurred shall be treated as an infringement of those rights—

(a)if done at a time when it was possible for the period referred to in section 20A(1) above to be extended, or

(b)if it was a continuation or repetition of an earlier act infringing those rights.

(4)If the application has been published under section 16 above before its termination and, after the termination and before publication of notice of the request for its reinstatement, a person—

(a)began in good faith to do an act which would have constituted an infringement of the rights conferred by publication of the application if the termination had not taken place, or

(b)made in good faith effective and serious preparations to do such an act,

he has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the reinstatement of the application and the grant of the patent; but this right does not extend to granting a licence to another person to do the act.

[F36(4A)The right conferred by subsection (4) does not become exercisable until the end of the period during which a request may be made under this Act, or under the rules, for an extension of the period referred to in section 20A(1).]

(5)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (4) above may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(6)Where a product is disposed of to another in exercise of a right conferred by subsection (4) or (5) above, that other and any person claiming through him may deal with the product in the same way as if it had been disposed of by the applicant.

[F37(6A)The above provisions apply in relation to the use of a patented invention for the services of the Crown as they apply in relation to infringement of the rights conferred by publication of the application for a patent (or, as the case may be, infringement of the patent).]

(7)In this section “termination”, in relation to an application, means—

(a)the refusal of the application, or

(b)the application being treated as having been refused or withdrawn.]

Textual Amendments

F37S. 20B(6A) inserted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(2), Sch. 2 para. 7 (see S.I. 2004/2357, art. 1(2))

21 Observations by third party on patentability.U.K.

(1)Where an application for a patent has been published but a patent has not been granted to the applicant, any other person may make observations in writing to the comptroller on the question whether the invention is a patentable invention, stating reasons for the observations, and the comptroller shall consider the observations in accordance with rules.

(2)It is hereby declared that a person does not become a party to any proceedings under this Act before the comptroller by reason only that he makes observations under this section.

Security and safetyU.K.

22 Information prejudicial to [F38national security ] or safety of public.U.K.

(1)Where an application for a patent is filed in the Patent Office (whether under this Act or any treaty or international convention to which the United Kingdom is a party and whether before or after the appointed day) and it appears to the comptroller that the application contains information of a description notified to him by the Secretary of State as being information the publication of which might be prejudicial to [F39national security] , the comptroller may give directions prohibiting or restricting the publication of that information or its communication to any specified person or description of persons.

(2)If it appears to the comptroller that any application so filed contains information the publication of which might be prejudicial to the safety of the public, he may give directions prohibiting or restricting the publication of that information or its communication to any specified person or description of persons until the end of a period not exceeding three months from the end of the period prescribed for the purposes of section 16 above.

(3)While directions are in force under this section with respect to an application—

(a)if the application is made under this Act, it may proceed to the stage where it is in order for the grant of a patent, but it shall not be published and that information shall not be so communicated and no patent shall be granted in pursuance of the application;

(b)if it is an application for a European patent, it shall not be sent to the European Patent Office; and

(c)if it is an international application for a patent, a copy of it shall not be sent to the International Bureau or any international searching authority appointed under the Patent Co-operation Treaty.

(4)Subsection (3)(b) above shall not prevent the comptroller from sending the European Patent Office any information which it is his duty to send that office under the European Patent Convention.

(5)Where the comptroller gives directions under this section with respect to any application, he shall give notice of the application and of the directions to the Secretary of State, and the following provisions shall then have effect:—

(a)the Secretary of State shall, on receipt of the notice, consider whether the publication of the application or the publication or communication of the information in question would be prejudicial to [F40national security] or the safety of the public;

(b)if the Secretary of State determines under paragraph (a) above that the publication of the application or the publication or communication of that information would be prejudicial to the safety of the public, he shall notify the comptroller who shall continue his directions under subsection (2) above until they are revoked under paragraph (e) below;

(c)if the Secretary of State determines under paragraph (a) above that the publication of the application or the publication or communication of that information would be prejudicial to [F41national security ] or the safety of the public, he shall (unless a notice under paragraph (d) below has previously been given by the Secretary of State to the comptroller) reconsider that question during the period of nine months from the date of filing the application and at least once in every subsequent period of twelve months;

(d)if on consideration of an application at any time it appears to the Secretary of State that the publication of the application or the publication or communication of the information contained in it would not, or would no longer, be prejudicial to [F42national security] or the safety of the public, he shall give notice to the comptroller to that effect; and

(e)on receipt of such a notice the comptroller shall revoke the directions and may, subject to such conditions (if any) as he thinks fit, extend the time for doing anything required or authorised to be done by or under this Act in connection with the application, whether or not that time has previously expired.

(6)The Secretary of State may do the following for the purpose of enabling him to decide the question referred to in subsection (5)(c) above—

(a)where the application contains information relating to the production or use of atomic energy or research into matters connected with such production or use, he may at any time do one or both of the following, that is to say,

[F43(i)inspect the application and any documents sent to the comptroller in connection with it;

(ii)authorise a government body with responsibility for the production of atomic energy or for research into matters connected with its production or use, or a person appointed by such a government body, to inspect the application and any documents sent to the comptroller in connection with it]; and

(b)in any other case, he may at any time after (or, with the applicant’s consent, before) the end of the period prescribed for the purposes of section 16 above inspect the application and any such documents;

and where [F44 a government body or a person appointed by a government body carries out an inspection which the body or person is authorised to carry out under paragraph (a) above, the body or (as the case may be) the person shall report on the inspection to the Secretary of State as soon as practicable.]

(7)Where directions have been given under this section in respect of an application for a patent for an invention and, before the directions are revoked, that prescribed period expires and the application is brought in order for the grant of a patent, then—

(a)if while the directions are in force the invention is worked by (or with the written authorisation of or to the order of) a government department, the provisions of sections 55 to 59 below shall apply as if—

(i)the working were use made by section 55;

(ii)the application had been published at the end of that period; and

(iii)a patent had been granted for the invention at the time the application is brought in order for the grant of a patent (taking the terms of the patent to be those of the application as it stood at the time it was so brought in order); and

(b)if it appears to the Secretary of State that the applicant for the patent has suffered hardship by reason of the continuance in force of the directions, the Secretary of State may, with the consent of the Treasury, make such payment (if any) by way of compensation to the applicant as appears to the Secretary of State and the Treasury to be reasonable having regard to the inventive merit and utility of the invention, the purpose for which it is designed and any other relevant circumstances.

(8)Where a patent is granted in pursuance of an application in respect of which directions have been given under this section, no renewal fees shall be payable in respect of any period during which those directions were in force.

(9)A person who fails to comply with any direction under this section shall be liable—

(a)on summary conviction, to a fine not exceeding £1,000; or

(b)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

Textual Amendments

F38Words in s. 22 heading substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 8(2); S.I. 2004/3205, art. 2(k) (with art. 9)

F39Words in s. 22(1) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 8(3); S.I. 2004/3205, art. 2(k) (with art. 9)

F40Words in s. 22(5)(a) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 8(3); S.I. 2004/3205, art. 2(k) (with art. 9)

F41Words in s. 22(5)(c) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 8(3); S.I. 2004/3205, art. 2(k) (with art. 9)

F42Words in s. 22(5)(d) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 8(3); S.I. 2004/3205, art. 2(k) (with art. 9)

F43Words in s. 22(6)(a) substituted (1.1.2005) by Patents Act 2004 (c. 16), Sch. 8 para. 4(a); S.I. 2004/3205, art. 2(k) (with art. 9)

F44Words in s. 22(6) substituted (1.1.2005) by Patents Act 2004 (c. 16), Sch. 8 para. 4(b); S.I. 2004/3205, art. 2(k) (with art. 9)

23 Restrictions on applications abroad by United Kingdom residents.U.K.

(1)Subject to the following provisions of this section, no person resident in the United Kingdom shall, without written authority granted by the comptroller, file or cause to be filed outside the United Kingdom an application for a patent for an invention [F45if subsection (1A) below applies to that application,] unless—

(a)an application for a patent for the same invention has been filed in the Patent Office (whether before, on or after the appointed day) not less than six weeks before the application outside the United Kingdom; and

(b)either no directions have been given under section 22 above in relation to the application in the United Kingdom or all such directions have been revoked.

[F46(1A)This subsection applies to an application if—

(a)the application contains information which relates to military technology or for any other reason publication of the information might be prejudicial to national security; or

(b)the application contains information the publication of which might be prejudicial to the safety of the public.]

(2)Subsection (1) above does not apply to an application for a patent for an invention for which an application for a patent has first been filed (whether before or after the appointed day) in a country outside the United Kingdom by a person resident outside the United Kingdom.

(3)A person who files or causes to be filed an application for the grant of a patent in contravention of this section shall be liable—

(a)on summary conviction, to a fine not exceeding £1,000; or

(b)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

[F47(3A)A person is liable under subsection (3) above only if—

(a)he knows that filing the application, or causing it to be filed, would contravene this section; or

(b)he is reckless as to whether filing the application, or causing it to be filed, would contravene this section.]

(4)In this section—

(a)any reference to an application for a patent includes a reference to an application for other protection for an invention;

(b)any reference to either kind of application is a reference to an application under this Act, under the law of any country other than the United Kingdom or under any treaty or international convention to which the United Kingdom is a party.

Textual Amendments

F45Words in s. 23(1) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 7(1), 17(1); S.I. 2004/3205, art. 2(c) (with art. 9)

F46S. 23(1A) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 7(2), 17(1); S.I. 2004/3205, art. 2(c) (with art. 9)

F47S. 23(3A) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 7(3), 17(1); S.I. 2004/3205, art. 2(c) (with art. 9)

Provisions as to patents after grantU.K.

24 Publication and certificate of grant.U.K.

(1)As soon as practicable after a patent has been granted under this Act the comptroller shall publish in the journal a notice that it has been granted.

(2)The comptroller shall, as soon as practicable after he publishes a notice under subsection (1) above, send the proprietor of the patent a certificate in the prescribed form that the patent has been granted to the proprietor.

(3)The comptroller shall, at the same time as he publishes a notice under subsection (1) above in relation to a patent publish the specification of the patent, the names of the proprietor and (if different) the inventor and any other matters constituting or relating to the patent which in the comptroller’s opinion it is desirable to publish.

[F48(4)Subsection (3) above shall not require the comptroller to identify as inventor a person who has waived his right to be mentioned as inventor in any patent granted for the invention.]

Textual Amendments

25 Term of patent.U.K.

(1)A patent granted under this Act shall be treated for the purposes of the following provisions of this Act as having been granted, and shall take effect, on the date on which notice of its grant is published in the journal and, subject to subsection (3) below, shall continue in force until the end of the period of 20 years beginning with the date of filing the application for the patent or with such other date as may be prescribed.

(2)A rule prescribing any such other date under this section shall not be made unless a draft of the rule has been laid before, and approved by resolution of, each House of Parliament.

[F49(3)Where any renewal fee in respect of a patent is not paid by the end of the period prescribed for payment (the “prescribed period”) the patent shall cease to have effect at the end of such day, in the final month of that period, as may be prescribed.]

(4)If during [F50the period ending with the sixth month after the month in which the prescribed period ends] the renewal fee and any prescribed additional fee are paid, the patent shall be treated for the purposes of this Act as if it had never expired, and accordingly—

(a)anything done under or in relation to it during that further period shall be valid;

(b)an act which would constitute an infringement of it if it had not expired shall constitute such an infringement; and

(c)an act which would constitute the use of the patented invention for the services of the Crown if the patent had not expired shall constitute that use.

(5)Rules shall include provision requiring the comptroller to notify the registered proprietor of a patent that a renewal fee has not been received from him in the Patent Office before the end of the prescribed period and before the framing of the notification.

Textual Amendments

F49S. 25(3) substituted (1.10.2005) by Patents Act 2004 (c. 16), ss. 8(1), 17(1); S.I. 2005/2471, art. 2(a) (with art. 3)

F50Words in s. 25(4) substituted (1.10.2005) by Patents Act 2004 (c. 16), ss. 8(2), 17(1); S.I. 2005/2471, art. 2(a) (with art. 3)

26 Patent not to be impugned for lack of unity.U.K.

No person may in any proceeding object to a patent or to an amendment of a specification of a patent on the ground that the claims contained in the specification of the patent, as they stand or, as the case may be, as proposed to be amended, relate—

(a)to more than one invention, or

(b)to a group of inventions which are not so linked as to form a single inventive concept.

27 General power to amend specification after grant.U.K.

(1)Subject to the following provisions of this section and to section 76 below, the comptroller may, on an application made by the proprietor of a patent, allow the specification of the patent to be amended subject to such conditions, if any, as he thinks fit.

(2)No such amendment shall be allowed under this section where there are pending before the court or the comptroller proceedings in which the validity of the patent may be put in issue.

(3)An amendment of a specification of a patent under this section shall have effect and be deemed always to have had effect from the grant of the patent.

(4)The comptroller may, without an application being made to him for the purpose, amend the specification of a patent so as to acknowledge a registered trade-mark.

(5)A person may give notice to the comptroller of his opposition to an application under this section by the proprietor of a patent, and if he does so the comptroller shall notify the proprietor and consider the opposition in deciding whether to grant the application.

[F51(6)In considering whether or not to allow an application under this section, the comptroller shall have regard to any relevant principles applicable under the European Patent Convention.]

Textual Amendments

F51S. 27(6) inserted (13.12.2007) by Patents Act 2004 (c. 16), ss. 2(1), 17(1); S.I. 2007/3396, art. 2(b)

Modifications etc. (not altering text)

28 Restoration of lapsed patents.U.K.

[F52(1)Where a patent has ceased to have effect by reason of a failure to pay any renewal fee, an application for the restoration of the patent may be made to the comptroller within the prescribed period.

(1A)Rules prescribing that period may contain such transitional provisions and savings as appear to the Secretary of State to be necessary or expedient.]

(2)An application under this section may be made by the person who was the proprietor of the patent or by any other person who would have been entitled to the patent if it had not ceased to have effect; and where the patent was held by two or more persons jointly, the application may, with the leave of the comptroller, be made by one or more of them without joining the others.

[F53(2A)Notice of the application shall be published by the comptroller in the prescribed manner.]

[F54(3)If the comptroller is satisfied that the failure of the proprietor of the patent—

(a)to pay the renewal fee within the prescribed period; or

(b)to pay that fee and any prescribed additional fee [F55within the period ending with the sixth month after the month in which the prescribed period ended],

was unintentional, the comptroller shall by order restore the patent on payment of any unpaid renewal fee and any prescribed additional fee.]

(4)An order under this section may be made subject to such conditions as the comptroller thinks fit (including a condition requiring compliance with any provisions of the rules relating to registration which have not been complied with), and if the proprietor of the patent does not comply with any condition of such an order the comptroller may revoke the order and give such directions consequential on the revocation as he thinks fit.

(5)—(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F56

Textual Amendments

F52S. 28(1)(1A) substituted and inserted respectively by Copyright, Designs and Patents Act 1988 (c.48, SIF 67A), s. 295, Sch. 5 para. 6(2)

F55Words in s. 28(3) substituted (1.10.2005) by Patents Act 2004 (c. 16), ss. 8(3), 17(1); S.I. 2005/2471, art. 2(a) (with art. 3)

[F5728A Effect of order for restoration of patent.U.K.

(1)The effect of an order for the restoration of a patent is as follows.

(2)Anything done under or in relation to the patent during the period between expiry and restoration shall be treated as valid.

(3)Anything done during that period which would have constituted an infringement if the patent had not expired shall be treated as an infringement—

(a)if done at a time when it was possible for the patent to be renewed under section 25(4), or

(b)if it was a continuation or repetition of an earlier infringing act.

(4)If after it was no longer possible for the patent to be so renewed, and before publication of notice of the application for restoration, a person—

(a)began in good faith to do an act which would have constituted an infringement of the patent if it had not expired, or

(b)made in good faith effective and serious preparations to do such an act,

he has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the restoration of the patent; but this right does not extend to granting a licence to another person to do the act.

(5)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (4) may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(6)Where a product is disposed of to another in exercise of the rights conferred by subsection (4) or (5), that other and any person claiming through him may deal with the product in the same way as if it had been disposed of by the registered proprietor of the patent.

(7)The above provisions apply in relation to the use of a patent for the services of the Crown as they apply in relation to infringement of the patent.]

Textual Amendments

29 Surrender of patents.U.K.

(1)The proprietor of a patent may at any time by notice given to the comptroller offer to surrender his patent.

(2)A person may give notice to the comptroller of his opposition to the surrender of a patent under this section, and if he does so the comptroller shall notify the proprietor of the patent and determine the question.

(3)If the comptroller is satisfied that the patent may properly be surrendered, he may accept the offer and, as from the date when notice of his acceptance is published in the journal, the patent shall cease to have effect, but no action for infringement shall lie in respect of any act done before that date and no right to compensation shall accrue for any use of the patented invention before that date for the services of the Crown.

Property in patents and applications, and registrationU.K.

30 Nature of, and transactions in, patents and applications for patents.E+W+N.I.

(1)Any patent or application for a patent is personal property (without being a thing in action), and any patent or any such application and rights in or under it may be transferred, created or granted in accordance with subsections (2) to (7) below.

(2)Subject to section 36(3) below, any patent or any such application, or any right in it, may be assigned or mortgaged.

(3)Any patent or any such application or right shall vest by operation of law in the same way as any other personal property and may be vested by an assent of personal representatives.

(4)Subject to section 36(3) below, a licence may be granted under any patent or any such application for working the invention which is the subject of the patent or the application; and—

(a)to the extent that the licence so provides, a sub-licence may be granted under any such licence and any such licence or sub-licence may be assigned or mortgaged; and

(b)any such licence or sub-licence shall vest by operation of law in the same way as any other personal property and may be vested by an assent of personal representatives.

(5)Subsections (2) to (4) above shall have effect subject to the following provisions of this Act.

(6)Any of the following transactions, that is to say—

(a)any assignment or mortgage of a patent or any such application, or any right in a patent or any such application;

(b)any assent relating to any patent or any such application or right;

shall be void unless it is in writing and is signed by or on behalf of [F58the assignor or mortgagor] (or, in the case of an assent or other transaction by a personal representative, by or on behalf of the personal representative) F59....

[F60(6A)If a transaction mentioned in subsection (6) above is by a body corporate, references in that subsection to such a transaction being signed by or on behalf of the assignor or mortgagor shall be taken to include references to its being under the seal of the body corporate.]

(7)An assignment of a patent or any such application or a share in it, and an exclusive licence granted under any patent or any such application, may confer on the assignee or licensee the right of the assignor or licensor to bring proceedings by virtue of section 61 or 69 below for a previous infringement or to bring proceedings under section 58 below for a previous act.

Textual Amendments

F59Words in s. 30(6) omitted (1.1.2005) by virtue of The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 10(2)(b) (with arts. 20-23)

31 Nature of, and transactions in, patents and applications for patents in Scotland.S

(1)Section 30 above shall not extend to Scotland, but instead the following provisions of this section shall apply there.

(2)Any patent or application for a patent, and any right in or under any patent or any such application, is incorporeal moveable property, and the provisions of the following sub-sections and of section 36(3) below shall apply to any grant of licences, assignations and securities in relation to such property.

(3)Any patent or any such application, or any right in it, may be assigned and security may be granted over a patent or any such application or right.

(4)A licence may be granted, under any patent or any application for a patent, for working the invention which is the subject of the patent or the application.

(5)To the extent that any licence granted under subsection (4) above so provides, a sub-licence may be granted under any such licence and any such licence or sub-licence may be assigned and security may be granted over it.

(6)Any assignation or grant of security under this section may be carried out only by writing [F61subscribed in accordance with the Requirements of Writing (Scotland) Act 1995.]

(7)An assignation of a patent or application for a patent or a share in it, and an exclusive licence granted under any patent or any such application, may confer on the assignee or licensee the right of the assignor or licensor to bring proceedings by virtue of section 61 or 69 below for a previous infringement or to bring proceedings under section 58 below for a previous act.

Textual Amendments

F61Words in s. 31(6) substituted (1.8.1995) by 1995 c. 7, ss. 14(1), 15(2), Sch. 4 para. 49 (with ss. 9(3)(5)(7), 13, 14(3))

[F6232 Register of patents etc.U.K.

(1)The comptroller shall maintain the register of patents, which shall comply with rules made by virtue of this section and shall be kept in accordance with such rules.

(2)Without prejudice to any other provision of this Act or rules, rules may make provision with respect to the following matters, including provision imposing requirements as to any of those matters—

(a)the registration of patents and of published applications for patents;

(b)the registration of transactions, instruments or events affecting rights in or under patents and applications;

[F63(ba)the entering on the register of notices concerning opinions issued, or to be issued, under section 74A below;]

(c)the furnishing to the comptroller of any prescribed documents or description of documents in connection with any matter which is required to be registered;

(d)the correction of errors in the register and in any documents filed at the Patent Office in connection with registration; and

(e)the publication and advertisement of anything done under this Act or rules in relation to the register.

(3)Notwithstanding anything in subsection (2)(b) above, no notice of any trust, whether express, implied or constructive, shall be entered in the register and the comptroller shall not be affected by any such notice.

(4)The register need not be kept in documentary form.

(5)Subject to rules, the public shall have a right to inspect the register at the Patent Office at all convenient times.

(6)Any person who applies for a certified copy of an entry in the register or a certified extract from the register shall be entitled to obtain such a copy or extract on payment of a fee prescribed in relation to certified copies and extracts; and rules may provide that any person who applies for an uncertified copy or extract shall be entitled to such a copy or extract on payment of a fee prescribed in relation to uncertified copies and extracts.

(7)Applications under subsection (6) above or rules made by virtue of that subsection shall be made in such manner as may be prescribed.

(8)In relation to any portion of the register kept otherwise than in documentary form—

(a)the right of inspection conferred by subsection (5) above is a right to inspect the material on the register; and

(b)the right to a copy or extract conferred by subsection (6) above or rules is a right to a copy or extract in a form in which it can be taken away and in which it is visible and legible.

(9)F64... the register shall be prima facie evidence of anything required or authorised by this Act or rules to be registered and in Scotland shall be sufficient evidence of any such thing.

(10)A certificate purporting to be signed by the comptroller and certifying that any entry which he is authorised by this Act or rules to make has or has not been made, or that any other thing which he is so authorised to do has or has not been done, shall be prima facie evidence, and in Scotland shall be sufficient evidence, of the matters so certified.

(11)Each of the following, that is to say—

(a)a copy of an entry in the register or an extract from the register which is supplied under subsection (6) above;

(b)a copy of any document kept in the Patent Office or an extract from any such document, any specification of a patent or any application for a patent which has been published,

which purports to be a certified copy or a certified extract shall, F65... be admitted in evidence without further proof and without production of any original; and in Scotland such evidence shall be sufficient evidence.

F66(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13)In this section “certified copy” and “certified extract” mean a copy and extract certified by the comptroller and sealed with the seal of the Patent Office.

(14)In this Act, except so far as the context otherwise requires—

  • “register”, as a noun, means the register of patents;

  • “register”, as a verb, means, in relation to any thing, to register or register particulars, or enter notice, of that thing in the register and, in relation to a person, means to enter his name in the register;

and cognate expressions shall be construed accordingly.]

Textual Amendments

F63S. 32(2)(ba) inserted (1.10.2005) by Patents Act 2004 (c. 16), ss. 13(3), 17(1); S.I. 2005/2471, art. 2(c)

F64Words in s. 32(9) repealed (4.4.2005) by Criminal Justice Act 2003 (c. 44), s. 336(3)(4), Sch. 37 Pt. 6; S.I. 2005/950, art. 2(1), Sch. 1 para. 44(3) (with Sch. 2) (as explained (29.7.2005) by S.I. 2005/2122, art. 2; and as amended: (14.7.2008) by 2008 c. 4, Sch. 26 para. 78, Sch. 28 Pt. 2; S.I. 2008/1586, Sch. 1 paras. 48(s), 50(2)(d); (30.11.2009) by S.I. 2009/3111, art. 2; (3.12.2012) by S.I. 2012/2905, art. 4; (3.12.2012) by 2012 c. 10, Sch. 14 para. 17; S.I. 2012/2906, art. 2(l))

F65Words in s. 32(11) repealed (4.4.2005) by Criminal Justice Act 2003 (c. 44), s. 336(3)(4), Sch. 37 Pt. 6; S.I. 2005/950, art. 2(1), Sch. 1 para. 44(3) (with Sch. 2) (as explained (29.7.2005) by S.I. 2005/2122, art. 2; and as amended: (14.7.2008) by 2008 c. 4, Sch. 26 para. 78, Sch. 28 Pt. 2; S.I. 2008/1586, Sch. 1 paras. 48(s), 50(2)(d); (30.11.2009) by S.I. 2009/3111, art. 2; (3.12.2012) by S.I. 2012/2905, art. 4; (3.12.2012) by 2012 c. 10, Sch. 14 para. 17; S.I. 2012/2906, art. 2(l))

F66S. 32(12) repealed (14.4.2000) by 1999 c. 23, s. 67, Sch. 6 (with Sch. 7 paras. 3(2)(3), 5(2)); S.I. 2000/1034, art. 2, Sch.

33 Effect of registration, etc., on rights in patents.U.K.

(1)Any person who claims to have acquired the property in a patent or application for a patent by virtue of any transaction, instrument or event to which this section applies shall be entitled as against any other person who claims to have acquired that property by virtue of an earlier transaction, instrument or event to which this section applies if, at the time of the later transaction, instrument or event—

(a)the earlier transaction, instrument or event was not registered, or

(b)in the case of any application which has not been published, notice of the earlier transaction, instrument or event had not been given to the comptroller, and

(c)in any case, the person claiming under the later transaction, instrument or event, did not know of the earlier transaction, instrument or event.

(2)Subsection (1) above shall apply equally to the case where any person claims to have acquired any right in or under a patent or application for a patent, by virtue of a transaction, instrument or event to which this section applies, and that right is incompatible with any such right acquired by virtue of an earlier transaction, instrument or event to which this section applies.

(3)This section applies to the following transactions, instruments and events:—

(a)the assignment or assignation of a patent or application for a patent, or a right in it;

(b)the mortgage of a patent or application or the granting of security over it;

(c)the grant, assignment or assignation of a licence or sub-licence, or mortgage of a licence or sub-licence, under a patent or application;

(d)the death of the proprietor or one of the proprietors of any such patent or application or any person having a right in or under a patent or application and the vesting by an assent of personal representatives of a patent, application or any such right; and

(e)any order or directions of a court or other competent authority—

(i)transferring a patent or application or any right in or under it to any person; or

(ii)that an application should proceed in the name of any person;

and in either case the event by virtue of which the court or authority had power to make any such order or give any such directions.

(4)Where an application for the registration of a transaction, instrument or event has been made, but the transaction, instrument or event has not been registered, then, for the purposes of subsection (1)(a) above, registration of the application shall be treated as registration of the transaction, instrument or event.

34 Rectification of register.U.K.

(1)The court may, on the application of any person aggrieved, order the register to be rectified by the making, or the variation or deletion, of any entry in it.

(2)In proceedings under this section the court may determine any question which it may be necessary or expedient to decide in connection with the rectification of the register.

(3)Rules of court may provide for the notification of any application under this section to the comptroller and for his appearance on the application and for giving effect to any order of the court on the application.

35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F67U.K.

Textual Amendments

36 Co-ownership of patents and applications for patents.U.K.

(1)Where a patent is granted to two or more persons, each of them shall, subject to any agreement to the contrary, be entitled to an equal undivided share in the patent.

(2)Where two or more persons are proprietors of a patent, then, subject to the provisions of this section and subject to any agreement to the contrary—

(a)each of them shall be entitled, by himself or his agents, to do in respect of the invention concerned, for his own benefit and without the consent of or the need to account to the other or others, any act which would apart from this subsection and section 55 below, amount to an infringement of the patent concerned; and

(b)any such act shall not amount to an infringement of the patent concerned.

(3)Subject to the provisions of sections 8 and 12 above and section 37 below and to any agreement for the time being in force, where two or more persons are proprietors of a patent one of them shall not without the consent of the other or others

[F68(a)amend the specification of the patent or apply for such an amendment to be allowed or for the patent to be revoked, or amend the specification of the patent or apply for such an amendment to be allowed or for the patent to be revoked, or

(b)]grant a licence under the patent or assign or mortgage a share in the patent or in Scotland cause or permit security to be granted over it.

(4)Subject to the provisions of those sections, where two or more persons are proprietors of a patent, anyone else may supply one of those persons with the means, relating to an essential element of the invention, for putting the invention into effect, and the supply of those means by virtue of this subsection shall not amount to an infringement of the patent.

(5)Where a patented product is disposed of by any of two or more proprietors to any person, that person and any other person claiming through him shall be entitled to deal with the product in the same way as if it had been disposed of by a sole registered proprietor.

(6)Nothing in subsection (1) or (2) above shall affect the mutual rights or obligations of trustees or of the personal representatives of a deceased person, or their rights or obligations as such.

(7)The foregoing provisions of this section shall have effect in relation to an application for a patent which is filed as they have effect in relation to a patent and—

(a)references to a patent and a patent being granted shall accordingly include references respectively to any such application and to the application being filed; and

(b)the reference in subsection (5) above to a patented product shall be construed accordingly.

Textual Amendments

F68Words in s. 36(3)(a)(b) inserted (1.10.2005) by Patents Act 2004 (c. 16), ss. 9, 17(1); S.I. 2005/2471, art. 2(b)

37 Determination of right to patent after grant.U.K.

[F69(1)After a patent has been granted for an invention any person having or claiming a proprietary interest in or under the patent may refer to the comptroller the question—

(a)who is or are the true proprietor or proprietors of the patent,

(b)whether the patent should have been granted to the person or persons to whom it was granted, or

(c)whether any right in or under the patent should be transferred or granted to any other person or persons;

and the comptroller shall determine the question and make such order as he thinks fit to give effect to the determination.]

(2)Without prejudice to the generality of subsection (1) above, an order under that subsection may contain provision—

(a)directing that the person by whom the reference is made under that subsection shall be included (whether or not to the exclusion of any other person) among the persons registered as proprietors of the patent;

(b)directing the registration of a transaction, instrument or event by virtue of which that person has acquired any right in or under the patent;

(c)granting any licence or other right in or under the patent;

(d)directing the proprietor of the patent or any person having any right in or under the patent to do anything specified in the order as necessary to carry out the other provisions of the order.

(3)If any person to whom directions have been given under subsection (2)(d) above fails to do anything necessary for carrying out any such directions within 14 days after the date of the order containing the directions, the comptroller may, on application made to him by any person in whose favour or on whose reference the order containing the directions was made, authorise him to do that thing on behalf of the person to whom the directions were given.

(4)Where the comptroller finds on a reference under [F70this section] that the patent was granted to a person not entitled to be granted that patent (whether alone or with other persons) and on an application made under section 72 below makes an order on that ground for the conditional or unconditional revocation of the patent, the comptroller may order that the person by whom the application was made or his successor in title may, subject to section 76 below, make a new application for a patent—

(a)in the case of unconditional revocation, for the whole of the matter comprised in the specification of that patent; and

(b)in the case of conditional revocation, for the matter which in the opinion of the comptroller should be excluded from that specification by amendment under section 75 below;

and where such a new application is made, it shall be treated as having been filed on the date of filing the application for the patent to which the reference relates.

(5)On any such reference no order shall be made under this section transferring the patent to which the reference relates on the ground that the patent was granted to a person not so entitled, and no order shall be made under subsection (4) above on that ground, if the reference was made after [F71the second anniversary of] the date of the grant, unless it is shown that any person registered as a proprietor of the patent knew at the time of the grant or, as the case may be, of the transfer of the patent to him that he was not entitled to the patent.

(6)An order under this section shall not be so made as to affect the mutual rights or obligations of trustees or of the personal representatives of a deceased person, or their rights or obligations as such.

(7)Where a question is referred to the comptroller under [F70this section] an order shall not be made by virtue of subsection (2) or under subsection (4) above on the reference unless notice of the reference is given to all persons registered as proprietor of the patent or as having a right in or under the patent, except those who are parties to the reference.

(8)If it appears to the comptroller on a reference under [F72this section] that the question referred to him would more properly be determined by the court, he may decline to deal with it and, without prejudice to the court’s jurisdiction to determine any such question and make a declaration, or any declaratory jurisdiction of the court in Scotland, the court shall have jurisdiction to do so.

(9)The court shall not in the exercise of any such declaratory jurisdiction determine a question whether a patent was granted to a person not entitled to be granted the patent if the proceedings in which the jurisdiction is invoked were commenced after [F73the second anniversary of] the date of the grant of the patent, unless it is shown that any person registered as a proprietor of the patent knew at the time of the grant or, as the case may be, of the transfer of the patent to him that he was not entitled to the patent.

Textual Amendments

38 Effect of transfer of patent under s. 37.U.K.

(1)Where an order is made under section 37 above that a patent shall be transferred from any person or persons (the old proprietor or proprietors) to one or more persons (whether or not including an old proprietor), then, except in a case falling within subsection (2) below, any licences or other rights granted or created by the old proprietor or proprietors shall, subject to section 33 above and to the provisions of the order, continue in force and be treated as granted by the person or persons to whom the patent is ordered to be transferred (the new proprietor or proprietors).

(2)Where an order is so made that a patent shall be transferred from the old proprietor or proprietors to one or more persons none of whom was an old proprietor (on the ground that the patent was granted to a person not entitled to be granted the patent), any licences or other rights in or under the patent shall, subject to the provisions of the order and subsection (3) below, lapse on the registration of that person or those persons as the new proprietor or proprietors of the patent.

(3)Where an order is so made that a patent shall be transferred as mentioned in subsection (2) above or that a person other than an old proprietor may make a new application for a patent and before the reference of the question under that section resulting in the making of any such order is registered, the old proprietor or proprietors or a licensee of the patent, acting in good faith, worked the invention in question in the United Kingdom or made effective and serious preparations to do so, the old proprietor or proprietors or the licensee shall, on making a request to the new proprietor or proprietors [F74or, as the case may be, the new applicant ] within the prescribed period, be entitled to be granted a licence (but not an exclusive licence) to continue working or, as the case may be, to work the invention, so far as it is the subject of the new application.

(4)Any such licence shall be granted for a reasonable period and on reasonable terms.

(5)The new proprietor or proprietors of the patent [F75or, as the case may be, the new applicant ] or any person claiming that he is entitled to be granted any such licence may refer to the comptroller the question whether that person is so entitled and whether any such period is or terms are reasonable, and the comptroller shall determine the question and may, if he considers it appropriate, order the grant of such a licence.

Textual Amendments

F74Words in s. 38(3) inserted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 10(2); S.I. 2004/3205, art. 2(k) (with art. 9)

F75Words in s. 38(5) inserted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 10(3); S.I. 2004/3205, art. 2(k) (with art. 9)

Employees’ inventionsU.K.

39 Right to employees’ inventions.U.K.

(1)Notwithstanding anything in any rule of law, an invention made by an employee shall, as between him and his employer, be taken to belong to his employer for the purposes of this Act and all other purposes if—

(a)it was made in the course of the normal duties of the employee or in the course of duties falling outside his normal duties, but specifically assigned to him, and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of his duties; or

(b)the invention was made in the course of the duties of the employee and, at the time of making the invention, because of the nature of his duties and the particular responsibilities arising from the nature of his duties he had a special obligation to further the interests of the employer’s undertaking.

(2)Any other invention made by an employee shall, as between him and his employer, be taken for those purposes to belong to the employee.

[F76(3)Where by virtue of this section an invention belongs, as between him and his employer, to an employee, nothing done—

(a)by or on behalf of the employee or any person claiming under him for the purposes of pursuing an application for a patent, or

(b)by any person for the purpose of performing or working the invention,

shall be taken to infringe any copyright or design right to which, as between him and his employer, his employer is entitled in any model or document relating to the invention.]

Textual Amendments

40 Compensation of employees for certain inventions.U.K.

[F77(1)Where it appears to the court or the comptroller on an application made by an employee within the prescribed period that—

(a)the employee has made an invention belonging to the employer for which a patent has been granted,

(b)having regard among other things to the size and nature of the employer’s undertaking, the invention or the patent for it (or the combination of both) is of outstanding benefit to the employer, and

(c)by reason of those facts it is just that the employee should be awarded compensation to be paid by the employer,

the court or the comptroller may award him such compensation of an amount determined under section 41 below.]

(2)Where it appears to the court or the comptroller on an application made by an employee within the prescribed period that—

(a)a patent has been granted for an invention made by and belonging to the employee;

(b)his rights in the invention, or in any patent or application for a patent for the invention, have since the appointed day been assigned to the employer or an exclusive licence under the patent or application has since the appointed day been granted to the employer;

(c)the benefit derived by the employee from the contract of assignment, assignation or grant or any ancillary contract (“the relevant contract”) is inadequate in relation to the benefit derived by the employer from [F78the invention or the patent for it (or both)] ; and

(d)by reason of those facts it is just that the employee should be awarded compensation to be paid by the employer in addition to the benefit derived from the relevant contract;

the court or the comptroller may award him such compensation of an amount determined under section 41 below.

(3)Subsections (1) and (2) above shall not apply to the invention of an employee where a relevant collective agreement provides for the payment of compensation in respect of inventions of the same description as that invention to employees of the same description as that employee.

(4)Subsection (2) above shall have effect notwithstanding anything in the relevant contract or any agreement applicable to the invention (other than any such collective agreement).

(5)If it appears to the comptroller on an application under this section that the application involves matters which would more properly be determined by the court, he may decline to deal with it.

(6)In this section—

  • “the prescribed period”, in relation to proceedings before the court, means the period prescribed by rules of court, and

  • “relevant collective agreement” means a collective agreement within the meaning of [F79the Trade Union and Labour Relations (Consolidation) Act 1992], made by or on behalf of a trade union to which the employee belongs, and by the employer or an employers’ association to which the employer belongs which is in force at the time of the making of the invention.

(7)References in this section to an invention belonging to an employer or employee are references to it so belonging as between the employer and the employee.

Textual Amendments

F77S. 40(1) substituted (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(1), 17(1) (with s. 10(8)); S.I. 2004/3205, art. 2(d) (with art. 9)

F78Words in s. 40(2)(c) substituted (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(2), 17(1) (with s. 10(8)); S.I. 2004/3205, art. 2(d) (with art. 9)

41 Amount of compensation.U.K.

[F80(1)An award of compensation to an employee under section 40(1) or (2) above shall be such as will secure for the employee a fair share (having regard to all the circumstances) of the benefit which the employer has derived, or may reasonably be expected to derive, from any of the following—

(a)the invention in question;

(b)the patent for the invention;

(c)the assignment, assignation or grant of—

(i)the property or any right in the invention, or

(ii)the property in, or any right in or under, an application for the patent,

to a person connected with the employer.]

(2)For the purposes of subsection (1) above the amount of any benefit derived or expected to be derived by an employer from the assignment, assignation or grant of—

(a)the property in, or any right in or under, a patent for the invention or an application for such a patent; or

(b)the property or any right in the invention;

to a person connected with him shall be taken to be the amount which could reasonably be expected to be so derived by the employer if that person had not been connected with him.

(3)Where the Crown[F81, United Kingdom Research and Innovation] or a Research Council in its capacity as employer assigns or grants the property in, or any right in or under, an invention, patent or application for a patent to a body having among its functions that of developing or exploiting inventions resulting from public research and does so for no consideration or only a nominal consideration, any benefit derived from the invention, patent or application by that body shall be treated for the purposes of the foregoing provisions of this section as so derived by the Crown[F82, United Kingdom Research and Innovation or the Research Council (as the case may be)].

In this subsection “Research Council” means a body which is a Research Council for the purposes of the M1Science and Technology Act 1965 F83...

(4)In determining the fair share of the benefit to be secured for an employee in respect of F84... an invention which has always belonged to an employer, the court or the comptroller shall, among other things, take the following matters into account, that is to say—

(a)the nature of the employee’s duties, his remuneration and the other advantages he derives or has derived from his employment or has derived in relation to the invention under this Act;

(b)the effort and skill which the employee has devoted to making the invention;

(c)the effort and skill which any other person has devoted to making the invention jointly with the employee concerned, and the advice and other assistance contributed by any other employee who is not a joint inventor of the invention; and

(d)the contribution made by the employer to the making, developing and working of the invention by the provision of advice, facilities and other assistance, by the provision of opportunities and by his managerial and commercial skill and activities.

(5)In determining the fair share of the benefit to be secured for an employee in respect of F85... an invention which originally belonged to him, the court or the comptroller shall, among other things, take the following matters into account, that is to say—

(a)any conditions in a licence or licences granted under this Act or otherwise in respect of the invention or the patent [F86for it];

(b)the extent to which the invention was made jointly by the employee with any other person; and

(c)the contribution made by the employer to the making, developing and working of the invention as mentioned in subsection (4)(d) above.

(6)Any order for the payment of compensation under section 40 above may be an order for the payment of a lump sum or for periodical payment, or both.

(7)Without prejudice to [F87section 12 or section 14 of the M2Interpretation Act 1978], the refusal of the court or the comptroller to make any such order on an application made by an employee under section 40 above shall not prevent a further application being made under that section by him or any successor in title of his.

(8)Where the court or the comptroller has made any such order, the court or he may on the application of either the employer or the employee vary or discharge it or suspend any provision of the order and revive any provision so suspended, and section 40(5) above shall apply to the application as it applies to an application under that section.

(9)In England and Wales any sums awarded by the comptroller under section 40 above shall, if [F88the county court] so orders, be recoverable [F89 under section 85 of the County Courts Act 1984] or otherwise as if they were payable under an order of that court.

(10)In Scotland an order made under section 40 above by the comptroller for the payment of any sums may be enforced in like manner as [F90an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.].

(11)In Northern Ireland an order made under section 40 above by the comptroller for the payment of any sums may be enforced as if it were a money judgment.

Textual Amendments

F80S. 41(1) substituted (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(3), 17(1) (with s. 10(8)); S.I. 2004/3205, art. 2(d) (with art. 9)

F84Words in s. 41(4) repealed (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(4), 17(1), Sch. 3 (with s. 10(8)); S.I. 2004/3205, art. 2(d)(g) (with art. 9)

F85Words in s. 41(5) repealed (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(4), 17(1), Sch. 3 (with s. 10(8)); S.I. 2004/3205, art. 2(d)(g) (with art. 9)

F86Words in s. 41(5)(a) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(5), 17(1) (with s. 10(8)); S.I. 2004/3205, art. 2(d) (with art. 9)

F87Words substituted by virtue of Interpretation Act 1978 (c. 30), s. 25(2)

F88Words in s. 41(9) substituted (E.W.S.) (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 52; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F90Words in s. 41(10) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 11; S.I. 2004/3205, art. 2(k) (with art. 9)

Marginal Citations

42 Enforceability of contracts relating to employees’ inventions.U.K.

(1)This section applies to any contract (whenever made) relating to inventions made by an employee, being a contract entered into by him—

(a)with the employer (alone or with another); or

(b)with some other person at the request of the employer or in pursuance of the employee’s contract of employment.

(2)Any term in a contract to which this section applies which diminishes the employee’s rights in inventions of any description made by him after the appointed day and the date of the contract, or in or under patents for those inventions or applications for such patents, shall be unenforceable against him to the extent that it diminishes his rights in an invention of that description so made, or in or under a patent for such an invention or an application for any such patent.

(3)Subsection (2) above shall not be construed as derogating from any duty of confidentiality owed to his employer by an employee by virtue of any rule of law or otherwise.

(4)This section applies to any arrangement made with a Crown employee by or on behalf of the Crown as his employer as it applies to any contract made between an employee and an employer other than the Crown, and for the purposes of this section “Crown employee” means a person employed under or for the purposes of a government department or any officer or body exercising on behalf of the Crown functions conferred by any enactment [F91or a person serving in the naval, military or air forces of the Crown.]

Textual Amendments

F91Words added (retrospectively) by Armed Forces Act 1981 (c. 55, SIF 7:1), s. 22(1)(2)

43 Supplementary.U.K.

(1)Sections 39 to 42 above shall not apply to an invention made before the appointed day.

(2)Sections 39 to 42 above shall not apply to an invention made by an employee unless at the time he made the invention one of the following conditions was satisfied in his case, that is to say—

(a)he was mainly employed in the United Kingdom; or

(b)he was not mainly employed anywhere or his place of employment could not be determined, but his employer had a place of business in the United Kingdom to which the employee was attached, whether or not he was also attached elsewhere.

(3)In sections 39 to 42 above and this section, except so far as the context otherwise requires, references to the making of an invention by an employee are references to his making it alone or jointly with any other person, but do not include references to his merely contributing advice or other assistance in the making of an invention by another employee.

(4)Any references [F92in sections 39 to 42] above to a patent and to a patent being granted are respectively references to a patent or other protection and to its being granted whether under the law of the United Kingdom or the law in force in any other country or under any treaty or international convention.

(5)For the purposes of sections 40 and 41 above the benefit derived or expected to be derived by an employer from [F93an invention or patent] shall, where he dies before any award is made under section 40 above in respect of [F94it] , include any benefit derived or expected to be derived from [F94it] by his personal representatives or by any person in whom it was vested by their assent.

[F95(5A)For the purposes of sections 40 and 41 above the benefit derived or expected to be derived by an employer from an invention shall not include any benefit derived or expected to be derived from the invention after the patent for it has expired or has been surrendered or revoked.]

(6)Where an employee dies before an award is made under section 40 above in respect of a patented invention made by him, his personal representatives or their successors in title may exercise his right to make or proceed with an application for compensation under subsection (1) or (2) of that section.

(7)In sections 40 and 41 above and this section “benefit” means benefit in money or money’s worth.

(8)Section 533 of the M3Income and Corporation Taxes Act 1970 (definition of connected persons) shall apply for determining for the purposes of section 41(2) above whether one person is connected with another as it applies for determining that question for the purposes of the Tax Acts.

Textual Amendments

F93Words in s. 43(5) substituted (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(6)(a), 17(1) (with s. 10(8)); S.I. 2004/3205, art. 2(d) (with art. 9)

F94Word in s. 43(5) substituted (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(6)(b), 17(1) (with s. 10(8)); S.I. 2004/3205, art. 2(d) (with art. 9)

F95S. 43(5A) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 10(7), 17(1) (with s. 10(8)); S.I. 2004/3205, art. 2(d) (with art. 9)

Marginal Citations

Contracts as to patented products, etc.U.K.

F9644. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F96S. 44 repealed (1.3.2000) by 1998 c. 41, s. 70, 74(3), Sch. 14 Pt. I (with s. 73); S.I. 2000/344, art. 2, Sch.

F9745 Determination of parts of certain contracts.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F97S. 45 repealed (1.3.2000) by 1998 c. 41, s. 70, 74(3), Sch. 14 Pt. I (with s. 73); S.I. 2000/344, art. 2, Sch.

Licences of right and compulsory licencesU.K.

46 Patentee’s application for entry in register that licences are available as of right.U.K.

(1)At any time after the grant of a patent its proprietor may apply to the comptroller for an entry to be made in the register to the effect that licences under the patent are to be available as of right.

(2)Where such an application is made, the comptroller shall give notice of the application to any person registered as having a right in or under the patent and, if satisfied that the proprietor of the patent is not precluded by contract from granting licences under the patent, shall make that entry.

(3)Where such an entry is made in respect of a patent—

(a)any person shall, at any time after the entry is made, be entitled as of right to a licence under the patent on such terms as may be settled by agreement or, in default of agreement, by the comptroller on the application of the proprietor of the patent or the person requiring the licence;

(b)the comptroller may, on the application of the holder of any licence granted under the patent before the entry was made, order the licence to be exchanged for a licence of right on terms so settled;

(c)if in proceedings for infringement of the patent (otherwise than by the importation of any article [F98from a country which is not a member State of the European Economic Community]) the defendant or defender undertakes to take a licence on such terms, no injunction or interdict shall be granted against him and the amount (if any) recoverable against him by way of damages shall not exceed double the amount which would have been payable by him as licensee if such a licence on those terms had been granted before the earliest infringement;

[F99(d)if the expiry date in relation to a renewal fee falls after the date of the entry, that fee shall be half the fee which would be payable had the entry not been made.]

[F100(3A)An undertaking under subsection (3)(c) above may be given at any time before final order in the proceedings, without any admission of liability.]

[F101(3B)For the purposes of subsection (3)(d) above the expiry date in relation to a renewal fee is the day at the end of which, by virtue of section 25(3) above, the patent in question ceases to have effect if that fee is not paid.]

(4)The licensee under a licence of right may (unless, in the case of a licence the terms of which are settled by agreement, the licence otherwise expressly provides) request the proprietor of the patent to take proceedings to prevent any infringement of the patent; and if the proprietor refuses or neglects to do so within two months after being so requested, the licensee may institute proceedings for the infringement in his own name as if he were proprietor, making the proprietor a defendant or defender.

(5)A proprietor so added as defendant or defender shall not be liable for any costs or expenses unless he enters an appearance and takes part in the proceedings.

Textual Amendments

F99S. 46(3)(d) substituted (1.10.2005) by Patents Act 2004 (c. 16), ss. 8(4)(a), 17(1); S.I. 2005/2471, art. 2(a)

47 Cancellation of entry made under s. 46.U.K.

(1)At any time after an entry has been made under section 46 above in respect of a patent, the proprietor of the patent may apply to the comptroller for cancellation of the entry.

(2)Where such an application is made and the balance paid of all renewal fees which would have been payable if the entry had not been made, the comptroller may cancel the entry, if satisfied that there is no existing licence under the patent or that all licensees under the patent consent to the application.

(3)Within the prescribed period after an entry has been made under section 46 above in respect of a patent, any person who claims that the proprietor of the patent is, and was at the time of the entry, precluded by a contract in which the claimant is interested from granting licences under the patent may apply to the comptroller for cancellation of the entry.

(4)Where the comptroller is satisfied, on an application under subsection (3) above, that the proprietor of the patent is and was so precluded, he shall cancel the entry; and the proprietor shall then be liable to pay, within a period specified by the comptroller, a sum equal to the balance of all renewal fees which would have been payable if the entry had not been made, and the patent shall cease to have effect at the expiration of that period if that sum is not so paid.

(5)Where an entry is cancelled under this section, the rights and liabilities of the proprietor of the patent shall afterwards be the same as if the entry had not been made.

(6)Where an application has been made under this section, then—

(a)in the case of an application under subsection (1) above, any person, and

(b)in the case of an application under subsection (3) above, the proprietor of the patent,

may within the prescribed period give notice to the comptroller of opposition to the cancellation; and the comptroller shall, in considering the application, determine whether the opposition is justified.

[48F102Compulsory licences: general.U.K.

(1)At any time after the expiration of three years, or of such other period as may be prescribed, from the date of the grant of a patent, any person may apply to the comptroller on one or more of the relevant grounds–

(a)for a licence under the patent;

(b)for an entry to be made in the register to the effect that licences under the patent are to be available as of right; or

(c)where the applicant is a government department, for the grant to any person specified in the application of a licence under the patent.

(2)Subject to sections 48A and 48B below, if he is satisfied that any of the relevant grounds are established, the comptroller may–

(a)where the application is under subsection (1)(a) above, order the grant of a licence to the applicant on such terms as the comptroller thinks fit;

(b)where the application is under subsection (1)(b) above, make such an entry as is there mentioned;

(c)where the application is under subsection (1)(c) above, order the grant of a licence to the person specified in the application on such terms as the comptroller thinks fit.

(3)An application may be made under this section in respect of a patent even though the applicant is already the holder of a licence under the patent; and no person shall be estopped or barred from alleging any of the matters specified in the relevant grounds by reason of any admission made by him, whether in such a licence or otherwise, or by reason of his having accepted a licence.

(4)In this section “the relevant grounds” means–

(a)in the case of an application made in respect of a patent whose proprietor is a WTO proprietor, the grounds set out in section 48A(1) below;

(b)in any other case, the grounds set out in section 48B(1) below.

(5)A proprietor is a WTO proprietor for the purposes of this section and sections 48A, 48B, 50 and 52 below if–

(a)he is a national of, or is domiciled in, a country which is a member of the World Trade Organisation; or

(b)he has a real and effective industrial or commercial establishment in such a country.

(6)A rule prescribing any such other period under subsection (1) above shall not be made unless a draft of the rule has been laid before, and approved by resolution of, each House of Parliament.]

Textual Amendments

F102S. 48 substituted (29.7.1999) by S.I. 1999/1899, reg. 3

[48AF103Compulsory licences: WTO proprietors.U.K.

(1)In the case of an application made under section 48 above in respect of a patent whose proprietor is a WTO proprietor, the relevant grounds are–

(a)where the patented invention is a product, that a demand in the United Kingdom for that product is not being met on reasonable terms;

(b)that by reason of the refusal of the proprietor of the patent concerned to grant a licence or licences on reasonable terms–

(i)the exploitation in the United Kingdom of any other patented invention which involves an important technical advance of considerable economic significance in relation to the invention for which the patent concerned was granted is prevented or hindered, or

(ii)the establishment or development of commercial or industrial activities in the United Kingdom is unfairly prejudiced;

(c)that by reason of conditions imposed by the proprietor of the patent concerned on the grant of licences under the patent, or on the disposal or use of the patented product or on the use of the patented process, the manufacture, use or disposal of materials not protected by the patent, or the establishment or development of commercial or industrial activities in the United Kingdom, is unfairly prejudiced.

(2)No order or entry shall be made under section 48 above in respect of a patent whose proprietor is a WTO proprietor unless–

(a)the applicant has made efforts to obtain a licence from the proprietor on reasonable commercial terms and conditions; and

(b)his efforts have not been successful within a reasonable period.

(3)No order or entry shall be so made if the patented invention is in the field of semi-conductor technology.

(4)No order or entry shall be made under section 48 above in respect of a patent on the ground mentioned in subsection (1)(b)(i) above unless the comptroller is satisfied that the proprietor of the patent for the other invention is able and willing to grant the proprietor of the patent concerned and his licensees a licence under the patent for the other invention on reasonable terms.

(5)A licence granted in pursuance of an order or entry so made shall not be assigned except to a person to whom the patent for the other invention is also assigned.

(6)A licence granted in pursuance of an order or entry made under section 48 above in respect of a patent whose proprietor is a WTO proprietor–

(a)shall not be exclusive;

(b)shall not be assigned except to a person to whom there is also assigned the part of the enterprise that enjoys the use of the patented invention, or the part of the goodwill that belongs to that part;

(c)shall be predominantly for the supply of the market in the United Kingdom;

(d)shall include conditions entitling the proprietor of the patent concerned to remuneration adequate in the circumstances of the case, taking into account the economic value of the licence; and

(e)shall be limited in scope and in duration to the purpose for which the licence was granted.]

Textual Amendments

F103S. 48A inserted (29.7.1999) by S.I. 1999/1899, reg. 4

[48BF104Compulsory licences: other cases.U.K.

(1)In the case of an application made under section 48 above in respect of a patent whose proprietor is not a WTO proprietor, the relevant grounds are–

(a)where the patented invention is capable of being commercially worked in the United Kingdom, that it is not being so worked or is not being so worked to the fullest extent that is reasonably practicable;

(b)where the patented invention is a product, that a demand for the product in the United Kingdom–

(i)is not being met on reasonable terms, or

(ii)is being met to a substantial extent by importation from a country which is not a member State;

(c)where the patented invention is capable of being commercially worked in the United Kingdom, that it is being prevented or hindered from being so worked–

(i)where the invention is a product, by the importation of the product from a country which is not a member State,

(ii)where the invention is a process, by the importation from such a country of a product obtained directly by means of the process or to which the process has been applied;

(d)that by reason of the refusal of the proprietor of the patent to grant a licence or licences on reasonable terms–

(i)a market for the export of any patented product made in the United Kingdom is not being supplied, or

(ii)the working or efficient working in the United Kingdom of any other patented invention which makes a substantial contribution to the art is prevented or hindered, or

(iii)the establishment or development of commercial or industrial activities in the United Kingdom is unfairly prejudiced;

(e)that by reason of conditions imposed by the proprietor of the patent on the grant of licences under the patent, or on the disposal or use of the patented product or on the use of the patented process, the manufacture, use or disposal of materials not protected by the patent, or the establishment or development of commercial or industrial activities in the United Kingdom, is unfairly prejudiced.

(2)Where–

(a)an application is made on the ground that the patented invention is not being commercially worked in the United Kingdom or is not being so worked to the fullest extent that is reasonably practicable; and

(b)it appears to the comptroller that the time which has elapsed since the publication in the journal of a notice of the grant of the patent has for any reason been insufficient to enable the invention to be so worked,

he may by order adjourn the application for such period as will in his opinion give sufficient time for the invention to be so worked.

(3)No order or entry shall be made under section 48 above in respect of a patent on the ground mentioned in subsection (1)(a) above if–

(a)the patented invention is being commercially worked in a country which is a member State; and

(b)demand in the United Kingdom is being met by importation from that country.

(4)No entry shall be made in the register under section 48 above on the ground mentioned in subsection (1)(d)(i) above, and any licence granted under section 48 above on that ground shall contain such provisions as appear to the comptroller to be expedient for restricting the countries in which any product concerned may be disposed of or used by the licensee.

(5)No order or entry shall be made under section 48 above in respect of a patent on the ground mentioned in subsection (1)(d)(ii) above unless the comptroller is satisfied that the proprietor of the patent for the other invention is able and willing to grant to the proprietor of the patent concerned and his licensees a licence under the patent for the other invention on reasonable terms.]

Textual Amendments

F104S. 48B inserted (29.7.1999) by S.I. 1999/1899, reg. 5

49 Provisions about licences under s. 48.U.K.

(1)Where the comptroller is satisfied, on an application made under section 48 above in respect of a patent, that the manufacture, use or disposal of materials not protected by the patent is unfairly prejudiced by reason of conditions imposed by the proprietor of the patent on the grant of licences under the patent, or on the disposal or use of the patented product or the use of the patented process, he may (subject to the provisions of that section) order the grant of licences under the patent to such customers of the applicant as he thinks fit as well as to the applicant.

(2)Where an application under section 48 above is made in respect of a patent by a person who holds a licence under the patent, the comptroller—

(a)may, if he orders the grant of a licence to the applicant, order the existing licence to be cancelled, or

(b)may, instead of ordering the grant of a licence to the applicant, order the existing licence to be amended.

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F105

(4)Section 46(4) and (5) above shall apply to a licence granted in pursuance of an order under section 48 above and to a licence granted by virtue of an entry under that section as it applies to a licence granted by virtue of an entry under section 46 above.

Textual Amendments

50 Exercise of powers on applications under s. 48.U.K.

(1)The powers of the comptroller on an application under section 48 above in respect of a patent [F106whose proprietor is not a WTO proprietor] shall be exercised with a view to securing the following general purposes:—

(a)that inventions which can be worked on a commercial scale in the United Kingdom and which should in the public interest be so worked shall be worked there without undue delay and to the fullest extent that is reasonably practicable;

(b)that the inventor or other person beneficially entitled to a patent shall receive reasonable remuneration having regard to the nature of the invention;

(c)that the interests of any person for the time being working or developing an invention in the United Kingdom under the protection of a patent shall not be unfairly prejudiced.

(2)Subject to subsection (1) above, the comptroller shall, in determining whether to make an order or entry in pursuance of [F107any application under section 48 above], take account of the following matters, that is to say—

(a)the nature of the invention, the time which has elapsed since the publication in the journal of a notice of the grant of the patent and the measures already taken by the proprietor of the patent or any licensee to make full use of the invention;

(b)the ability of any person to whom a licence would be granted under the order concerned to work the invention to the public advantage; and

(c)the risks to be undertaken by that person in providing capital and working the invention if the application for an order is granted,

but shall not be required to take account of matters subsequent to the making of the application.

Textual Amendments

F106Words in s. 50(1) inserted (29.7.1999) by S.I. 1999/1899, reg. 7(2)

F107Words in s. 50(2) substituted (29.7.1999) by S.I. 1999/1899, reg. 7(3)

[F10850A Powers exercisable following merger and market investigationsU.K.

(1)Subsection (2) below applies where—

(a)section 41(2), 55(2), 66(6), 75(2), 83(2), 138(2), 147(2) [F109, 147A(2)] or 160(2) of, or paragraph 5(2) or 10(2) of Schedule 7 to, the Enterprise Act 2002 (powers to take remedial action following merger or market investigations) applies;

(b)the [F110Competition and Markets Authority] or (as the case may be) the Secretary of State considers that it would be appropriate to make an application under this section for the purpose of remedying, mitigating or preventing a matter which cannot be dealt with under the enactment concerned; and

(c)the matter concerned involves—

(i)conditions in licences granted under a patent by its proprietor restricting the use of the invention by the licensee or the right of the proprietor to grant other licences; or

(ii)a refusal by the proprietor of a patent to grant licences on reasonable terms.

(2)The [F111Competition and Markets Authority] or (as the case may be) the Secretary of State may apply to the comptroller to take action under this section.

(3)Before making an application the [F111Competition and Markets Authority] or (as the case may be) the Secretary of State shall publish, in such manner as it or he thinks appropriate, a notice describing the nature of the proposed application and shall consider any representations which may be made within 30 days of such publication by persons whose interests appear to it or him to be affected.

(4)The comptroller may, if it appears to him on an application under this section that the application is made in accordance with this section, by order cancel or modify any condition concerned of the kind mentioned in subsection (1)(c)(i) above or may, instead or in addition, make an entry in the register to the effect that licences under the patent are to be available as of right.

[F112(5)References in this section to the Competition and Markets Authority are references to a CMA group except where—

(a)section 75(2) of the Enterprise Act 2002 applies; or

(b)any other enactment mentioned in subsection (1)(a) above applies and the functions of the Competition and Markets Authority under that enactment are being performed by the CMA Board by virtue of section 34C(3) or 133A(2) of the Enterprise Act 2002.]

(6)References in section 35, 36, 47, 63, 134 [F113, 141 or 141A] of the Enterprise Act 2002 (questions to be decided by the [F114Competition and Markets Authority] in its reports) to taking action under section 41(2), 55, 66, 138 [F115, 147 or 147A] shall include references to taking action under subsection (2) above.

(7)Action taken by virtue of subsection (4) above in consequence of an application under subsection (2) above where an enactment mentioned in subsection (1)(a) above applies shall be treated, for the purposes of sections 91(3), 92(1)(a), 162(1) and 166(3) of the Enterprise Act 2002 (duties to register and keep under review enforcement orders etc.), as if it were the making of an enforcement order (within the meaning of the Part concerned) under the relevant power in Part 3 or (as the case may be) 4 of that Act.

[F116(8)In subsection (5) “CMA Board” and “CMA group” have the same meaning as in Schedule 4 to the Enterprise and Regulatory Reform Act 2013.]]

Textual Amendments

F108S. 50A inserted (20.6.2003) by Enterprise Act 2002 (c. 40), ss. 278, 279, Sch. 25 para. 8(2); S.I. 2003/1397, art. 2(1), Sch. (with arts. 8, 12)

Modifications etc. (not altering text)

[F11751 Powers exercisable in consequence of report of [F118Competition and Markets Authority].U.K.

(1)Where a report of the [F119Competition and Markets Authority] has been laid before Parliament containing conclusions to the effect—

F120(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F120(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)on a competition reference, that a person was engaged in an anti-competitive practice which operated or may be expected to operate against the public interest, or

(d)on a reference under section 11 of the Competition Act 1980 (reference of public bodies and certain other persons), that a person is pursuing a course of conduct which operates against the public interest,

the appropriate Minister or Ministers may apply to the comptroller to take action under this section.

(2)Before making an application the appropriate Minister or Ministers shall publish, in such manner as he or they think appropriate, a notice describing the nature of the proposed application and shall consider any representations which may be made within 30 days of such publication by persons whose interests appear to him or them to be affected.

(3)If on an application under this section it appears to the comptroller that the matters specified in the [F121Competition and Markets Authority’s report as being those which in the opinion of the Competition and Markets Authority] operate, or operated or may be expected to operate, against the public interest include—

(a)conditions in licences granted under a patent by its proprietor restricting the use of the invention by the licensee or the right of the proprietor to grant other licences, or

(b)a refusal by the proprietor of a patent to grant licences on reasonable terms

he may by order cancel or modify any such condition or may, instead or in addition, make an entry in the register to the effect that licences under the patent are to be available as of right.

(4)In this section “the appropriate Minister or Ministers”means the Minister or Ministers to whom the report of the [F122Competition and Markets Authority] was made.]

Textual Amendments

F120S. 51(1)(a)(b) repealed (20.6.2003 for specified purposes and 29.12.2004 in so far as not already in force) by Enterprise Act 2002 (c. 40), s. 279, Sch. 25 para. 8(3), Sch. 26; S.I. 2003/1397, art. 2(1), Sch. (with arts. 3(1), 8, 12); S.I. 2004/3233, art. 2, Sch. (with arts. 3-5)

[52F123Opposition, appeal and arbitration.U.K.

(1)The proprietor of the patent concerned or any other person wishing to oppose an application under sections 48 to 51 above may, in accordance with rules, give to the comptroller notice of opposition; and the comptroller shall consider any opposition in deciding whether to grant the application.

(2)Where an order or entry has been made under section 48 above in respect of a patent whose proprietor is a WTO proprietor–

(a)the proprietor or any other person may, in accordance with rules, apply to the comptroller to have the order revoked or the entry cancelled on the grounds that the circumstances which led to the making of the order or entry have ceased to exist and are unlikely to recur;

(b)any person wishing to oppose an application under paragraph (a) above may, in accordance with rules, give to the comptroller notice of opposition; and

(c)the comptroller shall consider any opposition in deciding whether to grant the application.

(3)If it appears to the comptroller on an application under subsection (2)(a) above that the circumstances which led to the making of the order or entry have ceased to exist and are unlikely to recur, he may–

(a)revoke the order or cancel the entry; and

(b)terminate any licence granted to a person in pursuance of the order or entry subject to such terms and conditions as he thinks necessary for the protection of the legitimate interests of that person.

(4)Where an appeal is brought–

(a)from an order made by the comptroller in pursuance of an application under sections 48 to 51 above;

(b)from a decision of his to make an entry in the register in pursuance of such an application;

(c)from a revocation or cancellation made by him under subsection (3) above; or

(d)from a refusal of his to make such an order, entry, revocation or cancellation,

the Attorney General, the appropriate Law Officer within the meaning of section 4A of the Crown Suits (Scotland) Act 1857 F124 or the Attorney General for Northern Ireland, or [F125such other person who has a right of audience] as any of them may appoint, shall be entitled to appear and be heard.

(5)Where an application under sections 48 to 51 above or subsection (2) above is opposed, and either–

(a)the parties consent, or

(b)the proceedings require a prolonged examination of documents or any scientific or local investigation which cannot in the opinion of the comptroller conveniently be made before him,

the comptroller may at any time order the whole proceedings, or any question or issue of fact arising in them, to be referred to an arbitrator or arbiter agreed on by the parties or, in default of agreement, appointed by the comptroller.

(6)Where the whole proceedings are so referred, unless the parties otherwise agree before the award of the arbitrator or arbiter is made, an appeal shall lie from the award to the court.

(7)Where a question or issue of fact is so referred, the arbitrator or arbiter shall report his findings to the comptroller.]

Textual Amendments

F123S. 52 substituted (29.7.1999) by S.I. 1999/1899, reg. 6 (with transitional provisions in reg. 8(4))

53 Compulsory licences; supplementary provisions.U.K.

F126(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)In any proceedings on an [F127application made under section 48 above in respect of a patent], any statement with respect to any activity in relation to the patented invention, or with respect to the grant or refusal of licences under the patent, contained in a report of the [F128Competition and Markets Authority] laid before Parliament under Part VII of the M4Fair Trading Act 1973 [F129or section 17 of the Competition Act 1980] [F130 or published under Part 3 or 4 of the Enterprise Act 2002] shall be prima facie evidence of the matters stated, and in Scotland shall be sufficient evidence of those matters.

(3)The comptroller may make an entry in the register under sections 48 to 51 above notwithstanding any contract which would have precluded the entry on the application of the proprietor of the patent under section 46 above.

(4)An entry made in the register under sections 48 to 51 above shall for all purposes have the same effect as an entry made under section 46 above.

(5)No order or entry shall be made in pursuance of an application under sections 48 to 51 above which would be at variance with any treaty or international convention to which the United Kingdom is a party.

Textual Amendments

F130Words in s. 53(2) inserted (20.6.2003) by Enterprise Act 2002 (c. 40), s. 279, Sch. 25 para. 8(4); S.I. 2003/1397, art. 2(1), Sch. (with arts. 8 12)

Modifications etc. (not altering text)

C13S. 53(2) modified (20.6.2003) by The Enterprise Act 2002 (Protection of Legitimate Interests) Order 2003 (S.I. 2003/1592), art. 1(1), Sch. 4 para. 3(2) (as amended (1.4.2014) by S.I. 2014/891, arts. 1, 19(2) (with arts. 20-23))

Marginal Citations

54 Special provisions where patented invention is being worked abroad.U.K.

(1)Her Majesty may by Order in Council provide that the comptroller may not (otherwise than for purposes of the public interest) make an order or entry in respect of a patent in pursuance of an application under sections 48 to 51 above if the invention concerned is being commercially worked in any relevant country specified in the Order and demand in the United Kingdom for any patented product resulting from that working is being met by importation from that country.

(2)In subsection (1) above “relevant country” means a country other than a member state [F131or a member of the World Trade Organisation] whose law in the opinion of Her Majesty in Council incorporates or will incorporate provisions treating the working of an invention in, and importation from, the United Kingdom in a similar way to that in which the Order in Council would (if made) treat the working of an invention in, and and importation from, that country.

Textual Amendments

F131Words in s. 54(2) inserted (29.7.1999) by S.I. 1999/1899, reg. 7(4)

Use of patented inventions for services of the CrownU.K.

55 Use of patented inventions for services of the Crown.U.K.

(1)Notwithstanding anything in this Act, any government department and any person authorised in writing by a government department may, for the services of the Crown and in accordance with this section, do any of the following acts in the United Kingdom in relation to a patented invention without the consent of the proprietor of the patent, that is to say—

(a)where the invention is a product, may—

(i)make, use, import or keep the product, or sell or offer to sell it where to do so would be incidental or ancillary to making, using, importing or keeping it; or

(ii)in any event, sell or offer to sell it for foreign defence purposes or for the production or supply of specified drugs and medicines, or dispose or offer to dispose of it (otherwise than by selling it) for any purpose whatever;

(b)where the invention is a process, may use it or do in relation to any product obtained directly by means of the process anything mentioned in paragraph (a) above;

(c)without prejudice to the foregoing, where the invention or any product obtained directly by means of the invention is a specified drug or medicine, may sell or offer to sell the drug or medicine;

(d)may supply or offer to supply to any person any of the means, relating to an essential element of the invention, for putting the invention into effect;

(e)may dispose or offer to dispose of anything which was made, used, imported or kept in the exercise of the powers conferred by this section and which is no longer required for the purpose for which it was made, used, imported or kept (as the case may be),

and anything done by virtue of this subsection shall not amount to an infringement of the patent concerned.

(2)Any act done in relation to an invention by virtue of this section is in the following provisions of this section referred to as use of the invention; and “use”, in relation to an invention, in sections 56 to 58 below shall be construed accordingly.

(3)So far as the invention has before its priority date been duly recorded by or tried by or on behalf of a government department or the United Kingdom Atomic Energy Authority otherwise than in consequence of a relevant communication made in confidence, any use of the invention by virtue of this section may be made free of any royalty or other payment to the proprietor.

(4)So far as the invention has not been so recorded or tried, any use of it made by virtue of this section at any time either—

(a)after the publication of the application for the patent for the invention; or

(b)without prejudice to paragraph (a) above, in consequence of a relevant communication made after the priority date of the invention otherwise than in confidence;

shall be made on such terms as may be agreed either before or after the use by the government department and the proprietor of the patent with the approval of the Treasury or as may in default of agreement be determined by the court on a reference under section 58 below.

(5)Where an invention is used by virtue of this section at any time after publication of an application for a patent for the invention but before such a patent is granted, and the terms for its use agreed or determined as mentioned in subsection (4) above include terms as to payment for the use, then (notwithstanding anything in those terms) any such payment shall be recoverable only—

(a)after such a patent is granted; and

(b)if (apart from this section) the use would, if the patent had been granted on the date of the publication of the application, have infringed not only the patent but also the claims (as interpreted by the description and any drawings referred to in the description or claims) in the form in which they were contained in the application immediately before the preparations for its publication were completed by the Patent Office.

(6)The authority of a government department in respect of an invention may be given under this section either before or after the patent is granted and either before or after the use in respect of which the authority is given is made, and may be given to any person whether or not he is authorised directly or indirectly by the proprietor of the patent to do anything in relation to the invention.

(7)Where any use of an invention is made by or with the authority of a government department under this section, then, unless it appears to the department that it would be contrary to the public interest to do so, the department shall notify the proprietor of the patent as soon as practicable after the second of the following events, that is to say, the use is begun and the patent is granted, and furnish him with such information as to the extent of the use as he may from time to time require.

(8)A person acquiring anything disposed of in the exercise of powers conferred by this section, and any person claiming through him, may deal with it in the same manner as if the patent were held on behalf of the Crown.

(9)In this section “relevant communication”, in relation to an invention, means a communication of the invention directly or indirectly by the proprietor of the patent or any person from whom he derives title.

(10)Subsection (4) above is without prejudice to any rule of law relating to the confidentiality of information.

(11)In the application of this section to Northern Ireland, the reference in subsection (4) above to the Treasury shall, where the government department referred to in that subsection is a department of the Government of Northern Ireland, be construed as a reference to the Department of Finance for Northern Ireland.

Modifications etc. (not altering text)

C14S. 55(4) modified by Atomic Energy (Weapons Group) Act 1973 (c. 4, SIF 8), s. 5(2) (as amended by Patents Act 1977 (c.37 SIF 91), s. 132(5), Sch. 5 para. 6)

56 Interpretation, etc., of provisions about Crown use.U.K.

(1)Any reference in section 55 above to a patented invention, in relation to any time, is a reference to an invention for which a patent has before that time been, or is subsequently, granted.

(2)In this Act, except so far as the context otherwise requires, “the services of the Crown” includes—

(a)the supply of anything for foreign defence purposes;

(b)the production or supply of specified drugs and medicines; and

(c)such purposes relating to the production or use of atomic energy or research into matters connected therewith as the Secretary of State thinks necessary or expedient;

and “use for the services of the Crown” shall be construed accordingly.

(3)In section 55(1)(a) above and subsection (2)(a) above, references to a sale or supply of anything for foreign defence purposes are references to a sale or supply of the thing—

(a)to the government of any country outside the United Kingdom, in pursuance of an agreement or arrangement between Her Majesty’s Government in the United Kingdom and the government of that country, where the thing is required for the defence of that country or of any other country whose government is party to any agreement or arrangement with Her Majesty’s Government in respect of defence matters; or

(b)to the United Nations, or to the government of any country belonging to that organisation, in pursuance of an agreement or arrangement between Her Majesty’s Government and that organisation or government, where the thing is required for any armed forces operating in pursuance of a resolution of that organisation or any organ of that organisation.

(4)For the purposes of section 55(1)(a) and (c) above and subsection (2)(b) above, specified drugs and medicines are drugs and medicines which are both—

(a)required for the [F132provision of—

F133[(ai)primary medical services F134[under [F135the National Health Service Act 2006, the National Health Service (Wales) Act 2006], Part 1 of the National Health Service (Scotland) Act 1978 or any corresponding provisions of the law in force in Northern Ireland or the Isle of Man] or primary dental services under [F135the National Health Service Act 2006, the National Health Service (Wales) Act 2006] , or any corresponding provisions of the law in force in Northern Ireland or the Isle of Man, or]

(i)pharmaceutical services, general medical services or general dental services under [F136Chapter 1 of Part 7 of the National Health Service Act 2006 or Chapter 1 of Part 7 of the National Health Service (Wales) Act 2006] [F137 (in the case of pharmaceutical services) ], Part II of the National Health Service (Scotland) Act 1978 [F138(in the case of pharmaceutical services or general dental services)], or the corresponding provisions of the law in force in Northern Ireland or the Isle of Man, or

(ii)personal medical services or personal dental services provided in accordance with arrangements made under F139... section 17C of the 1978 Act [F140(in the case of personal dental services)] , or the corresponding provisions of the law in force in Northern Ireland or the Isle of Man][F141, or

(iii)local pharmaceutical services provided under a pilot scheme established under [F142section 134 of the National Health Service Act 2006, or section 92 of the National Health Service (Wales) Act 2006,] or an LPS scheme established under [F143Schedule 12 to the National Health Service Act 2006, or Schedule 7 to the National Health Service (Wales) Act 2006], or under any corresponding provision of the law in force in the Isle of Man]

and,

(b)specified for the purposes of this subsection in regulations made by the Secretary of State.

Textual Amendments

F132Words in s. 56(4)(a) substituted for s. 56(4)(a)(i)(ii) and words immediately preceding them (1.4.1998) by 1997 c. 46, s. 41(10), Sch. 2 Pt. I para. 2; S.I. 1998/631, art. 2(1)(b), Sch. 2 (subject to art. 3, 4, 5)

F136Words in s. 56(4)(a)(i) substituted (1.3.2007) by virtue of National Health Service (Consequential Provisions) Act 2006 (c. 43), s. 8(2), Sch. 1 para. 58(b) (with Sch. 3 Pt. 1)

F141S. 56(4)(a)(iii) and preceding word inserted (1.7.2002 for W. and 1.1.2003 for E.) by 2001 c. 15, ss. 67, 70, Sch. 5 para. 4; S.I. 2002/1475, art. 2(1), Sch. Pt. 1; S.I. 2003/53, art. 2(a)

57 Rights of third parties in respect of Crown use.U.K.

(1)In relation to—

(a)any use made for the services of the Crown of an invention by a government department, or a person authorised by a government department, by virtue of section 55 above, or

(b)anything done for the services of the Crown to the order of a government department by the proprietor of a patent in respect of a patented invention or by the proprietor of an application in respect of an invention for which an application for a patent has been filed and is still pending,

the provisions of any licence, assignment, assignation or agreement to which this subsection applies shall be of no effect so far as those provisions restrict or regulate the working of the invention, or the use of any model, document or information relating to it, or provide for the making of payments in respect of, or calculated by reference to, such working or use; and the reproduction or publication of any model or document in connection with the said working or use shall not be deemed to be an infringement of any copyright [F144or design right] subsisting in the model or document.

(2)Subsection (1) above applies to a licence, assignment, assignation or agreement which is made, whether before or after the appointed day, between (on the one hand) any person who is a proprietor of or an applicant for the patent, or anyone who derives title from any such person or from whom such person derives title, and (on the other hand) any person whatever other than a government department.

(3)Where an exclusive licence granted otherwise than for royalties or other benefits determined by reference to the working of the invention is in force under the patent or application concerned, then—

(a)in relation to anything done in respect of the invention which, but for the provisions of this section and section 55 above, would constitute an infringement of the rights of the licensee, subsection (4) of that section shall have effect as if for the reference to the proprietor of the patent there were substituted a reference to the licensee; and

(b)in relation to anything done in respect of the invention by the licensee by virtue of an authority given under that section, that section shall have effect as if the said subsection (4) were omitted.

(4)Subject to the provisions of subsection (3) above, where the patent, or the right to the grant of the patent, has been assigned to the proprietor of the patent or application in consideration of royalties or other benefits determined by reference to the working of the invention, then—

(a)in relation to any use of the invention by virtue of section 55 above, subsection (4) of that section shall have effect as if the reference to the proprietor of the patent included a reference to the assignor, and any sum payable by virtue of that subsection shall be divided between the proprietor of the patent or application and the assignor in such proportion as may be agreed on by them or as may in default of agreement be determined by the court on a reference under section 58 below; and

(b)in relation to any act done in respect of the invention for the services of the Crown by the proprietor of the patent or application to the order of a government department, section 55(4) above shall have effect as if that act were use made by virtue of an authority given under that section.

(5)Where section 55(4) above applies to any use of an invention and a person holds an exclusive licence under the patent or application concerned (other than such a licence as is mentioned in subsection (3) above) authorising him to work the invention, then subsections (7) and (8) below shall apply.

(6)In those subsections “the section 55(4)” payment means such payment (if any) as the proprietor of the patent or application and the department agree under section 55 above, or the court determines under section 58 below, should be made by the department to the proprietor in respect of the use of the invention.

(7)The licensee shall be entitled to recover from the proprietor of the patent or application such part (if any) of the section 55(4) payment as may be agreed on by them or as may in default of agreement be determined by the court under section 58 below to be just having regard to any expenditure incurred by the licensee—

(a)in developing the invention, or

(b)in making payments to the proprietor in consideration of the licence, other than royalties or other payments determined by reference to the use of the invention.

(8)Any agreement by the proprietor of the patent or application and the department under section 55(4) above as to the amount of the section 55(4) payment shall be of no effect unless the licensee consents to the agreement; and any determination by the court under section 55(4) above as to the amount of that payment shall be of no effect unless the licensee has been informed of the reference to the court and is given an opportunity to be heard.

(9)Where any models, documents or information relating to an invention are used in connection with any use of the invention which falls within subsection (1)(a) above, or with anything done in respect of the invention which falls within subsection (1)(b) above, subsection (4) of section 55 above shall (whether or not it applies to any such use of the invention) apply to the use of the models, documents or information as if for the reference in it to the proprietor of the patent there were substituted a reference to the person entitled to the benefit of any provision of an agreement which is rendered inoperative by this section in relation to that use; and in section 58 below the references to terms for the use of an invention shall be construed accordingly.

(10)Nothing in this section shall be construed as authorising the disclosure to a government department or any other person of any model, document or information to the use of which this section applies in contravention of any such licence, assignment, assignation or agreement as is mentioned in this section.

Textual Amendments

Modifications etc. (not altering text)

C15By S.I. 1987/1497, reg. 9(2) para. 2 Table B it is provided that s. 57(1) shall apply as if there were inserted at the end thereof the words, “or of any topography right”

[F14557A Compensation for loss of profit.U.K.

(1)Where use is made of an invention for the services of the Crown, the government department concerned shall pay—

(a)to the proprietor of the patent, or

(b)if there is an exclusive licence in force in respect of the patent, to the exclusive licensee,compensation for any loss resulting from his not being awarded a contract to supply the patented product or, as the case may be, to perform the patented process or supply a thing made by means of the patented process.

(2)Compensation is payable only to the extent that such a contract could have been fulfilled from his existing manufacturing or other capacity; but is payable notwithstanding the existence of circumstances rendering him ineligible for the award of such a contract.

(3)In determining the loss, regard shall be had to the profit which would have been made on such a contract and to the extent to which any manufacturing or other capacity was under-used.

(4)No compensation is payable in respect of any failure to secure contracts to supply the patented product or, as the case may be, to perform the patented process or supply a thing made by means of the patented process, otherwise than for the services of the Crown.

(5)The amount payable shall, if not agreed between the proprietor or licensee and the government department concerned with the approval of the Treasury, be determined by the court on a reference under section 58, and is in addition to any amount payable under section 55 or 57.

(6)In this section “the government department concerned”, in relation to any use of an invention for the services of the Crown, means the government department by whom or on whose authority the use was made.

(7)In the application of this section to Northern Ireland, the reference in subsection (5) above to the Treasury shall, where the government department concerned is a department of the Government of Northern Ireland, be construed as a reference to the Department of Finance and Personnel.]

Textual Amendments

58 References of disputes as to Crown use.U.K.

[F146(1)Any dispute as to—

(a)the exercise by a government department, or a person authorised by a government department, of the powers conferred by section 55 above,

(b)terms for the use of an invention for the services of the Crown under that section,

(c)the right of any person to receive any part of a payment made in pursuance of subsection (4) of that section, or

(d)the right of any person to receive a payment under section 57A,

may be referred to the court by either party to the dispute after a patent has been granted for the invention.]

(2)If in such proceedings any question arises whether an invention has been recorded or tried as mentioned in section 55 above, and the disclosure of any document recording the invention, or of any evidence of the trial thereof, would in the opinion of the department be prejudicial to the public interest, the disclosure may be made confidentially to [F147the other party's legal representative] or to an independent expert mutually agreed upon.

(3)In determining under this section any dispute between a government department and any person as to the terms for the use of an invention for the services of the Crown, the court shall have regard—

(a)to any benefit or compensation which that person or any person from whom he derives title may have received or may be entitled to receive directly or indirectly from any government department in respect of the invention in question;

(b)to whether that person or any person from whom he derives title has in the court’s opinion without reasonable cause failed to comply with a request of the department to use the invention for the services of the Crown on reasonable terms.

(4)In determining whether or not to grant any relief [F148under subsection (1)(a), (b) or (c) above] and the nature and extent of the relief granted the court shall, subject to the following provisions of this section, apply the principles applied by the court immediately before the appointed day to the granting of relief under section 48 of the 1949 Act.

(5)On a reference under this section the court may refuse to grant relief by way of compensation in respect of the use of an invention for the services of the Crown during any further period specified under section 25(4) above, but before the payment of the renewal fee and any additional fee prescribed for the purposes of that section.

(6)Where an amendment of the specification of a patent has been allowed under any of the provisions of this Act, [F149or, in the case of a European patent (UK), has been allowed under any of the provisions in the Agreement on a Unified Patent Court,] the court shall not grant relief by way of compensation under this section in respect of any such use before the decision to allow the amendment unless the court is satisfied that

[F150(a)]the specification of the patent as published was framed in good faith and with reasonable skill and knowledge [F151and.

(b)the relief is sought in good faith]

(7)If the validity of a patent is put in issue in proceedings under this section and it is found that the patent is only partially valid, the court may, subject to subsection (8) below, grant relief to the proprietor of the patent in respect of that part of the patent which is found to be valid and to have been used for the services of the Crown.

(8)Where in any such proceedings it is found that a patent is only partially valid, the court shall not grant relief by way of compensation, costs or expenses except where the proprietor of the patent proves that

[F152(a)]the specification of the patent was framed in good faith and with reasonable skill and knowledge, and

[F153(b)the relief is sought in good faith,

and] in that event the court may grant relief in respect of that part of the patent which is valid and has been so used, subject to the discretion of the court as to costs and expenses and as to the date from which compensation should be awarded.

(9)As a condition of any such relief the court may direct that the specification of the patent shall be amended to its satisfaction upon an application made for that purpose under section 75 below, and an application may be so made accordingly, whether or not all other issues in the proceedings have been determined.

[F154(9A)The court may also grant such relief in the case of a European patent (UK) on condition that the claims of the patent are limited to its satisfaction by the European Patent Office at the request of the proprietor.]

(10)In considering the amount of any compensation for the use of an invention for the services of the Crown after publication of an application for a patent for the invention and before such a patent is granted, the court shall consider whether or not it would have been reasonable to expect, from a consideration of the application as published under section 16 above, that a patent would be granted conferring on the proprietor of the patent protection for an act of the same description as that found to constitute that use, and if the court finds that it would not have been reasonable, it shall reduce the compensation to such amount as it thinks just.

(11)Where by virtue of a transaction, instrument or event to which section 33 above applies a person becomes the proprietor or one of the proprietors or an exclusive licensee of a patent (the new proprietor or licensee) and a government department or a person authorised by a government department subsequently makes use under section 55 above of the patented invention, the new proprietor or licensee shall not be entitled to any compensation under section 55(4) above (as it stands or as modified by section 57(3) above) [F155, or to any compensation under section 57A above,] in respect of a subsequent use of the invention before the transaction, instrument or event is registered unless—

(a)the transaction, instrument or event is registered within the period of six months beginning with its date; or

(b)the court is satisfied that it was not practicable to register the transaction, instrument or event before the end of that period and that it was registered as soon as practicable thereafter.

(12)In any proceedings under this section the court may at any time order the whole proceedings or any question or issue of fact arising in them to be referred, on such terms as the court may direct, to a Circuit judge discharging the functions of an official referee or an arbitrator in England and Wales or Northern Ireland, or to an arbiter in Scotland; and references to the court in the foregoing provisions of this section shall be construed accordingly.

(13)One of two or more joint proprietors of a patent or application for a patent may without the concurrence of the others refer a dispute to the court under this section, but shall not do so unless the others are made parties to the proceedings; but any of the others made a defendant or defender shall not be liable for any costs or expenses unless he enters an appearance and takes part in the proceedings.

Textual Amendments

F149Words in s. 58(6) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(2) (with art. 3)

F150Words in s. 58(6) renumbered as s. 58(6)(a) (13.12.2007) by Patents Act 2004 (c. 16), ss. 2(2)(a), 17(1); S.I. 2007/3396, art. 2(c)

F151S. 58(6)(b) and word inserted (13.12.2007) by Patents Act 2004 (c. 16), ss. 2(2)(a), 17(1); S.I. 2007/3396, art. 2(c)

F152Words in s. 58(8) renumbered as s. 58(8)(a) (13.12.2007) by Patents Act 2004 (c. 16), ss. 2(2)(b), 17(1); S.I. 2007/3396, art. 2(c)

F153S. 58(8)(b) and word inserted (13.12.2007) by Patents Act 2004 (c. 16), ss. 2(2)(b), 17(1); S.I. 2007/3396, art. 2(c)

F154S. 58(9A) inserted (13.12.2007) by Patents Act 2004 (c. 16), ss. 3(2), 17(1); S.I. 2007/3396, art. 2(e)

59 Special provisions as to Crown use during emergency.U.K.

(1)During any period of emergency within the meaning of this section the powers exercisable in relation to an invention by a government department or a person authorised by a government department under section 55 above shall include power to use the invention for any purpose which appears to the department necessary or expedient—

(a)for the efficient prosecution of any war in which Her Majesty may be engaged;

(b)for the maintenance of supplies and services essential to the life of the community;

(c)for securing a sufficiency of supplies and services essential to the well-being of the community;

(d)for promoting the productivity of industry, commerce and agriculture;

(e)for fostering and directing exports and reducing imports, or imports of any classes, from all or any countries and for redressing the balance of trade;

(f)generally for ensuring that the whole resources of the community are available for use, and are used, in a manner best calculated to serve the interests of the community; or

(g)for assisting the relief of suffering and the restoration and distribution of essential supplies and services in any country or territory outside the United Kingdom which is in grave distress as the result of war;

and any reference in this Act to the services of the Crown shall, as respects any period of emergency, include a reference to those purposes.

(2)In this section the use of an invention includes, in addition to any act constituting such use by virtue of section 55 above, any act which would, apart from that section and this section, amount to an infringement of the patent concerned or, as the case may be, give rise to a right under section 69 below to bring proceedings in respect of the application concerned, and any reference in this Act to “use for the services of the Crown” shall, as respects any period of emergency, be construed accordingly.

(3)In this section “period of emergency” means any period beginning with such date as may be declared by Order in Council to be the commencement, and ending with such date as may be so declared to be the termination, of a period of emergency for the purposes of this section.

(4)A draft of an Order under this section shall not be submitted to Her Majesty unless it has been laid before, and approved by resolution of, each House of Parliament.

InfringementU.K.

60 Meaning of infringement.U.K.

(1)Subject to the provisions of this section, a person infringes a patent for an invention if, but only if, while the patent is in force, he does any of the following things in the United Kingdom in relation to the invention without the consent of the proprietor of the patent, that is to say—

(a)where the invention is a product, he makes, disposes of, offers to dispose of, uses or imports the product or keeps it whether for disposal or otherwise;

(b)where the invention is a process, he uses the process or he offers it for use in the United Kingdom when he knows, or it is obvious to a reasonable person in the circumstances, that its use there without the consent of the proprietor would be an infringement of the patent;

(c)where the invention is a process, he disposes of, offers to dispose of, uses or imports any product obtained directly by means of that process or keeps any such product whether for disposal or otherwise.

(2)Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom.

(3)Subsection (2) above shall not apply to the supply or offer of a staple commercial product unless the supply or the offer is made for the purpose of inducing the person supplied or, as the case may be, the person to whom the offer is made to do an act which constitutes an infringement of the patent by virtue of subsection (1) above.

[F156(3A)Subsections (1) and (2) shall not apply to an act done in relation to a product that is subject to a patent where the product has been put on the market in the United Kingdom or the European Economic Area by or with the consent of the proprietor of the patent unless—

(a)there exist legitimate reasons for the proprietor of the patent to oppose the act for the purpose of protecting the proprietor’s property, and

(b)the opposition to the act interferes with the rights of any other person no more than is necessary to achieve that purpose.]

F157(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)An act which, apart from this subsection, would constitute an infringement of a patent for an invention shall not do so if—

(a)it is done privately and for purposes which are not commercial;

(b)it is done for experimental purposes relating to the subject-matter of the invention;

(c)it consists of the extemporaneous preparation in a pharmacy of a medicine for an individual in accordance with a prescription given by a registered medical or dental practitioner or consists of dealing with a medicine so prepared;

(d)it consists of the use, exclusively for the needs of a relevant ship, of a product or process in the body of such a ship or in its machinery, tackle, apparatus or other accessories, in a case where the ship has temporarily or accidentally entered the internal or territorial waters of the United Kingdom;

(e)it consists of the use of a product or process in the body or operation of a relevant aircraft, hovercraft or vehicle which has temporarily or accidentally entered or is crossing the United Kingdom (including the air space above it and its territorial waters) or the use of accessories for such a relevant aircraft, hovercraft or vehicle;

(f)it consists of the use of an exempted aircraft which has lawfully entered or is lawfully crossing the United Kingdom as aforesaid or of the importation into the United Kingdom, or the use or storage there, of any part or accessory for such an aircraft.

[F158(g)it consists of the use by a farmer of the product of his harvest for propagation or multiplication by him on his own holding, where there has been a sale of plant propagating material to the farmer by the proprietor of the patent or with his consent for agricultural use;

(h)it consists of the use of an animal or animal reproductive material by a farmer for an agricultural purpose following a sale to the farmer, by the proprietor of the patent or with his consent, of breeding stock or other animal reproductive material which constitutes or contains the patented invention.]

[F159(i)it consists of—

(i)an act done in conducting a study, test or trial which is necessary for and is conducted with a view to the application of paragraphs 1 to 5 of article 13 of Directive 2001/82/EC or paragraphs 1 to 4 of article 10 of Directive 2001/83/EC, or

(ii)any other act which is required for the purpose of the application of those paragraphs.]

[F160(j)it consists of a use referred to in Article 27(c) of the Agreement on a Unified Patent Court;

(k)subject to subsection (6H), it consists of an act or use referred to in Article 27(k) of the Agreement on a Unified Patent Court.]

(6)For the purposes of subsection (2) above a person who does an act in relation to an invention which is prevented only by virtue of paragraph (a), (b) or (c) of subsection (5) above from constituting an infringement of a patent for the invention shall not be treated as a person entitled to work the invention, but—

(a)the reference in that subsection to a person entitled to work an invention includes a reference to a person so entitled by virtue of section 55 above, and

(b)a person who by virtue of [F161section 20B(4) or (5) above or] [F162section 28A(4) or (5)] above or section 64 below [F163or section 117A(4) or (5) below] is entitled to do an act in relation to the invention without it constituting such an infringement shall, so far as concerns that act, be treated as a person entitled to work the invention.

[F164(6A)Schedule A1 contains—

(a)provisions restricting the circumstances in which subsection (5)(g) applies; and

(b)provisions which apply where an act would constitute an infringement of a patent but for subsection (5)(g).

(6B)For the purposes of subsection (5)(h), use for an agricultural purpose—

(a)includes making an animal or animal reproductive material available for the purposes of pursuing the farmer’s agricultural activity; but

(b)does not include sale within the framework, or for the purposes, of a commercial reproduction activity.

(6C)In paragraphs (g) and (h) of subsection (5) “sale” includes any other form of commercialisation.]

[F165(6D)For the purposes of subsection (5)(b), anything done in or for the purposes of a medicinal product assessment which would otherwise constitute an infringement of a patent for an invention is to be regarded as done for experimental purposes relating to the subject-matter of the invention.

(6E)In subsection (6D), “medicinal product assessment” means any testing, course of testing or other activity undertaken with a view to providing data for any of the following purposes—

(a)obtaining or varying an authorisation to sell or supply, or offer to sell or supply, a medicinal product (whether in the United Kingdom or elsewhere);

(b)complying with any regulatory requirement imposed (whether in the United Kingdom or elsewhere) in relation to such an authorisation;

(c)enabling a government or public authority (whether in the United Kingdom or elsewhere), or a person (whether in the United Kingdom or elsewhere) with functions of—

(i)providing health care on behalf of such a government or public authority, or

(ii)providing advice to, or on behalf of, such a government or public authority about the provision of health care,

to carry out an assessment of suitability of a medicinal product for human use for the purpose of determining whether to use it, or recommend its use, in the provision of health care.

(6F)In subsection (6E) and this subsection—

  • “medicinal product” means a medicinal product for human use or a veterinary medicinal product;

  • “medicinal product for human use” has the meaning given by article 1 of Directive 2001/83/EC;

  • “veterinary medicinal product” has the meaning given by article 1 of Directive 2001/82/EC.

(6G)Nothing in subsections (6D) to (6F) is to be read as affecting the application of subsection (5)(b) in relation to any act of a kind not falling within subsection (6D).]

[F166(6H)Subsection 5(k) applies to an act or use in relation to a European patent (UK) or a European patent with unitary effect, but does not apply to an act or use in relation to a patent granted by the comptroller.]

(7)In this section—

  • “relevant ship” and “relevant aircraft, hovercraft or vehicle” mean respectively a ship and an aircraft, hovercraft or vehicle registered in, or belonging to, any country, other than the United Kingdom, which is a party to the Convention for the Protection of Industrial Property signed at Paris on 20th March 1883 [F167or which is a member of the World Trade Organisation]; and

  • “exempted aircraft” means an aircraft to which [F168section 89 of the Civil Aviation Act 1982] section 53 of the M5Civil Aviation Act 1949 (aircraft exempted from seizure in respect of patent claims) applies.

  • [F169“Directive 2001/82/EC” means Directive 2001/82/EC of the European Parliament and of the Council on the Community code relating to veterinary medicinal products as amended by [F170 Directive 2004/28/EC] of the European Parliament and of the Council;

  • “Directive 2001/83/EC” means Directive 2001/83/EC of the European Parliament and of the Council on the Community code relating to medicinal products for human use, as amended by Directive 2002/98/EC of the European Parliament and of the Council, by Commission Directive 2003/63/EC and by Directives 2004/24/EC and 2004/27/EC of the European Parliament and of the Council]

Textual Amendments

F158S. 60(5)(g)(h) inserted (28.7.2000) by S.I. 2000/2037, reg. 4(a)

F160S. 60(5)(j)(k) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(3) (with art. 3)

F164S. 60(6A)(6B)(6C) inserted (28.7.2000) by S.I. 2000/2037, reg. 4(b)

F165S. 60(6D)-(6G) inserted (1.10.2014) by The Legislative Reform (Patents) Order 2014 (S.I. 2014/1997), arts. 1(2), 2

F167Words in s. 60(7) in the definition of “relevant ship” and “relevant aircraft, hovercraft or vehicle” inserted (29.7.1999) by virtue of S.I. 1999/1899, reg. 7

Marginal Citations

61 Proceedings for infringement of patent.U.K.

(1)Subject to the following provisions of this Part of this Act, civil proceedings may be brought in the court by the proprietor of a patent in respect of any act alleged to infringe the patent and (without prejudice to any other jurisdiction of the court) in those proceedings a claim may be made—

(a)for an injunction or interdict restraining the defendant or defender from any apprehended act of infringement;

(b)for an order for him to deliver up or destroy any patented product in relation to which the patent is infringed or any article in which that product is inextricably comprised;

(c)for damages in respect of the infringement;

(d)for an account of the profits derived by him from the infringement;

(e)for a declaration or declarator that the patent is valid and has been infringed by him.

(2)The court shall not, in respect of the same infringement, both award the proprietor of a patent damages and order that he shall be given an account of the profits.

(3)The proprietor of a patent and any other person may by agreement with each other refer to the comptroller the question whether that other person has infringed the patent and on the reference the proprietor of the patent may make any claim mentioned in subsection (1)(c) or (e) above.

(4)Except so far as the context requires, in the following provisions of this Act—

(a)any reference to proceedings for infringement and the bringing of such proceedings includes a reference to a reference under subsection (3) above and the making of such a reference;

(b)any reference to a [F171claimant] or pursuer includes a reference to the proprietor of the patent; and

(c)any reference to a defendant or defender includes a reference to any other party to the reference.

(5)If it appears to the comptroller on a reference under subsection (3) above that the question referred to him would more properly be determined by the court, he may decline to deal with it and the court shall have jurisdiction to determine the question as if the reference were proceedings brought in the court.

(6)Subject to the following provisions of this Part of this Act, in determining whether or not to grant any kind of relief claimed under this section and the extent of the relief granted the court or the comptroller shall apply the principles applied by the court in relation to that kind of relief immediately before the appointed day.

[F172(7)If the comptroller awards any sum by way of damages on a reference under subsection (3) above, then—

(a)in England and Wales, the sum shall be recoverable, if [F173the county court] so orders, [F174 under section 85 of the County Courts Act 1984] or otherwise as if it were payable under an order of that court;

(b)in Scotland, payment of the sum may be enforced in like manner as an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland;

(c)in Northern Ireland, payment of the sum may be enforced as if it were a money judgment.]

Textual Amendments

F171Word in s. 61(4)(b) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 14; S.I. 2004/3205, art. 2(k) (with art. 9)

F172S. 61(7) inserted (1.1.2005) by Patents Act 2004 (c. 16), ss. 11, 17(1); S.I. 2004/3205, art. 2(d) (with art. 9)

F173Words in s. 61(7)(a) substituted (E.W.S.) (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 52; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

62 Restrictions on recovery of damages for infringement.U.K.

(1)In proceedings for infringement of a patent damages shall not be awarded, and no order shall be made for an account of profits, against a defendant or defender who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed; and a person shall not be taken to have been so aware or to have had reasonable grounds for so supposing by reason only of the application to a product of the word “patent” or “patented”, or any word or words expressing or implying that a patent has been obtained for the product, unless the number of the patent [F175or a relevant internet link] accompanied the word or words in question.

[F176(1A)The reference in subsection (1) to a relevant internet link is a reference to an address of a posting on the internet—

(a)which is accessible to the public free of charge, and

(b)which clearly associates the product with the number of the patent.]

(2)In proceedings for infringement of a patent the court or the comptroller may, if it or he thinks fit, refuse to award any damages or make any such order in respect of an infringement committed during [F177the further period specified in] section 25(4) above, but before the payment of the renewal fee and any additional fee prescribed for the purposes of that subsection.

(3)Where an amendment of the specification of a patent has been allowed under any of the provisions of this Act, [F178the court or the comptroller shall, when awarding damages or making an order for an account of profits in proceedings for an infringement of the patent committed before the decision to allow the amendment, take into account the following—

(a)whether at the date of infringement the defendant or defender knew, or had reasonable grounds to know, that he was infringing the patent;

(b)whether the specification of the patent as published was framed in good faith and with reasonable skill and knowledge;

(c)whether the proceedings are brought in good faith.]

Textual Amendments

F175Words in s. 62(1) inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 15(1), 24(1); S.I. 2014/2330, art. 3, Sch. (with art. 5)

F177Words in s. 62(2) substituted (1.10.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 15; S.I. 2005/2471, art. 2(g)

63 Relief for infringement of partially valid patent.U.K.

(1)If the validity of a patent is put in issue in proceedings for infringement of the patent and it is found that the patent is only partially valid, the court or the comptroller may, subject to subsection (2) below, grant relief in respect of that part of the patent which is found to be valid and infringed.

(2)Where in any such proceedings it is found that a patent is only partially valid, the court or the comptroller shall [F179, when awarding damages, costs or expenses or making an order for an account of profits, take into account the following—

(a)whether at the date of the infringement the defendant or defender knew, or had reasonable grounds to know, that he was infringing the patent;

(b)whether the specification of the patent was framed in good faith and with reasonable skill and knowledge;

(c)whether the proceedings are brought in good faith;

and any relief granted shall be subject to the discretion of the court or the comptroller as to costs or expenses and as to the date from which damages or an account should be reckoned.]

(3)As a condition of relief under this section the court or the comptroller may direct that the specification of the patent shall be amended to its or his satisfaction upon an application made for that purpose under section 75 below, and an application may be so made accordingly, whether or not all other issues in the proceedings have been determined.

[F180(4)The court or the comptroller may also grant relief under this section in the case of a European patent (UK) on condition that the claims of the patent are limited to its or his satisfaction by the European Patent Office at the request of the proprietor.]

Textual Amendments

[F18164 Right to continue use begun before priority date.U.K.

(1)Where a patent is granted for an invention, a person who in the United Kingdom before the priority date of the invention—

(a)does in good faith an act which would constitute an infringement of the patent if it were in force, or

(b)makes in good faith effective and serious preparations to do such an act,

has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the grant of the patent; but this right does not extend to granting a licence to another person to do the act.

(2)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (1) may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(3)Where a product is disposed of to another in exercise of the rights conferred by subsection (1) or (2), that other and any person claiming through him may deal with the product in the same way as if it had been disposed of by the registered proprietor of the patent.]

Textual Amendments

65 Certificate of contested validity of patent.U.K.

(1)If in any proceedings before the court or the comptroller the validity of a patent to any extent is contested and that patent is found by the court or the comptroller to be wholly or partially valid, the court or the comptroller may certify the finding and the fact that the validity of the patent was so contested.

(2)Where a certificate is granted under this section, then, if in any subsequent proceedings before the court or the comptroller for infringement of the patent concerned or for revocation of the patent a final order or judgment or interlocutor is made or given in favour of the party relying on the validity of the patent as found in the earlier proceedings, that party shall, unless the court or the comptroller otherwise directs, be entitled to his costs or expenses as between solicitor and own client (other than the costs or expenses of any appeal in the subsequent proceedings).

66 Proceedings for infringement by a co-owner.U.K.

(1)In the application of section 60 above to a patent of which there are two or more joint proprietors the reference to the proprietor shall be construed—

(a)in relation to any act, as a reference to that proprietor or those proprietors who, by virtue of section 36 above or any agreement referred to in that section, is or are entitled to do that act without its amounting to an infringement; and

(b)in relation to any consent, as a reference to that proprietor or those proprietors who, by virtue of section 36 above or any such agreement, is or are the proper person or persons to give the requisite consent.

(2)One of two or more joint proprietors of a patent may without the concurrence of the others bring proceedings in respect of an act alleged to infringe the patent, but shall not do so unless the others are made parties to the proceedings; but any of the others made a defendant or defender shall not be liable for any costs or expenses unless he enters an appearance and takes part in the proceedings.

67 Proceedings for infringement by exclusive licensee.U.K.

(1)Subject to the provisions of this section, the holder of an exclusive licence under a patent shall have the same right as the proprietor of the patent to bring proceedings in respect of any infringement of the patent committed after the date of the licence; and references to the proprietor of the patent in the provisions of this Act relating to infringement shall be construed accordingly.

(2)In awarding damages or granting any other relief in any such proceedings the court or the comptroller shall take into consideration any loss suffered or likely to be suffered by the exclusive licensee as such as a result of the infringement, or, as the case may be, the profits derived from the infringement, so far as it constitutes an infringement of the rights of the exclusive licensee as such.

(3)In any proceedings taken by an exclusive licensee by virtue of this section the proprietor of the patent shall be made a party to the proceedings, but if made a defendant or defender shall not be liable for any costs or expenses unless he enters an appearance and takes part in the proceedings.

68 Effect of non-registration on infringement proceedings.U.K.

Where by virtue of a transaction, instrument or event to which section 33 above applies a person becomes the proprietor or one of the proprietors or an exclusive licensee of a patent and the patent is subsequently infringedF182... before the transaction, instrument or event is registered [F183, in proceedings for such an infringement, the court or comptroller shall not award him costs or expenses] unless—

(a)the transaction, instrument or event is registered within the period of six months beginning with its date; or

(b)the court or the comptroller is satisfied that it was not practicable to register the transaction, instrument or event before the end of that period and that it was registered as soon as practicable thereafter.

Textual Amendments

69 Infringement of rights conferred by publication of application.U.K.

(1)Where an application for a patent for an invention is published, then, subject to subsections (2) and (3) below, the applicant shall have, as from the publication and until the grant of the patent, the same right as he would have had, if the patent had been granted on the date of the publication of the application, to bring proceedings in the court or before the comptroller for damages in respect of any act which would have infringed the patent; and (subject to subsections (2) and (3) below) references in sections 60 to 62 and 66 to 68 above to a patent and the proprietor of a patent shall be respectively construed as including references to any such application and the applicant, and references to a patent being in force, being granted, being valid or existing shall be construed accordingly.

(2)The applicant shall be entitled to bring proceedings by virtue of this section in respect of any act only—

(a)after the patent has been granted; and

(b)if the act would, if the patent had been granted on the date of the publication of the application, have infringed not only the patent, but also the claims (as interpreted by the description and any drawings referred to in the description or claims) in the form in which they were contained in the application immediately before the preparations for its publication were completed by the Patent Office.

(3)Section 62(2) and (3) above shall not apply to an infringement of the rights conferred by this section, but in considering the amount of any damages for such an infringement, the court or the comptroller shall consider whether or not it would have been reasonable to expect, from a consideration of the application as published under section 16 above, that a patent would be granted conferring on the proprietor of the patent protection from an act of the same description as that found to infringe those rights, and if the court or the comptroller finds that it would not have been reasonable, it or he shall reduce the damages to such an amount as it or he thinks just.

[F18470 Threats of infringement proceedingsU.K.

(1)A communication contains a “threat of infringement proceedings” if a reasonable person in the position of a recipient would understand from the communication that—

(a)a patent exists, and

(b)a person intends to bring proceedings (whether in a court in the United Kingdom or elsewhere) against another person for infringement of the patent by—

(i)an act done in the United Kingdom, or

(ii)an act which, if done, would be done in the United Kingdom.

(2)References in this section and in section 70C to a “recipient” include, in the case of a communication directed to the public or a section of the public, references to a person to whom the communication is directed.

Textual Amendments

70AActionable threatsU.K.

(1)Subject to subsections (2) to (5), a threat of infringement proceedings made by any person is actionable by any person aggrieved by the threat.

(2)A threat of infringement proceedings is not actionable if the infringement is alleged to consist of—

(a)where the invention is a product, making a product for disposal or importing a product for disposal, or

(b)where the invention is a process, using a process.

(3)A threat of infringement proceedings is not actionable if the infringement is alleged to consist of an act which, if done, would constitute an infringement of a kind mentioned in subsection (2)(a) or (b).

(4)A threat of infringement proceedings is not actionable if the threat—

(a)is made to a person who has done, or intends to do, an act mentioned in subsection (2)(a) or (b) in relation to a product or process, and

(b)is a threat of proceedings for an infringement alleged to consist of doing anything else in relation to that product or process.

(5)A threat of infringement proceedings which is not an express threat is not actionable if it is contained in a permitted communication.

(6)In sections 70C and 70D “an actionable threat” means a threat of infringement proceedings that is actionable in accordance with this section.

Textual Amendments

70BPermitted communicationsU.K.

(1)For the purposes of section 70A(5), a communication containing a threat of infringement proceedings is a “permitted communication” if—

(a)the communication, so far as it contains information that relates to the threat, is made for a permitted purpose;

(b)all of the information that relates to the threat is information that—

(i)is necessary for that purpose (see subsection (5)(a) to (c) for some examples of necessary information), and

(ii)the person making the communication reasonably believes is true.

(2)Each of the following is a “permitted purpose”—

(a)giving notice that a patent exists;

(b)discovering whether, or by whom, a patent has been infringed by an act mentioned in section 70A(2)(a) or (b);

(c)giving notice that a person has a right in or under a patent, where another person's awareness of the right is relevant to any proceedings that may be brought in respect of the patent.

(3)The court may, having regard to the nature of the purposes listed in subsection (2)(a) to (c), treat any other purpose as a “permitted purpose” if it considers that it is in the interests of justice to do so.

(4)But the following may not be treated as a “permitted purpose”—

(a)requesting a person to cease doing, for commercial purposes, anything in relation to a product or process,

(b)requesting a person to deliver up or destroy a product, or

(c)requesting a person to give an undertaking relating to a product or process.

(5)If any of the following information is included in a communication made for a permitted purpose, it is information that is “necessary for that purpose” (see subsection (1)(b)(i))—

(a)a statement that a patent exists and is in force or that an application for a patent has been made;

(b)details of the patent, or of a right in or under the patent, which—

(i)are accurate in all material respects, and

(ii)are not misleading in any material respect; and

(c)information enabling the identification of the products or processes in respect of which it is alleged that acts infringing the patent have been carried out.

Textual Amendments

70CRemedies and defencesU.K.

(1)Proceedings in respect of an actionable threat may be brought against the person who made the threat for—

(a)a declaration that the threat is unjustified;

(b)an injunction against the continuance of the threat;

(c)damages in respect of any loss sustained by the aggrieved person by reason of the threat.

(2)In the application of subsection (1) to Scotland—

(a)“declaration” means “declarator”, and

(b)“injunction” means “interdict”.

(3)It is a defence for the person who made the threat to show that the act in respect of which proceedings were threatened constitutes (or if done would constitute) an infringement of the patent.

(4)It is a defence for the person who made the threat to show—

(a)that, despite having taken reasonable steps, the person has not identified anyone who has done an act mentioned in section 70A(2)(a) or (b) in relation to the product or the use of a process which is the subject of the threat, and

(b)that the person notified the recipient, before or at the time of making the threat, of the steps taken.

Textual Amendments

70DProfessional advisersU.K.

(1)Proceedings in respect of an actionable threat may not be brought against a professional adviser (or any person vicariously liable for the actions of that professional adviser) if the conditions in subsection (3) are met.

(2)In this section “professional adviser” means a person who, in relation to the making of the communication containing the threat—

(a)is acting in a professional capacity in providing legal services or the services of a trade mark attorney or a patent attorney, and

(b)is regulated in the provision of legal services, or the services of a trade mark attorney or a patent attorney, by one or more regulatory bodies (whether through membership of a regulatory body, the issue of a licence to practise or any other means).

(3)The conditions are that—

(a)in making the communication the professional adviser is acting on the instructions of another person, and

(b)when the communication is made the professional adviser identifies the person on whose instructions the adviser is acting.

(4)This section does not affect any liability of the person on whose instructions the professional adviser is acting.

(5)It is for a person asserting that subsection (1) applies to prove (if required) that at the material time—

(a)the person concerned was acting as a professional adviser, and

(b)the conditions in subsection (3) were met.

Textual Amendments

70ESupplementary: pending registrationU.K.

(1)In sections 70 and 70B references to a patent include references to an application for a patent that has been published under section 16.

(2)Where the threat of infringement proceedings is made after an application has been published (but before grant) the reference in section 70C(3) to “the patent” is to be treated as a reference to the patent as granted in pursuance of that application.

Textual Amendments

70FSupplementary: proceedings for delivery up etc.U.K.

In section 70(1)(b) the reference to proceedings for infringement of a patent includes a reference to proceedings for an order under section 61(1)(b) (order to deliver up or destroy patented products etc.) [F185and proceedings in the Unified Patent Court for an order for delivery up made in accordance with articles 32(1)(c) and 62(3) of the Agreement on a Unified Patent Court.]]

Textual Amendments

[F186Declaration or declarator as to non-infringement]U.K.

Textual Amendments

71Declaration or declarator as to non-infringementU.K.

(1)Without prejudice to the court’s jurisdiction to make a declaration or declarator apart from this section, a declaration or declarator that an act does not, or a proposed act would not, constitute an infringement of a patent may be made by the court or the comptroller in proceedings between the person doing or proposing to do the act and the proprietor of the patent, notwithstanding that no assertion to the contrary has been made by the proprietor, if it is shown—

(a)that that person has applied in writing to the proprietor for a written acknowledgment to the effect of the declaration or declarator claimed, and has furnished him with full particulars in writing of the act in question; and

(b)that the proprietor has refused or failed to give any such acknowledgment.

(2)Subject to section 72(5) below, a declaration made by the comptroller under this section shall have the same effect as a declaration or declarator by the court.

Revocation of patentsU.K.

72 Power to revoke patents on application.U.K.

(1)Subject to the following provisions of this Act, the court or the comptroller may F187... by order revoke a patent for an invention [F188on the application of any person (including the proprietor of the patent)] on (but only on) any of the following grounds, that is to say—

(a)the invention is not a patentable invention;

[F189(b)that the patent was granted to a person who was not entitled to be granted that patent;]

(c)the specification of the patent does not disclose the invention clearly enough and completely enough for it to be performed by a person skilled in the art;

(d)the matter disclosed in the specification of the patent extends beyond that disclosed in the application for the patent, as filed, or, if the patent was granted on a new application filed under section 8(3), 12 or 37(4) above or as mentioned in [F190section 15(9)] above, in the earlier application, as filed;

(e)the protection conferred by the patent has been extended by an amendment which should not have been allowed.

(2)An application for the revocation of a patent on the ground mentioned in subsection (1)(b) above—

(a)may only be made by a person found by the court in an action for a declaration or declarator, or found by the court or the comptroller on a reference under section 37 above, to be entitled to be granted that patent or to be granted a patent for part of the matter comprised in the specification of the patent sought to be revoked; and

(b)may not be made if that action was commenced or that reference was made after [F191the second anniversary of] the date of the grant of the patent sought to be revoked, unless it is shown that any person registered as a proprietor of the patent knew at the time of the grant or of the transfer of the patent to him that he was not entitled to the patent.

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F192

(4)An order under this section may be an order for the unconditional revocation of the patent or, where the court or the comptroller determines that one of the grounds mentioned in subsection (1) above has been established, but only so as to invalidate the patent to a limited extent, an order that the patent should be revoked unless within a specified time the specification is amended F193... to the satisfaction of the court or the comptroller, as the case may be.

[F194(4A)The reference in subsection (4) above to the specification being amended is to its being amended under section 75 below and also, in the case of a European patent (UK), to its being amended under any provision of the European Patent Convention under which the claims of the patent may be limited by amendment at the request of the proprietor.]

(5)A decision of the comptroller or on appeal from the comptroller shall not estop any party to civil proceedings in which infringement of a patent is in issue from alleging invalidity of the patent on any of the grounds referred to in subsection (1) above, whether or not any of the issues involved were decided in the said decision.

(6)Where the comptroller refuses to grant an application made to him by any person under this section, no application (otherwise than by way of appeal or by way of putting validity in issue in proceedings for infringement) may be made to the court by that person under this section in relation to the patent concerned, without the leave of the court.

(7)Where the comptroller has not disposed of an application made to him under this section, the applicant may not apply to the court under this section in respect of the patent concerned unless either—

(a)the proprietor of the patent agrees that the applicant may so apply, or

(b)the comptroller certifies in writing that it appears to him that the question whether the patent should be revoked is one which would more properly be determined by the court.

Textual Amendments

F188Words in s. 72(1) inserted (1.10.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 18; S.I. 2005/2471, art. 2(g)

F190Words in s. 72(1)(d) substituted (1.1.2005) by The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 12 (with arts. 20-23)

F193Words in s. 72(4) repealed (13.12.2007) by Patents Act 2004 (c. 16), ss. 4, 17(1), Sch. 3; S.I. 2007/3396, art. 2(f)(i)

F194S. 72(4A) inserted (13.12.2007) by Patents Act 2004 (c. 16), ss. 4, 17(1); S.I. 2007/3396, art. 2(f)

73 Comptroller’s power to revoke patents on his own initiative.U.K.

(1)If it appears to the comptroller that an invention for which a patent has been granted formed part of the state of the art by virtue only of section 2(3) above, he may on his own initiative by order revoke the patent, but shall not do so without giving the proprietor of the patent an opportunity of making any observations and of amending the specification of the patent so as to exclude any matter which formed part of the state of the art as aforesaid without contravening section 76 below.

[F195(1A)Where the comptroller issues an opinion under section 74A that section 1(1)(a) or (b) is not satisfied in relation to an invention for which there is a patent, the comptroller may revoke the patent.

(1B)The power under subsection (1A) may not be exercised before—

(a)the end of the period in which the proprietor of the patent may apply under the rules (by virtue of section 74B) for a review of the opinion, or

(b)if the proprietor applies for a review, the decision on the review is made (or, if there is an appeal against that decision, the appeal is determined).

(1C)The comptroller shall not exercise the power under subsection (1A) without giving the proprietor of the patent an opportunity to make any observations and to amend the specification of the patent without contravening section 76.]

[F196(2)If it appears to the comptroller that a patent under this Act and a European patent (UK) have been granted for the same invention having the same priority date, and that the applications for the patents were filed by the same applicant or his successor in title, he shall give the proprietor of the patent under this Act an opportunity of making observations and of amending the specification of the patent, and if the proprietor fails to satisfy the comptroller that there are not two patents in respect of the same invention, or to amend the specification so as to prevent there being two patents in respect of the same invention, the comptroller shall revoke the patent.

(3)The comptroller shall not take action under subsection (2) above before—

(a)the end of the period for filing an opposition to the European patent (UK) under the European Patent Convention, or

(b)if later, the date on which opposition proceedings are finally disposed of;

and he shall not then take any action if the decision is not to maintain the European patent or if it is amended so that there are not two patents in respect of the same invention.

(4)The comptroller shall not take action under subsection (2) above if the European patent (UK) has been surrendered under section 29(1) above before the date on which by virtue of section 25(1) above the patent under this Act is to be treated as having been granted or, if proceedings for the surrender of the European patent (UK) have been begun before that date, until those proceedings are finally disposed of; and he shall not then take any action if the decision is to accept the surrender of the European patent.]

Textual Amendments

F196S. 73(2)(3)(4) substituted for subsections (2) and (3) by Copyright, Designs and Patents Act 1988 (c. 48, SIF 67A), s. 295, Sch. 5 para. 19

Putting validity in issueU.K.

74 Proceedings in which validity of patent may be put in issue.U.K.

(1)Subject to the following provisions of this section, the validity of a patent may be put in issue—

(a)by way of defence, in proceedings for infringement of the patent under section 61 above or proceedings under section 69 above for infringement of rights conferred by the publication of an application;

(b)in proceedings [F197in respect of an actionable threat under section 70A] above;

(c)in proceedings in which a declaration in relation to the patent is sought under section 71 above;

(d)in proceedings before the court or the comptroller under section 72 above for the revocation of the patent;

(e)in proceedings under section 58 above.

(2)The validity of a patent may not be put in issue in any other proceedings and, in particular, no proceedings may be instituted (whether under this Act or otherwise) seeking only a declaration as to the validity or invalidity of a patent.

(3)The only grounds on which the validity of a patent may be put in issue (whether in proceedings for revocation under section 72 above or otherwise) are the grounds on which the patent may be revoked under that section.

(4)No determination shall be made in any proceedings mentioned in subsection (1) above on the validity of a patent which any person puts in issue on the ground mentioned in section 72(1)(b) above unless—

(a)it has been determined in entitlement proceedings commenced by that person or in the proceedings in which the validity of the patent is in issue that the patent should have been granted to him and not some other person; and

(b)except where it has been so determined in entitlement proceedings, the proceedings in which the validity of the patent is in issue are commenced [F198on or before the second anniversary of] the date of the grant of the patent or it is shown that any person registered as a proprietor of the patent knew at the time of the grant or of the transfer of the patent to him that he was not entitled to the patent.

(5)Where the validity of a patent is put in issue by way of defence or counterclaim the court or the comptroller shall, if it or he thinks it just to do so, give the defendant an opportunity to comply with the condition in subsection (4)(a) above.

(6)In subsection (4) above “entitlement proceedings”, in relation to a patent, means a reference under [F199section 37(1) above] on the ground that the patent was granted to a person not entitled to it or proceedings for a declaration or declarator that it was so granted.

(7)Where proceedings with respect to a patent are pending in the court under any provision of this Act mentioned in subsection (1) above, no proceedings may be instituted without the leave of the court before the comptroller with respect to that patent under section 61(3), 69, 71 or 72 above.

(8)It is hereby declared that for the purposes of this Act the validity of a patent is not put in issue merely because

[F200(a)]the comptroller is considering its validity in order to decide whether to revoke it under section 73 above, [F201or

(b)its validity is being considered in connection with an opinion under section 74A below or a review of such an opinion.]

Textual Amendments

F200Words in s. 74(8) renumbered (1.10.2005) as s. 74(8)(a) by Patents Act 2004 (c. 16), ss. 13(2), 17(1); S.I. 2005/2471, art. 2(c)

F201S. 74(8)(b) and preceding word inserted (1.10.2005) by Patents Act 2004 (c. 16), ss. 13(2), 17(1); S.I. 2005/2471, art. 2(c)

[F202Opinions by Patent OfficeU.K.

Textual Amendments

F202Ss. 74A, 74B and cross-heading inserted (1.10.2005) by Patents Act 2004 (c. 16), ss. 13(1), 17(1); S.I. 2005/2471, art. 2(c)

74A[F203Opinions on matters prescribed in the rules]U.K.

(1)The proprietor of a patent or any other person may request the comptroller to issue [F204an opinion on a prescribed matter in relation to the patent].

(2)Subsection (1) above applies even if the patent has expired or has been surrendered.

(3)The comptroller shall issue an opinion if requested to do so under subsection (1) above, but shall not do so—

(a)in such circumstances as may be prescribed, or

(b)if for any reason he considers it inappropriate in all the circumstances to do so.

(4)An opinion under this section shall not be binding for any purposes.

(5)An opinion under this section shall be prepared by an examiner.

(6)In relation to a decision of the comptroller whether to issue an opinion under this section—

(a)for the purposes of section 101 below, only the person making the request under subsection (1) above shall be regarded as a party to a proceeding before the comptroller; and

(b)no appeal shall lie at the instance of any other person.

Textual Amendments

F204Words in s. 74A(1) substituted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 16(1), 24(1); S.I. 2014/2330, art. 3, Sch.

74BReviews of opinions under section 74AU.K.

(1)Rules may make provision for a review before the comptroller, on an application by the proprietor or an exclusive licensee of the patent in question, of an opinion under section 74A above.

(2)The rules may, in particular—

(a)prescribe the circumstances in which, and the period within which, an application may be made;

(b)provide that, in prescribed circumstances, proceedings for a review may not be brought or continued where other proceedings have been brought;

F205(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)provide for there to be a right of appeal against a decision made on a review only in prescribed cases.]

Textual Amendments

F205S. 74B(2)(c) omitted (1.10.2014) by virtue of Intellectual Property Act 2014 (c. 18), ss. 16(2), 24(1); S.I. 2014/2330, art. 3, Sch.

General provisions as to amendment of patents and applicationsU.K.

75 Amendment of patent in infringement or revocation proceedings.U.K.

(1)In any proceedings before the court or the comptroller in which the validity of a patent [F206may be ] put in issue the court or, as the case may be, the comptroller may, subject to section 76 below, allow the proprietor of the patent to amend the specification of the patent in such manner, and subject to such terms as to advertising the proposed amendment and as to costs, expenses or otherwise, as the court or comptroller thinks fit.

(2)A person may give notice to the court or the comptroller of his opposition to an amendment proposed by the proprietor of the patent under this section, and if he does so the court or the comptroller shall notify the proprietor and consider the opposition in deciding whether the amendment or any amendment should be allowed.

(3)An amendment of a specification of a patent under this section shall have effect and be deemed always to have had effect from the grant of the patent.

(4)Where an application for an order under this section is made to the court, the applicant shall notify the comptroller, who shall be entitled to appear and be heard and shall appear if so directed by the court.

[F207(5)In considering whether or not to allow an amendment proposed under this section, the court or the comptroller shall have regard to any relevant principles applicable under the European Patent Convention.]

Textual Amendments

F206Words in s. 75(1) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 19; S.I. 2004/3205, art. 2(k) (with art. 9)

[F20876 Amendments of applications and patents not to include added matter.U.K.

(1)An application for a patent which—

(a)is made in respect of matter disclosed in an earlier application, or in the specification of a patent which has been granted, and

(b)discloses additional matter, that is, matter extending beyond that disclosed in the earlier application, as filed, or the application for the patent, as filed,

may be filed under section 8(3), 12 or 37(4) above, or as mentioned in [F209section 15(9)] above, but shall not be allowed to proceed unless it is amended so as to exclude the additional matter.

[F210(1A)Where, in relation to an application for a patent—

(a)a reference to an earlier relevant application has been filed as mentioned in section 15(1)(c)(ii) above; and

(b)the description filed under section 15(10)(b)(i) above discloses additional matter, that is, matter extending beyond that disclosed in the earlier relevant application,

the application shall not be allowed to proceed unless it is amended so as to exclude the additional matter.]

(2)No amendment of an application for a patent shall be allowed under [F211section 15A(6)] , 18(3) or 19(1) if it results in the application disclosing matter extending beyond that disclosed in the application as filed.

(3)No amendment of the specification of a patent shall be allowed under section 27(1), 73 or 75 if it—

(a)results in the specification disclosing additional matter, or

(b)extends the protection conferred by the patent.]

[F212(4)In subsection (1A) above “relevant application” has the meaning given by section 5(5) above.]

Textual Amendments

[F21376ABiotechnological inventionsU.K.

(1)Any provision of, or made under, this Act is to have effect in relation to a patent or an application for a patent which concerns a biotechnological invention, subject to the provisions of Schedule A2.

(2)Nothing in this section or Schedule A2 is to be read as affecting the application of any provision in relation to any other kind of patent or application for a patent.]

Textual Amendments

F213S. 76A inserted (28.7.2000) by S.I. 2000/2037, reg. 5

Part IIU.K. Provisions about International Conventions

European patents and patent applicationsU.K.

77 Effect of European patent (UK).U.K.

(1)Subject to the provisions of this Act, a European patent (UK) shall, as from the publication of the mention of its grant in the European Patent Bulletin, be treated for the purposes of Parts I and III of this Act as if it were a patent under this Act granted in pursuance of an application made under this Act and as if notice of the grant of the patent had, on the date of that publication, been published under section 24 above in the journal; and—

(a)the proprietor of a European patent (UK) shall accordingly as respects the United Kingdom have the same rights and remedies, subject to the same conditions, as the proprietor of a patent under this Act;

(b)references in Parts I and III of this Act to a patent shall be construed accordingly; and

(c)any statement made and any certificate filed for the purposes of the provision of the convention corresponding to section 2(4)(c) above shall be respectively treated as a statement made and written evidence filed for the purposes of the said paragraph (c).

(2)Subsection (1) above shall not affect the operation in relation to a European patent (UK) of any provisions of the European Patent Convention relating to the amendment or revocation of such a patent in proceedings before the European Patent Office.

[F214(3)Where in the case of a European patent (UK)—

(a)proceedings for infringement, or proceedings under section 58 above, have been commenced before the court or the comptroller and have not been finally disposed of, and

(b)it is established in proceedings before the European Patent Office that the patent is only partially valid,

the provisions of section 63 or, as the case may be, of subsections (7) to (9) of section 58 apply as they apply to proceedings in which the validity of a patent is put in issue and in which it is found that the patent is only partially valid.]

[F215(4)Where a European patent (UK) is amended in accordance with the European Patent Convention [F216or the Agreement on a Unified Patent Court], the amendment shall have effect for the purposes of Parts I and III of this Act as if the specification of the patent had been amended under this Act; but subject to subsection (6)(b) below.

(4A)Where a European patent (UK) is revoked in accordance with the European Patent Convention [F217or the Agreement on a Unified Patent Court], the patent shall be treated for the purposes of Parts I and III of this Act as having been revoked under this Act.]

(5)Where—

(a)under the European Patent Convention [F218or the Agreement on a Unified Patent Court] a European patent (UK) is revoked for failure to observe a time limit and is subsequently restored [F219 or is revoked by the Board of Appeal and is subsequently restored by the Enlarged Board of Appeal] [F220or is revoked and subsequently restored by the Unified Patent Court]; and

(b)between the revocation and publication of the fact that it has been restored a person begins in good faith to do an act which would, apart from section 55 above, constitute an infringement of the patent or makes in good faith effective and serious preparations to do such an act;

he shall have the rights conferred by [F221section 28A(4) and (5) above, and subsections (6) and (7) of that section shall apply accordingly.]

[F222(5A)Where, under the European Patent Convention [F223or the Agreement on a Unified Patent Court], a European patent (UK) is revoked and subsequently restored (including where it is revoked by the Board of Appeal and subsequently restored by the Enlarged Board of Appeal), any fee that would have been imposed in relation to the patent after the revocation but before the restoration is payable within the prescribed period following the restoration.]

(6)[F224While this subsection is in force—

(a)subsection (1) above shall not apply to a European patent (UK) the specification of which was published in French or German, unless a translation of the specification into English is filed at the Patent Office and the prescribed fee is paid before the end of the prescribed period;

(b)subsection (4) above shall not apply to an amendment made in French or German unless [F225a translation into English of the specification as amended] is filed at the Patent Office and the prescribed fee is paid before the end of the prescribed period.]

(7)Where [F226such a translation is not filed], the patent shall be treated as always having been void.

(8)The comptroller shall publish any translation filed at the Patent Office under subsection (6) above.

(9)Subsection (6) above shall come into force on a day appointed for the purpose by rules and shall cease to have effect on a day so appointed, without prejudice, however, to the power to bring it into force again.

[F227(10)Subsection (1) does not apply and is to be treated as never having applied in respect of a European patent (UK) whose unitary effect is registered by the European Patent Office in the Register for unitary patent protection (see, in particular, the Unitary Patent Regulation).]

Textual Amendments

F216Words in s. 77(4) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(5)(a) (with art. 3)

F217Words in s. 77(4A) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(5)(a) (with art. 3)

F218Words in s. 77(5)(a) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(5)(b)(i) (with art. 3)

F219Words in s. 77(5)(a) inserted (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 2; S.I. 2007/3396, art. 2(j)

F220Words in s. 77(5)(a) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(5)(b)(ii) (with art. 3)

F223Words in s. 77(5A) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(5)(a) (with art. 3)

F224S. 77(6) ceased to have effect (6.4.2005) by virtue of The Patents (Translations) Rules 2005 (S.I. 2005/687), art. 1rule 23

Modifications etc. (not altering text)

C16S. 77(9): 1.9.1987 appointed by S.I. 1987/288, rule 4(1) (subject to a saving in rule 4(2))

78 Effect of filing an application for a European patent (UK).U.K.

(1)Subject to the provisions of this Act, an application for a European patent (UK) having a date of filing under the European Patent Convention shall be treated for the purposes of the provisions of this Act to which this section applies as an application for a patent under this Act having that date as its date of filing and having the other incidents listed in subsection (3) below, but subject to the modifications mentioned in the following provisions of this section.

(2)This section applies to the following provisions of this Act:—

  • section 2(3) and so much of section 14(7) as relates to section 2(3);

  • section 5;

  • section 6;

  • so much of section 13(3) as relates to an application for and issue of a certificate under that subsection;

  • sections 30 to 33;

  • section 36;

  • sections 55 to 69;

  • [F228sections 70 to 70F ]

  • section 74, so far as relevant to any of the provisions mentioned above;

  • section 111; and

  • section 125.

(3)The incidents referred to in subsection (1) above in relation to an application for a European patent (UK) are as follows:—

(a)any declaration of priority made in connection with the application under the European Patent Convention shall be treated for the purposes of this Act as a declaration made under section 5(2) above;

(b)where a period of time relevant to priority is extended under that convention, the period of twelve months [F229allowed under section 5(2A)(a)] above shall be so treated as altered correspondingly;

(c)where the date of filing an application is re-dated under that convention to a later date, that date shall be so treated as the date of filing the application;

(d)the application, if published in accordance with that convention, shall, subject to subsection (7) and section 79 below, be so treated as published under section 16 above;

(e)any designation of the inventor under that convention or any statement under it indicating the origin of the right to a European patent shall be treated for the purposes of section 13(3) above as a statement filed under section 13(2) above;

(f)registration of the application in the register of European patents shall be treated as registration under this Act.

(4)Rules under section 32 above may not impose any requirements as to the registration of applications for European patents (UK) but may provide for the registration of copies of entries relating to such applications in the European register of patents.

[F230(5)Subsections (1) to (3) above shall cease to apply to an application for a European patent (UK), except as mentioned in subsection (5A) below, if—

(a)the application is refused or withdrawn or deemed to be withdrawn, or

(b)the designation of the United Kingdom in the application is withdrawn or deemed to be withdrawn,

but shall apply again if the rights of the applicant are re-established under the European Patent Convention, as from their re-establishment.

(5A)The occurrence of any of the events mentioned in subsection (5)(a) or (b) shall not affect the continued operation of section 2(3) above in relation to matter contained in an application for a European patent (UK) which by virtue of that provision has become part of the state of the art as regards other inventions.] [F231; and the occurrence of any event mentioned in subsection (5)(b) shall not prevent matter contained in an application for a European patent (UK) becoming part of the state of the art by virtue of section 2(3) above as regards other inventions where the event occurs before the publication of that application.]

[F232(6)Where, between subsections (1) to (3) above ceasing to apply to an application for a European patent (UK) and the re-establishment of the rights of the applicant, a person—

(a)begins in good faith to do an act which would constitute an infringement of the rights conferred by publication of the application if those subsections then applied, or

(b)makes in good faith effective and serious preparations to do such an act,

he shall have the right to continue to do the act or, as the case may be, to do the act, notwithstanding subsections (1) to (3) applying again and notwithstanding the grant of the patent.

(6A)Subsections (5) and (6) of section 20B above have effect for the purposes of subsection (6) above as they have effect for the purposes of that section and as if the references to subsection (4) of that section were references to subsection (6) above.

(6B)Subject to subsection (6A) above, the right conferred by subsection (6) above does not extend to granting a licence to another person to do the act in question.

(6C)Subsections (6) to (6B) above apply in relation to the use of a patented invention for the services of the Crown as they apply in relation to an infringement of the rights conferred by publication of the application (or, as the case may be, infringement of the patent).

“Patented invention” has the same meaning as in section 55 above.]

(7)While this subsection is in force, an application for a European patent (UK) published by the European Patent Office under the European Patent Convention in French or German shall be treated for the purposes of sections 55 and 69 above as published under section 16 above when a translation into English of the claims of the specification of the application has been filed at and published by the Patent Office and the prescribed fee has been paid, but an applicant—

(a)may recover a payment by virtue of section 55(5) above in respect of the use of the invention in question before publication of that translation; or

(b)may bring proceedings by virtue of section 69 above in respect of an act mentioned in that section which is done before publication of that translation;

if before that use or the doing of that act he has sent by post or delivered to the government department who made use or authorised the use of the invention, or, as the case may be, to the person alleged to have done the act, a translation into English of those claims.

(8)Subsection (7) above shall come into force on a day appointed for the purpose by rules and shall cease to have effect on a day so appointed, without prejudice, however, to the power to bring it into force again.

Textual Amendments

F229Words in s. 78(3)(b) substituted (1.1.2005) by The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 14 (with arts. 20-23)

F231Words in s. 78(5A) inserted (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 3(2); S.I. 2007/3396, art. 2(j) (with art. 3)

F232S. 78(6)-(6C) substituted for s. 78(6) (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 3(3); S.I. 2007/3396, art. 2(j)

Modifications etc. (not altering text)

C17S. 78(8): 1.9.1986 appointed by S.I. 1987/288, rule 4(1) (subject to saving in rule 4(2))

79 Operation of s. 78 in relation to certain European patent applications.U.K.

(1)Subject to the following provisions of this section, section 78 above, in its operation in relation to an international application for a patent (UK) which is treated by virtue of the European Patent Convention as an application for a European patent (UK), shall have effect as if any reference in that section to anything done in relation to the application under the European Patent Convention included a reference to the corresponding thing done under the Patent Co-operation Treaty.

(2)Any such international application which is published under that treaty shall be treated for the purposes of section 2(3) above as published only when a copy of the application has been supplied to the European Patent Office in English, French or German and the relevant fee has been paid under that convention.

(3)Any such international application which is published under that treaty in a language other than English, French or German shall, subject to section 78(7) above, be treated for the purposes of sections 55 and 69 above as published only when it is re-published in English, French or German by the European Patent Office under that convention.

80 Authentic text of European patents and patent applications.U.K.

(1)Subject to subsection (2) below, the text of a European patent or application for such a patent in the language of the proceedings, that is to say, the language in which proceedings relating to the patent or the application are to be conducted before the European Patent Office, shall be the authentic text for the purposes of any domestic proceedings, that is to say, any proceedings relating to the patent or application before the comptroller or the court.

(2)Where the language of the proceedings is French or German, a translation into English of the specification of the patent under section 77 above or of the claims of the application under section 78 above shall be treated as the authentic text for the purpose of any domestic proceedings, other than proceedings for the revocation of the patent, if the patent or application as translated into English confers protection which is narrower than that conferred by it in French or German.

(3)If any such translation results in a European patent or application conferring the narrower protection, the proprietor of or applicant for the patent may file a corrected translation with the Patent Office and, if he pays the prescribed fee within the prescribed period, the Patent Office shall publish it, but—

(a)any payment for any use of the invention which (apart from section 55 above) would have infringed the patent as correctly translated, but not as originally translated, or in the case of an application would have infringed it as aforesaid if the patent had been granted, shall not be recoverable under that section,

(b)the proprietor or applicant shall not be entitled to bring proceedings in respect of an act which infringed the patent as correctly translated, but not as originally translated, or in the case of an application would have infringed it as aforesaid if the patent had been granted,

unless before that use or the doing of the act the corrected translation has been published by the Patent Office or the proprietor or applicant has sent the corrected translation by post or delivered it to the government department who made use or authorised the use of the invention or, as the case may be, to the person alleged to have done that act.

[F233(4)Where a correction of a translation is published under subsection (3) above and before it is so published a person—

(a)begins in good faith to do an act which would not constitute an infringement of the patent as originally translated, or of the rights conferred by publication of the application as originally translated, but would do so under the amended translation, or

(b)makes in good faith effective and serious preparations to do such an act,

he shall have the right to continue to do the act or, as the case may be, to do the act, notwithstanding the publication of the corrected translation and notwithstanding the grant of the patent.

(5)Subsections (5) and (6) of section 28A above have effect for the purposes of subsection (4) above as they have effect for the purposes of that section and as if—

(a)the references to subsection (4) of that section were references to subsection (4) above;

(b)the reference to the registered proprietor of the patent included a reference to the applicant.

(6)Subject to subsection (5) above, the right conferred by subsection (4) above does not extend to granting a licence to another person to do the act in question.

(7)Subsections (4) to (6) above apply in relation to the use of a patented invention for the services of the Crown as they apply in relation to an infringement of the patent or of the rights conferred by the publication of the application.

“Patented invention” has the same meaning as in section 55 above.]

Textual Amendments

F233S. 80(4)-(7) substituted for s. 80(4) (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 4; S.I. 2007/3396, art. 2(j)

81 Conversion of European patent applications.U.K.

(1)The comptroller may direct that on compliance with the relevant conditions mentioned in subsection (2) below an application for a European patent (UK) shall be treated as an application for a patent under this Act [F234where the application is deemed to be withdrawn under the provisions of the European Patent Convention relating to the time for forwarding applications to the European Patent Office]

(2)The relevant conditions referred to above are F235...—

(a)F235. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)[F236that] ,—

(i)the applicant requests the comptroller within the relevant prescribed period (where the application was filed with the Patent Office) to give a direction under this section, or

(ii)the central industrial property office of a country which is party to the convention, other than the United Kingdom, with which the application was filed transmits within the relevant prescribed period a request that the application should be converted into an application under this Act, together with a copy of the application; and

(c)[F237that] the applicant within the relevant prescribed period pays the [F238application fee] and if the application is in a language other than English, files a translation into English of the application and of any amendments previously made in accordance with the convention.

(3)Where an application for a European patent falls to be treated as an application for a patent under this Act by virtue of a direction under this section—

(a)the date which is the date of filing the application under the European Patent Convention shall be treated as its date of filing for the purposes of this Act, but if that date is re-dated under the convention to a later date, that later date shall be treated for those purposes as the date of filing the application;

(b)if the application satisfies a requirement of the convention corresponding to any of the requirements of this Act or rules designated as formal requirements, it shall be treated as satisfying that formal requirement;

(c)any document filed with the European Patent Office under any provision of the convention corresponding to any of the following provisions of this Act, that is to say, sections 2(4)(c), 5, 13(2) and 14, or any rule made for the purposes of any of those provisions, shall be treated as filed with the Patent Office under that provision or rule; and

(d)the comptroller shall refer the application for only so much of the examination and search required by sections [F23915A,] 17 and 18 above as he considers appropriate in view of any examination and search carried out under the convention, and those sections shall apply with any necessary modifications accordingly.

Textual Amendments

F234Words in s. 81(1) substituted (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 5(2); S.I. 2007/3396, art. 2(j)

F236Word in s. 81(2)(b) substituted (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 5(3)(b); S.I. 2007/3396, art. 2(j)

F237Word in s. 81(2)(c) substituted (13.12.2007) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 5(3)(c); S.I. 2007/3396, art. 2(j)

82 Jurisdiction to determine questions as to right to a patent.U.K.

(1)The court shall not have jurisdiction to determine a question to which this section applies except in accordance with the following provisions of this section.

(2)Section 12 above shall not confer jurisdiction on the comptroller to determine a question to which this section applies except in accordance with the following provisions of this section.

(3)This section applies to a question arising before the grant of a European patent whether a person has a right to be granted a European patent, or a share in any such patent, and in this section “employer-employee question” means any such question between an employer and an employee, or their successors in title, arising out of an application for a European patent for an invention made by the employee.

(4)The court and the comptroller shall have jurisdiction to determine any question to which this section applies, other than an employer-employee question, if either of the following conditions is satisfied, that is to say—

(a)the applicant has his residence or principal place of business in the United Kingdom; or

(b)the other party claims that the patent should be granted to him and he has his residence or principal place of business in the United Kingdom and the applicant does not have his residence or principal place of business in any of the relevant contracting states;

and also if in either of those cases there is no written evidence that the parties have agreed to submit to the jurisdiction of the competent authority of a relevant contracting state other than the United Kingdom.

(5)The court and the comptroller shall have jurisdiction to determine an employer-employee question if either of the following conditions is satisfied, that is to say—

(a)the employee is mainly employed in the United Kingdom; or

(b)the employee is not mainly employed anywhere or his place of main employment cannot be determined, but the employer has a place of business in the United Kingdom to which the employee is attached (whether or not he is also attached elsewhere);

and also if in either of those cases there is no written evidence that the parties have agreed to submit to the jurisdiction of the competent authority of a relevant contracting state other than the United Kingdom or, where there is such evidence of such an agreement, if the [F240law applicable to] the contract of employment does not recognise the validity of the agreement.

(6)Without prejudice to subsections (2) to (5) above, the court and the comptroller shall have jurisdiction to determine any question to which this section applies if there is written evidence that the parties have agreed to submit to the jurisdiction of the court or the comptroller, as the case may be, and, in the case of an employer-employee question, the [F240law applicable to] the contract of employment recognises the validity of the agreement.

(7)If, after proceedings to determine a question to which this section applies have been brought before the competent authority of a relevant contracting state other than the United Kingdom, proceedings are begun before the court or a reference is made to the comptroller under section 12 above to determine that question, the court or the comptroller, as the case may be, shall stay or sist the proceedings before the court or the comptroller unless or until the competent authority of that other state either—

(a)determines to decline jurisdiction and no appeal lies from the determination or the time for appealing expires, or

(b)makes a determination which the court or the comptroller refuses to recognise under section 83 below.

(8)References in this section to the determination of a question include respectively references to—

(a)the making of a declaration or the grant of a declarator with respect to that question (in the case of the court); and

(b)the making of an order under section 12 above in relation to that question (in the case of the court or the comptroller).

(9)In this section and section 83 below “relevant contracting state” means a country which is a party to the European Patent Convention and has not exercised its right under the convention to exclude the application of the protocol to the convention known as the Protocol on Recognition.

Textual Amendments

83 Effect of patent decisions of competent authorities of other states.U.K.

(1)A determination of a question to which section 82 above applies by the competent authority of a relevant contracting state other than the United Kingdom shall, if no appeal lies from the determination or the time for appealing has expired, be recognised in the United Kingdom as if it had been made by the court or the comptroller unless the court or he refuses to recognise it under subsection (2) below.

(2)The court or the comptroller may refuse to recognise any such determination that the applicant for a European patent had no right to be granted the patent, or any share in it, if either—

(a)the applicant did not contest the proceedings in question because he was not notified of them at all or in the proper manner or was not notified of them in time for him to contest the proceedings; or

(b)the determination in the proceedings in question conflicts with the determination of the competent authority of any relevant contracting state in proceedings instituted earlier between the same parties as in the proceedings in question.

[F24183AEuropean patent with unitary effect and Unified Patent CourtU.K.

(1)Schedule A3 contains provision about the application of this Act in relation to the European patent with unitary effect.

(2)Schedule A4 contains provision about the jurisdiction of the Unified Patent Court in relation to the European patent (UK) and the European patent with unitary effect.]

Textual Amendments

84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F242U.K.

Textual Amendments

85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F243U.K.

Textual Amendments

Community patentsU.K.

Prospective

F24486 Implementation of Community Patent Convention.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Prospective

F24587 Decisions on Community Patent Convention.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F246U.K.

Textual Amendments

[F247Unified Patent Court]U.K.

Textual Amendments

F247Ss. 88A, 88B and cross-heading inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 17, 24(1); S.I. 2014/2330, art. 3, Sch.

F24888AImplementation of Agreement on a Unified Patent CourtU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F24888BDesignation as international organisation of which UK is memberU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

International applications for patentsU.K.

[F24989 Effect of international application for patent.U.K.

(1)An international application for a patent (UK) for which a date of filing has been accorded under the Patent Co-operation Treaty shall, subject to—

  • section 89A (international and national phases of application), and

  • section 89B (adaptation of provisions in relation to international application),

be treated for the purposes of Parts I and III of this Act as an application for a patent under this Act.

(2)If the application, or the designation of the United Kingdom in it, is withdrawn or (except as mentioned in subsection (3)) deemed to be withdrawn under the Treaty, it shall be treated as withdrawn under this Act.

(3)An application shall not be treated as withdrawn under this Act if it, or the designation of the United Kingdom in it, is deemed to be withdrawn under the Treaty—

(a)because of an error or omission in an institution having functions under the Treaty, or

(b)because, owing to circumstances outside the applicant’s control, a copy of the application was not received by the International Bureau before the end of the time limited for that purpose under the Treaty,

or in such other circumstances as may be prescribed.

F250(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)If an international application for a patent which designates the United Kingdom is refused a filing date under the Treaty and the comptroller determines that the refusal was caused by an error or omission in an institution having functions under the Treaty, he may direct that the application shall be treated as an application under this Act, having such date of filing as he may direct.]

Textual Amendments

[F25189A International and national phases of application.U.K.

(1)The provisions of the Patent Co-operation Treaty relating to publication, search, examination and amendment, and not those of this Act, apply to an international application for a patent (UK) during the international phase of the application.

(2)The international phase of the application means the period from the filing of the application in accordance with the Treaty until the national phase of the application begins.

(3)The national phase of the application begins—

(a)when the prescribed period expires, provided any necessary translation of the application into English has been filed at the Patent Office and the prescribed fee has been paid by the applicant; or

(b)on the applicant expressly requesting the comptroller to proceed earlier with the national phase of the application, filing at the Patent Office—

(i)a copy of the application, if none has yet been sent to the Patent Office in accordance with the Treaty, and

(ii)any necessary translation of the application into English,

and paying the prescribed fee.

For this purpose a “copy of the application” includes a copy published in accordance with the Treaty in a language other than that in which it was originally filed.

(4)If the prescribed period expires without the conditions mentioned in subsection (3)(a) being satisfied, the application shall be taken to be withdrawn.

(5)Where during the international phase the application is amended in accordance with the Treaty, the amendment shall be treated as made under this Act if—

(a)when the prescribed period expires, any necessary translation of the amendment into English has been filed at the Patent Office, or

(b)where the applicant expressly requests the comptroller to proceed earlier with the national phase of the application, there is then filed at the Patent Office—

(i)a copy of the amendment, if none has yet been sent to the Patent Office in accordance with the Treaty, and

(ii)any necessary translation of the amendment into English;

otherwise the amendment shall be disregarded.

(6)The comptroller shall on payment of the prescribed fee publish any translation filed at the Patent Office under subsection (3) or (5) above.]

Textual Amendments

[F25289B Adaptation of provisions in relation to international application.U.K.

(1)Where an international application for a patent (UK) is accorded a filing date under the Patent Co-operation Treaty—

(a)that date, or if the application is re-dated under the Treaty to a later date that later date, shall be treated as the date of filing the application under this Act,

(b)any declaration of priority made under the Treaty shall be treated as made under section 5(2) above, and where in accordance with the Treaty any extra days are allowed, the period of 12 months [F253allowed under section 5(2A)(a) above] shall be treated as altered accordingly, and

(c)any statement of the name of the inventor under the Treaty shall be treated as a statement filed under section 13(2) above.

(2)If the application, not having been published under this Act, is published in accordance with the Treaty it shall be treated, for purposes other than those mentioned in subsection (3), as published under section 16 above when the [F254national phase of the application begins or, if later, when published in accordance with the Treaty] .

(3)For the purposes of section 55 (use of invention for service of the Crown) and section 69 (infringement of rights conferred by publication) the application, not having been published under this Act, shall be treated as published under section 16 above-—

(a)if it is published in accordance with the Treaty in English, on its being so published; and

(b)if it is so published in a language other than English—

(i)on the publication of a translation of the application in accordance with section 89A(6) above, or

(ii)on the service by the applicant of a translation into English of the specification of the application of the government department concerned or, as the case may be, on the person committing the infringing act.

The reference in paragraph (b)(ii) to the service of a translation on a government department or other person is to its being sent by post or delivered to that department or person.

(4)During the international phase of the application, section 8 above does not apply (determination of questions of entitlement in relation to application under this Act) and section 12 above (determination of entitlement in relation to foreign and convention patents) applies notwithstanding the application; but after the end of the international phase, section 8 applies and section 12 does not.

(5)When the national phase begins the comptroller shall refer the application for so much of the examination and search [F255under sections 15A,] 17 and 18 above as he considers appropriate in view of any examination or search carried out under the Treaty.]

Textual Amendments

F253Words in s. 89B(1)(b) substituted (1.1.2005) by The Regulatory Reform (Patents) Order 2004 (S.I. 2004/2357), arts. 1(2), 16(2) (with arts. 20-23)

F254Words in s. 89B(2) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 8; S.I. 2004/3205, art. 2(i) (with art. 9)

Convention countriesU.K.

90 Orders in Council as to convention countries.U.K.

(1)Her Majesty may with a view to the fulfilment of a treaty or international convention, arrangement or engagement, by Order in Council declare that any country specified in the Order is a convention country for the purposes of section 5 above.

(2)Her Majesty may by Order in Council direct that any of the Channel Islands, any colony . . . F256 shall be taken to be a convention country for those purposes.

(3)For the purposes of subsection (1) above every colony, protectorate, and territory subject to the authority or under the suzerainty of another country, and every territory administered by another country under the trusteeship system of the United Nations shall be taken to be a country in the case of which a declaration may be made under that subsection.

Textual Amendments

MiscellaneousU.K.

91 Evidence of conventions and instruments under conventions.U.K.

(1)Judicial notice shall be taken of the following, that is to say—

(a)the European Patent Convention, the Community Patent Convention [F257, the Agreement on a Unified Patent Court] and the Patent Co-operation Treaty (each of which is hereafter in this section referred to as the relevant convention);

(b)any bulletin, journal or gazette published under the relevant convention and the register of European [F258patents kept under the European Patent Convention]; and

(c)any decision of, or expression of opinion by, the relevant convention court on any question arising under or in connection with the relevant convention.

(2)Any document mentioned in subsection (1)(b) above shall be admissible as evidence of any instrument or other act thereby communicated of any convention institution.

(3)Evidence of any instrument issued under the relevant convention by any such institution, including any judgment or order of the relevant convention court, or of any document in the custody of any such institution or reproducing in legible form any information in such custody otherwise than in legible form, or any entry in or extract from such a document, may be given in any legal proceedings by production of a copy certified as a true copy by an official of that institution; and any document purporting to be such a copy shall be received in evidence without proof of the official position or handwriting of the person signing the certificate.

(4)Evidence of any such instrument may also be given in any legal proceedings—

(a)by production of a copy purporting to be printed by the Queen’s Printer;

(b)where the instrument is in the custody of a government department, by production of a copy certified on behalf of the department to be a true copy by an officer of the department generally or specially authorised to do so;

and any document purporting to be such a copy as is mentioned in paragraph (b) above of an instrument in the custody of a department shall be received in evidence without proof of the official position or handwriting of the person singing the certificate, or of his authority to do so, or of the document being in the custody of the department.

(5)In any legal proceedings in Scotland evidence of any matter given in a manner authorised by this section shall be sufficient evidence of it.

(6)In this section—

  • “convention institution” means an institution established by or having functions under the relevant convention;

  • “relevant convention court” does not include a court of the United Kingdom or of any other country which is a party to the relevant convention [F259but does include the Unified Patent Court]; and

  • “legal proceedings”, in relation to the United Kingdom, includes proceedings before the comptroller.

Textual Amendments

F257Words in s. 91(1)(a) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(7)(a) (with art. 3)

F258Words in s. 91(1) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 20; S.I. 2004/3205, art. 2(k) (with art. 9)

F259Words in s. 91(6) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(7)(b) (with art. 3)

92 Obtaining evidence for proceedings under the European Patent Convention.U.K.

(1)Sections 1 to 3 of the M6Evidence (Proceedings in Other Jurisdictions) Act 1975 (provisions enabling United Kingdom courts to assist in obtaining evidence for foreign courts) shall apply for the purpose of proceedings before a relevant convention court under the European Patent Convention [F260or proceedings before the Unified Patent Court] as they apply for the purpose of civil proceedings in a court exercising jurisdiction in a country outside the United Kingdom.

(2)In the application of those sections by virtue of this section any reference to the High Court, the Court of Session or the High Court of Justice in Northern Ireland shall include a reference to the comptroller.

(3)Rules under this Act may include provision—

(a)as to the manner in which an application under section 1 of the said Act of 1975 is to be made to the comptroller for the purpose of proceedings before a relevant convention court under the European Patent Convention; and

(b)subject to the provisions of that Act, as to the circumstances in which an order can be made under section 2 of that Act on any such application.

(4)Rules of court and rules under this Act may provide for an officer of the European Patent Office to attend the hearing of an application under section 1 of that Act before the court or the comptroller, as the case may be, and examine the witnesses or request the court or comptroller to put specified questions to the witnesses.

(5)Section 1(4) of the M7Perjury Act 1911 and [F261Article 3(4) of the Perjury (Northern Ireland) Order 1979] (statements made for the purposes, among others, of judicial proceedings in a tribunal of a foreign state) shall apply in relation to proceedings before a relevant convention court under the European Patent Convention [F262or proceedings before the Unified Patent Court] as they apply to a judicial proceeding in a tribunal of a foreign state.

Textual Amendments

F260Words in s. 92(1) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(8) (with art. 3)

F262Words in s. 92(5) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(8) (with art. 3)

Marginal Citations

93 Enforcement of orders for costs.U.K.

If the European Patent Office orders the payment of costs in any proceedings before it—

(a)in England and Wales the costs shall, if [F263the county court] so orders, be recoverable [F264 under section 85 of the County Courts Act 1984] or otherwise as if they were payable under an order of that court;

(b)in Scotland the order may be enforced in like manner as [F265a recorded decree arbitral][F265an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.]

(c)in Northern Ireland the order may be enforced as if it were a money judgment.

Textual Amendments

F263Words in s. 93(a) substituted (E.W.S.) (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 52; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F265Words commencing “an extract registered” substituted (S.) for the words “a recorded decree arbitral” by Debtors (Scotland) Act 1987 (c. 18, SIF 45:2), s. 108(1), Sch. 6 paras. 1, 20

94 Communication of information to the European Patent Office, etc.U.K.

It shall not be unlawful by virtue of any enactment to communicate the following information in pursuance of the European Patent Convention to the European Patent Office or the competent authority of any country which is party to the Convention, that is to say—

(a)information in the files of the court which, in accordance with rules of court, the court authorises to be so communicated;

(b)information in the files of the Patent Office which, in accordance with rules under this Act, the comptroller authorises to be so communicated.

95 Financial provisions.U.K.

(1)There shall be paid out of moneys provided by Parliament any sums required by any Minister of the Crown or government department to meet any financial obligation of the United Kingdom under the European Patent Convention, F266... or the Patent Co-operation Treaty.

(2)Any sums received by any Minister of the Crown or government department in pursuance of [F267that convention ] or that treaty shall be paid into the Consolidated Fund.

Textual Amendments

F267Words in s. 95(2) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 21(b); S.I. 2004/3205, art. 2(k) (with art. 9)

Part IIIU.K. Miscellaneous and General

Legal ProceedingsU.K.

[F26896 The Patents Court.U.K.

(1)There shall be constituted, as part of the Chancery Division of the High Court, a Patents Court to take such proceedings relating to patents and other matters as may be prescribed by rules of court.

(2)The judges of the Patents Court shall be such of the puisne judges of the High Court as the Lord Chancellor may from time to time nominate.

(3)The foregoing provisions of this section shall not be taken as prejudicing the provisions of the M8Supreme Court of Judicature (Consolidation) Act 1925 which enable the whole jurisdiction of the High Court to be exercised by any judge of that court.

(4)Rules of court shall make provision for the appointment of scientific advisers to assist the Patents Court in proceedings under this Act and for regulating the functions of such advisers.

(5)The remuneration of any such adviser shall be determined by the Lord Chancellor with the consent of the Minister for the Civil Service and shall be defrayed out of moneys provided by Parliament.]

Textual Amendments

Marginal Citations

97 Appeals from the comptroller.U.K.

(1)Except as provided by subsection (4) below, an appeal shall lie to the Patents Court from any decision of the comptroller under this Act or rules except any of the following decisions, that is to say—

(a)a decision falling within section 14(7) above;

(b)a decision under section 16(2) above to omit matter from a specification;

(c)a decision to give directions under subsection (1) or (2) of section 22 above;

(d)a decision under rules which is excepted by rules from the right of appeal conferred by this section.

(2)For the purpose of hearing appeals under this section the Patents Court may consist of one or more judges of that court in accordance with directions given by [F269the Lord Chief Justice of England and Wales after consulting the Lord Chancellor] ; [F270and the Patents Court shall not be treated as a divisional court for the purposes of section 31(1)(f) of the M9Supreme Court of Judicature (Consolidation) Act 1925 (appeals from divisional courts).]

(3)An appeal shall not lie to the Court of Appeal from a decision of the Patents Court on appeal from a decision of the comptroller under this Act or rules—

(a)except where the comptroller’s decision was given under section 8, 12, 18, 20, 27, 37, 40, 61, 72, 73 or 75 above; or

(b)except where the ground of appeal is that the decision of the Patents Court is wrong in law;

but an appeal shall only lie to the Court of Appeal under this section if leave to appeal is given by the Patents Court or the Court of Appeal.

[F271(4)The Lord Chief Justice may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under subsection (2).]

(4)An appeal shall lie to the Court of Session from any decision of the comptroller in proceedings which under rules are held in Scotland, except any decision mentioned in paragraphs (a) to (d) of subsection (1) above.

(5)An appeal shall not lie to the Inner House of the Court of Session from a decision of an Outer House judge on appeal from a decision of the comptroller under this Act or rules—

(a)except where the comptroller’s decision was given under section 8, 12, 18, 20, 27, 37, 40, 61, 72, 73 or 75 above; or

(b)except where the ground of appeal is that the decision of the Outer House judge is wrong in law.

Textual Amendments

F270S. 97(2): from “and” onwards repealed (E.W.) by Supreme Court Act 1981 (c. 54, SIF 37), Sch. 7

Marginal Citations

98 Proceedings in Scotland.U.K.

(1)In Scotland proceedings relating primarily to patents (other than proceedings before the comptroller) shall be competent in the Court of Session only, and any jurisdiction of the sheriff court relating to patents is hereby abolished except in relation to questions which are incidental to the issue in proceedings which are otherwise competent there.

(2)The remuneration of any assessor appointed to assist the court in proceedings under this Act in the Court of Session shall be determined by the Lord President of the Court of Session with the consent of the [F272Treasury] and shall be defrayed out of moneys provided by Parliament.

Textual Amendments

F272Words substituted by virtue of S.I. 1981/1670 arts. 2(2), 3(5)

99 General powers of the court.U.K.

The court may, for the purpose of determining any question in the exercise of its original or appellate jurisdiction under this Act or any treaty or international convention to which the United Kingdom is a party, make any order or exercise any other power which the comptroller could have made or exercised for the purpose of determining that question.

[F27399A Power of Patents Court to order report.U.K.

(1)Rules of court shall make provision empowering the Patents Court in any proceedings before it under this Act, on or without the application of any party, to order the Patent Office to inquire into and report on any question of fact or opinion.

(2)Where the court makes such an order on the application of a party, the fee payable to the Patent Office shall be at such rate as may be determined in accordance with rules of court and shall be costs of the proceedings unless otherwise ordered by the court.

(3)Where the court makes such an order of its own motion, the fee payable to the Patent Office shall be at such rate as may be determined by the Lord Chancellor with the approval of the Treasury and shall be paid out of money provided by Parliament.]

Textual Amendments

[F27499B Power of Court of Session to order report.U.K.

(1)In any proceedings before the Court of Session under this Act the court may, either of its own volition or on the application of any party, order the Patent Office to inquire into and report on any question of fact or opinion.

(2)Where the court makes an order under subsection (1) above of its own volition the fee payable to the Patent Office shall be at such rate as may be determined by the Lord President of the Court of Session with the consent of the Treasury and shall be defrayed out of moneys provided by Parliament.

(3)Where the court makes an order under subsection (1) above on the application of a party, the fee payable to the Patent Office shall be at such rate as may be provided for in rules of court and shall be treated as expenses in the cause.]

Textual Amendments

100 Burden of proof in certain cases.U.K.

(1)If the invention for which a patent is granted is a process for obtaining a new product, the same product produced by a person other than the proprietor of the patent or a licensee of his shall, unless the contrary is proved, be taken in any proceedings to have been obtained by that process.

(2)In considering whether a party has discharged the burden imposed upon him by this section, the court shall not require him to disclose any manufacturing or commercial secrets if it appears to the court that it would be unreasonable to do so.

101 Exercise of comptroller’s discretionary powers.U.K.

Without prejudice to any rule of law, the comptroller shall give any party to a proceeding before him an opportunity of being heard before exercising adversely to that party any discretion vested in the comptroller by this Act or rules.

[F275102 Right of audience, &c. in proceedings before comptroller.U.K.

(1)A party to proceedings before the comptroller under this Act, or under any treaty or international convention to which the United Kingdom is a party, may appear before the comptroller in person or be represented by any person whom he desires to represent him.

(2)No offence is committed under the enactments relating to the preparation of documents by persons not legally qualified by reason only of the preparation by any person of a document, other than a deed, for use in such proceedings.

[F276(2A)For the purposes of subsection (2), as it has effect in relation to England and Wales, “the enactment relating to the preparation of documents by persons not qualified” means section 14 of the Legal Services Act 2007 (offence to carry on a reserved legal activity if not entitled) as it applies in relation to an activity which amounts to the carrying on of reserved instrument activities within the meaning of that Act.]

(3)Subsection (1) has effect subject to rules made under section 281 of the Copyright, Designs and Patents Act 1988 (power of comptroller to refuse to recognise certain agents).

(4)In its application to proceedings in relation to applications for, or otherwise in connection with, European patents, this section has effect subject to any restrictions imposed by or under the European Patent Convention.

[F277(5)Nothing in this section is to be taken to limit any entitlement to prepare deeds conferred on a registered patent attorney by virtue of the Legal Services Act 2007.]]

Textual Amendments

F279[F278102A] Right of audience, &c. in proceedings on appeal from the comptroller.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

103 Extension of privilege for communications with solicitors relating to patent proceedings.E+W+N.I.

(1)It is hereby declared that the rule of law which confers privilege from disclosure in legal proceedings in respect of communications made with a solicitor or a person acting on his behalf, or in relation to information obtained or supplied for submission to a solicitor or a person acting on his behalf, for the purpose of any pending or contemplated proceedings before a court in the United Kingdom extends to such communications so made for the purpose of any pending or contemplated—

(a)proceedings before the comptroller under this Act or any of the relevant conventions, or

(b)proceedings before the relevant convention court under any of those conventions.

(2)In this section—

  • “legal proceedings” includes proceedings before the comptroller;

  • the references to legal proceedings and pending or contemplated proceedings include references to applications for a patent or a European patent and to international applications for a patent; and

  • “the relevant conventions” means the European Patent Convention, F280... and the Patent Co-operation Treaty.

(3)This section shall not extend to Scotland.

Extent Information

E2S. 103 does not extend to Scotland, the Channel Islands nor the Colonies.

Textual Amendments

Modifications etc. (not altering text)

C18S. 103 amended (E.W.) (1.1.1992) by S.I. 1991/2684, arts. 2, 4, 5, Sch.1.

104 Privilege for communications with patent agents relating to patent proceedings.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F281

Textual Amendments

105 Extension of privilege in Scotland for communications relating to patent proceedings.U.K.

[F282(1)It is hereby declared that in Scotland the rules of law which confer privilege from disclosure in legal proceedings in respect of communications, reports or other documents (by whomsoever made) made for the purpose of any pending or contemplated proceedings in a court in the United Kingdom extend to communications, reports or other documents made for the purpose of patent proceedings.]

[F283(2)In this section—

  • “patent proceedings” means proceedings under this Act or any of the relevant conventions, before the court, the comptroller or the relevant convention court, whether contested or uncontested and including an application for a patent; and

  • “the relevant conventions” means the European Patent Convention, F284... and the Patent Co-operation Treaty.]

Textual Amendments

F282S. 105: the existing text is renumbered as s. 105(1) and the words “within the meaning of section 104 above” are repealed by Copyright, Designs and Patents Act 1988 (c. 48, SIF 67A), ss. 303(1), 303(2), Sch. 7 para. 21, Sch. 8

106 Costs and expenses in proceedings before the Court F285....U.K.

(1)In [F286proceedings to which this section applies] under section 40 above (whether on an application or on appeal to the court), the court, in determining whether to award costs or expenses to any party and what costs or expenses to award, shall have regard to all the relevant circumstances, including the financial position of the parties.

[F287(1A)This section applies to proceedings before the court (including proceedings on an appeal to the court) which are—

(a)proceedings under section 40;

(b)proceedings for infringement;

(c)proceedings [F288in respect of an actionable threat under section 70A] ; or

(d)proceedings on an application for a declaration or declarator under section 71.]

(2)If in any such proceedings the Patents Court directs that any costs of one party shall be paid by another party, the court may settle the amount of the costs by fixing a lump sum or may direct that the costs shall be taxed on a scale specified by the court, being a scale of costs prescribed by [F289rules of court] .

Textual Amendments

F285Words in s. 106 heading repealed (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 3; S.I. 2004/3205, art. 2(g) (with art. 9)

F286Words in s. 106(1) substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 14(2)(4), 17(1); S.I. 2004/3205, art. 2(e) (with art. 9)

F287S. 106(1A) inserted (1.1.2005) by Patents Act 2004 (c. 16), s. 14(3)(4), 17(1); S.I. 2004/3205, art. 2(e) (with art. 9)

107 Costs and expenses in proceedings before the comptroller.U.K.

(1)The comptroller may, in proceedings before him under this Act, by order award to any party such costs or, in Scotland, such expenses as he may consider reasonable and direct how and by what parties they are to be paid.

(2)In England and Wales any costs awarded under this section shall, if [F290the county court] so orders, be recoverable [F291 under section 85 of the County Courts Act 1984] or otherwise as if they were payable under an order of that court.

(3)In Scotland any order under this section for the payment of expenses may be enforced in like manner as [F292a recorded decree arbitral][F292an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.]

[F293(4)The comptroller may make an order for security for costs or expenses against any party to proceedings before him under this Act if—

(a)the prescribed conditions are met, and

(b)he is satisfied that it is just to make the order, having regard to all the circumstances of the case;

and in default of the required security being given the comptroller may treat the reference, application or notice in question as abandoned.]

(5)In Northern Ireland any order under this section for the payment of costs may be enforced as if it were a money judgment.

Textual Amendments

F290Words in s. 107(2) substituted (E.W.S.) (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 52; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F292Words commencing “an extract registered” substituted (S.) for the words “a recorded decree arbitral” by Debtors (Scotland) Act 1987 (c. 18, SIF 45:2), s. 108(1), Sch. 6 paras. 1, 20

F293S. 107(4) substituted (1.10.2005) by Patents Act 2004 (c. 16), ss. 15, 17(1); S.I. 2005/2471, art. 2(d) (with art. 4)

108 Licences granted by order of comptroller.U.K.

Any order for the grant of a licence under section 11, 38, 48 or 49 above shall, without prejudice to any other method of enforcement, have effect as if it were a deed, executed by the proprietor of the patent and all other necessary parties, granting a licence in accordance with the order.

OffencesU.K.

109 Falsification of register etc.U.K.

If a person makes or causes to be made a false entry in any register kept under this Act, or a writing falsely purporting to be a copy or reproduction of an entry in any such register, or produces or tenders or causes to be produced or tendered in evidence any such writing, knowing the entry or writing to be false, he shall be liable—

(a)on summary conviction, to a fine not exceeding £1,000,

(b)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

110 Unauthorised claim of patent rights.U.K.

(1)If a person falsely represents that anything disposed of by him for value is a patented product he shall, subject to the following provisions of this section, be liable on summary conviction to a fine not exceeding [F294level 3 on the standard scale]

(2)For the purposes of subsection (1) above a person who for value disposes of an article having stamped, engraved or impressed on it or otherwise applied to it the word “patent” or “patented” or anything expressing or implying that the article is a patented product, shall be taken to represent that the article is a patented product.

(3)Subsection (1) above does not apply where the representation is made in respect of a product after the patent for that product or, as the case may be, the process in question has expired or been revoked and before the end of a period which is reasonably sufficient to enable the accused to take steps to ensure that the representation is not made (or does not continue to be made).

(4)In proceedings for an offence under this section it shall be a defence for the accused to prove that he used due diligence to prevent the commission of the offence.

Textual Amendments

111 Unauthorised claim that patent has been applied for.U.K.

(1)If a person represents that a patent has been applied for in respect of any article disposed of for value by him and—

(a)no such application has been made, or

(b)any such application has been refused or withdrawn,

he shall, subject to the following provisions of this section, be liable on summary conviction to a fine not exceeding [F295level 3 on the standard scale]

(2)Subsection (1)(b) above does not apply where the representation is made (or continues to be made) before the expiry of a period which commences with the refusal or withdrawal and which is reasonably sufficient to enable the accused to take steps to ensure that the representation is not made (or does not continue to be made).

(3)For the purposes of subsection (1) above a person who for value disposes of an article having stamped, engraved or impressed on it or otherwise applied to it the words “patent applied for” or “patent pending”, or anything expressing or implying that a patent has been applied for in respect of the article, shall be taken to represent that a patent has been applied for in respect of it.

(4)In any proceedings for an offence under this section it shall be a defence for the accused to prove that he used due diligence to prevent the commission of such an offence.

Textual Amendments

112 Misuse of title “Patent Office”.U.K.

If any person uses on his place of business, or on any document issued by him, or otherwise, the words “Patent Office” or any other words suggesting that his place of business is, or is officially connected with, the Patent Office, he shall be liable on summary conviction to a fine not exceeding [F296level 4 on the standard scale]

Textual Amendments

Modifications etc. (not altering text)

C20S. 112 amended (3.1.1995) by 1994 c. 40, ss. 76, 82(2)(f), Sch. 16 para. 4

113 Offences by corporations.U.K.

(1)Where an offence under this Act which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, a director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(2)Where the affairs of a body corporate are managed by its members, subsection (1) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

114. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F297U.K.

Textual Amendments

115. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F298U.K.

Textual Amendments

Immunity of departmentU.K.

116 Immunity of department as regards official acts.U.K.

Neither the Secretary of State nor any officer of his—

(a)shall be taken to warrant the validity of any patent granted under this Act or any treaty or international convention to which the United Kingdom is a party; or

(b)shall incur any liability by reason of or in connection with any examination or investigation required or authorised by this Act or any such treaty or convention, or any report or other proceedings consequent on any such examination or investigation.

Administrative provisionsU.K.

117 Correction of errors in patents and applications.U.K.

(1)The comptroller may, subject to any provision of rules, correct any error of translation or transcription, clerical error or mistake in any specification of a patent or application for a patent or any document filed in connection with a patent or such an application.

(2)Where the comptroller is requested to correct such an error or mistake, any person may in accordance with rules give the comptroller notice of opposition to the request and the comptroller shall determine the matter.

[F299(3)Where the comptroller is requested to correct an error or mistake in a withdrawal of an application for a patent, and—

(a)the application was published under section 16 above; and

(b)details of the withdrawal were published by the comptroller;

the comptroller shall publish notice of such a request in the prescribed manner.

(4)Where the comptroller publishes a notice under subsection (3) above, the comptroller may only correct an error or mistake under subsection (1) above by order.]

Textual Amendments

[F300 117AEffect of resuscitating a withdrawn application under section 117U.K.

(1)Where—

(a)the comptroller is requested to correct an error or mistake in a withdrawal of an application for a patent; and

(b)an application has been resuscitated in accordance with that request,

the effect of that resuscitation is as follows.

(2)Anything done under or in relation to the application during the period between the application being withdrawn and its resuscitation shall be treated as valid.

(3)If the comptroller has published notice of the request as mentioned in section 117(3) above, anything done during that period which would have constituted an infringement of the rights conferred by publication of the application if the application had not been withdrawn shall be treated as an infringement of those rights if it was a continuation or repetition of an earlier act infringing those rights.

(4)If the comptroller has published notice of the request as mentioned in section 117(3) above and, after the withdrawal of the application and before publication of the notice, a person—

(a)began in good faith to do an act which would have constituted an infringement of the rights conferred by publication of the application if the withdrawal had not taken place, or

(b)made in good faith effective and serious preparations to do such an act,

he has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the resuscitation of the application and the grant of the patent; but this right does not extend to granting a licence to another person to do the act.

(5)If the act was done, or the preparations were made, in the course of a business, the person entitled to the right conferred by subsection (4) above may—

(a)authorise the doing of that act by any partners of his for the time being in that business, and

(b)assign that right, or transmit it on death (or in the case of a body corporate on its dissolution), to any person who acquires that part of the business in the course of which the act was done or the preparations were made.

(6)Where a product is disposed of to another in exercise of a right conferred by subsection (4) or (5) above, that other and any person claiming through him may deal with the product in the same way as if it had been disposed of by the applicant.]

[F301(7)The above provisions apply in relation to the use of a patented invention for the services of the Crown as they apply in relation to infringement of the rights conferred by publication of the application for a patent (or, as the case may be, infringement of the patent).

“Patented invention” has the same meaning as in section 55 above.]

Textual Amendments

F301S. 117A(7) inserted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(2), Sch. 2 para. 23 (see S.I. 2004/2357, art. 1(2))

[F300117BExtension of time limits specified by comptrollerU.K.

(1)Subsection (2) below applies in relation to a period if it is specified by the comptroller in connection with an application for a patent, or a patent.

(2)Subject to subsections (4) and (5) below, the comptroller shall extend a period to which this subsection applies if—

(a)the applicant or the proprietor of the patent requests him to do so; and

(b)the request complies with the relevant requirements of rules.

(3)An extension of a period under subsection (2) above expires—

(a)at the end of the period prescribed for the purposes of this subsection, or

(b)if sooner, at the end of the period prescribed for the purposes of section 20 above.

(4)If a period has already been extended under subsection (2) above—

(a)that subsection does not apply in relation to it again;

(b)the comptroller may further extend the period subject to such conditions as he thinks fit.

(5)Subsection (2) above does not apply to a period specified in relation to proceedings before the comptroller.]

Textual Amendments

118 Information about patent applications and patents, and inspection of documents.U.K.

(1)After publication of an application for a patent in accordance with section 16 above the comptroller shall on a request being made to him in the prescribed manner and on payment of the prescribed fee (if any) give the person making the request such information, and permit him to inspect such documents, relating to the application or to any patent granted in pursuance of the application as may be specified in the request, subject, however, to any prescribed restrictions.

(2)Subject to the following provisions of this section, until an application for a patent is so published documents or information constituting or relating to the application shall not, without the consent of the applicant, be published or communicated to any person by the comptroller.

(3)Subsection (2) above shall not prevent the comptroller from—

(a)sending the European Patent Office information which it is his duty to send that office in accordance with any provision of the European Patent Convention;

[F302(aa)sending any patent office outside the United Kingdom such information about unpublished applications for patents as that office requests;] or

(b)publishing or communicating to others any prescribed bibliographic information about an unpublished application for a patent;

nor shall that subsection prevent the Secretary of State from inspecting or authorising the inspection of an application for a patent or any connected documents under [F303section 22(6) above].

[F304(3A)Information may not be sent to a patent office in reliance on subsection (3)(aa) otherwise than in accordance with the working arrangements that the comptroller has made for that purpose with that office.

(3B)Those arrangements must include provision for ensuring that the confidentiality of information of the kind referred to in subsection (3)(aa) sent by the comptroller to the patent office in question is protected.]

[F305(3C)The reference in subsection (3)(aa) to a patent office is to an organisation which carries out, in relation to patents, functions of the kind carried out at the Patent Office.]

(4)Where a person is notified that an application for a patent has been made, but not published in accordance with section 16 above, and that the applicant will, if the patent is granted, bring proceedings against that person in the event of his doing an act specified in the notification after the application is so published, that person may make a request under subsection (1) above, notwithstanding that the application has not been published, and that subsection shall apply accordingly.

(5)Where an application for a patent is filed, but not published, and a new application is filed in respect of any part of the subject-matter of the earlier application (either in accordance with rules or in pursuance of an order under section 8 above) and is published, any person may make a request under subsection (1) above relating to the earlier application and on payment of the prescribed fee the comptroller shall give him such information and permit him to inspect such documents as could have been given or inspected if the earlier application had been published.

Textual Amendments

F306118A.Copyright in documents made available electronically for inspection under section 118(1)U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

119 Service by post.U.K.

Any notice required or authorised to be given by this Act or rules, and any application or other document so authorised or required to be made or filed, may be given, made or filed by post.

120 Hours of business and excluded days.U.K.

(1)[F307 The comptroller may give directions specifying ] the hour at which the Patent Office shall be taken to be closed on any day for purposes of the transaction by the public of business under this Act or of any class of such business, [F308 and the directions may specify ] days as excluded days for any such purposes.

(2)Any business done under this Act on any day after the hour so specified in relation to business of that class, or on a day which is an excluded day in relation to business of that class, shall be taken to have been done on the next following day not being an excluded day; and where the time for doing anything under this Act expires on an excluded day that time shall be extended to the next following day not being an excluded day.

[F309(3)Directions under this section shall be published in the prescribed manner.]

Textual Amendments

F307Words in s. 120(1) substituted (22.9.2004) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 24(2)(a); S.I. 2004/2177, art. 2 (with arts. 6, 8)

F308Words in s. 120(1) substituted (22.9.2004) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 24(2)(b); S.I. 2004/2177, art. 2 (with arts. 6, 8)

121 Comptroller’s annual report.U.K.

Before [F3101st December] in every [F311financial year ] the comptroller shall cause to be laid before both Houses of Parliament a report with respect to the execution of this Act and the discharge of his functions under the European Patent Convention, F312... and the Patent Co-operation Treaty, and every such report shall include an account of all fees, salaries and allowances, and other money received and paid by him under this Act, [F313that convention] and that treaty during the previous [F311financial year] .

Textual Amendments

F310Words in s. 121 substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 25(a); S.I. 2004/3205, art. 2(k) (with art. 9)

F311Words in s. 121 substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 25(b); S.I. 2004/3205, art. 2(k) (with art. 9)

F313Words in s. 121 substituted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 2 para. 25(d); S.I. 2004/3205, art. 2(k) (with art. 9)

Modifications etc. (not altering text)

C21S. 121 amended (31.10.1994) by 1994 c. 26, s. 71(1); S.I. 1994/2550, art. 2

SupplementalU.K.

122 Crown’s right to sell forfeited articles.U.K.

Nothing in this Act affects the right of the Crown or any person deriving title directly or indirectly from the Crown to dispose of or use articles forfeited under the laws relating to customs or excise.

123 Rules.U.K.

(1)The Secretary of State may make such rules as he thinks expedient for regulating the business of the Patent Office in relation to patents and applications for patents (including European patents, applications for European patents and international applications for patents) and for regulating all matters placed by this Act under the direction or control of the comptroller; and in this Act, except so far as the context otherwise requires, “prescribed” means prescribed by rules and “rules” means rules made under this section.

(2)Without prejudice to the generality of subsection (1) above, rules may make provision—

(a)prescribing the form and contents of applications for patents and other documents which may be filed at the Patent Office and requiring copies to be furnished of any such documents;

(b)regulating the procedure to be followed in connection with any proceeding or other matter before the comptroller or the Patent Office and authorising the rectification of irregularities of procedure;

(c)requiring fees to be paid in connection with any such proceeding or matter or in connection with the provision of any service by the Patent Office and providing for the remission of fees in the prescribed circumstances;

(d)regulating the mode of giving evidence in any such proceeding and empowering the comptroller to compel the attendance of witnesses and the discovery of and production of documents;

(e)requiring the comptroller to advertise any proposed amendments of patents and any other prescribed matters, including any prescribed steps in any such proceeding;

(f)requiring the comptroller to hold proceedings in Scotland in such circumstances as may be specified in the rules where there is more than one party to proceedings under section 8, 12, 37, 40(1) or (2), 41(8), 61(3), 71 or 72 above;

(g)providing for the appointment of advisers to assist the comptroller in any proceeding before him;

(h)prescribing time limits for doing anything required to be done in connection with any such proceeding by this Act or the rules and providing for the alteration of any period of time specified in this Act or the rules;

[F314(i)giving effect to an inventor’s rights to be mentioned conferred by section 13, and providing for an inventor’s waiver of any such right to be subject to acceptance by the comptroller;]

(j)without prejudice to any other provision of this Act, requiring and regulating the translation of documents in connection with an application for a patent or a European patent or an international application for a patent and the filing and authentication of any such translations;

(k). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F315

(l)providing for the publication and sale of documents in the Patent Office and of information about such documents.

[F316(2A)The comptroller may set out in directions any forms the use of which is required by rules; and any such directions shall be published in the prescribed manner.]

(3)Rules may make different provision for different cases.

[F317(3A)It is hereby declared that rules—

(a)authorising the rectification of irregularities of procedure, or

(b)providing for the alteration of any period of time,

may authorise the comptroller to extend or further extend any period notwithstanding that the period has already expired.]

F318(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F319(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Rules shall provide for the publication by the comptroller of a journal (in this Act referred to as “the journal”) containing particulars of applications for and grants of patents, and of other proceedings under this Act.

(7)Rules shall require or authorise the comptroller to make arrangements for the publication of reports of cases relating to patents, trade marks [F320registered designs or design right] decided by him and of cases relating to patents (whether under this Act or otherwise) trade marks, registered designs [F321, copyright and design right] decided by any court or body (whether in the United Kingdom or elsewhere).

Textual Amendments

F317Words substituted by virtue of S.I. 1981/1670 arts. 2, 3(5)

Modifications etc. (not altering text)

C23S. 123(1) amended (2.1.1993) by S.I. 1992/3091, reg. 4(1)

C24S. 123(2)-(7) applied (10.12.1992) by S.I 1992/3091, reg. 4(2)

124 Rules, regulations and orders; supplementary.U.K.

(1)Any power conferred on the Secretary of State by this Act to make rules, regulations or orders shall be exercisable by statutory instrument.

(2)Any Order in Council and any statutory instrument containing an order, rules or regulations under this Act, other than an order or rule required to be laid before Parliament in draft or an order under section 132(5) below, shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3)Any Order in Council or order under any provision of this Act may be varied or revoked by a subsequent order.

Modifications etc. (not altering text)

C26S. 124 applied (10.12.1992) by S.I. 1992/3091, reg. 4(2)

[F322124A.Use of electronic communicationsU.K.

(1)The comptroller may [F323give] directions as to the form and manner in which documents to be delivered to the comptroller—

(a)in electronic form; or

(b)using electronic communications,

are to be delivered to him.

(2)A direction under subsection (1) may provide that in order for a document to be delivered in compliance with the direction it shall be accompanied by one or more additional documents specified in the direction.

(3)[F324Subject to subsections (14) and (15), if a document to which a direction under subsection (1) or (2)] applies is delivered to the comptroller in a form or manner which does not comply with the direction the comptroller may treat the document as not having been delivered.

(4)Subsection (5) applies in relation to a case where—

(a)a document is delivered using electronic communications, and

(b)there is a requirement for a fee to accompany the document.

(5)The comptroller may [F325give] directions specifying—

(a)how the fee shall be paid; [F326and]

(b)when the fee shall be deemed to have been paid.

(6)The comptroller may [F327give] directions specifying that a person who delivers a document to the comptroller in electronic form or using electronic communications cannot treat the document as having been delivered unless its delivery has been acknowledged.

(7)The comptroller may [F328give] directions specifying how a time of delivery is to be accorded to a document delivered to him in electronic form or using electronic communications.

(8)A direction under this section may be given—

(a)generally;

(b)in relation to a description of cases specified in the direction;

(c)in relation to a particular person or persons.

F329(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F329(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)A direction under this section may be varied or revoked by a subsequent direction under this section.

F330(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F331(13)The delivery using electronic communications to any person by the comptroller of any document is deemed to be effected, unless the comptroller has otherwise specified, by transmitting an electronic communication containing the document to an address provided or made available to the comptroller by that person as an address of his for the receipt of electronic communications; and unless the contrary is proved such delivery is deemed to be effected immediately upon the transmission of the communication.

(14)A requirement of this Act that something must be done in the prescribed manner is satisfied in the case of something that is done—

(a)using a document in electronic form, or

(b)using electronic communications,

only if the directions under this section that apply to the manner in which it is done are complied with.

(15)In the case of an application made as mentioned in subsection (14)(a) or (b) above, a reference in this Act to the application not having been made in compliance with rules or requirements of this Act includes a reference to its not having been made in compliance with any applicable directions under this section.

(16)This section applies—

(a)to delivery at, in, with or to the Patent Office as it applies to delivery to the comptroller; and

(b)to delivery by the Patent Office as it applies to delivery by the comptroller.]]

Textual Amendments

125 Extent of invention.U.K.

(1)For the purposes of this Act an invention for a patent for which an application has been made or for which a patent has been granted shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the application or patent, as the case may be, as interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent or application for a patent shall be determined accordingly.

(2)It is hereby declared for the avoidance of doubt that where more than one invention is specified in any such claim, each invention may have a different priority date under section 5 above.

(3)The Protocol on the Interpretation of Article 69 of the European Patent Convention (which Article contains a provision corresponding to subsection (1) above) shall, as for the time being in force, apply for the purposes of subsection (1) above as it applies for the purposes of that Article.

[F332125A Disclosure of invention by specification: availablity of samples of [F333biological material].U.K.

(1)Provision may be made by rules prescribing the circumstances in which the specification of an application for a patent, or of a patent, for an invention which [F334involves the use of or concerns biological material] is to be treated as disclosing the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art.

(2)The rules may in particular require the applicant or patentee—

(a)to take such steps as may be prescribed for the purposes of making available to the public samples of the [F334biological material], and

(b)not to impose or maintain restrictions on the uses to which such samples may be put, except as may be prescribed.

(3)The rules may provide that, in such cases as may be prescribed, samples need only be made available to such persons or descriptions of persons as may be prescribed; and the rules may identify a description of persons by reference to whether the comptroller has given his certificate as to any matter.

(4)An application for revocation of the patent under section 72(1)(c) above may be made if any of the requirements of the rules cease to be complied with.]

Textual Amendments

F333Words in sidenote to s. 125A substituted (28.7.2000) by S.I. 2000/2037, reg. 6(2)

F334Words in s. 125A(1)(2)(a) substituted (28.7.2000) by S.I. 2000/2037, reg. 6(3)(4)

F335126. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F335S. 126 repealed (28.7.2000 with effect as mentioned in Sch. 40 Pt. III Note 1 of the amending Act) by 2000 c. 17, s. 156, Sch. 40 Pt. III

127 Existing patents and applications.U.K.

(1)No application for a patent may be made under the 1949 Act on or after the appointed day.

(2)Schedule 1 to this Act shall have effect for securing that certain provisions of the 1949 Act shall continue to apply on and after the appointed day to—

(a)a patent granted before that day;

(b)an application for a patent which is filed before that day, and which is accompanied by a complete specification or in respect of which a complete specification is filed before that day;

(c)a patent granted in pursuance of such an application.

(3)Schedule 2 to this Act shall have effect for securing that (subject to the provisions of that Schedule) certain provisions of this Act shall apply on and after the appointed day to any patent and application to which subsection (2) above relates, but, except as provided by the following provisions of this Act, this Act shall not apply to any such patent or application.

(4)An application for a patent which is made before the appointed day, but which does not comply with subsection (2)(b) above, shall be taken to have been abandoned immediately before that day, but, notwithstanding anything in section 5(3) above, the application may nevertheless serve to establish a priority date in relation to a later application for a patent under this Act if the date of filing the abandoned application falls within the period of fifteen months immediately preceding the filing of the later application.

(5)Schedule 3 to this Act shall have effect for repealing certain provisions of the 1949 Act.

(6)The transitional provisions and savings in Schedule 4 to this Act shall have effect.

(7)In Schedules 1 to 4 to this Act “existing patent” means a patent mentioned in subsection (2)(a) and (c) above, “existing application” means an application mentioned in subsection (2)(b) above, and expressions used in the 1949 Act and those Schedules have the same meanings in those Schedules as in that Act.

Modifications etc. (not altering text)

C28The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

128 Priorities between patents and applications under 1949 Act and this Act.U.K.

(1)The following provisions of this section shall have effect for the purpose of resolving questions of priority arising between patents and applications for patents under the 1949 Act and patents and applications for patents under this Act.

(2)A complete specification under the 1949 Act shall be treated for the purposes of sections 2(3) and 5(2) above—

(a)if published under that Act, as a published application for a patent under this Act;

(b)if it has a date of filing under that Act, as an application for a patent under this Act which has a date of filing under this Act;

and in the said section 2(3), as it applies by virtue of this subsection in relation to any such specification, the words “both as filed and” shall be omitted.

(3)In section 8(1), (2) and (4) of the 1949 Act (search for anticipation by prior claim) the references to any claim of a complete specification, other than the applicant’s, published and filed as mentioned in section 8(1) shall include references to any claim contained in an application made and published under this Act or in the specification of a patent granted under this Act, being a claim in respect of an invention having a priority date earlier than the date of filing the complete specification under the 1949 Act.

(4)In section 32(1)(a) of the 1949 Act (which specifies, as one of the grounds of revoking a patent, that the invention was claimed in a valid claim of earlier priority date contained in the complete specification of another patent), the reference to such a claim shall include a reference to a claim contained in the specification of a patent granted under this Act (a new claim) which satisfies the following conditions:—

(a)the new claim must be in respect of an invention having an earlier priority date than that of the relevant claim of the complete specification of the patent sought to be revoked; and

(b)the patent containing the new claim must be wholly valid or be valid in those respects which have a bearing on that relevant claim.

(5)For the purposes of this section and the provisions of the 1949 Act mentioned in this section the date of filing an application for a patent under that Act and the priority date of a claim of a complete specification under that Act shall be determined in accordance with the provisions of that Act, and the priority date of an invention which is the subject of a patent or application for a patent under this Act shall be determined in accordance with the provisions of this Act.

[F337128A. [F336Compulsory pharmaceutical] licencesU.K.

(1)In this Act [F338a “compulsory pharmaceutical] licence” means a compulsory licence granted under Regulation (EC) No 816/2006 of the European Parliament and of the Council of 17 May 2006 on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems (referred to in this Act as “the Compulsory Licensing Regulation”).

(2)In the application to [F339compulsory pharmaceutical] licences of the provisions of this Act listed in subsection (3)—

(a)references to a licence under a patent,

(b)references to a right under a patent, and

(c)references to a proprietary interest under a patent,

include [F340a compulsory pharmaceutical] licence.

(3)The provisions referred to in subsection (2) are—

  • sections 32 and 33 (registration of patents etc);

  • section 37 (determination of right to patent after grant);

  • section 38 (effect of transfer etc of patent under section 37), apart from subsection (2) and subsections (3) to (5) so far as relating to subsection (2);

  • section 41 (amount of compensation);

  • section 46(2) (notice of application for entry that licences are available as of right);

  • section 57(1) and (2) (rights of third parties in respect of Crown use).

(4)In the following provisions references to this Act include the Compulsory Licensing Regulation—

  • sections 97 to 99B, 101 to 103, 105 and 107 (legal proceedings);

  • section 119 (service by post);

  • section 120 (hours of business and excluded days);

  • section 121 (comptroller’s annual report);

  • section 123 (rules);

  • section 124A (use of electronic communications);

  • section 130(8) (disapplication of Part 1 of Arbitration Act 1996).

(5)In section 108 (licences granted by order of comptroller) the reference to a licence under section 11, 38, 48 or 49 includes [F341a compulsory pharmaceutical] licence.

(6)References in this Act to the Compulsory Licensing Regulation are to that Regulation as amended from time to time.

Textual Amendments

F336Words in s. 128A heading substituted (31.12.2020) by S.I. 2019/801, reg. 3(a) (as substituted by The Intellectual Property (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1050), regs. 1(2), 27)

F338Words in s. 128A(1) substituted (31.12.2020) by S.I. 2019/801, reg. 3(b) (as substituted by The Intellectual Property (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1050), regs. 1(2), 27)

128B.Supplementary protection certificatesU.K.

(1)Schedule 4A contains provision about the application of this Act in relation to supplementary protection certificates and other provision about such certificates.

(2)In this Act a “supplementary protection certificate” means a certificate issued under—

(a)[F342Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6th May 2009 concerning the supplementary protection certificate for medicinal products], or

(b)Regulation (EC) No 1610/96 of the European Parliament and of the Council of 23 July 1996 concerning the creation of a supplementary protection certificate for plant protection products.]

Textual Amendments

129 Application of Act to Crown.U.K.

—This Act does not affect Her Majesty in her private capacity but, subject to that, it binds the Crown.

130 Interpretation.U.K.

(1)In this Act, except so far as the context otherwise requires—

  • [F343“Agreement on a Unified Patent Court” means the Agreement on a Unified Patent Court signed at Brussels on 19th February 2013;]

  • [F344“application fee” means the fee prescribed for the purposes of section 14(1A) above;]

  • “application for a European patent (UK)” and [F345(subject to subsection (4A) below)] “international application for a patent (UK)” each mean an application of the relevant description which, on its date of filing, designates the United Kingdom;

  • “appointed day”, in any provision of this Act, means the day appointed under section 132 below for the coming into operation of that provision;

  • [F346“biological material” means any material containing genetic information and capable of reproducing itself or being reproduced in a biological system;

  • F346“biotechnological invention” means an invention which concerns a product consisting of or containing biological material or a process by means of which biological material is produced, processed or used;

  • F347...

  • “comptroller” means the Comptroller-General of Patents, Designs and Trade Marks;

  • “Convention on International Exhibitions” means the Convention relating to International Exhibitions signed in Paris on 22nd November 1928, as amended or supplemented by any protocol to that convention which is for the time being in force;

  • “court” means

    (a)

    [F348as respects England and Wales, the High [F349Court;]]

    (b)

    as respects Scotland, the Court of Session;

    (c)

    as respects Northern Ireland, the High Court in Northern Ireland;

    [F350or the Unified Patent Court, as respects the jurisdiction which it has by virtue of Schedule A4;]

  • “date of filing” means—

    (a)

    in relation to an application for a patent made under this Act, the date which is the date of filing that application by virtue of section 15 above; and

    (b)

    in relation to any other application, the date which, under the law of the country where the application was made or in accordance with the terms of a treaty or convention to which that country is a party, is to be treated as the date of filing that application or is equivalent to the date of filing an application in that country (whatever the outcome of the application);

  • “designate” in relation to an application or a patent, means designate the country or countries (in pursuance of the European Patent Convention or the Patent Co-operation Treaty) in which protection is sought for the invention which is the subject of the application or patent [F351and includes a reference to a country being treated as designated in pursuance of the convention or treaty];

  • [F352“electronic communication” has the same meaning as in the Electronic Communications Act 2000;]

  • “employee” means a person who works or (where the employment has ceased) worked under a contract of employment or in employment under or for the purposes of a government department [F353or a person who serves (or served) in the naval, military or air forces of the Crown];

  • “employer”, in relation to an employee, means the person by whom the employee is or was employed;

  • “European Patent Convention” means the Convention on the Grant of European Patents, “European patent” means a patent granted under that convention, “European patent (UK)” means a European patent designating the United Kingdom, “European Patent Bulletin” means the bulletin of that name published under that convention, and “European Patent Office” means the office of that name established by that convention;

  • [F343“European patent with unitary effect” has the same meaning as in Article 2 of the Unitary Patent Regulation;]

  • “exclusive licence” means a licence from the proprietor of or applicant for a patent conferring on the licensee, or on him and persons authorised by him, to the exclusion of all other persons (including the proprietor or applicant), any right in respect of the invention to which the patent or application relates, and “exclusive licensee” and “non-exclusive licence” shall be construed accordingly;

  • F344...

  • “formal requirements” means those requirements designated as such by rules made for the purposes of [F354section 15A] above;

  • “international application for a patent” means an application made under the Patent Co-operation Treaty;

  • “International Bureau” means the secretariat of the World Intellectual Property Organization established by a convention signed at Stockholm on 14th July 1967;

  • “international exhibition” means an official or officially recognised international exhibition falling within the terms of the Convention on International Exhibitions or falling within the terms of any subsequent treaty or convention replacing that convention;

  • “inventor” has the meaning assigned to it by section 7 above;

  • “journal” has the meaning assigned to it by section 123(6) above;

  • “mortgage”, when used as a noun, includes a charge for securing money or money’s worth and, when used as a verb, shall be construed accordingly;

  • M10“1949 Act” means the Patents Act 1949;

  • “patent” means a patent under this Act;

  • F355. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ;

  • “Patent Co-operation Treaty” means the treaty of that name signed at Washington on 19th June 1970;

  • “patented invention” means an invention for which a patent is granted and “patented process” shall be construed accordingly;

  • “patented product” means a product which is a patented invention or, in relation to a patented process, a product obtained directly by means of the process or to which the process has been applied;

  • “prescribed” and “rules” have the meanings assigned to them by section 123 above;

  • “priority date” means the date determined as such under section 5 above;

  • “published” means made available to the public (whether in the United Kingdom or elsewhere) and a document shall be taken to be published under any provision of this Act if it can be inspected as of right at any place in the United Kingdom by members of the public, whether on payment of a fee or not; and “republished” shall be construed accordingly;

  • “register” and cognate expressions have the meanings assigned to them by section 32 above;

  • F356“relevant convention court”, in relation to any proceedings under the European Patent Convention, ... or the Patent Co-operation Treaty, means that court or other body which under that convention or treaty has jurisdiction over those proceedings, including (where it has such jurisdiction) any department of the European Patent Office;

  • “right”, in relation to any patent or application, includes an interest in the patent or application and, without prejudice to the foregoing, any reference to a right in a patent includes a reference to a share in the patent;

  • “search fee” means the fee prescribed for the purposes of [F357section 17(1) above];

  • “services of the Crown” and “use for the services of the Crown” have the meanings assigned to them by section 56(2) above, including, as respects any period of emergency within the meaning of section 59 above, the meanings assigned to them by the said section 59.

  • [F343“Unified Patent Court” means the court established under the Agreement on a Unified Patent Court;]

  • [F343“Unitary Patent Regulation” means Regulation (EU) No 1257/2012 of the European Parliament and of the Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection.]

(2)Rules may provide for stating in the journal that an exhibition falls within the definition of international exhibition in subsection (1) above and any such statement shall be conclusive evidence that the exhibition falls within that definition.

(3)For the purposes of this Act matter shall be taken to have been disclosed in any relevant application within the meaning of section 5 above or in the specification of a patent if it was either claimed or disclosed (otherwise than by way of disclaimer or acknowledgment of prior art) in that application or specification.

(4)References in this Act to an application for a patent, as filed, are references to such an application in the state it was on the date of filing.

[F358(4A)An international application for a patent is not, by reason of being treated by virtue of the European Patent Convention as an application for a European patent (UK), to be treated also as an international application for a patent (UK).]

(5)References in this Act to an application for a patent being published are references to its being published under section 16 above.

[F359(5A)References in this Act to the amendment of a patent or its specification (whether under this Act or by the European Patent Office) include, in particular, limitation of the claims (as interpreted by the description and any drawings referred to in the description or claims).]

(6)References in this Act to any of the following conventions, that is to say—

(a)The European Patent Convention;

(b)The Community Patent Convention;

(c)The Patent Co-operation Treaty;

[F360(d)The Agreement on a Unified Patent Court;]

are references to that convention or any other international convention or agreement replacing it, as amended or supplemented by any convention or international agreement (including in either case any protocol or annex), or in accordance with the terms of any such convention or agreement, and include references to any instrument made under any such convention or agreement.

(7)Whereas by a resolution made on the signature of the Community Patent Convention the governments of the member states of the European Economic Community resolved to adjust their laws relating to patents so as (among other things) to bring those laws into conformity with the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty, it is hereby declared that the following provisions of this Act, that is to say, sections 1(1) to (4), 2 to 6, 14(3), (5) and (6), 37(5), 54, 60, 69, 72(1) and (2), 74(4), 82, 83, . . . F361 100 and 125, are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty have in the territories to which those Conventions apply.

(8)[F362Nothing in any of sections 1 to 15 of and schedule 1 to the Arbitration (Scotland) Act 2010 or] [F363Part I of the Arbitration Act 1996] [F364shall not apply] [F364applies] to any proceedings before the comptroller under this Act.

(9)Except so far as the context otherwise requires, any reference in this Act to any enactment shall be construed as a reference to that enactment as amended or extended by or under any other enactment, including this Act.]

Textual Amendments

F343Words in s. 130(1) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(9)(a) (with art. 3)

F345Words in s. 130(1) inserted (1.1.2005) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 9(2)(a); S.I. 2004/3205, art. 2(i) (with art. 9)

F346S. 130: definitions of “biological material” and “biotechnological invention” inserted (28.7.2000) by S.I. 2000/2037, reg. 7

F350Words in s. 130(1) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(9)(b) (with art. 3)

F351Words in s. 130(1) inserted (1.1.2005 for specified purposes, 13.12.2007 for specified purposes) by Patents Act 2004 (c. 16), s. 17(1), Sch. 1 para. 9(2)(b); S.I. 2004/3205, art. 2(j) (with art. 9); S.I. 2007/3396, art. 2(k) (with art. 3)

F360S. 130(6)(d) inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(9)(c) (with art. 3)

F363Words in s. 130(8) substituted (31.1.1997) by 1996 c. 23, s. 107(1), Sch. 3 para. 33 (with Pt. I); S.I. 1996/3146, art. 3

Marginal Citations

131 Northern Ireland.U.K.

In the application of this Act to Northern Ireland—

(a)“enactment” includes an enactment of the Parliament of Northern Ireland and a Measure of the Northern Ireland Assembly;

(b)any reference to a government department includes a reference to a Department of the Government of Northern Ireland;

(c)any reference to the Crown includes a reference to the Crown in right of Her Majesty’s Government in Northern Ireland;

(d)any reference to the [F365Companies Act 1985] includes a reference to the corresponding enactments in force in Northern Ireland; and

F366(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F367(f)any reference to a claimant includes a reference to a plaintiff.]

Textual Amendments

F366S. 131(e) repealed (31.1.1997) by 1996 c. 23, s. 107(2), Sch. 4 (with Pt. I); S.I. 1996/3146, art. 3

[131AF368ScotlandU.K.

In the application of this Act to Scotland–

(a)“enactment” includes an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament;

(b)any reference to a government department includes a reference to any part of the Scottish Administration; and

(c)any reference to the Crown includes a reference to the Crown in right of the Scottish Administration.]

Textual Amendments

F368S. 131A inserted (1.7.1999) by S.I. 1999/1820, arts. 1(2)(3), 4, Sch. 2 Pt. I para. 58 (with saving in art. 5)

132 Short title, extent, commencement, consequential amendments and repeals.U.K.

(1)This Act may be cited as the Patents Act 1977.

(2)This Act shall extend to the Isle of Man, subject to any modifications contained in an Order made by Her Majesty in Council, and accordingly, subject to any such order, references in this Act to the United Kingdom shall be construed as including references to the Isle of Man.

(3)For the purposes of this Act the territorial waters of the United Kingdom shall be treated as part of the United Kingdom.

(4)This Act applies to acts done in an area designated by order under section 1(7) of the M11Continental Shelf Act 1964, [F369or specified by Order under [F370section 10(8) of the Petroleum Act 1998] in connection with any activity falling within section 23(2) of that Act], as it applies to acts done in the United Kingdom.

(5)This Act (except sections 77(6), (7) and (9), 78(7) and (8), this subsection and the repeal of section 41 of the 1949 Act) shall come into operation on such day as may be appointed by the Secretary of State by order, and different days may be appointed under this subsection for different purposes.

(6)The consequential amendments in Schedule 5 shall have effect.

(7)Subject to the provisions of Schedule 4 to this Act, the enactments specified in Schedule 6 to this Act (which include certain enactments which were spent before the passing of this Act) are hereby repealed to the extent specified in column 3 of that Schedule.

Textual Amendments

F370Words in s. 132(4) substituted (15.2.1999) by 1998 c. 17, s. 50, Sch. 4 para. 14 (with Sch. 3 para. 5(1)): S.I. 1999/161, art. 2

Modifications etc. (not altering text)

C29Power of appointment conferred by s. 132(5) partly exercised by S.I. 1977/2090, 1978/586

C30The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Marginal Citations

SCHEDULES

Section 60(5)(g)

[F371SCHEDULE A1U.K. DEROGATION FROM PATENT PROTECTION IN RESPECT OF BIOTECHNOLOGICAL INVENTIONS

Textual Amendments

F371Sch. A1 inserted (28.7.2000) by S.I. 2000/2037, reg. 8(1), Sch. 1

InterpretationU.K.

1In this Schedule—

  • F372...

  • “farmer’s own holding” means any land which a farmer actually exploits for plant growing, whether as his property or otherwise managed under his own responsibility and on his own account;

  • “the gazette” means the gazette published under section 34 of the Plant Variety and Seeds Act 1964 F373;

  • “protected material” means plant propagating material which incorporates material subject to a patent;

  • “relevant activity” means the use by a farmer of the product of his harvest for propagation or multiplication by him on his own holding, where the product of the harvest constitutes or contains protected material;

  • “relevant rights holder” means the proprietor of a patent to which protected material is subject;

  • “seed” includes seed potatoes;

  • “seed year” means the period from 1st July in one year to 30th June in the following year, both dates inclusive.

Textual Amendments

Specified speciesU.K.

2Section 60(5)(g) applies only to varieties of the following plant species and groups:

NameCommon Name
Fodder plants
Cicer arietinum L.Chickpea milkvetch
Lupinus luteus L.Yellow lupin
Medicago sativa L.Lucerne
Pisum sativum L. (partim)Field pea
Trifolium alexandrinum L.Berseem/Egyptian clover
Trifolium resupinatum L.Persian clover
Vicia fabaField bean
Vicia sativa L.Common vetch
Cereals
Avena sativaOats
Hordeum vulgare L.Barley
Oryza sativa L.Rice
Phalaris canariensis L.Canary grass
Secale cereale L.Rye
X Triticosecale Wittm.Triticale
Triticum aestivum L. emend. Fiori et Paol.Wheat
Triticum durum Desf.Durum wheat
Triticum spelta L.Spelt wheat
Potatoes
Solanum tuberosumPotatoes
Oil and fibre plants
Brassica napus L. (partim)Swede rape
Brassica rapa L. (partim)Turnip rape
Linum usitatissimumLinseed with the exclusion of flax

Liability to pay equitable remunerationU.K.

3(1)If a farmer’s use of protected material is authorised by section 60(5)(g), he shall, at the time of the use, become liable to pay the relevant rights holder equitable remuneration.

(2)That remuneration must be sensibly lower than the amount charged for the production of protected material of the same variety in the same area with the holder’s authority.

(3)Remuneration is to be taken to be sensibly lower if it would be taken to be sensibly lower within the meaning of [F374regulation 20A of the Plant Breeders’ Rights Regulations 1998].

Textual Amendments

Exemption for small farmersU.K.

4(1)Paragraph 3 does not apply to a farmer who is considered to be a small farmer for the purposes of [F375section 9(10) of the Plant Varieties Act 1997].

(2)It is for a farmer who claims to be a small farmer to prove that he is such a farmer.

Textual Amendments

Information to be supplied by farmerU.K.

5(1)At the request of a relevant rights holder (“H”), a farmer must tell H—

(a)his name and address;

(b)whether he has performed a relevant activity; and

(c)if he has performed such an activity, the address of the holding on which he performed it.

(2)If the farmer has performed such an activity, he must tell H whether he is—

(a)liable to pay remuneration as a result of paragraph 3; or

(b)not liable because he is a small farmer.

(3)If the farmer has told H that he is liable to pay remuneration as a result of paragraph 3, he must tell H—

(a)the amount of the protected material used;

(b)whether the protected material has been processed for planting; and

(c)if it has, the name and address of the person who processed it.

(4)The farmer must comply with sub-paragraphs (2) and (3) when complying with sub-paragraph (1).

(5)If the farmer has told H that he is liable to pay remuneration as a result of paragraph 3, he must (if H asks him to do so) tell H—

(a)whether he used any protected material with the authority of H within the same seed year; and

(b)if he did, the amount used and the name and address of the person who supplied it.

Information to be supplied by seed processorU.K.

6(1)On the request of a relevant rights holder, a seed processor shall supply the following information—

(a)the name and address of the seed processor;

(b)the address of the seed processor’s principal place of business; and

(c)whether the seed processor has processed seed of a species specified in paragraph 2 above.

(2)If the seed processor has processed seed of a species specified in paragraph 2 above he shall also supply the following information with the information referred to in sub-paragraph (1)—

(a)the name and address of the person for whom the processing was carried out;

(b)the amount of seed resulting from the processing;

(c)the date processing commenced;

(d)the date processing was completed;

(e)the place where processing was carried out.

Information to be supplied by relevant rights holderU.K.

7On the request of a farmer or a seed processor a relevant rights holder shall supply the following information—

(a)his name and address; and

(b)the amount of royalty charged for certified seed of the lowest certification category for seed containing that protected material.

Period in respect of which inquiry may be madeU.K.

8A request may be made under paragraphs 5, 6 and 7 in respect of the current seed year and the three preceding seed years.

Restriction on movement for processing from the holdingU.K.

9No person shall remove or cause to be removed from a holding protected material in order to process it unless—

(a)he has the permission of the relevant rights holder in respect of that protected material;

(b)he has taken measures to ensure that the same protected material is returned from processing as is sent for processing and the processor has undertaken to him that the processor has taken measures to ensure that the same protected material is returned from processing as is sent for processing; or

(c)he has the protected material processed by a seed processor on the list of processors referred to in the gazette as being permitted to process seed away from a holding.

ConfidentialityU.K.

10(1)A person who obtains information pursuant to this Schedule shall owe an obligation of confidence in respect of the information to the person who supplied it.

(2)Sub-paragraph (1) shall not have effect to restrict disclosure of information—

(a)for the purposes of, or in connection with, establishing the amount to be paid to the holder of rights pursuant to paragraph 3 and obtaining payment of that amount,

(b)for the purposes of, or in connection with, establishing whether a patent has been infringed, or

(c)for the purposes of, or in connection with, any proceedings for the infringement of a patent.

FormalitiesU.K.

11(1)A request for information under this Schedule, and any information given in response to such a request, must be in writing.

(2)Information requested under this Schedule must be given—

(a)within 28 days; or

(b)if the request specifies a longer period, within the specified period.

RemediesU.K.

12(1)If, in response to a request under this Schedule, a person—

(a)knowingly fails to provide information which he is required by this Schedule to give, or

(b)refuses to provide any such information,

the court may order him to provide it.

(2)Sub-paragraph (1) does not affect any of the court’s other powers to make orders.

(3)A person who knowingly provides false information in response to a request under this Schedule is liable in damages to the person who made the request.

(4)In any action for damages under sub-paragraph (3) the court must have regard, in particular to—

(a)how flagrant the defendant was in providing the false information, and

(b)any benefit which accrued to him as a result of his providing false information,

and shall award such additional damages as the justice of the case may require.]

Section 76A

[F376SCHEDULE A2U.K. BIOTECHNOLOGICAL INVENTIONS

Textual Amendments

F376Sch. A2 inserted (28.7.2000) by 2000/2037, reg. 8(2), Sch. 2

1U.K.An invention shall not be considered unpatentable solely on the ground that it concerns—

(a)a product consisting of or containing biological material; or

(b)a process by which biological material is produced, processed or used.

2U.K.Biological material which is isolated from its natural environment or produced by means of a technical process may be the subject of an invention even if it previously occurred in nature.

3U.K.The following are not patentable inventions—

(a)the human body, at the various stages of its formation and development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene;

(b)processes for cloning human beings;

(c)processes for modifying the germ line genetic identity of human beings;

(d)uses of human embyos for industrial or commercial purposes;

(e)processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes;

(f)any variety of animal or plant or any essentially biological process for the production of animals or plants, not being a micro-biological or other technical process or the product of such a process.

4U.K.Inventions which concern plants or animals may be patentable if the technical feasibility of the invention is not confined to a particular plant or animal variety.

5U.K.An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element.

6U.K.The industrial application of a sequence or partial sequence of a gene must be disclosed in the patent application as filed.

7U.K.The protection conferred by a patent on a biological material possessing specific characteristics as a result of the invention shall extend to any biological material derived from that biological material through propagation or multiplication in an identical or divergent form and possessing those same characteristics.

8U.K.The protection conferred by a patent on a process that enables a biological material to be produced possessing specific characteristics as a result of the invention shall extend to biological material directly obtained through that process and to any other biological material derived from the directly obtained biological material through propagation or multiplication in an identical or divergent form and possessing those same characteristics.

9U.K.The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material, save as provided for in paragraph 3(a) above, in which the product is incorporated and in which the genetic information is contained and performs its function.

10U.K.The protection referred to in paragraphs 7, 8 and 9 above shall not extend to biological material obtained from the propagation or multiplication of biological material placed on the market by the proprietor of the patent or with his consent, where the multiplication or propagation necessarily results from the application for which the biological material was marketed, provided that the material obtained is not subsequently used for other propagation or multiplication.

11U.K.In this Schedule:

  • “essentially biological process” means a process for the production of animals and plants which consists entirely of natural phenomena such as crossing and selection;

  • “microbiological process” means any process involving or performed upon or resulting in microbiological material;

  • “plant variety” means a plant grouping within a single botanical taxon of the lowest known rank, which grouping can be:

    (a)

    defined by the expression of the characteristics that results from a given genotype or combination of genotypes; and

    (b)

    distinguished from any other plant grouping by the expression of at least one of the said characteristics; and

    (c)

    considered as a unit with regard to its suitability for being propagated unchanged.]

[F377SCHEDULE A3U.K.EUROPEAN PATENT WITH UNITARY EFFECT

Textual Amendments

F377Schs. A3, A4 inserted (coming into force in accordance with art. 1(2)) by The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (S.I. 2016/388), arts. 1(2), 2(10) (with art. 3)

Meaning of “relevant statutory provisions”U.K.

1.U.K.In this Schedule “relevant statutory provisions” means—

(a)the provisions of this Act which, by virtue of paragraph 2, apply in relation to the European patent with unitary effect, and

(b)the other provisions of this Act which, by virtue of the Unitary Patent Regulation, are to be treated as applying in relation to the European patent with unitary effect (see, in particular, Article 7 of that Regulation).

Provisions applied by this Schedule to the European patent with unitary effectU.K.

2.U.K.The following provisions of this Act apply in relation to a European patent with unitary effect, subject to paragraphs 3 and 4—

section 48 (compulsory licences: general);

section 48A (compulsory licences: WTO proprietors);

section 48B (compulsory licences: other cases);

section 49 (provisions about licences under section 48);

section 50 (exercise of powers on applications under section 48);

section 50A (powers exercisable following merger and market investigations);

section 51 (powers exercisable in consequence of report of Competition and Markets Authority);

section 52 (opposition, appeal and arbitration);

section 53 (compulsory licences; supplementary provisions);

section 54 (special provisions where patented invention is being worked abroad);

section 55 (use of patented inventions for services of the Crown);

section 56 (interpretation, etc., of provisions about Crown use);

section 57 (rights of third parties in respect of Crown use);

section 57A (compensation for loss of profit);

section 58(1) to (6) and (9A) to (13) (references of disputes as to Crown use);

section 59 (special provisions as to Crown use during emergency);

section 60 (meaning of infringement);

section 64 (right to continue use begun before priority date);

[F378sections 70 to 70F (unjustified threats);]

section 73(2) to (4) (Comptroller’s power to revoke patents on his own initiative);

section 74A (opinions on matters prescribed in the rules);

section 74B (reviews of opinions under section 74A);

section 76A (biotechnological inventions);

section 77(4) to (5A) (effect of European patent (UK));

section 80(1) (authentic text of European patents and patent applications);

sections 97 to 100 (legal proceedings) so far as they relate to proceedings which do not fall within the exclusive jurisdiction of the Unified Patent Court as set out in paragraph 1 of Schedule A4;

section 101 (exercise of comptroller’s discretionary powers);

section 102 (right of audience, &c in proceedings before comptroller);

sections 103 (extension of privilege for communications with solicitors relating to patent proceedings) and 105 (extension of privilege in Scotland for communications relating to patent proceedings) so far as they relate to proceedings before the comptroller;

section 107 (costs and expenses in proceedings before the comptroller);

section 108 (licences granted by order of comptroller);

section 110 (unauthorised claim of patent rights);

section 116 (immunity of department as regards official acts);

section 118 (information about patent applications and patents, and inspection of documents);

section 123 (rules);

section 124 (rules, regulations and orders; supplementary);

section 125 (extent of invention);

section 128A (EU compulsory licences);

section 128B (supplementary protection certificates).

Textual Amendments

Manner of application of relevant statutory provisionsU.K.

3.U.K.The relevant statutory provisions apply in relation to a European patent with unitary effect in the same way as they apply in relation to a European patent (UK).

Modifications of relevant statutory provisionsU.K.

4.(1)In their application in relation to the European patent with unitary effect, the relevant statutory provisions which are referred to in this paragraph have effect subject to the modifications set out in this paragraph.U.K.

(2)In section 7(2)(b), the reference to the United Kingdom is a reference to any of the Participating Member States.

(3)In sections 30(7) and 31(7), references to proceedings by virtue of section 61 or 69 are references to equivalent proceedings in the Unified Patent Court.

(4)In sections 33(1)(a), 33(4), 37(2), 37(7), 38(2) and 38(3), the reference to registration is a reference to registration in the Register for unitary patent protection.

(5)In sections 48(1)(b), 48B(4), 50A(4), 51(3), 53(3), and 53(4), the reference to the register is a reference to the Register for unitary patent protection.

(6)In sections 48(2)(b), 50A(4), 51(3), 53(3), 53(4) and 53(5), the reference to making an entry is a reference to directing the making of an entry.

(7)In sections 48B(2)(b) and 50(2)(a), the reference to the journal is a reference to the European Patent Bulletin.

(8)In section 55(5)(b), the reference to the Patent Office is a reference to the European Patent Office.

(9)In section 59(2), the reference to section 69 includes a reference to Article 67 of the European Patent Convention.

(10)In section 60—

(a)in subsections (1), (2), and (5)(d), (e) and (f), the references to the United Kingdom are references to the territory of a Contracting Member State in which the European patent with unitary effect has effect;

(b)in subsection (7)—

(i)in the definition of “relevant ship” and “relevant aircraft, hovercraft or vehicle”, the reference to the United Kingdom is a reference to a Contracting Member State in which the European patent with unitary effect has effect; and

(ii)in the definition of “exempted aircraft”, the reference to an aircraft to which section 89 of the Civil Aviation Act 1982 applies is a reference to an aircraft other than an aircraft of a Contracting Member State in which the European patent with unitary effect has effect.

InterpretationU.K.

5.U.K.In this Schedule—

(a)“Contracting Member State” has the same meaning as in Article 2(c) of the Agreement on a Unified Patent Court; and

(b)the following expressions have the same meanings as in Article 2 of the Unitary Patent Regulation—

Participating Member State;

Register for unitary patent protection.

SCHEDULE A4U.K.THE UNIFIED PATENT COURT

JurisdictionU.K.

1.U.K.The Unified Patent Court has exclusive jurisdiction in respect of an Article 32(1) action which relates to—

(a)a European patent with unitary effect, or

(b)a supplementary protection certificate for which the basic patent is a European patent with unitary effect,

(c)subject to paragraph 2—

(i)a European patent (UK), or

(ii)a supplementary protection certificate for which the basic patent is a European patent (UK).

Transitional provisionsU.K.

2.(1)The transitional provisions in Article 83 apply in relation to an action referred to in Article 83(1).U.K.

(2)An opt out referred to in Article 83(3) may be exercised in accordance with that provision and any relevant Rules of Procedure.

(3)Such opt out may be withdrawn in accordance with Article 83(4) and any relevant Rules of Procedure.

(4)For the purposes of this paragraph, a reference to Article 83 is a reference to Article 83 of the Agreement on a Unified Patent Court.

Modifications of law applicable where UPC has jurisdictionU.K.

3.(1)In the case of an Article 32(1) action relating to—U.K.

(a)a European patent with unitary effect, or

(b)a European patent (UK),

the provisions of this Act listed in sub-paragraph (2) do not apply in relation to the action where the Unified Patent Court has jurisdiction in accordance with paragraph 1.

(2)The provisions referred to in sub-paragraph (1) are—

section 58(7) to (9) (references of disputes as to Crown use);

section 61 (proceedings for infringement of patent);

section 62 (restrictions on recovery of damages for infringement);

section 63 (relief for infringement of partially valid patent);

section 65 (certificate of contested validity of patent);

section 66 (proceedings for infringement by a co-owner);

section 67 (proceedings for infringement by exclusive licensee);

section 68 (effect of non-registration on infringement proceedings);

section 69 (infringement of rights conferred by publication of application);

section 71 (declaration or declarator as to non-infringement);

section 72 (power to revoke patents on application);

section 73(1) to (1C) (comptroller’s power to revoke patents on his own initiative);

section 74 (proceedings in which validity of patent may be put in issue);

section 75 (amendment of patent in infringement or revocation proceedings);

section 77(3) (effect of European patent (UK)).

(3)In the case of an Article 32(1) action relating to a supplementary protection certificate for which the basic patent is—

(a)a European patent with unitary effect, or

(b)a European patent (UK),

the provisions of this Act listed in sub-paragraph (4) do not apply in relation to the action where the Unified Patent Court has jurisdiction in accordance with paragraph 1.

(4)The provisions referred to in sub-paragraph (3) are—

section 58(7) to (9) (references of disputes as to Crown use);

section 61 (proceedings for infringement of patent);

section 62 (restrictions on recovery of damages for infringement);

section 63 (relief for infringement of partially valid patent);

section 65 (certificate of contested validity of patent);

section 66 (proceedings for infringement by a co-owner);

section 67 (proceedings for infringement by exclusive licensee);

section 68 (effect of non-registration on infringement proceedings);

section 69 (infringement of rights conferred by publication of application);

section 71 (declaration or declarator as to non-infringement);

section 74 (proceedings in which validity of patent may be put in issue);

section 75 (amendment of a patent in infringement or revocation proceedings).

EnforcementU.K.

4.(1)For the purposes of enforcement of a decision or order of the Unified Patent Court—U.K.

(a)the decision or order has the same force and effect,

(b)proceedings for or with respect to enforcement of the decision or order may be taken, and

(c)the enforcing court, or in a relevant Northern Ireland case the Enforcement of Judgments Office, has the same powers in relation to the enforcement of the decision or order,

as if the decision or order had originally been made by the enforcing court.

(2)The enforcing court, or in a relevant Northern Ireland case the Enforcement of Judgments Office, may enforce a mediation settlement in the same manner as a judgment or order of the enforcing court.

(3)In this paragraph—

  • “enforcing court” means—

    (a)

    as respects England and Wales, the High Court,

    (b)

    as respects Scotland, the Court of Session, and

    (c)

    as respects Northern Ireland, the High Court in Northern Ireland;

  • “mediation settlement” means a settlement reached through mediation using the facilities of the patent mediation and arbitration centre established under Article 35 of the Agreement on a Unified Patent Court;

  • “relevant Northern Ireland case” means a case where—

    (a)

    the decision or order of the Unified Patent Court would, if it had been given by the High Court in Northern Ireland, or

    (b)

    the mediation settlement would, if enforced in the same manner as a judgment or order of the High Court in Northern Ireland,

    be enforced by the Enforcement of Judgments Office under the Judgments Enforcement (Northern Ireland) Order 1981.

InterpretationU.K.

5.U.K.In this Schedule—

(a)“Article 32(1) action” means an action listed in Article 32(1) of the Agreement on a Unified Patent Court;

(b)“basic patent” has the same meaning as in Article 1(c) of Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6th May 2009 concerning the supplementary protection certificate for medicinal products; and

(c)“Rules of Procedure” has the same meaning as in the Agreement on a Unified Patent Court.]

Section 127.

SCHEDULE 1U.K. Application of 1949 Act to existing patents and applications

1(1)The provisions of the 1949 Act referred to in sub-paragraph (2) below shall continue to apply on and after the appointed day in relation to existing patents and applications (but not in relation to patents and applications for patents under this Act).U.K.

(2)The provisions are sections 1 to 10, 11(1) and (2), 12, 13, 15 to 17, 19 to 21, 22(1) to (3), 23 to 26, 28 to 33, 46 to 53, 55, 56, 59 to 67, 69, 76, 80, 87(2), 92(1), 96, 101, 102(1) and 103 to 107.

(3)Sub-paragraph (1) above shall have effect subject to the following provisions of this Schedule, paragraph 2(b) of Schedule 3 below and the provisions of Schedule 4 below.

2(1)In section 6 of the 1949 Act, at the end of the proviso to subsection (3) (post-dating of application) there shall be insertedU.K.

“and—

(c)no application shall, on or after the appointed day, be postdated under this subsection to a date which is that of the appointed day or which falls after it ””

and there shall be inserted at the end of subsection (4) “ ; but no application shall on or after the appointed day be post-dated under this subsection to a date which is that of the appointed day or which falls after it”.

(2)At the end of subsection (5) of that section (ante-dating) there shall be inserted “ ; but a fresh application or specification may not be filed on or after the appointed day in accordance with this subsection and those rules unless the comptroller agrees that he will direct that the application or specification shall be ante-dated to a date which falls before the appointed day”.

Modifications etc. (not altering text)

C31The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

3(1)This paragraph and paragraph 4 below shall have effect with respect to the duration of existing patents after the appointed day, and in those paragraphs—U.K.

(a)“old existing patent” means an existing patent the date of which fell eleven years or more before the appointed day and also any patent of addition where the patent for the main invention is, or was at any time, an old existing patent by virtue of the foregoing provision;

(b)“new existing patent” means any existing patent not falling within paragraph (a) above; and

(c)any reference to the date of a patent shall, in relation to a patent of addition, be construed as a reference to the date of the patent for the main invention.

(2)Sections 23 to 25 of the 1949 Act (extension of patents on grounds of inadequate remuneration and war loss) shall not apply to a new existing patent.

(3)The period for which the term of an old existing patent may be extended under section 23 or 24 of that Act shall not exceed in the aggregate four years, except where an application for an order under the relevant section has been made before the appointed day and has not been disposed of before that day.

4(1)The term of every new existing patent under section 22(3) of the 1949 Act shall be twenty instead of sixteen years from the date of the patent, but—U.K.

(a)the foregoing provision shall have effect subject to section 25(3) to (5) above; and

(b)on and after the end of the sixteenth year from that date a patent shall not be renewed under section 25(3) to (5) above except by or with the consent of the proprietor of the patent.

(2)Where the term of a new existing patent is extended by this paragraph,—

(a)any licence in force under the patent from immediately before the appointed day until the end of the sixteenth year from the date of the patent shall, together with any contract relating to the licence, continue in force so long as the patent remains in force (unless determined otherwise than in accordance with this sub-paragraph), but, if it is an exclusive licence, it shall after the end of that year be treated as a non-exclusive licence;

(b)notwithstanding the terms of the licence, the licensee shall not be required to make any payment to the proprietor for working the invention in question after the end of that year;

(c)every such patent shall after the end of that year be treated as endorsed under section 35 of the 1949 Act (licences of right) [F379, but subject to paragraph 4A below].

(3)Where the term of a new existing patent is extended by this paragraph and any government department or any person authorised by a government department—

(a)has before the appointed day, used the invention in question for the services of the Crown; and

(b)continues to so use it until the end of the sixteenth year from the date of the patent,

any such use of the invention by any government department or person so authorised, after the end of that year, may be made free of any payment to the proprietor of the patent.

(4)Without prejudice to any rule of law about the frustration of contracts, where any person suffers loss or is subjected to liability by reason of the extension of the term of a patent by this paragraph, the court may on the application of that person determine how and by whom the loss or liability is to be borne and make such order as it thinks fit to give effect to the determination.

Textual Amendments

[F3804A(1)If the proprietor of a patent for an invention which is a product files a declaration with the Patent Office in accordance with this paragraph, the licences to which persons are entitled by virtue of paragraph 4(2)(c) above shall not extend to a use of the product which is excepted by or under this paragraph.U.K.

(2)Pharmaceutical use is excepted, that is—

(a)use as a medicinal product within the meaning of the Medicines Act 1968, and

(b)the doing of any other act mentioned in section 60(1)(a) above with a view to such use.

(3)The Secretary of State may by order except such other uses as he thinks fit; and an order may—

(a)specify as an excepted use any act mentioned in section 60(1)(a) above, and

(b)make different provision with respect to acts done in different circumstances or for different purposes.

(4)For the purposes of this paragraph the question what uses are excepted, so far as that depends on—

(a)orders under section 130 of the Medicines Act 1968 (meaning of “medicinal product”), or

(b)orders under sub-paragraph (3) above,

shall be determined in relation to a patent at the beginning of the sixteenth year of the patent.

(5)A declaration under this paragraph shall be in the prescribed form and shall be filed in the prescribed manner and within the prescribed time limits.

(6)A declaration may not be filed—

(a)in respect of a patent which has at the commencement of section 293 of the Copyright, Designs and Patents Act 1988 passed the end of its fifteenth year; or

(b)if at the date of filing there is—

(i)an existing licence for any description of excepted use of the product, or

(ii)an outstanding application under section 46(3)(a) or (b) above for the settlement by the comptroller of the terms of a licence for any description of excepted use of the product,

and, in either case, the licence took or is to take effect at or after the end of the sixteenth year of the patent.

(7)Where a declaration has been filed under this paragraph in respect of a patent—

(a)section 46(3)(c) above (restriction of remedies for infringement where licences available as of right) does not apply to an infringement of the patent in so far as it consists of the excepted use of the product after the filing of the declaration; and

(b)section 46(3)(d) above (abatement of renewal fee if licences available as of right) does not apply to the patent.]

Textual Amendments

[F3814B(1)An application under section 46(3)(a) or (b) above for the settlement by the comptroller of the terms on which a person is entitled to a licence by virtue of paragraph 4(2)(c) above is ineffective if made before the beginning of the sixteenth year of the patent.U.K.

(2)This paragraph applies to applications made after the commencement of section 294 of the Copyright, Designs and Patents Act 1988 and to any application made before the commencement of that section in respect of a patent which has not at the commencement of that section passed the end of its fifteenth year.]

(5)No order shall be made on an application under sub-paragraph (4) above which has the effect of imposing a liability on any person other than the applicant unless notification of the application is given to that person.

Textual Amendments

5U.K.In section 26(3) of the 1949 Act (no patent of addition unless date of filing of complete specification was the same as or later than the date of filing of complete specification in respect of main invention) after “main invention” there shall be inserted “and was earlier than the date of the appointed day”.

Modifications etc. (not altering text)

C32The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

6U.K.Notwithstanding anything in section 32(1)(j) of the 1949 Act (ground for revocation that patent was obtained on a false suggestion or representation), it shall not be a ground of revoking a patent under that subsection that the patent was obtained on a false suggestion or representation that a claim of the complete specification of the patent had a priority date earlier than the date of filing the application for the patent, but if it is shown—

(a)on a petition under that section or an application under section 33 of that Act; or

(b)by way of defence or on a counterclaim on an action for infringement;

that such a suggestion or representation was falsely made, the priority date of the claim shall be taken to be the date of filing the application for that patent.

7(1)In section 33 of the 1949 Act (revocation of patent by comptroller), in subsection (1) for the words preceding the proviso there shall be substituted—U.K.

“(1)Subject to the provisions of this Act, a patent may, on the application of any person interested, be revoked by the comptroller on any of the grounds set out in section 32(1) of this Act:”

(2)At the end of the said section 33 there shall be added the following subsection:—

“(5)A decision of the comptroller or on appeal from the comptroller shall not estop any party to civil proceedings in which infringement of a patent is in issue from alleging that any claim of the specification is invalid on any of the grounds set out in section 32(1) of this Act, whether or not any of the issues involved were decided in that decision.”

Modifications etc. (not altering text)

C33The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

8U.K.In section 101(1) of the 1949 Act (interpretation) there shall be inserted in the appropriate place—

““appointed day”means the day appointed under section 132 of the Patents Act 1977 for the coming into operation of Schedule 1 to that Act;”

Modifications etc. (not altering text)

C34The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Section 127.

SCHEDULE 2U.K. Application of this Act to Existing Patents and Applications

1(1)Without prejudice to those provisions of Schedule 4 below which apply (in certain circumstances) provisions of this Act in relation to existing patents and applications, the provisions of this Act referred to in sub-paragraph (2) below shall apply in relation to existing patents and applications on and after the appointed day subject to the following provisions of this Schedule and the provisions of Schedule 4 below.U.K.

(2)The provisions are sections 22, 23, 25(3) to (5), 28 to 36, 44 to 54, 86, [F38296], 98, 99, 101 to 105, 107 to 111, 113 to 116, 118(1) to (3), 119 to 124, 130 and 132(2), (3) and (4).

Textual Amendments

F382The reference to section 96 is repealed (E.W.) by Supreme Court Act 1981 (c. 54, SIF 37), s. 152(4), Sch. 7

2U.K.In those provisions as they apply by virtue of this Schedule—

(a)a reference to this Act includes a reference to the 1949 Act;

(b)a reference to a specified provision of this Act other than one of those provisions shall be construed as a reference to the corresponding provision of the 1949 Act (any provision of that Act being treated as corresponding to a provision of this Act if it was enacted for purposes which are the same as or similar to that provision of this Act);

(c)a reference to rules includes a reference to rules under the 1949 Act;

(d)references to a patent under this Act and to an application for such a patent include respectively a reference to an existing patent and application;

(e)references to the grant of a patent under this Act includes a reference to the sealing and grant of an existing patent;

(f)a reference to a patented product and to a patented invention include respectively a reference to a product and invention patented under an existing patent;

(g)references to a published application for a patent under this Act, and to publication of such an application, include respectively references to a complete specification which has been published under the 1949 Act and to publication of such a specification (and a reference to an application for a patent under this Act which has not been published shall be construed accordingly);

(h)a reference to the publication in the journal of a notice of the grant of a patent includes a reference to the date of an existing patent;

(i)a reference to the priority date of an invention includes a reference to the priority date of the relevant claim of the complete specification.

Section 127.

SCHEDULE 3U.K. REPEALS OF PROVISIONS OF 1949 ACT

Modifications etc. (not altering text)

C35The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

1U.K.Subject to the provisions of Schedule 4 below, the provisions of the 1949 Act referred to in paragraph 2 below (which have no counterpart in the new law of patents established by this Act in relation to future patents and applications) shall cease to have effect.

2U.K.The provisions are:—

(a)section 14 (opposition to grant of patent) ;

(b)section 32(3) (revocation for refusal to comply with Crown request to use invention) ;

(c)section 41 (inventions relating to food or medicine, etc.) ;

(d)section 42 (comptroller’s power to revoke patent after expiry of two years from grant of compulsory licence);

(e)section 71 (extension of time for certain convention applications) ;

(f)section 72 (protection of inventions communicated under international agreements).

Section 127.

SCHEDULE 4U.K. Transitional Provisions

GeneralU.K.

1U.K.In so far as any instrument made or other thing done under any provision of the 1949 Act which is repealed by virtue of this Act could have been made or done under a corresponding provision of this Act, it shall not be invalidated by the repeals made by virtue of this Act but shall have effect as if made or done under that corresponding provision.

Use of patented invention for services of the CrownU.K.

2(1)Any question whether—U.K.

(a)an act done before the appointed day by a government department or a person authorised in writing by a government department amounts to the use of an invention for the services of the Crown; or

(b)any payment falls to be made in respect of any such use (whether to a person entitled to apply for a patent for the invention, to the patentee or to an exclusive licensee);

shall be determined under sections 46 to 49 of that Act and those sections shall apply accordingly.

(2)Sections 55 to 59 above shall apply to an act so done on or after the appointed day in relation to an invention—

(a)for which an existing patent has been granted or an existing application for a patent has been made; or

(b)which was communicated before that day to a government department or any person authorised in writing by a government department by the proprietor of the patent or any person from whom he derives title;

and shall so apply subject to sub-paragraph (3) below, the modifications contained in paragraph 2 of Schedule 2 above and the further modification that sections 55(5)(b) and 58(10) above shall not apply in relation to an existing application.

(3)Where an act is commenced before the appointed day and continues to be done on or after that day, then, if it would not amount to the use of an invention for the services of the Crown under the 1949 Act, its continuance on or after that day shall not amount to such use under this Act.

InfringementU.K.

3(1)Any question whether an act done before the appointed day infringes an existing patent or the privileges or rights arising under a complete specification which has been published shall be determined in accordance with the law relating to infringement in force immediately before that day and, in addition to those provisions of the 1949 Act which continue to apply by virtue of Schedule 1 above, section 70 of that Act shall apply accordingly.U.K.

(2)Sections 60 to 71 above shall apply to an act done on or after the appointed day which infringes an existing patent or the privileges or rights arising under a complete specification which has been published (whether before, on or after the appointed day) as they apply to infringements of a patent under this Act or the rights conferred by an application for such a patent, and shall so apply subject to sub-paragraph (3) below, the modifications contained in paragraph 2 of Schedule 2 above and the further modification that section 69(2) and (3) above shall not apply in relation to an existing application.

(3)Where an act is commenced before the appointed day and continues to be done on or after that day, then, if it would not, under the law in force immediately before that day, amount to an infringement of an existing patent or the privileges or rights arising under a complete specification, its continuance on or after that day shall not amount to the infringement of that patent or those privileges or rights.

Notice of oppositionU.K.

4(1)Where notice of opposition to the grant of a patent has been given under section 14 of the 1949 Act before the appointed day, the following provisions shall apply:—U.K.

(a)if issue has been joined on the notice before the appointed day, the opposition, any appeal from the comptroller’s decision on it and any further appeal shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court;

(b)in any other case, the notice shall be taken to have abated immediately before the appointed day.

(2)Sub-paragraph (1)(a) above shall have effect subject to paragraph 12(2) below.

SecrecyU.K.

5(1)Where directions given under section 18 of the 1949 Act in respect of an existing application (directions restricting publication of information about inventions) are in force immediately before the appointed day, they shall continue in force on and after that day and that section shall continue to apply accordingly.U.K.

(2)Where sub-paragraph (1) above does not apply in the case of an existing application section 18 of the 1949 Act shall not apply to the application but section 22 of this Act shall.

(3)Where the comptroller has before the appointed day served a notice under section 12 of the M12Atomic Energy Act 1946 (restrictions on publication of information about atomic energy etc.) in respect of an existing application that section shall continue to apply to the application on and after that day; but where no such notice has been so served that section shall not apply to the application on and after that day.

Marginal Citations

RevocationU.K.

6(1)Where before the appointed day an application has been made under section 33 of the 1949 Act for the revocation of a patent (the original application), the following provisions shall apply:—U.K.

(a)if issue has been joined on the application before the appointed day, the application, any appeal from the comptroller’s decision on it and any further appeal shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court;

(b)if issue has not been so joined, the original application shall be taken to be an application under section 33 of the 1949 Act for the revocation of the patent on whichever of the grounds referred to in section 32(1) of that Act corresponds (in the comptroller’s opinion) to the ground on which the original application was made, or, if there is no ground which so corresponds, shall be taken to have abated immediately before the appointed day.

(2)Sub-paragraph (1)(a) above shall have effect subject to paragraph 11(3) below.

7(1)This paragraph applies where an application has been made before the appointed day under section 42 of the 1949 Act for the revocation of a patent.U.K.

(2)Where the comptroller has made no order before that day for the revocation of the patent under that section, the application shall be taken to have abated immediately before that day.

(3)Where the comptroller has made such an order before that day, then, without prejudice to [F383section 16(1) or section 17(2)(a) of the M13Interpretation Act 1978], section 42 shall continue to apply to the patent concerned on and after that day as if this Act had not been enacted.

Textual Amendments

F383Words substituted by virtue of Interpretation Act 1978 (c. 30), s. 25(2)

Marginal Citations

Licences of right and compulsory licencesU.K.

8(1)Sections 35 to 41 and 43 to 45 of the 1949 Act shall continue to apply on and after the relevant day—U.K.

(a)to any endorsement or order made or licence granted under sections 35 to 41 which is in force immediately before that day; and

(b)to any application made before that day under sections 35 to 41.

(2)Any appeal from a decision or order of the comptroller instituted under sections 35 to 41 or 43 to 45 on or after the relevant day (and any further appeal) shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court.

(3)In this paragraph “the relevant day” means, in relation to section 41, the date of the passing of this Act and, in relation to sections 35 to 40 and 43 to 45, the appointed day.

Convention countriesU.K.

9(1)Without prejudice to paragraph 1 above, an Order in Council declaring any country to be a convention country for all purposes of the 1949 Act or for the purposes of section 1(2) of that Act and in force immediately before the appointed day shall be treated as an Order in Council under section 90 above declaring that country to be a convention country for the purposes of section 5 above.U.K.

(2)Where an Order in Council declaring any country to be a convention country for all purposes of the 1949 Act or for the purposes of section 70 of that Act is in force immediately before the appointed day, a vessel registered in that country (whether before, on or after that day) shall be treated for the purposes of section 60 above, as it applies by virtue of paragraph 3(2) above to an existing patent or existing application, as a relevant ship and an aircraft so registered and a land vehicle owned by a person ordinarily resident in that country shall be so treated respectively as a relevant aircraft and a relevant vehicle.

Appeals from court on certain petitions for revocationU.K.

10U.K.Where the court has given judgment on a petition under section 32(1)(j) of the 1949 Act before the appointed day, any appeal from the judgment (whether instituted before, on or after that day) shall be continued or instituted and be disposed of under the old law.

Appeals from comptroller under continuing provisions of 1949 ActU.K.

11(1)In this paragraph “the continuing 1949 Act provisions” means the provisions of the 1949 Act which continue to apply on and after the appointed day as mentioned in paragraph 1 of Schedule 1 above.U.K.

(2)This paragraph applies where—

(a)the comptroller gives a decision or direction (whether before or on or after the appointed day) under any of the continuing 1949 Act provisions, and

(b)an appeal lies under those provisions from the decision or direction;

but this paragraph applies subject to the foregoing provisions of this Schedule.

(3)Where such an appeal has been instituted before the Appeal Tribunal before the appointed day, and the hearing of the appeal has begun but has not been completed before that day, the appeal (and any further appeal) shall be continued and disposed of under the old law.

(4)Where such an appeal has been so instituted, but the hearing of it has not begun before the appointed day, it shall be transferred by virtue of this sub-paragraph to the Patents Court on that day and the appeal (and any further appeal) shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court.

(5)Any such appeal instituted on or after the appointed day shall lie to the Patents Court or, where the proceedings appealed against were held in Scotland, the Court of Session; and accordingly, the reference to the Appeal Tribunal in section 31(2) of the 1949 Act shall be taken to include a reference to the Patents Court or (as the case may be) the Court of Session.

(6)Section 97(3) of this Act shall apply to any decision of the Patents Court on an appeal instituted on or after the appointed day from a decision or direction of the comptroller under any of the continuing 1949 Act provisions as it applies to a decision of that Court referred to in that subsection, except that for references to the sections mentioned in paragraph (a) of that subsection there shall be substituted references to sections 33, 55 and 56 of the 1949 Act.

Appeals from comptroller under repealed provisions of 1949 ActU.K.

12(1)This paragraph applies where an appeal to the Appeal Tribunal has been instituted before the appointed day under any provision of the 1949 Act repealed by this Act.U.K.

(2)Where the hearing of such an appeal has begun but has not been completed before that day,the appeal (and any further appeal) shall be continued and disposed of under the old law.

(3)Where the hearing of such an appeal has not begun before that day, it shall be transferred by virtue of this sub-paragraph to the Patents Court on that day and the appeal (and any further appeal) shall be prosecuted under the old law, but as if references in the 1949 Act and rules made under it to the Appeal Tribunal were references to the Patents Court.

Appeals from Appeal Tribunal to Court of AppealU.K.

13U.K.Section 87(1) of the 1949 Act shall continue to apply on and after the appointed day to any decision of the Appeal Tribunal given before that day, and any appeal by virtue of this paragraph (and any further appeal) shall be prosecuted under the old law.

RulesU.K.

14U.K.The power to make rules under section 123 of this Act shall include power to make rules for any purpose mentioned in section 94 of the 1949 Act.

SupplementaryU.K.

15U.K.Section 97(2) of this Act applies to—

(a)any appeal to the Patents Court by virtue of paragraph 4(1)(a), 6(1)(a), 8(2) or 11(5) above, and

(b)any appeal which is transferred to that Court by virtue of paragraph 11(4) or 12(3) above,

as it applies to an appeal under that section; and section 97 of this Act shall apply for the purposes of any such appeal instead of section 85 of the 1949 Act.

16U.K.In this Schedule “the old law” means the 1949 Act, any rules made under it and any relevant rule of law as it was or they were immediately before the appointed day.

17U.K.For the purposes of this Schedule—

(a)issue is joined on a notice of opposition to the grant of a patent under section 14 of the 1949 Act when the applicant for the patent files a counter-statement fully setting out the grounds on which the opposition is contested;

(b)issue is joined on an application for the revocation of a patent under section 33 of that Act when the patentee files a counter-statement fully setting out the grounds on which the application is contested.

18(1)Nothing in the repeals made by this Act in sections 23 and 24 of the 1949 Act shall have effect as respects any such application as is mentioned in paragraph 3(3) of Schedule 1 above.U.K.

(2)Nothing in the repeal by this Act of the M14Patents Act 1957 shall have effect as respects existing applications.

(3)Section 69 of the 1949 Act (which is not repealed by this Act) and section 70 of that Act (which continues to have effect for certain purposes by virtue of paragraph 3 above) shall apply as if section 68 of that Act has not been repealed by this Act and as if paragraph 9 above had not been enacted.

Marginal Citations

[F384SCHEDULE 4AU.K.SUPPLEMENTARY PROTECTION CERTIFICATES

Textual Amendments

References to patents etcU.K.

1.(1)In the application to supplementary protection certificates of the provisions of this Act listed in sub-paragraph (2)—

(a)references to a patent are to a supplementary protection certificate;

(b)references to an application or the applicant for a patent are to an application or the applicant—

(i)for a supplementary protection certificate, or

(ii)for an extension of the duration of a supplementary protection certificate;

(c)references to the proprietor of a patent are to the holder of a supplementary protection certificate;

(d)references to the specification of a patent are to the text of a supplementary protection certificate;

(e)references to a patented product or an invention (including a patented invention) are to a product for which a supplementary protection certificate has effect;

(f)references to a patent having expired or having been revoked are to a supplementary protection certificate having lapsed or having been declared invalid;

(g)references to proceedings for the revocation of a patent are to proceedings—

(i)for a decision that a supplementary protection certificate has lapsed, or

(ii)for a declaration that a supplementary protection certificate is invalid;

(h)references to the issue of the validity of a patent include the issue of whether a supplementary protection certificate has lapsed or is invalid.

(2)The provisions referred to in sub-paragraph (1) are—

  • section 14(1), (9) and (10) (making of application);

  • section 19(1) (general power to amend application before grant);

  • sections 20A and 20B (reinstatement of applications);

  • section 21 (observations by third party on patentability);

  • section 27 (general power to amend specification after grant);

  • section 29 (surrender of patents);

  • sections 30 to 36, 37(1) to (3) and (5) to (9) and 38 (property in patents and applications, and registration);

  • sections 39 to 59 (employees’ inventions, licences of right and compulsory licences and use of patented inventions for services of the Crown);

  • sections 60 to 71 (infringement);

  • section 74(1) and (7) (proceedings in which validity of patent may be put in issue);

  • [F385 sections 74A and 74B (opinions by the Patent Office);]

  • section 75 (amendment of patent in infringement or revocation proceedings);

  • sections 103 and 105 (privilege for communications relating to patent proceedings);

  • section 108 (licences granted by order of comptroller);

  • sections 110 and 111 (unauthorised claim of patent rights or that patent has been applied for);

  • section 116 (immunity of department as regards official acts);

  • sections 117 to 118 (administrative provisions);

  • section 123 (rules);

  • section 130 (interpretation).

Textual Amendments

F385Words in Sch. 4A para. 1(2) inserted (1.10.2014) by Intellectual Property Act 2014 (c. 18), ss. 16(3), 24(1); S.I. 2014/2330, art. 3, Sch.

2.(1)In the case of the provisions of this Act listed in sub-paragraph (2), paragraph 1 applies in relation to an application for a supplementary protection certificate only if the basic patent expires before the certificate is granted.

(2)The provisions referred to in sub-paragraph (1) are—

  • section 20B(3) to (6A) (effect of reinstatement under section 20A);

  • section 55(5) and (7) (use of patented inventions for services of the Crown);

  • section 58(10) (disputes as to Crown use);

  • section 69 (infringement of rights conferred by publication of application);

  • section 117A(3) to (7) (effect of resuscitating a withdrawn application under section 117).

References to this Act etcU.K.

3.(1)In the provisions of this Act listed in sub-paragraph (2)—

(a)references to this Act include the Medicinal Products Regulation and the Plant Protection Products Regulation, and

(b)references to a provision of this Act include any equivalent provision of the Medicinal Products Regulation and the Plant Protection Products Regulation.

(2)The provisions referred to in sub-paragraph (1) are—

  • sections 20A and 20B (reinstatement of applications);

  • section 21 (observations by third party on patentability);

  • section 69 (infringement of rights conferred by publication of application);

  • section 74(1) and (7) (proceedings in which validity of patent may be put in issue);

  • sections 97 to 99B, 101 to 103, 105 and 107 (legal proceedings);

  • section 116 (immunity of department as regards official acts);

  • sections 117 and 118 to 121 (administrative provisions);

  • section 122 (Crown’s right to sell forfeited articles);

  • section 123 (rules);

  • section 124A (use of electronic communications);

  • section 130 (interpretation).

Other referencesU.K.

4.(1)In the application of section 21(1) (observations by third party on patentability) to supplementary protection certificates, the reference to the question whether the invention is a patentable invention is to the question whether the product is one for which a supplementary protection certificate may have effect.

(2)In the application of section 69(2) (conditions for infringement of rights conferred by publication of application) to supplementary protection certificates, the condition in paragraph (b) is that the act would, if the certificate had been granted on the date of the publication of the application, have infringed not only the certificate as granted but also the certificate for which the application was made.

FeesU.K.

5.A supplementary protection certificate does not take effect unless—

(a)the prescribed fee is paid before the end of the prescribed period, or

(b)the prescribed fee and any prescribed additional fee are paid before the end of the period of six months beginning immediately after the prescribed period.

InterpretationU.K.

6.(1)Expressions used in this Act that are defined in the Medicinal Products Regulation or the Plant Protection Products Regulation have the same meaning as in that Regulation.

(2)References in this Act to, or to a provision of, the Medicinal Products Regulation or the Plant Protection Products Regulation are to that Regulation or that provision as amended from time to time.

7.In this Act—

(a)“the Medicinal Products Regulation” means [F386Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6th May 2009 concerning the supplementary protection certificate for medicinal products], and

(b)“the Plant Protection Products Regulation” means Regulation (EC) No 1610/96 of the European Parliament and of the Council of 23 July 1996 concerning the creation of a supplementary protection certificate for plant protection products.

Textual Amendments

Transitional provisionU.K.

[F3878.(1)A reference (express or implied) in this Act to the Medicinal Products Regulation, or a provision of it, is to be read as being or (subject to context) including a reference to the old Regulation, or the corresponding provision of the old Regulation, in relation to times, circumstances or purposes in relation to which the old Regulation, or that provision, had effect.

(2)Other than in relation to times, circumstances or purposes referred to in subparagraph (1), anything done, or having effect as if done, under (or for the purposes of or in reliance on) the old Regulation or a provision of the old Regulation and in force or effective immediately before 1st October 2014 (the day on which the Patents (Supplementary Protection Certificates) Regulations 2014 came into force) has effect on or after that date for the purposes of this Act as if done under (or for the purpose of or in reliance on) the Medicinal Products Regulation or the corresponding provision of it.

(3)In this paragraph “the old Regulation” means Council Regulation (EEC) No 1768/92 of 18th June 1992 concerning the creation of a supplementary protection certificate for medicinal products.]]

Textual Amendments

Section 132.

SCHEDULE 5U.K. CONSEQUENTIAL AMENDMENTS

1, 2.U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F388

Textual Amendments

[F3893U.K.In sections 42 and 44(1) of the Registered Designs Act 1949, for “the Patents Act 1949” there shall be substituted, in each case, “the Patents Act 1977”.]

Textual Amendments

Defence Contracts Act 1958 (c. 38)U.K.

4U.K.In subsection (4) of section 4 of the Defence Contracts Act 1958, for the words from “Patents Act 1949” to the end there shall be substituted “Patents Act 1977”.

Modifications etc. (not altering text)

C36The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Administration of Justice Act 1970 (c. 31)U.K.

5(1)In subsections (2) and (3) of section 10 of the Administration of Justice Act 1970 for “either” there shall be substituted in each case, “the”.U.K.

(2)In subsection (4) of the said section 10, for “(as so amended)” there shall be substituted “(as amended by section 24 of the Administration of Justice Act 1969)”.

(3)For subsection (5) of the said section 10, there shall be substituted :—

“(5)In subsection (8) of the said section 28 (which confers power on the Tribunal to make rules about procedure etc.), there shall be inserted at end of the subsection the words “including right of audience”.”

Modifications etc. (not altering text)

C37The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

Atomic Energy Authority (Weapons Group) Act 1973 (c. 4)U.K.

6U.K.In section 5(2) of the Atomic Energy Authority (Weapons Group) Act 1973—

(a)after the first “Patents Act 1949”there shall be inserted “, the Patents Act 1977” ; and

(b)after the second “Patents Act 1949” there shall be inserted “section 55(4) of the Patents Act 1977”.

Modifications etc. (not altering text)

C38The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

7, 8.U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F390

Textual Amendments

F390Sch. 5 paras. 7, 8 repealed by Copyright, Designs and Patents Act 1988 (c. 48, SIF 67A), and Sch. 5 para. 7 expressed to be repealed (prosp.) by Enterprise Act 2002 (c. 40), ss. 278, 279, Sch. 26

Section 132.

SCHEDULE 6U.K. ENACTMENTS REPEALED

Modifications etc. (not altering text)

C39The text of ss. 127(5), 132(6),(7); Sch. 1 para. 2(1),(2), 5, 7(1)(2), 8; Sch. 3; Sch. 5 paras 4, 5(1), (2), (3), 6; Sch. 6 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

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\ No newline at end of file diff --git a/raw/uk/social-security-intermediaries-regs b/raw/uk/social-security-intermediaries-regs new file mode 100644 index 0000000..0b946dd --- /dev/null +++ b/raw/uk/social-security-intermediaries-regs @@ -0,0 +1,94 @@ + + + +The Social Security Contributions (Intermediaries) Regulations 2000 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +

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Statutory Instruments

2000 No. 727

SOCIAL SECURITY

The Social Security Contributions (Intermediaries) Regulations 2000

Made

13th March 2000

Laid before Parliament

13th March 2000

Coming into force

6th April 2000

The Treasury, with the concurrence of the Secretary of State for Social Security, in exercise of the powers conferred on them by sections 4A, 122(1) and 175(1A), (2) to (4) of the Social Security Contributions and Benefits Act 1992M1 and of all other powers enabling them in that behalf, and the Commissioners of Inland Revenue, in exercise of the powers conferred on them by section 8(1)(m) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999M2 and of all other powers enabling them in that behalf, hereby make the following Regulations:

Modifications etc. (not altering text)

Marginal Citations

M11992 c. 4. Section 4A was inserted by section 75 of the Welfare Reform and Pensions Act 1999 (c. 30). Section 122(1) is cited because of the meaning ascribed to the word “prescribe". Section 175 was amended by paragraph 29 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2).

Citation, commencement and effectE+W+S

1.—(1) These Regulations may be cited as the Social Security Contributions (Intermediaries) Regulations 2000 and shall come into force on 6th April 2000.

(2) These Regulations have effect for the tax year 2000–01 and subsequent years and apply in relation to services performed, or to be performed, on or after 6th April 2000.

(3) Payments or other benefits in respect of such services received before that date shall be treated as if received in the tax year 2000–01.

[F1Part 1E+W+S Intermediaries – general provisions and workers' services provided to small clients]

Textual Amendments

InterpretationE+W+S

2.—(1) In these Regulations unless the context otherwise requires–

  • F2...

  • “associate" has the meaning given by regulation 3;

  • “attributable earnings" in relation to a worker shall be construed in accordance with regulation 6(3)(a);

  • [F3“the Board” means the Commissioners for Her Majesty’s Revenue and Customs;]

  • F4...

  • “Class 1A contributions" has the meaning given by section 10 of the Contributions and Benefits Act M3;

  • F2...

  • “company" means any body corporate or unincorporated association, but does not include a partnership;

  • “the Contributions and Benefits Act" means the Social Security Contributions and Benefits Act 1992;

  • [F5“the Contributions Regulations” means the Social Security (Contributions) Regulations 2001;]

  • [F6“CTA 2010” means the Corporation Taxes Act 2010;]

  • F2...

  • [F7“public authority” has the meaning given by regulation 3A;]

  • “relevant benefit" means any benefit falling within regulation 4 that is provided to the intermediary or to or on behalf of the worker under the arrangements;

  • “relevant payment" means any payment made to an intermediary or to or on behalf of the worker under the arrangements;

  • “secondary Class 1 contributions" has the meaning given by section 6 of the Contributions and Benefits Act M4;

  • “secondary contributor" has the meaning given by section 7 of the Contributions and Benefits Act M5;

  • [F8“statutory auditor” has the meaning given by Part 42 of the Companies Act 2006.]

  • “the Taxes Act" means the Income and Corporation Taxes Act 1988 M6;

  • “tax year" means year of assessment;

  • F2...

(2) References in these Regulations to payments or benefits received or receivable from a partnership or unincorporated association include payments or benefits to which a person is or may be entitled in his capacity as a member of the partnership or association.

(3) For the purposes of these Regulations–

(a)anything done by or in relation to an associate of an intermediary is treated as done by or in relation to the intermediary, and

(b)a payment or other benefit provided to a member of an individual’s family or household is treated as provided to the individual.

(4) The reference in paragraph (3)(b) to an individual’s family or household shall be construed in accordance with [F9sections 721(4) and (5) of ITEPA 2003].

[F10(5) For the purposes of these Regulations, two people living together as if they were a married couple or civil partners are treated as if they were married to, or civil partners of, each other.]

[F11(7) For the purposes of these Regulations “connected” shall be construed in accordance with section 993 of the Income Tax Act 2007.

(8) For the purposes of these Regulations “controlled” shall be construed in accordance with section 995 of the Income Tax Act 2007.]

Textual Amendments

Marginal Citations

M3Section 10 was amended by section 52 of, and paragraph 58 of Schedule 7 to, the Social Security Act 1998 (c. 14), paragraph 10 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 and regulation 4 of S.I. 1994/667.

M4Section 6 was substituted by paragraph 2 of Schedule 9 to the Welfare Reform and Pensions Act 1999.

M5Section 7 was amended by paragraph 7 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999.

[F12Definitions for the purposes of Part 1E+W+S

2A.  In this Part—

“arrangements” means the arrangements referred to in regulation 6(1)(b);

“client” shall be construed in accordance with regulation 6(1)(b);

“intermediary” has the meaning given by regulation 5; and

“worker” means the individual referred to in regulation 6(1)(a).]

Textual Amendments

Meaning of associateE+W+S

3.—(1) In these Regulations “associate"–

(a)in relation to an individual, has the meaning given by section 417(3) and (4) of the Taxes Act M7, subject to the following provisions of this regulation;

(b)in relation to a company, means a person connected with the company within the meaning of section 839 of the Taxes Act M8; and

(c)in relation to a partnership, means any associate of a member of the partnership.

(2) Where an individual has an interest in shares or obligations of the company as a beneficiary of an employee benefit trust, the trustees are not regarded as associates of his by reason only of that interest except in the following circumstances.

(3) The exception is where–

(a)the individual, either on his own or with one or more of his associates, or

(b)any associate of his, with or without other such associates,

has been the beneficial owner of, or able (directly or through the medium of other companies or by any other indirect means) to control, more than 5 per cent. of the ordinary share capital of the company.

(4) In paragraph (2) “employee benefit trust" has the same meaning as in [F13sections 550 and 551 of ITEPA 2003.]

Textual Amendments

Marginal Citations

M7Section 417 was amended by paragraph 6 of Schedule 17 to the Finance Act 1995 (c. 4).

M8Section 839 was amended by paragraph 20 of Schedule 17 to the Finance Act 1995.

[F14Meaning of public authorityE+W+S

3A.—(1) In these Regulations “public authority” means—

(a)a public authority as defined by the Freedom of Information Act 2000,

[F15(aa)a body specified in section 23(3) of the Freedom of Information Act 2000,]

(b)a Scottish public authority as defined by the Freedom of Information (Scotland) Act 2002,

[F16(ba)the Advanced Research and Invention Agency,]

(c)the Corporate Officer of the House of Commons,

(d)the Corporate Officer of the House of Lords,

(e)the National Assembly for Wales Commission, F17...

(f)the Northern Ireland Assembly Commission[F18, or

(g)a company connected with any person mentioned in sub-paragraphs (a) to (f).]

(2) An authority within paragraph (1)(a) or (b) is a public authority for the purposes of these Regulations in relation to all its activities even if provisions of the Act mentioned in that paragraph do not apply to all information held by the authority.

(3) Paragraph (1) is subject to paragraph (4).

(4) A primary-healthcare provider is a public authority for the purposes of these Regulations only if the primary-healthcare provider—

(a)has a registered patient list for the purposes of relevant medical-services regulations,

(b)is within paragraph 43A in Part 3 of Schedule 1 to the Freedom of Information Act 2000 (providers of primary healthcare services in England and Wales) by reason of being a person providing primary dental services,

(c)is within paragraph 51 in that Part of that Schedule (providers of healthcare services in Northern Ireland) by reason of being a person providing general dental services, or

(d)is within paragraph 33 in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002 (providers of healthcare services in Scotland) by reason of being a person providing general dental services.

(5) In paragraph (4)—

“primary-healthcare provider” means an authority that is within paragraph (1)(a) or (b) only because it is within a relevant paragraph,

“relevant paragraph” means—

(a)

any of paragraphs 43A to 45A and 51 in Part 3 of Schedule 1 to the Freedom of Information Act 2000, or

(b)

any of paragraphs 33 to 35 in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002, and

“relevant medical-services regulations” means any of the following—

(a)

the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) Regulations 2004,

(b)

the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) (Wales) Regulations 2004,

(c)

the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) (Scotland) Regulations 2004, and

(d)

the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) Regulations (Northern Ireland) 2004.]

Textual Amendments

Meaning of benefitE+W+S

4.—[F19(1) For the purposes of these Regulations a “benefit” means anything that, if received by an employee for performing the duties of an employment, would be general earnings of the employment.]

(2) The amount of a benefit is taken to be–

(a)in the case of a cash benefit, the amount received, and

(b)in the case of a non-cash benefit, the cash equivalent of the benefit.

(3) The cash equivalent of a non-cash benefit is taken to be whichever is the greater of–

[F20(a)the amount that would, for income tax purposes, be general earnings if the benefit were general earnings from an employment, and

(b)the cash equivalent determined in accordance with section 398(2)(b) of 2003.]

(4) For the purposes of these Regulations a benefit is treated as received–

(a)in the case of a cash benefit, when payment is made of or on account of the benefit; and

(b)in the case of an non-cash benefit, when it is used or enjoyed.

Textual Amendments

Meaning of intermediaryE+W+S

5.—(1) [F21In this Part] “intermediary" means any person, including a partnership or unincorporated association of which the worker is a member–

(a)whose relationship with the worker in any tax year satisfies the conditions specified in paragraph (2), (6), (7) or (8), and

(b)from whom the worker, or an associate of the worker–

(i)receives, directly or indirectly, in that year a payment or benefit that is not chargeable to tax [F22as employment income under ITEPA 2003], or

(ii)is entitled to receive, or in any circumstances would be entitled to receive, directly or indirectly, in that year any such payment or benefit.

(2) Where the intermediary is a company the conditions are that–

(a)the intermediary is not an associated company of the client, within the meaning of section 416 of the Taxes Act M9, by reason of the intermediary and the client both being under the control of the worker, or under the control of the worker and another person; and

(b)either–

(i)the worker has a material interest in the intermediary, or

(ii)the payment or benefit is received or receivable by the worker directly from the intermediary, and can reasonably be taken to represent remuneration for services provided by the worker to the client.

(3) A worker is treated as having a material interest in a company for the purposes of paragraph (2)(a) if–

(a)the worker, alone or with one or more associates of his, or

(b)an associate of the worker, with or without other such associates,

has a material interest in the company.

(4) For this purpose a material interest means–

(a)beneficial ownership of, or the ability to control, directly or through the medium of other companies or by any other indirect means, more than 5 per cent. of the ordinary share capital of the company; or

(b)possession of, or entitlement to acquire, rights entitling the holder to receive more than 5 per cent. of any distributions that may be made by the company; or

(c)where the company is a close company, possession of, or entitlement to acquire, rights that would in the event of the winding up of the company, or in any other circumstances, entitle the holder to receive more than 5 per cent. of the assets that would then be available for distribution among the participators.

In sub-paragraph (c) “close company" has the meaning given by sections 414 and 415 of the Taxes Act M10, and “participator" has the meaning given by section 417(1) of that Act.

(5) Where the intermediary is a partnership the conditions are as follows.

(6) In relation to payments or benefits received or receivable by the worker as a member of the partnership, the conditions are–

(a)that the worker, alone or with one or more relatives, is entitled to 60 per cent. or more of the profits of the partnership; or

(b)that most of the profits of the partnership derive from the provision of services under the arrangements–

(i)to a single client, or

(ii)to a single client together with an associate or associates of that client; or

(c)that under the profit sharing arrangements the income of any of the partners is based on the amount of income generated by that partner by the provision of services under the arrangements.

In sub-paragraph (a) “relative" means [F23spouse or civil partner], parent [F24or child or remoter relation in the direct line, or brother or sister.]

(7) In relation to payments or benefits received or receivable by the worker otherwise than as a member of the partnership, the conditions are that the payment or benefit–

(a)is received or receivable by the worker directly from the intermediary, and

(b)can reasonably be taken to represent remuneration for services provided by the worker to the client.

(8) Where the intermediary is an individual the conditions are that the payment or benefit–

(a)is received or receivable by the worker directly from the intermediary, and

(b)can reasonably be taken to represent remuneration for services provided by the worker to the client.

Textual Amendments

Marginal Citations

M9Section 416 was amended by Part V of Schedule 17 to the Finance Act 1989.

M10Section 414 was amended by section 104 of, and Part V of Schedule 17 to, the Finance Act 1989. Section 415 was amended by paragraph 6(2)(f) of Schedule 38 to the Finance Act 1996.

[F25When a client qualifies as small and has a UK connection for a tax yearE+W+S

5A.—(1) For the purposes of this Part a person qualifies as small for a tax year if the person qualifies as small for that tax year under sections 60A to 60G of ITEPA 2003.

(2) For the purposes of this Part a person has a UK connection for a tax year if the person fulfils the conditions as to residence and presence for liability to pay secondary Class 1 contributions prescribed under section 1(6)(a) of the Contributions and Benefits Act.]

Textual Amendments

[F25Duty on client to state whether it qualifies as small for a tax yearE+W+S

5B.—(1) This regulation applies if, in the case of an engagement that meets conditions (a) to (b) in regulation 6(1), the client receives from the client's agent or the worker a request to state whether in the client's opinion the client qualifies as small for a tax year specified in the request.

(2) The client must provide to the person who made the request a statement as to whether in the client's opinion the client qualifies as small for the tax year specified in the request.

(3) If the client fails to provide the statement by the time mentioned in paragraph (4) the duty to do so is enforceable by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988 .

(4) The time is whichever is the later of—

(a)the end of the period of 45 days beginning with the date the client receives the request, and

(b)the beginning of the period of 45 days ending with the start of the tax year specified in the request.

(5) In this regulation “the client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in sub-paragraph (b) of regulation 6(1).]

Textual Amendments

Provision of services through intermediaryE+W+S

6.—(1) [F26This Part applies] where–

(a)an individual (“the worker") personally performs, or is under an obligation personally to perform, services [F27for another person] (“the client"), [F28who is not a public authority]

F29(aa). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F30(ab)the client either qualifies as small for a tax year or does not have a UK connection for a tax year,]

(b)the performance of those services by the worker is carried out, not under a contract directly between the client and the worker, but under arrangements involving an intermediary, and

(c)the circumstances are such that, had the arrangements taken the form of a contract between the worker and the client, the worker would be regarded for the purposes of Parts I to V of the Contributions and Benefits Act as employed in employed earner’s employment by the client.

(2) Paragraph (1)(b) has effect irrespective of whether or not–

(a)there exists a contract between the client and the worker, or

(b)the worker is the holder of an office with the client.

[F31(2A) Holding office as a statutory auditor of the client does not count as the worker being the holder of an office with the client for the purposes of paragraph 6(2)(b).]

[F32(2B) The condition in paragraph (1)(ab) is to be ignored if—

(a)the client concerned is an individual, and

(b)the services concerned are performed otherwise than for the purposes of the client's business.]

[F32(2C) For the purposes of paragraph (1)(ab) the client is to be treated as not qualifying as small for the tax year concerned if the client is treated as medium or large for that tax year by reason of regulation 20A(3)(a).]

(3) [F33Where this Part applies]–

(a)the worker is treated, for the purposes of Parts I to V of the Contributions and Benefits Act, and in relation to the amount deriving from relevant payments and relevant benefits that is calculated in accordance with regulation 7 (“ the worker’s attributable earnings"), as employed in employed earner’s employment by the intermediary, and

(b)the intermediary, whether or not he fulfils the conditions prescribed under section 1(6)(a) of the Contributions and Benefits Act M11 for secondary contributors, is treated for those purposes as the secondary contributor in respect of the worker’s attributable earnings,

and Parts I to V of that Act have effect accordingly.

(4) Any issue whether the circumstances are such as are mentioned in paragraph (1)(c) is an issue relating to contributions that is prescribed for the purposes of section 8(1)(m) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (decision by officer of the Board).

Textual Amendments

Marginal Citations

M11Section 1(6) was amended by paragraph 56(3) of Schedule 7 to the Social Security Act 1998.

Worker’s attributable earnings—calculationE+W+S

7.—(1) For the purposes of regulation 6(3)(a) the amount of the worker’s attributable earnings for a tax year is calculated as follows:

Step One

Find the total amount of all payments and benefits received by the intermediary in that year under the arrangements [F34but excluding amounts on which Class 1 or Class 1A contributions are payable by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014], and reduce that amount by 5 per cent.

Step Two

Add the amount of any payments and benefits received by the worker in that year under the arrangements, otherwise than from the intermediary, that–

(a)are not chargeable to income tax [F35as employment income under ITEPA 2003], and

(b)would be so chargeable if the worker were employed by the client.

Step Three

Deduct the amount of any expenses met in that year by the intermediary that under [F36ITEPA 2003] would have been deductible from the [F37taxable earnings of the employment, within the meaning of section 10 of ITEPA 2003, in accordance with section 327(3) to (5) of that Act] if the worker had been employed by the client and the expenses had been met by the worker out of [F38those earnings].

Step Four

Deduct the amount of any capital allowances in respect of expenditure incurred by the intermediary in that year that could have been claimed by the worker [F39under Part 2 of the Capital Allowances Act 2001 (plant and machinery allowances) by virtue of section 15(1)(i) of that Act (which provides that employment is a qualifying activity for the purposes of that Part)]) if the worker had been employed by the client and had incurred the expenditure.

Step Five

Deduct any contributions made in that year for the benefit of the worker by the intermediary to [F40a registered pension scheme for the purposes of Part 4 of the Finance Act 2004]M12that if made by an employer for the benefit of an employee would not be chargeable to income tax as income of the employee[F41, and any payments made in that year in respect of the worker by the intermediary in respect of any of the Pensions Act levies].

This does not apply to excess contributions made and later repaid.

Step Six

Deduct the amount of secondary Class 1 contributions and Class 1A contributions paid by the intermediary for that year in respect of earnings of the worker.

Step Seven

Deduct–

(a)the amount of any payments made by the intermediary to the worker in that year that constitute remuneration derived from the worker’s employment by that intermediary including, where the intermediary is a body corporate and the worker is a director of that body corporate, payments treated as remuneration derived from that employment by virtue of regulation[F4222(2)] of the Contributions Regulations M13 (payments to directors to be treated as earnings), but excluding payments which represent items in respect of which a deduction was made under Step Three [F43and payments within paragraph 25 of Part 10 of Schedule 3 to the Contributions Regulations], and

(b)the amount of any benefits provided by the intermediary to the worker in that year, being benefits that constitute amounts of [F44general earnings] in respect of which Class 1A contributions are payable, but excluding any benefits which represent items in respect of which a deduction was made under Step Three.

If the result at this point is nil or a negative amount, there are no worker’s attributable earnings for that year.

Step Eight

Find the amount that, together with the amount of secondary Class 1 contributions payable in respect of it, is equal to the amount resulting from Step Seven (if that amount is a positive amount).

Step Nine

The result is the amount of the worker’s attributable earnings for that year.

(2) Where section 559 of the Taxes Act applies (sub-contractors in the construction industry: payments to be made under deduction) the intermediary is treated for the purposes of Step One of the calculation in paragraph (1) as receiving the amount that would have been received had no deduction been made under that section.

(3) For the purpose of calculating the amount of deductible expenses referred to in Step Three of the calculation in paragraph (1) it shall be assumed that all engagements of the worker under the arrangements involving the intermediary are undertaken in the course of the same employment.

(4) For the purposes of this regulation any necessary apportionment shall be made on a just and reasonable basis of amounts received by the intermediary that are referable–

(a)to the services of more than one worker, or

(b)partly to the services of the worker and partly to other matters.

(5) For the purposes of this regulation the time when payments are received by the intermediary or the worker under the arrangements shall be found in accordance with the rules contained in [F45sections 18 and 19 of ITEPA 2003, subject to the qualification that the worker shall not be treated, by virtue of Rule 2 in section 18, as receiving a payment prior to the time of its actual receipt.]

[F46(6) The reference in Step Three of the calculation in paragraph (1) to expenses met by the intermediary includes expenses met by the worker and reimbursed by the intermediary.

(7) Where the intermediary is a partnership and the worker is a member of the partnership, expenses met by the worker for and on behalf of the intermediary shall be treated for the purposes of paragraph (6) as expenses met by the worker and reimbursed by the intermediary.

(8) Where—

(a)the intermediary provides a vehicle for the worker, and

(b) the worker would have been entitled to an amount of mileage allowance relief under [F47 section 231 of ITEPA 2003 ] for a tax year in respect of the use of the vehicle if the worker had been employed by the client, or would have been so entitled if the worker had been employed by the client and the vehicle had not been a company vehicle,

Step Three of the calculation in paragraph (1) shall have effect as if that amount were an amount of expenses deductible under that Step.

(9) Where—

(a)the intermediary is a partnership,

(b)the worker is a member of the partnership, and

(c)the worker provides a vehicle for the purposes of the business of the partnership,

then for the purposes of paragraph (8) the vehicle shall be regarded as provided by the intermediary for the worker.

(10)  Where the intermediary makes payments to the worker that are exempt from income tax [F48 as employment income under ITEPA 2003 ] by virtue of [F49 section 229 or 233 of ITEPA 2003 ] (mileage allowance payments and passenger payments), paragraph (a) of Step Seven of the calculation in paragraph (1) shall have effect as if the intermediary had made payments to the worker that constituted remuneration derived from the worker’s employment by the intermediary. ]

[F50(11) In this regulation “the Pensions Act levies” means—

(a)the administration levy referred to in section 117(1) of the Pensions Act 2004;

(b)the initial levy referred to in section 174(1) of that Act;

(c)the risk-based pension protection levy referred to in section 175(1)(a) of that Act;

(d)the scheme-based pension protection levy referred to in section 175(1)(b) of that Act;

(e)the fraud compensation levy referred to in section 189(1) of that Act;

(f)a levy in respect of eligible schemes imposed by regulations made under section 209(7) of that Act (the Ombudsman for the Board of the Pension Protection Fund).]

Textual Amendments

Modifications etc. (not altering text)

Marginal Citations

M13Regulation 17A was inserted by regulation 5 of S.I. 1983/10.

Worker’s attributable earnings—deemed paymentE+W+S

8.—(1) The amount referred to in Step Nine of the calculation in regulation 7(1) is treated, for the purposes of Parts I to V of the Contributions and Benefits Act, as a single payment of the worker’s attributable earnings made by the intermediary on the 5th April in the tax year concerned or, as the case may be, on the date found in accordance with paragraphs (4) to (7), and those Parts of that Act shall have effect accordingly.

(2) The worker’s attributable earnings shall be aggregated with any other earnings paid to the worker by the intermediary in the year concerned to or for the benefit of the worker in respect of employed earner’s employment, and the amount of earnings-related contributions payable in respect of that aggregate amount shall be assessed in accordance with the appropriate earnings period specified in regulation [F518] of the Contributions Regulations (earnings period for directors), whether or not the worker is a director of a company during that year.

(3) Where the intermediary is a partnership or unincorporated association, the amount referred to in Step Nine of the calculation in regulation 7(1) is treated, for the purposes of Parts I to V of the Contributions and Benefits Act, as received by the worker in his personal capacity and not as income of the partnership or association.

(4) If in a tax year–

(a)an amount of the worker’s attributable earnings is treated as made under paragraph (1), and

(b)before the date on which the payment would be treated as made under that paragraph any relevant event (as defined below) occurs in relation to the intermediary,

that amount is treated, for the purposes of Parts I to V of the Contributions and Benefits Act, as having been made immediately before that event or, if there is more than one, immediately before the first of them.

(5) Where the intermediary is a company the following are relevant events–

(a)where the worker is a member of the company, his ceasing to be such a member;

(b)where the worker holds an office with the company, his ceasing to hold such an office;

(c)where the worker is employed by the company, his ceasing to be so employed.

[F52(d)the company ceasing to trade.]

(6) Where the intermediary is a partnership the following are relevant events–

(a)the dissolution of the partnership or the partnership ceasing to trade or a partner ceasing to act as such;

(b)where the worker is employed by the partnership, his ceasing to be so employed.

(7) Where the intermediary is an individual and the worker is employed by him, it is a relevant event if the worker ceases to be so employed.

(8) The fact that an amount of the worker’s attributable earnings is treated as made under paragraph (1) before the end of the tax year concerned does not affect what payments and benefits are taken into account in calculating that amount.

Textual Amendments

Multiple intermediaries—generalE+W+S

9.—(1) Regulations 10 and 11 apply where in any tax year the arrangements involve more than one intermediary.

(2) Except as provided by regulations 10 and 11, the provisions of [F53this Part [F54apply]] separately in relation to each intermediary.

Textual Amendments

Multiple intermediaries—avoidance of double-countingE+W+S

10.—(1) This regulation applies where a payment or benefit has been made or provided, directly or indirectly, from one intermediary to another intermediary under the arrangements.

(2) In that case, the amount taken into account in relation to any intermediary in Step One or Step Two of the calculation in regulation 7(1) shall be reduced to such extent as is necessary to avoid double-counting having regard to the amount so taken into account in relation to any other intermediary.

Multiple intermediaries—joint and several liabilityE+W+S

11.—(1) Where the arrangements involve more than one intermediary, all the intermediaries are jointly and severally liable, subject to paragraph (3), to pay contributions in respect of the amount of the worker’s attributable earnings treated in accordance with regulation 8(1) as paid by any of them–

(a)under those arrangements, or

(b)under those arrangements together with other arrangements.

(2) For the purposes of paragraph (1), each amount of the worker’s attributable earnings shall be aggregated, and the aggregate amount shall be treated for the purposes of regulation 8(1) as a single payment of the worker’s attributable earnings, but so that the total liability of the intermediaries to pay contributions in respect of that aggregate amount is not less than it would have been if the arrangements had involved a single intermediary and that aggregate amount had been an amount treated as paid in accordance with regulation 8(1) by a single intermediary.

(3) An intermediary is not jointly and severally liable as mentioned in paragraph (1) if the intermediary has not received any payment or benefit under the arrangements concerned or under any such other arrangements as are mentioned in sub-paragraph (b) of that paragraph.

[F55Application of the Social Security (Categorisation of Earners) Regulations 1978 and the Social Security Contributions (Managed Services Companies) Regulations 2007]E+W+S

12.— [F56(1)]  Nothing in these Regulations affects the operation of regulation 2 of the Social Security (Categorisation of Earners) Regulations 1978 M14 (treatment of earners in one category of earners as falling within another category and disregard of employments) as that regulation applies to employment listed in paragraph 2 in column (A) of Part I of Schedule 1 to those Regulations (earner supplied through a third person treated as employed earner).

[F57(2) This Part does not apply to services provided by a managed service company (within the meaning of the Social Security Contributions (Managed Service Companies) Regulations 2007).]

Textual Amendments

Marginal Citations

[F58When a client qualifies as medium or large and has a UK connection for a tax yearE+W+S

12A.—(1) For the purposes of this Part a person qualifies as medium or large for a tax year if the person does not qualify as small for the tax year for the purposes of Part 1 of these Regulations.

(2) For the purposes of this Part a person has a UK connection for a tax year if the person fulfils the conditions as to residence and presence for liability to pay secondary Class 1 contributions prescribed under section 1(6)(a) of the Contributions and Benefits Act.]

Textual Amendments

[F59[F60Part 2 E+W+S Intermediaries – workers' services provided to public authorities or medium or large clients]

Textual Amendments

Engagements to which this Part appliesE+W+S

13.—(1) Regulations 14 to 18 apply where—

(a)an individual (“the worker”) personally performs, or is under an obligation personally to perform, services for another person (“the client”),

F61(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)the services are provided not under a contract directly between the client and the worker but under arrangements involving a third party (“the intermediary”), F62...

[F63(ca)the client—

(i)is a public authority, or

(ii)is a person who qualifies as medium or large and has a UK connection for one or more tax years during which the arrangements mentioned in sub-paragraph (c) have effect, and]

(d)the circumstances are such that—

(i)if the services were provided under a contract directly between the client and the worker, the worker would be regarded for the purposes of Parts I to V of the Contributions and Benefits Act as employed in employed earner’s employment by the client, or

(ii)the worker is an office-holder who holds that office under the client and the services relate to that office.

[F64(1A) But regulations 14 to 18 do not apply if—

(a)the client is an individual, and

(b)the services are provided otherwise than for the purposes of the client's trade or business.]

(2) The references in sub-paragraph (1)(c) to “third party” includes a partnership or unincorporated association of which the worker is a member.

(3) The circumstances referred to in sub-paragraph (1)(d) includes the terms on which the services are provided, having regard to the terms of the contracts forming part of the arrangements under which the services are provided.

(4) Holding office as a statutory auditor of the client does not count as holding office under the client for the purposes of sub-paragraph (1)(d).

Textual Amendments

Worker treated as receiving earnings from employmentE+W+S

14.—(1) If one of conditions A to C in paragraphs (9) to (11) is met, identify the chain of two or more persons where—

(a)the highest person in the chain is the client,

(b)the lowest person in the chain is the intermediary, and

(c)each person in the chain above the lowest makes a chain payment to the person immediately below them in the chain.

(See regulation 21 for cases where one of conditions A to C is treated as being met).

(2) In this Part—

(a)“chain payment” means a payment, or money’s worth that can reasonably be taken to be for the worker’s services to the client,

(b)“make” in relation to a chain payment that is money’s worth, means transfer, and

(c)“the fee-payer” means the person in the chain immediately above the lowest.

(3) The fee-payer is treated as making to the worker, and the worker is treated as receiving, a payment (“the deemed direct earnings”) which is to be treated for the purposes of Parts 1 to 5 of the Contributions and Benefits Act as earnings from an employed earner’s employment, but this is subject to paragraphs (5) to (7) [F65and (8A)] and regulations 20[F66, 20A][F67, 22 and 24].

(4) The deemed direct earnings are treated as paid at the same time as the chain payment made by the fee-payer.

[F68(5) Unless and until the client gives a status determination statement to the worker in accordance with regulation 14A, paragraphs (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to [F69regulations 22 and 24].

(5A) Paragraphs (6) and (7) apply, subject to regulations 20, 20A[F70, 22 and 24], if—

(a)the client has given a status determination statement to the worker,

(b)the client is not the fee-payer, and

(c)the fee-payer is not a qualifying person.]

(6) If there is no person in the chain below the highest and above the lowest who is a qualifying person, paragraphs (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client.

(7) Otherwise, paragraphs (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the person in the chain who—

(a)is above the lowest,

(b)is a qualifying person, and

(c)is lower in the chain than any other person in the chain who—

(i)is above the lowest, and

(ii)is a qualifying person.

(8) In paragraphs (5) to (7) a “qualifying person” is a person who—

[F71(za)has been given by the person immediately above them in the chain the status determination statement given by the client to the worker,]

(a)is resident in the United Kingdom or has a place of business in the United Kingdom,

(b)is not a person who is controlled by—

(i)the worker, alone or with one or more associates of the worker, or

(ii)an associate of the worker, with or without other associates of the worker, and

(c)if a company, is not one in which—

(i)the worker, alone or with one or more associates of the worker, or

(ii)an associate of the worker, with or without other associates of the worker,

has a material interest (within the meaning given by section 51(4) and (5) of ITEPA 2003 (meaning of material interest)).

[F72(8A) If the client is not a public authority, a person is to be treated by paragraph (3) as making a payment of deemed direct earnings to the worker only if the chain payment made by the person is made in a tax year for which the client qualifies as medium or large and has a UK connection.]

(9) Condition A is that—

(a)the intermediary is a company, and

(b)the conditions in regulation 15 are met in relation to the intermediary.

(10) Condition B is that—

(a)the intermediary is a partnership,

(b)the worker is a member of the partnership,

(c)the provision of the services is by the worker as a member of the partnership, and

(d)the condition in regulation 16 is met in relation to the intermediary.

(11) Condition C is that the intermediary is an individual.

(12) Where a payment or money’s worth can reasonably be taken to be for both—

(a)the worker’s services to the client, and

(b)anything else,

then, for the purposes of this Part, so much of it as can, on a just and reasonable apportionment, be taken to be for the worker’s services is to be treated as (and the rest is to be treated as not being) a payment or money’s worth, that can reasonably be taken to be for the worker’s services.

Textual Amendments

[F73Meaning of status determination statementE+W+S

14A.—(1) For the purposes of regulation 14 “status determination statement” means a statement by the client that—

(a)states that the client has concluded that the condition in regulation 13(1)(d) is met in the case of the engagement and explains the reasons for that conclusion, or

(b)states (albeit incorrectly) that the client has concluded that the condition in regulation 13(1)(d) is not met in the case of the engagement and explains the reasons for that conclusion.

(2) But a statement is not a status determination statement if the client fails to take reasonable care in coming to the conclusion mentioned in it.]

Textual Amendments

Conditions where intermediary is a companyE+W+S

15.—(1) The conditions mentioned in regulation 14(9)(b) are that—

(a)the intermediary is not an associated company of the client that falls within sub-paragraph (2), and

[F74(b)paragraph (1A) or (1B) is satisfied.]

[F75(1A) This paragraph is satisfied where the worker has a material interest in the intermediary.]

[F75(1B) This paragraph is satisfied where—

(a)the worker has a non-material interest in the intermediary,

(b)the worker—

(i)has received,

(ii)has rights which entitle, or which in any circumstances would entitle, the worker to receive, or

(iii)expects to receive,

a chain payment from the intermediary, and

(c)the chain payment does not, or will not, wholly constitute earnings from an employed earner’s employment of the worker (apart from as a result of this Part).]

(2) An associated company of the client falls within this paragraph if it is such a company by reason of the intermediary and the client being under the control—

(a)of the worker, or

(b)of the worker and other persons.

(3) The worker is treated as having a material interest in the intermediary if—

(a)the worker, alone or with one or more associates of the worker, or

(b)an associate of the worker, with or without other associates of the worker,

has a material interest in the intermediary.

(4) For this purpose “material interest” has the meaning given by section 51(4) and (5) of ITEPA 2003.

[F76(4A) The worker is treated as having a non-material interest in the intermediary if—

(a)the worker, alone or with one or more associates of the worker, or

(b)an associate of the worker, with or without other associates of the worker,

has a non-material interest in the intermediary.]

[F76(4B) For this purpose a non-material interest means—

(a)beneficial ownership of, or the ability to control, directly or through the medium of other companies or by any other indirect means, 5% or less of the ordinary share capital of the company,

(b)possession of, or entitlement to acquire, rights entitling the holder to receive 5% or less of any distributions that may be made by the company, or

(c)where the company is a close company, possession of, or entitlement to acquire, rights that would in the event of the winding up of the company, or in any other circumstances, entitle the holder to receive 5% or less of the assets that would then be available for distribution among the participators.]

[F76(4C) In paragraph (4B)(c)—

“close company” has the meaning given by section 989 of the Income Tax Act 2007;

“participator” has the meaning given by section 454 of CTA 2010.]

(5) In this regulation “associated company” has the meaning given by section 449 of CTA 2010.

Textual Amendments

Conditions where intermediary is a partnershipE+W+S

16.—(1) The condition mentioned in regulation 14(10)(d) is—

(a)that the worker, alone or with one or more relatives, is entitled to 60 per cent or more of the profits of the partnership, or

(b)that most of the profits of the partnership derive from the provision of services under engagements to which one or other of this Part and Part 1 applies—

(i)to a single client, or

(ii)to a single client together with associates of that client, or

(c)that under the profit sharing arrangements the income of any of the partners is based on the amount of income generated by that partner by the provision of services under engagements to which one or other of this Part and Part 1 applies.

(2) In sub-paragraph (1)(a) “relative” means spouse or civil partner, parent or child or remoter relation in the direct line, or brother or sister.

F77(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Calculation of deemed direct earningsE+W+S

17.—(1) The amount of the deemed direct earnings is the amount resulting from the following steps—

Step 1

Identify the amount or value of the chain payment made by the person who is treated as making the deemed direct earnings, and deduct from that amount so much of it (if any) as is in respect of value added tax.

Step 2

Deduct, from the amount resulting from Step 1, so much of that amount as represents the direct cost to the intermediary of materials used, or to be used, in the performance of the services.

Step 3

Deduct, at the option of the person treated as making the deemed direct earnings, from the amount resulting from Step 2, so much of that amount as represents expenses met by the intermediary that under ITEPA 2003 would have been deductible from the taxable earnings of the employment under section 10 ITEPA 2003, in accordance with section 327(3) to (5) of that Act, if—

(a)the worker had been employed by the client, and

(b)the expenses had been met by the worker out of those earnings.

Step 4

If the amount resulting from the preceding Steps is nil or negative, there are no deemed direct earnings. Otherwise, that amount is the amount of the deemed direct earnings.

(2) For the purposes of Step 1 of paragraph (1), exclude amounts on which Class 1 or Class 1A contributions are payable by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014.

(3) In paragraph (1), the reference to the amount or value of the chain payment means the amount or value of that payment before the deduction (if any) permitted under regulation 19.

(4) If the actual amount or value of the chain payment mentioned in Step 1 of paragraph (1) is such that its recipient bears the cost of amounts due under the Income Tax (Pay As You Earn) Regulations 2003 or the Contributions Regulations in respect of the deemed direct earnings, that Step applies as if the amount or value of the chain payment were what it would be if the burden of that cost were not being passed on through the setting of the level of the payment.

(5) In Step 3 of paragraph (1), the reference to “expenses met by the intermediary” includes—

(a)expenses met by the worker and reimbursed by the intermediary, and

(b)where the intermediary is a partnership and the worker is a member of the partnership, expenses met by the worker for and on behalf of the partnership.

(6) The deemed direct earnings are to be assessed on the amount of such earnings paid, or treated as paid, in the earnings period specified in regulations 3 to 6 or 8 of the Contributions Regulations.

(7) For the purposes of paragraph (6), the definition of “regular interval” in regulation 1(2) of the Contributions Regulations is to be read as if “employed earner” were replaced with “intermediary” and the words “of earnings” were deleted.

Application of Social Security Contributions and Benefits Act 1992 to deemed employmentE+W+S

18.—(1) This regulation applies where deemed direct earnings are treated as having been paid in any tax year under regulation 14.

(2) For the purposes of Parts 1 to 5 of the Contributions and Benefits Act—

(a)the amount of any deemed direct earnings calculated under regulation 17 shall be treated as remuneration derived from an employed earner’s employment,

(b)the worker shall be treated, in relation to the deemed direct earnings as employed in employed earner’s employment by the person treated as making the payment of deemed direct earnings,

(c)the services were performed, or are to be performed, by the worker in the course of performing the duties of that employment, and

(d)the person treated as making the payment of deemed direct earnings shall be treated as the secondary contributor in relation to the deemed direct earnings.

Deductions from chain paymentsE+W+S

19.—(1) This regulation applies if, as a result of regulation 18, a person who is treated as making a payment of deemed direct earnings is required under the Contributions Regulations to pay primary Class 1 contributions to the Commissioners for Her Majesty’s Revenue and Customs (the Commissioners) in respect of the payment.

(But see paragraph (4)).

(2) The person may deduct from the underlying chain payment an amount which is equal to the amount payable to the Commissioners in respect of primary Class 1 contributions, but where the amount or value of the underlying chain payment is treated by regulation 17(4) as increased by the cost of any amount due under the Contributions Regulations, the amount that may be deducted is limited to the difference (if any) between the amount of primary Class 1 contributions payable to the Commissioners and the amount of that increase.

(3) Where a person in the chain other than the intermediary receives a chain payment from which an amount has been deducted in reliance on paragraph (2) or this paragraph, that person may deduct the same amount from the chain payment made by them.

(4) This regulation does not apply in a case to which regulation 22(2) applies.

(5) In paragraph (2) “the underlying chain payment” means the chain payment whose amount is used at Step 1 of regulation 17(1) as the starting point for calculating the amount of the deemed direct earnings.

[F78Client-led status disagreement processE+W+S

20.—(1) This regulation applies if, before the final chain payment is made in the case of an engagement to which this Part applies, the worker or the deemed employer makes representations to the client that the conclusion contained in a status determination statement is incorrect.

(2) The client must either—

(a)give a statement to the worker or (as the case may be) the deemed employer that—

(i)states that the client has considered the representations and has decided that the conclusion contained in the status determination statement is correct, and

(ii)states the reasons for that decision, or

(b)give a new status determination statement to the worker and the deemed employer that—

(i)contains a different conclusion from the conclusion contained in the previous status determination,

(ii)states the date from which the client considers that the conclusion contained in the new status determination statement became correct, and

(iii)states that the previous status determination statement is withdrawn.

(3) If the client fails to comply with the duty in paragraph (2) before the end of the period of 45 days beginning with the date the client receives the representations, regulation 14(3) and (4) has effect from the end of that period until the duty is complied with as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to [F79regulations 22 and 24].

(4) A new status determination statement given to the deemed employer under paragraph (2)(b) is to be treated for the purposes of regulation 14(8)(za) as having been given to the deemed employer by the person immediately above the deemed employer in the chain.

(5) In this regulation—

“the deemed employer” means the person who, assuming one of conditions A to C in regulation 14 were met, would be treated as making a payment of deemed direct earnings to the worker under regulation 14(3) on the making of a chain payment;

“status determination statement” has the meaning given by regulation 14A.

Textual Amendments

Duty for client to withdraw status determination statement if it ceases to be medium or largeE+W+S

20A.—(1) This regulation applies if in the case of an engagement to which this Part applies—

(a)the client is not a public authority,

(b)the client gives a status determination statement to the worker, the client's agent or both, and

(c)the client does not (but for this regulation) qualify as medium or large for a tax year beginning after the status determination statement is given.

(2) Before the beginning of the tax year the client must give a statement to the relevant person, or (as the case may be) to both of the relevant persons, stating—

(a)that the client does not qualify as medium or large for the tax year, and

(b)that the status determination statement is withdrawn with effect from the beginning of the tax year.

(3) If the client fails to comply with that duty the following rules apply in relation to the engagement for the tax year—

(a)the client is to be treated as medium or large for the tax year, and

(b)regulation 14(3) and (4) has effect as if for any reference to the fee-payer there were substituted a reference to the client.

(4) For the purposes of paragraph (2)—

(a)the worker is a relevant person if the status determination statement was given to the worker, and

(b)the deemed employer is a relevant person if the status determination statement was given to the client's agent.

(5) In this regulation—

“client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in regulation 13(1)(c);

“the deemed employer” means the person who, assuming one of conditions A to C in regulation 14 were met, would be treated as making a payment of deemed direct earnings to the worker under regulation 14(3) on the making of a chain payment;

“status determination statement” has the meaning given by regulation 14A.]

Textual Amendments

Information to be provided by worker [F80or intermediary] and consequences of failureE+W+S

21.—(1) In the case of an engagement to which this Part applies, [F81the relevant person] must inform the potential deemed employer of which one of the following is applicable—

(a)that one of conditions A to C in regulation 14 is met in the case,

(b)that none of conditions A to C in regulation 14 is met in the case.

(2) If [F82the relevant person] has not complied with paragraph (1), then for the purposes of regulation 14(1), one of conditions A to C in regulation 14 is to be treated as met.

(3) In this regulation[F83—

“relevant person” means the worker or, in a case where the worker has not complied with paragraph (1), the intermediary;]

“the potential deemed employer” is the person who, if one of conditions A to C in regulation 14 were met, would be treated as making a payment of deemed direct earnings to the worker under regulation 14(3).

Textual Amendments

Consequences of providing fraudulent informationE+W+S

22.—(1) Paragraph (2) applies if in any case—

(a)a person (“the deemed employer”) would, but for this paragraph, be treated by regulation 14(3) as making a payment to another person (“the services-provider”), and

(b)the fraudulent documentation condition is met.

(2) Regulation 14(3) has effect in the case as if the reference to the fee-payer were a reference to the [F84relevant person (or if more than one, the first relevant person) in relation to whom the fraudulent documentation condition is met], but

(a)regulation 14(4) continues to have effect as if the reference to the fee-payer were a reference to the deemed employer, and

(b)Step 1 of regulation 17(1) continues to have effect as referring to the chain payment to be made by the deemed employer.

(3) Paragraph (2) has effect even though that [F85may involve a services-provider] being treated as both employer and employee in relation to the deemed employment under regulation 14(3).

(4) “The fraudulent documentation condition” is that a relevant person provided any person with a fraudulent document intended to constitute evidence—

(a)that the case is not an engagement to which this Part applies, or

(b)that none of the conditions A to C in regulation 14 is met in the case.

(5) For the purposes of this regulation a “relevant person” is—

(a)the services-provider,

(b)a person connected with the services-provider,

(c)if the intermediary in the case is a company, an office-holder in that company.

[F86(d)a person in the chain who fulfils the conditions as to residence and presence for liability to pay secondary Class 1 contributions prescribed under section 1(6)(a) of the Contributions and Benefits Act.]

Textual Amendments

Prevention of double liability to national insurance contributions and allowance of certain deductionsE+W+S

23.—(1) Paragraph (2) applies where—

(a)a person (“the payee”) receives a payment (“the end-of-line remuneration”) from another person (“the paying intermediary”),

(b)the end-of-line remuneration can reasonably be taken to represent remuneration for services of the payee to [F87another person (“the client”)],

(c)a payment (“the deemed payment”) has been treated by regulation 14(3) as paid to the payee,

(d)the underlying chain payment can reasonably be taken to be for the same services of the payee to [F88the client], and

(e)the recipient of the underlying chain payment has (whether by deduction from that payment or otherwise) borne the cost of any amounts due, under Income Tax (Pay As You Earn) Regulations 2003 and Contributions Regulations in respect of the deemed payment from the person treated by regulation 14(3) as making the deemed payment.

(2) For national insurance contributions purposes, the paying intermediary may treat the amount of the end-of-line remuneration as reduced (but not below nil) by the amount (see regulation 17) of the deemed payment less the amount of income tax and primary Class 1 national insurance contributions deducted from that amount.

(3) Nothing in paragraph (2) shall be read as removing a worker’s entitlement to Statutory Maternity Pay which would have existed but for the operation of that paragraph.

(4) In sub-paragraph (1)(d) “the underlying chain payment” means the chain payment whose amount is used at Step 1 of regulation 17(1) as the starting point for calculating the amount of the deemed direct earnings.]

Textual Amendments

[F89Anti-avoidanceE+W+S

24.—(1) This regulation applies if in any case at least one relevant person in a chain participates in a relevant avoidance arrangement.

(2) An arrangement is a “relevant avoidance arrangement” if its main purpose, or one of its main purposes, is to secure a NICs advantage by securing that at least one of the conditions mentioned in regulation 15 or 16 is not met in relation to an intermediary.

(3) Regulation 14(3) has effect as if the reference to the fee-payer were a reference to the participating person, but—

(a)regulation 14(4) continues to have effect as if the reference to the fee-payer were a reference to the deemed employer, and

(b)Step 1 of regulation 17(1) continues to have effect as referring to the chain payment made by the deemed employer.

(4) The “participating person” is—

(a)in a case where only one relevant person participates in the arrangement, that person;

(b)in any other case the highest relevant person in the chain who participated in the arrangement and from whom Her Majesty’s Revenue and Customs considers there is a realistic prospect of recovering, within a reasonable period, the amount of NICs that would have been paid (or not repaid) in the absence of the arrangement.

(5) Paragraph (3) has effect even though that may involve a participating person being treated as both employer and employee in relation to the deemed employment under regulation 14(3).

(6) In this regulation—

“arrangement” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

“deemed employer” means a person who would, but for this regulation, be treated by regulation 14(3) as making a payment to the worker;

“NICs” means National Insurance contributions (and “NICs advantage” is to be construed accordingly);

“NICs advantage” includes—

(a)

avoidance or reduction of a NICs liability,

(b)

repayment or increased repayment of NICs,

(c)

avoidance of a possible NICs liability, and

(d)

deferral of a payment of NICs or advancement of a repayment of NICs;

“relevant person” means—

(a)

the worker;

(b)

a person who fulfils the conditions as to residence and presence for liability to pay secondary Class 1 contributions prescribed under section 1(6)(a) of the Contributions and Benefits Act.]

Textual Amendments

Greg Pope

Bob Ainsworth

Two of the Lords Commissioners of Her Majesty’s Treasury

The Secretary of State for Social Security hereby concurs.

Signed by authority of the Secretary of State for Social Security

Jeff Rooker

Nick Montagu

Steve Matheson

Two of the Commissioners of Inland Revenue

Explanatory Note

(This note is not part of the Regulations)

These Regulations, which come into force on 6th April 2000, make provision for ensuring that social security contributions payable in relation to employed earner’s employment remain payable notwithstanding the existence of arrangements whereby the services of the worker for another person (“the client") are performed through another person (“the intermediary") and not pursuant to a contract of employment between the worker and the client.

Regulation 1 provides for citation, commencement and effect, and regulations 2 to 5 contain definitions.

Regulation 6 provides that, where the worker’s services are carried out in pursuance of arrangements involving an intermediary, the worker shall be treated, for the purposes of social security contributions in respect of a calculated amount of payments or benefits made or provided under the arrangements, as employed in employed earner’s employment by the intermediary, and the intermediary shall be treated as the secondary contributor for those purposes. The regulation also provides that an officer of the Board of Inland Revenue may make a decision on whether the regulation applies in a particular case.

Regulation 7 provides the method of calculation of the amount of payments and benefits in respect of which social security contributions are payable by virtue of regulation 6.

Regulation 8 treats the amount found under regulation 7 as a single payment of earnings made by the intermediary on 5th April in the year of assessment concerned or, where one or more specified events occur in that year, immediately before that event or the earliest of those events.

Regulations 9 to 11 make provision for the case where more than one intermediary is involved in the same arrangements.

Regulation 12 contains a saving provision that nothing in these Regulations affects the operation of secondary legislation relating to agency workers.

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\ No newline at end of file diff --git a/raw/uk/trade-secrets-regulations-2018 b/raw/uk/trade-secrets-regulations-2018 new file mode 100644 index 0000000..63dfcd0 --- /dev/null +++ b/raw/uk/trade-secrets-regulations-2018 @@ -0,0 +1,92 @@ + + + +The Trade Secrets (Enforcement, etc.) Regulations 2018 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +

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The Trade Secrets (Enforcement, etc.) Regulations 2018

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Statutory Instruments

2018 No. 597

Intellectual Property

The Trade Secrets (Enforcement, etc.) Regulations 2018

Made

15th May 2018

Laid before Parliament

18th May 2018

Coming into force

9th June 2018

The Secretary of State is a Minister designated for the purposes of section 2(2) of the European Communities Act 1972(1) in relation to intellectual property (including both registered and unregistered rights)(2).

The Secretary of State, in exercise of the powers conferred by section 2(2) of that Act, makes the following Regulations.

Citation, commencement and extent

1.—(1) These Regulations may be cited as the Trade Secrets (Enforcement, etc.) Regulations 2018 and come into force on 9th June 2018.

(2) These Regulations extend to England and Wales, Scotland and Northern Ireland.

Interpretation

2.  For the purposes of these Regulations—

“court” means—

(a)

in England and Wales, a County Court hearing centre where there is also a Chancery District Registry or the High Court (as provided for in rule 63.13 of the Civil Procedure Rules 1998(3)),

(b)

in Scotland, the sheriff or the Court of Session, and

(c)

in Northern Ireland, a county court or the High Court;

“infringer” means a person who has unlawfully acquired, used or disclosed a trade secret;

“infringing goods” means goods, the design, functioning, production process, marketing or a characteristic of which significantly benefits from a trade secret unlawfully acquired, used or disclosed;

“trade secret” means information which—

(a)

is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among, or readily accessible to, persons within the circles that normally deal with the kind of information in question,

(b)

has commercial value because it is secret, and

(c)

has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret;

“trade secret holder” means any person lawfully controlling a trade secret.

Wider protection

3.—(1) The acquisition, use or disclosure of a trade secret is unlawful where the acquisition, use or disclosure constitutes a breach of confidence in confidential information.

(2) A trade secret holder may apply for and a court may grant measures, procedures, and remedies available in an action for breach of confidence where the measures, procedures and remedies—

(a)provide wider protection to the trade secret holder than that provided under these Regulations in respect of the unlawful acquisition, use or disclosure of a trade secret, and

(b)comply with the safeguards referred to in Article 1 of Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure(4).

(3) A trade secret holder may apply for and a court may grant the measures, procedures and remedies referred to in paragraph (2) in addition, or as an alternative, to the measures procedures and remedies provided for in these Regulations in respect of the unlawful acquisition, use or disclosure of a trade secret.

Time limits for bringing proceedings

4.—(1) Proceedings may not be brought before a court in respect of a claim for the unlawful acquisition, use or disclosure of a trade secret and for the application of measures, procedures and remedies provided for under these Regulations—

(a)in England and Wales and Northern Ireland, after the end of the limitation period for the claim, and

(b)in Scotland, after the end of the prescriptive period for the claim, except where the subsistence of the obligation in relation to which the claim is made was relevantly acknowledged before the end of that period.

(2) The limitation period referred to in paragraph 1(a) is to be determined in accordance with this regulation and regulations 5 to 7 and 9.

(3) Section 36 of the Limitation Act 1980(5) (equitable jurisdiction and remedies) does not apply in relation to proceedings in respect of a claim for the unlawful acquisition, use or disclosure of a trade secret.

(4) The prescriptive period referred to in paragraph 1(b) is to be determined in accordance with this regulation and regulations 5, 6 and 8.

(5) Section 6 of the Prescription and Limitation (Scotland) Act 1973(6) (extinction of obligations by prescriptive periods of five years) does not apply in relation to an obligation arising from a claim for the unlawful acquisition, use or disclosure of a trade secret.

(6) The following provisions of the Prescription and Limitation (Scotland) Act 1973 apply for the purposes of, or in relation to, paragraph (1)(b) as they apply for the purposes of, or in relation to, section 6 of that Act—

(a)section 10 (relevant acknowledgment);

(b)section 13 (prohibition of contracting out);

(c)section 14(1)(c) and (d) (computation of prescriptive periods).

Length of limitation or prescriptive period

5.—(1) The limitation period is six years.

(2) The prescriptive period is five years.

(3) The limitation or prescriptive period begins with the day specified in regulation 6.

Beginning of limitation or prescriptive period

6.—(1) The limitation or prescriptive period for a claim for the unlawful acquisition, use or disclosure of a trade secret against an infringer begins with the later of—

(a)the day on which the unlawful acquisition, use or disclosure that is the subject of the claim ceases, and

(b)the day of knowledge of the trade secret holder.

(2) In paragraph (1)(b), “the day of knowledge of the trade secret holder” is the day on which the trade secret holder first knows or could reasonably be expected to know—

(a)of the infringer’s activity,

(b)that the activity constitutes an unlawful acquisition, use or disclosure of a trade secret, and

(c)the identity of the infringer.

(3) The reference in paragraph (2) to the trade secret holder knowing something is to the trade secret holder having sufficient knowledge of it to bring a claim for the unlawful acquisition, use or disclosure of a trade secret.

(4) Where a person has acquired the liability of an infringer from another person (whether by operation of law or otherwise)—

(a)the reference to an infringer in paragraph (1) is to be read as a reference to the person who has acquired the liability, but

(b)the references to the infringer in paragraph (2) are to be read as references to the original infringer.

(5) This regulation has effect subject to—

(a)regulation 7 in relation to the limitation period, and

(b)regulation 8 in relation to the prescriptive period.

Effect of disability on limitation period

7.—(1) If, in relation to a claim in England and Wales and Northern Ireland for the unlawful acquisition, use or disclosure of a trade secret, the trade secret holder is under a disability during the whole or any part of the limitation period, the limitation period for the claim begins with the earlier of—

(a)the day on which the trade secret holder ceases to be under a disability, and

(b)the day on which the trade secret holder dies.

(2) In England and Wales, references in paragraph (1) to a person being “under a disability” have the same meaning as in section 38(2) of the Limitation Act 1980 (interpretation).

(3) In Northern Ireland, references in paragraph (1) to a person being “under a disability” have the same meaning as in article 47 of the Limitation (Northern Ireland) Order 1989(7) (persons under a disability).

Suspension of prescriptive period during period of disability

8.—(1) If, in relation to a claim in Scotland for the unlawful acquisition, use or disclosure of a trade secret, the trade secret holder is under legal disability for a period at any time, the period during which the trade secret holder is under legal disability—

(a)is not to be counted when calculating whether the prescriptive period for the claim has expired, and

(b)is not to be regarded as separating the time immediately before it from the time immediately after it.

(2) In paragraph (1), “legal disability” has the same meaning as in section 15(1) of the Prescription and Limitation (Scotland) Act 1973 (interpretation).

New claims in pending actions: England and Wales and Northern Ireland

9.  For the purposes of regulations 4 to 7—

(a)section 35 of the Limitation Act 1980 (new claims in pending action) applies in relation to a claim for the unlawful acquisition, use or disclosure of a trade secret that is a new claim and to proceedings for the unlawful acquisition, use or disclosure of a trade secret as it applies in relation to new claims and proceedings for the purposes of that Act; and

(b)Article 73 of the Limitation (Northern Ireland) Order 1989 (new claims in pending actions) applies in relation to a claim for the unlawful acquisition, use or disclosure of a trade secret that is a new claim and to proceedings for the unlawful acquisition, use or disclosure of a trade secret as it applies in relation to new claims and proceedings for the purposes of that Order.

Preservation of confidentiality of trade secrets in the course of proceedings

10.—(1) A participant, or a participant who has access to documents which form part of the proceedings, must not use or disclose any trade secret or alleged trade secret—

(a)which, on a duly reasoned application by an interested party or on a court’s own initiative, a court by order identifies as confidential, and

(b)of which a participant has become aware as a result of participation in the proceedings or the access.

(2) The obligation referred to in paragraph (1) remains in force after the proceedings have ended, subject to paragraph (3).

(3) The obligation in paragraph (1) ceases to exist—

(a)where a court, by final decision, finds that the alleged trade secret does not meet the requirements of a trade secret, or

(b)where over time the information in question becomes generally known among, or readily accessible to, persons within the circles that normally deal with that kind of information.

(4) On a duly reasoned application by a party or on a court’s own initiative, a court may order any of the measures set out in paragraph (5) as may be necessary to preserve the confidentiality of any trade secret or alleged trade secret used or referred to in the course of proceedings.

(5) A court may—

(a)restrict access to any document containing a trade secret or alleged trade secret submitted by the parties or third parties, in whole or in part, to a limited number of persons,

(b)restrict access to hearings, when trade secrets or alleged trade secrets may be disclosed, and to the record or transcript of those hearings to a limited number of persons, and

(c)make available to a person, who is not one of the limited number of persons referred to in sub-paragraph (a) or (b), a non-confidential version of any judicial decision, in which the passages containing trade secrets have been removed or redacted.

(6) The number of persons referred to in paragraph 5(a) or (b) must be no greater than necessary to ensure compliance with the right of the parties to the legal proceedings to an effective remedy and to a fair trial, and must include, at least, one individual from each party and the lawyers or other representatives of those parties to the proceedings.

(7) In deciding whether or not to grant the measures in paragraph (5) in accordance with paragraphs (4) and (6) and which of the measures to order and in assessing the proportionality of the measures, a court must take into account—

(a)the need to ensure the right to an effective remedy and to a fair trial,

(b)the legitimate interests of the parties, and

(c)any potential harm for the parties.

(8) In this regulation—

“participant” means a party, a lawyer or other representative of a party, a court official, a witness, an expert or any other person participating in proceedings;

“parties”, in paragraph (7), includes, where appropriate, third parties;

“proceedings” means legal proceedings relating to the unlawful acquisition, use or disclosure of a trade secret.

Interim measures

11.—(1) On the application of a trade secret holder, a court may order any of the following measures against the alleged infringer—

(a)the cessation of, or (as the case may be) the prohibition of, the use or disclosure of the trade secret on a provisional basis;

(b)the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes;

(c)the seizure or delivery up of the suspected infringing goods, including imported goods, so as to prevent the goods entering into, or circulating on, the market.

(2) A person to whom the suspected infringing goods are delivered up under paragraph (1)(c) must retain the infringing goods pending a decision to make or not to make an order under regulation 14(2).

(3) A court making an order under paragraph (1) may set a reasonable period within which a trade secret holder must bring proceedings for a decision on the merits of the case before a court.

(4) Where no period is set under paragraph (3), a trade secret holder must bring proceedings before a court within a period not exceeding 20 working days or 31 calendar days after the day on which the order under paragraph (1) has been made, whichever is the longer.

(5) For the purposes of paragraph (4)—

(a)if the period of 20 working days ends on a day other than a working day, the proceedings are in time if they are brought on the next working day, and

(b)“working day” means any day except a Saturday or Sunday, Christmas Day, Good Friday or a day which is a bank holiday in any part of the United Kingdom under section 1 of the Banking and Financial Dealings Act 1971(8) (bank holidays).

(6) As an alternative to the measures referred to in paragraph (1), a court may make an order making the continuation of the alleged unlawful use conditional upon the lodging by the alleged infringer of guarantees intended to ensure the compensation of the trade secret holder.

(7) An order under paragraph (6) must not permit disclosure of a trade secret in return for the lodging of guarantees.

(8) A court may make an order under paragraph (1) or (6) conditional upon the lodging by the trade secret holder of adequate security or an equivalent assurance intended to ensure compensation for any prejudice suffered by the alleged infringer and, where appropriate, by any other person affected by the order.

Matters to be considered before making an order under regulation 11(1)

12.—(1) Before making an order under regulation 11(1), a court may require the trade secret holder to provide evidence that may reasonably be considered available to satisfy the court with a sufficient degree of certainty that—

(a)a trade secret exists,

(b)the trade secret holder is making the application, and

(c)the alleged infringer—

(i)has acquired the trade secret unlawfully,

(ii)is unlawfully using or disclosing the trade secret, or

(iii)is about to unlawfully use or disclose the trade secret.

(2) In considering whether to make an order under regulation 11(1) and in assessing the proportionality of such an order, a court must take into account the specific circumstances of the case, including where appropriate—

(a)the value and other specific features of the trade secret,

(b)the measures taken to protect the trade secret,

(c)the conduct of the alleged infringer in acquiring, using or disclosing the trade secret,

(d)the impact of the unlawful use or disclosure of the trade secret,

(e)the legitimate interests of the parties and the impact which the granting or rejection of the measures could have on the parties,

(f)the legitimate interests of third parties,

(g)the public interest, and

(h)the safeguard of fundamental rights.

Revocation of order under regulation 11(1)

13.—(1) Where a court makes an order under regulation 11(1), the court may, on the application of the alleged infringer, revoke the order—

(a)if the trade secret holder does not bring proceedings leading to a decision on the merits of the case before a court within the period set under regulation 11(3) or in regulation 11(4), or

(b)if the information in question is no longer a trade secret for reasons that cannot be attributed to the alleged infringer.

(2) A court may, on the application of the alleged infringer or an injured third party, order the trade secret holder to provide the alleged infringer, or the injured third party, appropriate compensation for any injury caused by a measure ordered under regulation 11(1)—

(a)where a court revokes an order under paragraph (1)(a),

(b)where the measure lapses due to any act or omission by the trade secret holder, or

(c)where it is subsequently found that there has been no unlawful acquisition, use or disclosure of a trade secret or threat of such conduct.

Injunctions or interdicts and corrective measures

14.—(1) Where a court finds on the merits of the case that there has been an unlawful acquisition, use or disclosure of a trade secret, the court may, on application by the trade secret holder, order one or more of the following measures against the infringer—

(a)the cessation of, or (as the case may be) the prohibition of, the use or disclosure of the trade secret;

(b)the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes;

(c)the adoption of corrective measures with regard to the infringing goods, including where appropriate—

(i)recall of the infringing goods from the market;

(ii)depriving the infringing goods of their infringing quality;

(iii)destruction of the infringing goods or their withdrawal from the market, provided that the withdrawal does not undermine the protection of the trade secret in question;

(d)the destruction of all or part of any document, object, material, substance or electronic file containing or embodying the trade secret, or where appropriate, the delivery up to the applicant of all or part of that document, object, material, substance or electronic file.

(2) Where a court orders that infringing goods be withdrawn from the market, the court may order, on the application of the trade secret holder, that the infringing goods be delivered up and forfeited to the trade secret holder together with all or part of any document, object, material, substance or electronic file containing or embodying the trade secret.

(3) Where a court makes an order for a measure under paragraph (1)(c) or (d) or paragraph (2), the court must—

(a)order that the measure be carried out at the expense of the infringer, unless there are particular reasons for not doing so, and

(b)ensure the measure is without prejudice to any damages that may be due to the trade secret holder by reason of the unlawful acquisition, use or disclosure of the trade secret.

Matters to be considered when making an order under regulation 14

15.—(1) In considering an application for an order under regulation 14 and assessing the proportionality of such an order, the court must take into account the specific circumstances of the case, including where appropriate—

(a)the value or other specific features of the trade secret,

(b)the measures taken to protect the trade secret,

(c)the conduct of the infringer in acquiring, using or disclosing the trade secret,

(d)the impact of the unlawful use or disclosure of the trade secret,

(e)the legitimate interests of the parties and the impact which the granting or rejection of the measures could have on the parties,

(f)the legitimate interests of third parties,

(g)the public interest, and

(h)the safeguard of fundamental rights.

(2) Where a court makes an order limiting the duration of a measure ordered under regulation 14(1)(a) or (b), the duration must be sufficient to eliminate any commercial or economic advantage that the infringer could have derived from the unlawful acquisition, use or disclosure of the trade secret.

(3) On the application of the defendant, the court must revoke a measure ordered under regulation 14(1)(a) or (b) if the information in question no longer constitutes a trade secret for reasons that cannot be attributed directly or indirectly to the defendant.

(4) In the application of paragraph (3) to Scotland, “defendant” means defender.

Compensation instead of order under regulation 14

16.—(1) A person liable to the imposition of an order under regulation 14 may apply for, and a court may make, an order for compensation to be paid to the injured party instead of an order under regulation 14—

(a)if at the time of use or disclosure the person neither knew nor ought, under the circumstances, to have known that the trade secret was obtained from another person who was using or disclosing the trade secret unlawfully,

(b)if the execution of the measures in question would cause disproportionate harm to the person liable to the measures, and

(c)if it appears reasonably satisfactory to pay compensation to the injured party.

(2) Where a court makes an order for the payment of compensation instead of an order under regulation 14(1)(a) or (b), the compensation must not exceed the amount of royalties or fees which would have been due, had that person obtained a licence to use the trade secret in question, for the period for which use of the trade secret could have been prohibited.

Assessment of damages

17.—(1) On the application of an injured party, a court must order an infringer, who knew or ought to have known that unlawful acquisition, use or disclosure of a trade secret was being engaged in, to pay the trade secret holder damages appropriate to the actual prejudice suffered as a result of the unlawful acquisition, use or disclosure of the trade secret.

(2) A court may award damages under paragraph (1) on the basis of either paragraph (3) or (4).

(3) When awarding damages under paragraph (1) on the basis of this paragraph, a court must take into account all appropriate factors, including in particular—

(i)the negative economic consequences, including any lost profits, which the trade secret holder has suffered, and any unfair profits made by the infringer, and

(ii)elements other than economic factors, including the moral prejudice caused to the trade secret holder by the unlawful acquisition, use or disclosure of the trade secret.

(4) When awarding damages under paragraph (1) on the basis of this paragraph, a court may, where appropriate, award damages on the basis of the royalties or fees which would have been due had the infringer obtained a licence to use the trade secret in question.

Publication of judicial decisions

18.—(1) In proceedings for the unlawful acquisition, use or disclosure of a trade secret, a court may order, on the application of the trade secret holder and at the expense of the infringer, appropriate measures for the dissemination of information concerning the judgment, including its publication in whole or in part.

(2) Any measure a court may order under paragraph (1) must preserve the confidentiality of trade secrets as provided for in regulation 10.

(3) In deciding whether to order a measure under paragraph (1) and when assessing whether such measure is proportionate, the court must take into account where appropriate—

(a)the value of the trade secret,

(b)the conduct of the infringer in acquiring, using or disclosing the trade secret,

(c)the impact of the unlawful use or disclosure of the trade secret,

(d)the likelihood of further unlawful use, or disclosure of the trade secret by the infringer, and

(e)whether the information on the infringer would be such as to allow an individual to be identified and, if so, whether publication of that information would be justified, in particular in the light of the possible harm that such measure may cause to the privacy and reputation of the infringer.

Proceedings to which these Regulations apply

19.  These Regulations apply only to proceedings—

(a)brought before a court after the coming into force of these Regulations,

(b)in respect a claim for the unlawful acquisition, use or disclosure of a trade secret, and

(c)for the application of measures, procedures and remedies provided for under these Regulations.

Sam Gyimah

Minister of State

Department for Business, Energy and Industrial Strategy

15th May 2018

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations implement provisions of Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ L157, 15.6.2017, p.1) (“the Directive”). A number of the provisions of the Directive, in particular the provisions in Chapter II and Articles 6, 7 and 16, have been implemented in the United Kingdom by the principles of common law and equity relating to breach of confidence in confidential information, and by statute and court rules. These Regulations address those areas where gaps occur or where the implementation of the provisions of the Directive in the United Kingdom, across its jurisdictions, may be made more transparent and coherent.

Regulation 2 defines the terms “infringer”, “infringing goods”, “trade secret” and “trade secret holder” in accordance with Article 2 of the Directive and adds a definition of “court”.

Regulation 3(1) makes clear that the issue of whether the acquisition, use or disclosure of a trade secret is unlawful is determined by reference to the principles of the law of confidence. Where the measures, procedures and remedies available in an action for breach of confidence offer wider protection to a trade secret holder than that offered under the Regulations, the trade secret holder may apply for, and a court may grant, them provided they comply with the safeguards referred to in Article 1 of the Directive (Regulation 3(2)). The measures, procedures and remedies referred to in regulation 3(2) are in addition, or an alternative, to the measures, procedures and remedies provided under these Regulations in respect of the unlawful acquisition, use or disclosure of a trade secret (Regulation 3(3)).

Regulations 4 to 9 make provision for limitation and prescriptive periods applicable to proceedings for claims for the unlawful acquisition, use or disclosure of a trade secret and for the application of measures, procedures and remedies under these Regulations. Regulations 4 to 9 implement Article 8 of the Directive. A limitation period of six years is set for England and Wales and Northern Ireland. A prescriptive period of five years is set for Scotland. Provision is made for determining when the limitation or prescriptive period begins to run and for suspending the limitation or prescriptive period on account of disability.

Regulation 10 provides for the preservation of confidentiality of trade secrets in the course of legal proceedings in implementation of Article 9(1) to (3) of the Directive.

Regulation 11 provides for interim measures against an alleged infringer in implementation of Article 10 of the Directive. Where an interim order for delivery up is made, a trade secret holder must retain the infringing goods until an order is made under regulation 14(2) that the goods be forfeited to the trade secret holder or destroyed. A time limit is set within which a claim must be brought after an interim order has been made. As an alternative to interim measures, a court may require guarantees to be lodged by the alleged infringer to compensate the trade secret holder. A court may also require a trade secret holder to provide adequate security to compensate an alleged infringer for any prejudice suffered.

Regulation 12 provides for the matters a court needs to consider before making an interim order under regulation 11(1). Regulation 12 implements Article 11(1) and (2) of the Directive.

Regulation 13 provides for revocation of an order made under regulation 11(1) where a trade secret holder does not bring proceedings before a court within the specified period or in certain other circumstances. Where a measure ordered is revoked, a court may order payment of appropriate compensation to the alleged infringer or injured third party. Regulation 13 implements Article 11(3) and (5) of the Directive.

Regulation 14 provides for injunctions, or interdicts in Scotland, and corrective measures which may be imposed on an infringer. These measures include requiring an infringer, at his expense, to recall the infringing goods from the market, to deprive them of their infringing quality, to destroy the infringing goods or to withdraw them from the market. When ordering the withdrawal of the goods from the market, a court may require the goods to be delivered up and forfeited to the trade secret holder. Regulation 14 implements Article 12 of the Directive.

Regulation 15 sets out the matters to be considered when making an order under regulation 14 and implements Article 13(1) and (2) of the Directive.

Regulation 16 enables a court to order compensation instead of an order under regulation 14 under certain conditions. This implements Article 13(3) of the Directive.

Regulation 17 sets out the factors that need to be taken into account when making an award of damages for the unlawful acquisition, use or disclosure of a trade secret. This implements Article 14 of the Directive.

Regulation 18 makes provision for the publication of information relating to judicial decisions in proceedings for the unlawful acquisition, use or disclosure of a trade secret. This implements Article 15 of the Directive.

Regulation 19 makes clear that the Regulations apply only to proceedings brought before a court after the coming into force of these Regulations in respect of a claim for the unlawful acquisition, use or disclosure of a trade secret and for the application of measures, procedures and remedies provided for under these Regulations.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen. A transposition note is available from the Intellectual Property Office, Concept House, Cardiff Road, Newport NP10 8QQ and is available with the explanatory memorandum alongside this instrument on the Legislation UK website at www.legislation.gov.uk. Copies have also been placed in the libraries of both Houses of Parliament.

(1)

1972 c.68; section 2(2) was amended by the Legislative and Regulatory Reform Act 2006 (c.51), section 27(1)(a) and the European Union (Amendment) Act 2008 (c.7), section 3(3) and Schedule, Part I.

(3)

S.I. 1998/3132; relevant amending instruments are S.I. 2009/2092, Schedule 1, S.I. 2009/3390, rule 38(a), S.I. 2013/1974, rule 26(g), and S.I. 2014/407, rule 27(a).

(4)

OJ L157, 15.6.2016, p1.

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EDITOR'S NOTE: The following is the text of Titles I and V of the Americans with Disabilities Act of 1990 (Pub. L. 101-336) (ADA), as amended. The ADA is codified at 42 U.S.C. 12101 and in subsequent sections. Amendments to the ADA include those introduced by the Civil Rights Act of 1991, the ADA Amendments Act of 2008 (ADAAA), and the Lilly Ledbetter Fair Pay Act of 2009. Amendments introduced by the ADAAA and the Lilly Ledbetter Fair Pay Act appear in boldface. Editor’s notes appear in italics and include cross references to the codified version of the ADA. Title I of the ADA prohibits employment discrimination against qualified individuals with disabilities by employers with 15 or more employees, while Title V contains miscellaneous provisions.

An Act to establish a clear and comprehensive prohibition of
discrimination on the basis of disability.

Be it enacted by the Senate and House of Representatives of the United States of America assembled, that this Act may be cited as the "Americans with Disabilities Act of 1990".

* * *

FINDINGS AND PURPOSES

SEC. 12101. [Section 2]

(a) Findings. - The Congress finds that-

(1) physical or mental disabilities in no way diminish a person's right to fully participate in all aspects of society, yet many people with physical or mental disabilities have been precluded from doing so because of discrimination; others who have a record of a disability or are regarded as having a disability also have been subjected to discrimination;

(2) historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem;

(3) discrimination against individuals with disabilities persists in such critical areas as employment, housing, public accommodations, education, transportation, communication, recreation, institutionalization, health services, voting, and access to public services;

(4) unlike individuals who have experienced discrimination on the basis of race, color, sex, national origin, religion, or age, individuals who have experienced discrimination on the basis of disability have often had no legal recourse to redress such discrimination;

(5) individuals with disabilities continually encounter various forms of discrimination, including outright intentional exclusion, the discriminatory effects of architectural, transportation, and communication barriers, overprotective rules and policies, failure to make modifications to existing facilities and practices, exclusionary qualification standards and criteria, segregation, and relegation to lesser services, programs, activities, benefits, jobs, or other opportunities;

(6) census data, national polls, and other studies have documented that people with disabilities, as a group, occupy an inferior status in our society, and are severely disadvantaged socially, vocationally, economically, and educationally;

(7) the Nation's proper goals regarding individuals with disabilities are to assure equality of opportunity, full participation, independent living, and economic self­-sufficiency for such individuals; and

(8) the continuing existence of unfair and unnecessary discrimination and prejudice denies people with disabilities the opportunity to compete on an equal basis and to pursue those opportunities for which our free society is justifiably famous, and costs the United States billions of dollars in unnecessary expenses resulting from dependency and nonproductivity.

(b) Purpose. - It is the purpose of this chapter-

(1) to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities;

(2) to provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities;

(3) to ensure that the Federal Government plays a central role in enforcing the standards established in this chapter on behalf of individuals with disabilities; and

(4) to invoke the sweep of congressional authority, including the power to enforce the fourteenth amendment and to regulate commerce, in order to address the major areas of discrimination faced day ­to­ day by people with disabilities.

DEFINITION OF DISABILITY

SEC. 12102. [Section 3]

As used in this chapter:

(1) Disability. - The term "disability" means, with respect to an individual-

(A) a physical or mental impairment that substantially limits one or more major life activities of such individual;

(B) a record of such an impairment; or

(C) being regarded as having such an impairment (as described in paragraph (3)).

(2) Major life activities

A) In general

For purposes of paragraph (1), major life activities include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.

(B) Major bodily functions

For purposes of paragraph (1), a major life activity also includes the operation of a major bodily function, including but not limited to, functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.

(3) Regarded as having such an impairment

For purposes of paragraph (1)(C):

(A) An individual meets the requirement of "being regarded as having such an impairment" if the individual establishes that he or she has been subjected to an action prohibited under this chapter because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.

(B) Paragraph (1)(C) shall not apply to impairments that are transitory and minor. A transitory impairment is an impairment with an actual or expected duration of 6 months or less.

(4) Rules of construction regarding the definition of disability

The definition of "disability" in paragraph (1) shall be construed in accordance with the following:

(A) The definition of disability in this chapter shall be construed in favor of broad coverage of individuals under this chapter, to the maximum extent permitted by the terms of this chapter.

(B) The term "substantially limits" shall be interpreted consistently with the findings and purposes of the ADA Amendments Act of 2008.

(C) An impairment that substantially limits one major life activity need not limit other major life activities in order to be considered a disability.

(D) An impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.

(E)(i) The determination of whether an impairment substantially limits a major life activity shall be made without regard to the ameliorative effects of mitigating measures such as-

(I) medication, medical supplies, equipment, or appliances, low-vision devices (which do not include ordinary eyeglasses or contact lenses), prosthetics including limbs and devices, hearing aids and cochlear implants or other implantable hearing devices, mobility devices, or oxygen therapy equipment and supplies;

(II) use of assistive technology;

(III) reasonable accommodations or auxiliary aids or services; or

(IV) learned behavioral or adaptive neurological modifications.

(ii) The ameliorative effects of the mitigating measures of ordinary eyeglasses or contact lenses shall be considered in determining whether an impairment substantially limits a major life activity.

(iii) As used in this subparagraph-

(I) the term "ordinary eyeglasses or contact lenses" means lenses that are intended to fully correct visual acuity or eliminate refractive error; and

(II) the term "low-vision devices" means devices that magnify, enhance, or otherwise augment a visual image.

ADDITIONAL DEFINITIONS

SEC. 12103. [Section 4]

As used in this chapter:

(1) Auxiliary aids and services. - The term "auxiliary aids and services" includes-

(A) qualified interpreters or other effective methods of making aurally delivered materials available to individuals with hearing impairments;

(B) qualified readers, taped texts, or other effective methods of making visually delivered materials available to individuals with visual impairments;

(C) acquisition or modification of equipment or devices; and

(D) other similar services and actions.

(2) State. - The term "State" means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands of the United States, the Trust Territory of the Pacific Islands, and the Commonwealth of the Northern Mariana Islands.

SUBCHAPTER I [TITLE I] - EMPLOYMENT

DEFINITIONS

SEC. 12111. [Section 101]

As used in this subchapter:

(1) Commission. - The term "Commission" means the Equal Employment Opportunity Commission established by section 2000e-4 of this title [section 705 of the Civil Rights Act of 1964].

(2) Covered entity. - The term "covered entity" means an employer, employment agency, labor organization, or joint labor ­management committee.

(3) Direct threat. - The term "direct threat" means a significant risk to the health or safety of others that cannot be eliminated by reasonable accommodation.

(4) Employee. - The term "employee" means an individual employed by an employer. With respect to employment in a foreign country, such term includes an individual who is a citizen of the United States.

(5) Employer. -

(A) In general. - The term "employer" means a person engaged in an industry affecting commerce who has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year, and any agent of such person, except that, for two years following the effective date of this subchapter, an employer means a person engaged in an industry affecting commerce who has 25 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding year, and any agent of such person.

(B) Exceptions. - The term "employer" does not include-

(i) the United States, a corporation wholly owned by the government of the United States, or an Indian tribe; or

(ii) a bona fide private membership club (other than a labor organization) that is exempt from taxation under section 501(c) of Title 26 [the Internal Revenue Code of 1986].

(6) Illegal use of drugs. -

(A) In general. - The term "illegal use of drugs" means the use of drugs, the possession or distribution of which is unlawful under the Controlled Substances Act [21 U.S.C. 801 et seq.]. Such term does not include the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law.

(B) Drugs. - The term "drug" means a controlled substance, as defined in schedules I through V of section 202 of the Controlled Substances Act [21 U.S.C. 812].

(7) Person, etc. - The terms "person", "labor organization", "employment agency", "commerce", and "industry affecting commerce", shall have the same meaning given such terms in section 2000e of this title [section 701 of the Civil Rights Act of 1964].

(8) Qualified individual. - The term "qualified individual" means an individual who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires. For the purposes of this subchapter, consideration shall be given to the employer's judgment as to what functions of a job are essential, and if an employer has prepared a written description before advertising or interviewing applicants for the job, this description shall be considered evidence of the essential functions of the job.

(9) Reasonable accommodation. - The term "reasonable accommodation" may include-

(A) making existing facilities used by employees readily accessible to and usable by individuals with disabilities; and

(B) job restructuring, part-­time or modified work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustment or modifications of examinations, training materials or policies, the provision of qualified readers or interpreters, and other similar accommodations for individuals with disabilities.

(10) Undue hardship. -

(A) In general. - The term "undue hardship" means an action requiring significant difficulty or expense, when considered in light of the factors set forth in subparagraph (B).

(B) Factors to be considered. - In determining whether an accommodation would impose an undue hardship on a covered entity, factors to be considered include-

(i) the nature and cost of the accommodation needed under this chapter;

(ii) the overall financial resources of the facility or facilities involved in the provision of the reasonable accommodation; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such accommodation upon the operation of the facility;

(iii) the overall financial resources of the covered entity; the overall size of the business of a covered entity with respect to the number of its employees; the number, type, and location of its facilities; and

(iv) the type of operation or operations of the covered entity, including the composition, structure, and functions of the workforce of such entity; the geographic separateness, administrative, or fiscal relationship of the facility or facilities in question to the covered entity.

DISCRIMINATION

SEC. 12112. [Section 102]

(a) General rule. - No covered entity shall discriminate against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.

(b) Construction. - As used in subsection (a) of this section, the term "discriminate against a qualified individual on the basis of disability" includes-

(1) limiting, segregating, or classifying a job applicant or employee in a way that adversely affects the opportunities or status of such applicant or employee because of the disability of such applicant or employee;

(2) participating in a contractual or other arrangement or relationship that has the effect of subjecting a covered entity's qualified applicant or employee with a disability to the discrimination prohibited by this subchapter (such relationship includes a relationship with an employment or referral agency, labor union, an organization providing fringe benefits to an employee of the covered entity, or an organization providing training and apprenticeship programs);

(3) utilizing standards, criteria, or methods of administration-

(A) that have the effect of discrimination on the basis of disability; or

(B) that perpetuate the discrimination of others who are subject to common administrative control;

(4) excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association;

(5) (A) not making reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, unless such covered entity can demonstrate that the accommodation would impose an undue hardship on the operation of the business of such covered entity; or

(B) denying employment opportunities to a job applicant or employee who is an otherwise qualified individual with a disability, if such denial is based on the need of such covered entity to make reasonable accommodation to the physical or mental impairments of the employee or applicant;

(6) using qualification standards, employment tests or other selection criteria that screen out or tend to screen out an individual with a disability or a class of individuals with disabilities unless the standard, test or other selection criteria, as used by the covered entity, is shown to be job­-related for the position in question and is consistent with business necessity; and

(7) failing to select and administer tests concerning employment in the most effective manner to ensure that, when such test is administered to a job applicant or employee who has a disability that impairs sensory, manual, or speaking skills, such test results accurately reflect the skills, aptitude, or whatever other factor of such applicant or employee that such test purports to measure, rather than reflecting the impaired sensory, manual, or speaking skills of such employee or applicant (except where such skills are the factors that the test purports to measure).

(c) Covered entities in foreign countries. -

(1) In general. - It shall not be unlawful under this section for a covered entity to take any action that constitutes discrimination under this section with respect to an employee in a workplace in a foreign country if compliance with this section would cause such covered entity to violate the law of the foreign country in which such workplace is located.

(2) Control of corporation

(A) Presumption. - If an employer controls a corporation whose place of incorporation is a foreign country, any practice that constitutes discrimination under this section and is engaged in by such corporation shall be presumed to be engaged in by such employer.

(B) Exception. - This section shall not apply with respect to the foreign operations of an employer that is a foreign person not controlled by an American employer.

(C) Determination. - For purposes of this paragraph, the determination of whether an employer controls a corporation shall be based on-

(i) the interrelation of operations;

(ii) the common management;

(iii) the centralized control of labor relations; and

(iv) the common ownership or financial control, of the employer and the corporation.

(d) Medical examinations and inquiries. -

(1) In general. - The prohibition against discrimination as referred to in subsection (a) of this section shall include medical examinations and inquiries.

(2) Pre-employment. -

(A) Prohibited examination or inquiry. - Except as provided in paragraph (3), a covered entity shall not conduct a medical examination or make inquiries of a job applicant as to whether such applicant is an individual with a disability or as to the nature or severity of such disability.

(B) Acceptable inquiry. - A covered entity may make pre-employment inquiries into the ability of an applicant to perform job-­related functions.

(3) Employment entrance examination. - A covered entity may require a medical examination after an offer of employment has been made to a job applicant and prior to the commencement of the employment duties of such applicant, and may condition an offer of employment on the results of such examination, if-

(A) all entering employees are subjected to such an examination regardless of disability;

(B) information obtained regarding the medical condition or history of the applicant is collected and maintained on separate forms and in separate medical files and is treated as a confidential medical record, except that-

(i) supervisors and managers may be informed regarding necessary restrictions on the work or duties of the employee and necessary accommodations;

(ii) first aid and safety personnel may be informed, when appropriate, if the disability might require emergency treatment; and

(iii) government officials investigating compliance with this chapter shall be provided relevant information on request; and

(C) the results of such examination are used only in accordance with this subchapter.

(4) Examination and inquiry. -

(A) Prohibited examinations and inquiries. - A covered entity shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job­related and consistent with business necessity.

(B) Acceptable examinations and inquiries. - A covered entity may conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site. A covered entity may make inquiries into the ability of an employee to perform job­-related functions.

(C) Requirement. - Information obtained under subparagraph (B) regarding the medical condition or history of any employee are subject to the requirements of subparagraphs (B) and (C) of paragraph (3).

DEFENSES

SEC. 12113. [Section 103]

(a) In general. - It may be a defense to a charge of discrimination under this chapter that an alleged application of qualification standards, tests, or selection criteria that screen out or tend to screen out or otherwise deny a job or benefit to an individual with a disability has been shown to be job­-related and consistent with business necessity, and such performance cannot be accomplished by reasonable accommodation, as required under this subchapter.

(b) Qualification standards. - The term "qualification standards" may include a requirement that an individual shall not pose a direct threat to the health or safety of other individuals in the workplace.

(c) Qualification standards and tests related to uncorrected vision. - Notwithstanding section 12102(4)(E)(ii) of this title, a covered entity shall not use qualification standards, employment tests, or other selection criteria based on an individual's uncorrected vision unless the standard, test, or other selection criteria, as used by the covered entity, is shown to be job-related for the position in question and consistent with business necessity.

(d) Religious entities. -

(1) In general. - This subchapter shall not prohibit a religious corporation, association, educational institution, or society from giving preference in employment to individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.

(2) Religious tenets requirement. - Under this subchapter, a religious organization may require that all applicants and employees conform to the religious tenets of such organization.

(e) List of infectious and communicable diseases. -

(1) In general. - The Secretary of Health and Human Services, not later than 6 months after July 26, 1990 [the date of enactment of this Act], shall-

(A) review all infectious and communicable diseases which may be transmitted through handling the food supply;

(B) publish a list of infectious and communicable diseases which are transmitted through handling the food supply;

(C) publish the methods by which such diseases are transmitted; and

(D) widely disseminate such information regarding the list of diseases and their modes of transmissibility to the general public. Such list shall be updated annually.

(2) Applications. - In any case in which an individual has an infectious or communicable disease that is transmitted to others through the handling of food, that is included on the list developed by the Secretary of Health and Human Services under paragraph (1), and which cannot be eliminated by reasonable accommodation, a covered entity may refuse to assign or continue to assign such individual to a job involving food handling.

(3) Construction. - Nothing in this chapter shall be construed to preempt, modify, or amend any State, county, or local law, ordinance, or regulation applicable to food handling which is designed to protect the public health from individuals who pose a significant risk to the health or safety of others, which cannot be eliminated by reasonable accommodation, pursuant to the list of infectious or communicable diseases and the modes of transmissibility published by the Secretary of Health and Human Services.

ILLEGAL USE OF DRUGS AND ALCOHOL

SEC. 12114. [Section 104]

(a) Qualified individual with a disability. - For purposes of this subchapter, a qualified individual with a disability shall not include any employee or applicant who is currently engaging in the illegal use of drugs, when the covered entity acts on the basis of such use.

(b) Rules of construction. - Nothing in subsection (a) of this section shall be construed to exclude as a qualified individual with a disability an individual who-

(1) has successfully completed a supervised drug rehabilitation program and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully and is no longer engaging in such use;

(2) is participating in a supervised rehabilitation program and is no longer engaging in such use; or

(3) is erroneously regarded as engaging in such use, but is not engaging in such use; except that it shall not be a violation of this chapter for a covered entity to adopt or administer reasonable policies or procedures, including but not limited to drug testing, designed to ensure that an individual described in paragraph (1) or (2) is no longer engaging in the illegal use of drugs.

(c) Authority of covered entity. -

A covered entity-

(1) may prohibit the illegal use of drugs and the use of alcohol at the workplace by all employees;

(2) may require that employees shall not be under the influence of alcohol or be engaging in the illegal use of drugs at the workplace;

(3) may require that employees behave in conformance with the requirements established under the Drug ­Free Workplace Act of 1988 (41 U.S.C. 701 et seq.);

(4) may hold an employee who engages in the illegal use of drugs or who is an alcoholic to the same qualification standards for employment or job performance and behavior that such entity holds other employees, even if any unsatisfactory performance or behavior is related to the drug use or alcoholism of such employee; and (5) may, with respect to Federal regulations regarding alcohol and the illegal use of drugs, require that-

(A) employees comply with the standards established in such regulations of the Department of Defense, if the employees of the covered entity are employed in an industry subject to such regulations, including complying with regulations (if any) that apply to employment in sensitive positions in such an industry, in the case of employees of the covered entity who are employed in such positions (as defined in the regulations of the Department of Defense);

(B) employees comply with the standards established in such regulations of the Nuclear Regulatory Commission, if the employees of the covered entity are employed in an industry subject to such regulations, including complying with regulations (if any) that apply to employment in sensitive positions in such an industry, in the case of employees of the covered entity who are employed in such positions (as defined in the regulations of the Nuclear Regulatory Commission); and

(C) employees comply with the standards established in such regulations of the Department of Transportation, if the employees of the covered entity are employed in a transportation industry subject to such regulations, including complying with such regulations (if any) that apply to employment in sensitive positions in such an industry, in the case of employees of the covered entity who are employed in such positions (as defined in the regulations of the Department of Transportation).

(d) Drug testing. -

(1) In general. - For purposes of this subchapter, a test to determine the illegal use of drugs shall not be considered a medical examination.

(2) Construction. - Nothing in this subchapter shall be construed to encourage, prohibit, or authorize the conducting of drug testing for the illegal use of drugs by job applicants or employees or making employment decisions based on such test results.

(e) Transportation employees. - Nothing in this subchapter shall be construed to encourage, prohibit, restrict, or authorize the otherwise lawful exercise by entities subject to the jurisdiction of the Department of Transportation of authority to-

(1) test employees of such entities in, and applicants for, positions involving safety­ sensitive duties for the illegal use of drugs and for on­ duty impairment by alcohol; and

(2) remove such persons who test positive for illegal use of drugs and on ­duty impairment by alcohol pursuant to paragraph (1) from safety­ sensitive duties in implementing subsection (c) of this section.

POSTING NOTICES

SEC. 12115. [Section 105]

Every employer, employment agency, labor organization, or joint labor­ management committee covered under this subchapter shall post notices in an accessible format to applicants, employees, and members describing the applicable provisions of this chapter, in the manner prescribed by section 2000e-10 of this title [section 711 of the Civil Rights Act of 1964].

REGULATIONS

SEC. 12116. [Section 106]

Not later than 1 year after July 26, 1990 [the date of enactment of this Act], the Commission shall issue regulations in an accessible format to carry out this subchapter in accordance with subchapter II of chapter 5 of title 5 [United States Code].

ENFORCEMENT

SEC. 12117. [Section 107]

(a) Powers, remedies, and procedures. - The powers, remedies, and procedures set forth in sections 2000e-4, 2000e-5, 2000e-6, 2000e-8, and 2000e-9 of this title [sections 705, 706, 707, 709 and 710 of the Civil Rights Act of 1964] shall be the powers, remedies, and procedures this subchapter provides to the Commission, to the Attorney General, or to any person alleging discrimination on the basis of disability in violation of any provision of this chapter, or regulations promulgated under section 12116 of this title [section 106], concerning employment.

(b) Coordination. - The agencies with enforcement authority for actions which allege employment discrimination under this subchapter and under the Rehabilitation Act of 1973 [29 U.S.C. 701 et seq.] shall develop procedures to ensure that administrative complaints filed under this subchapter and under the Rehabilitation Act of 1973 are dealt with in a manner that avoids duplication of effort and prevents imposition of inconsistent or conflicting standards for the same requirements under this subchapter and the Rehabilitation Act of 1973. The Commission, the Attorney General, and the Office of Federal Contract Compliance Programs shall establish such coordinating mechanisms (similar to provisions contained in the joint regulations promulgated by the Commission and the Attorney General at part 42 of title 28 and part 1691 of title 29, Code of Federal Regulations, and the Memorandum of Understanding between the Commission and the Office of Federal Contract Compliance Programs dated January 16, 1981 (46 Fed. Reg. 7435, January 23, 1981)) in regulations implementing this subchapter and Rehabilitation Act of 1973 not later than 18 months after July 26, 1990 [the date of enactment of this Act].

[42 USC § 2000e-5 note]

(a) AMERICANS WITH DISABILITIES ACT OF 1990. - The amendments made by section 3 [Lilly Ledbetter Fair Pay Act of 2009, PL 111-2, 123 Stat. 5] shall apply to claims of discrimination in compensation brought under title I and section 503 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12111 et seq., 12203), pursuant to section 107(a) of such Act (42 U.S.C. 12117(a)), which adopts the powers, remedies, and procedures set forth in section 706 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5).

SUBCHAPTER IV [TITLE V] - MISCELLANEOUS PROVISIONS

CONSTRUCTION

SEC. 12201. [Section 501]

(a) In general. - Except as otherwise provided in this chapter, nothing in this chapter shall be construed to apply a lesser standard than the standards applied under Title V of the Rehabilitation Act of 1973 (29 U.S.C. 790 et seq.) or the regulations issued by Federal agencies pursuant to such title.

(b) Relationship to other laws. - Nothing in this chapter shall be construed to invalidate or limit the remedies, rights, and procedures of any Federal law or law of any State or political subdivision of any State or jurisdiction that provides greater or equal protection for the rights of individuals with disabilities than are afforded by this chapter. Nothing in this chapter shall be construed to preclude the prohibition of, or the imposition of restrictions on, smoking in places of employment covered by subchapter I of this chapter [title I], in transportation covered by subchapter II or III of this chapter [title II or III], or in places of public accommodation covered by subchapter III of this chapter [title III].

(c) Insurance. - Subchapters I through III of this chapter [titles I through III] and title IV of this Act shall not be construed to prohibit or restrict-

(1) an insurer, hospital or medical service company, health maintenance organization, or any agent, or entity that administers benefit plans, or similar organizations from underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or

(2) a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or

(3) a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that is not subject to State laws that regulate insurance.

Paragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the purposes of subchapter I and III of this chapter [titles I and III].

(d) Accommodations and services. - Nothing in this chapter shall be construed to require an individual with a disability to accept an accommodation, aid, service, opportunity, or benefit which such individual chooses not to accept.

(e) Benefits under State worker's compensation laws

Nothing in this chapter alters the standards for determining eligibility for benefits under State worker's compensation laws or under State and Federal disability benefit programs.

(f) Fundamental alteration

Nothing in this chapter alters the provision of section 12182(b)(2)(A)(ii) of this title, specifying that reasonable modifications in policies, practices, or procedures shall be required, unless an entity can demonstrate that making such modifications in policies, practices, or procedures, including academic requirements in postsecondary education, would fundamentally alter the nature of the goods, services, facilities, privileges, advantages, or accommodations involved.

(g) Claims of no disability

Nothing in this chapter shall provide the basis for a claim by an individual without a disability that the individual was subject to discrimination because of the individual's lack of disability.

(h) Reasonable accommodations and modifications

A covered entity under subchapter I of this chapter, a public entity under subchapter II of this chapter, and any person who owns, leases (or leases to), or operates a place of public accommodation under subchapter III of this chapter, need not provide a reasonable accommodation or a reasonable modification to policies, practices, or procedures to an individual who meets the definition of disability in section 12102(1) of this title solely under subparagraph (C) of such section.

STATE IMMUNITY

SEC. 12202. [Section 502]

A State shall not be immune under the eleventh amendment to the Constitution of the United States from an action in Federal or State court of competent jurisdiction for a violation of this chapter. In any action against a State for a violation of the requirements of this chapter, remedies (including remedies both at law and in equity) are available for such a violation to the same extent as such remedies are available for such a violation in an action against any public or private entity other than a State.

PROHIBITION AGAINST RETALIATION AND COERCION

SEC. 12203. [Section 503]

(a) Retaliation. - No person shall discriminate against any individual because such individual has opposed any act or practice made unlawful by this chapter or because such individual made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this chapter.

(b) Interference, coercion, or intimidation. - It shall be unlawful to coerce, intimidate, threaten, or interfere with any individual in the exercise or enjoyment of, or on account of his or her having exercised or enjoyed, or on account of his or her having aided or encouraged any other individual in the exercise or enjoyment of, any right granted or protected by this chapter.

(c) Remedies and procedures. - The remedies and procedures available under sections 12117, 12133, and 12188 of this title [sections 107, 203 and 308] shall be available to aggrieved persons for violations of subsections (a) and (b) of this section, with respect to subchapter I, subchapter II and subchapter III, respectively, of this chapter [title I, title II and title III, respectively].

[42 USC § 2000e-5 note]

(a) AMERICANS WITH DISABILITIES ACT OF 1990. - The amendments made by section 3 [Lilly Ledbetter Fair Pay Act of 2009, PL 111-2, 123 Stat. 5] shall apply to claims of discrimination in compensation brought under title I and section 503 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12111 et seq., 12203), pursuant to section 107(a) of such Act (42 U.S.C. 12117(a)), which adopts the powers, remedies, and procedures set forth in section 706 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5).

REGULATIONS BY THE ARCHITECTURAL AND TRANSPORTATION BARRIERS COMPLIANCE BOARD

SEC. 12204. [Section 504]

(a) Issuance of guidelines. - Not later than 9 months after July 26, 1990 [the date of enactment of this Act], the Architectural and Transportation Barriers Compliance Board shall issue minimum guidelines that shall supplement the existing Minimum Guidelines and Requirements for Accessible Design for purposes of subchapters II and III of this chapter [titles II and III]. (b) Contents of guidelines. - The supplemental guidelines issued under subsection (a) of this section shall establish additional requirements, consistent with this chapter, to ensure that buildings, facilities, rail passenger cars, and vehicles are accessible, in terms of architecture and design, transportation, and communication, to individuals with disabilities.

(c) Qualified historic properties. -

(1) In general. - The supplemental guidelines issued under subsection (a) of this section shall include procedures and requirements for alterations that will threaten or destroy the historic significance of qualified historic buildings and facilities as defined in 4.1.7(1)(a) of the Uniform Federal Accessibility Standards.

(2) Sites eligible for listing in National Register. - With respect to alterations of buildings or facilities that are eligible for listing in the National Register of Historic Places under the National Historic Preservation Act (16 U.S.C. 470 et seq.), the guidelines described in paragraph (1) shall, at a minimum, maintain the procedures and requirements established in 4.1.7(1) and (2) of the Uniform Federal Accessibility Standards.

(3) Other sites. - With respect to alterations of buildings or facilities designated as historic under State or local law, the guidelines described in paragraph (1) shall establish procedures equivalent to those established by 4.1.7(1)(b) and (c) of the Uniform Federal Accessibility Standards, and shall require, at a minimum, compliance with the requirements established in 4.1.7(2) of such standards.

ATTORNEY'S FEES

SEC. 12205. [Section 505]

In any action or administrative proceeding commenced pursuant to this chapter, the court or agency, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee, including litigation expenses, and costs, and the United States shall be liable for the foregoing the same as a private individual.

Rule of construction regarding regulatory authority

SEC. 12205a. [Section 506]

The authority to issue regulations granted to the Equal Employment Opportunity Commission, the Attorney General, and the Secretary of Transportation under this chapter includes the authority to issue regulations implementing the definitions of disability in section 12102 of this title (including rules of construction) and the definitions in section 12103 of this title, consistent with the ADA Amendments Act of 2008.

TECHNICAL ASSISTANCE

SEC. 12206. [Section 507]

(a) Plan for assistance. -

(1) In general. - Not later than 180 days after July 26, 1990 [the date of enactment of this Act], the Attorney General, in consultation with the Chair of the Equal Employment Opportunity Commission, the Secretary of Transportation, the Chair of the Architectural and Transportation Barriers Compliance Board, and the Chairman of the Federal Communications Commission, shall develop a plan to assist entities covered under this chapter, and other Federal agencies, in understanding the responsibility of such entities and agencies under this chapter.

(2) Publication of plan. - The Attorney General shall publish the plan referred to in paragraph (1) for public comment in accordance with subchapter II of chapter 5 of title 5 [United States Code] (commonly known as the Administrative Procedure Act).

(b) Agency and public assistance. - The Attorney General may obtain the assistance of other Federal agencies in carrying out subsection (a) of this section, including the National Council on Disability, the President's Committee on Employment of People with Disabilities, the Small Business Administration, and the Department of Commerce.

(c) Implementation. -

(1) Rendering assistance. - Each Federal agency that has responsibility under paragraph (2) for implementing this chapter may render technical assistance to individuals and institutions that have rights or duties under the respective subchapter or subchapters of this chapter for which such agency has responsibility.

(2) Implementation of subchapters. -

(A) Subchapter I [Title I]. - The Equal Employment Opportunity Commission and the Attorney General shall implement the plan for assistance developed under subsection (a) of this section, for subchapter I of this chapter [title I]. (B) Subchapter II [Title II]. -

(i) Part A [Subtitle A]. - The Attorney General shall implement such plan for assistance for part A of subchapter II of this chapter [subtitle A of title II].

(ii) Part B [Subtitle B]. - The Secretary of Transportation shall implement such plan for assistance for part B of subchapter II of this chapter [subtitle B of title II].

(C) Subchapter III [Title III]. - The Attorney General, in coordination with the Secretary of Transportation and the Chair of the Architectural Transportation Barriers Compliance Board, shall implement such plan for assistance for subchapter III of this chapter, except for section 12184 of this title [section 304], the plan for assistance for which shall be implemented by the Secretary of Transportation.

(D) Title IV. - The Chairman of the Federal Communications Commission, in coordination with the Attorney General, shall implement such plan for assistance for title IV.

(3) Technical assistance manuals. - Each Federal agency that has responsibility under paragraph (2) for implementing this chapter shall, as part of its implementation responsibilities, ensure the availability and provision of appropriate technical assistance manuals to individuals or entities with rights or duties under this chapter no later than six months after applicable final regulations are published under subchapters I, II, and III of this chapter [titles I, II, and III] and title IV.

(d) Grants and contracts. -

(1) In general. - Each Federal agency that has responsibility under subsection (c)(2) of this section for implementing this chapter may make grants or award contracts to effectuate the purposes of this section, subject to the availability of appropriations. Such grants and contracts may be awarded to individuals, institutions not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual (including educational institutions), and associations representing individuals who have rights or duties under this chapter. Contracts may be awarded to entities organized for profit, but such entities may not be the recipients or grants described in this paragraph.

(2) Dissemination of information. - Such grants and contracts, among other uses, may be designed to ensure wide dissemination of information about the rights and duties established by this chapter and to provide information and technical assistance about techniques for effective compliance with this chapter.

(e) Failure to receive assistance. - An employer, public accommodation, or other entity covered under this chapter shall not be excused from compliance with the requirements of this chapter because of any failure to receive technical assistance under this section, including any failure in the development or dissemination of any technical assistance manual authorized by this section.

FEDERAL WILDERNESS AREAS

SEC. 12207. [Section 508]

(a) Study. - The National Council on Disability shall conduct a study and report on the effect that wilderness designations and wilderness land management practices have on the ability of individuals with disabilities to use and enjoy the National Wilderness Preservation System as established under the Wilderness Act (16 U.S.C. 1131 et seq.).

(b) Submission of report. - Not later than 1 year after July 26, 1990 [the date of enactment of this Act], the National Council on Disability shall submit the report required under subsection (a) of this section to Congress.

(c) Specific wilderness access. -

(1) In general. - Congress reaffirms that nothing in the Wilderness Act [16 U.S.C. 1131 et seq.] is to be construed as prohibiting the use of a wheelchair in a wilderness area by an individual whose disability requires use of a wheelchair, and consistent with the Wilderness Act no agency is required to provide any form of special treatment or accommodation, or to construct any facilities or modify any conditions of lands within a wilderness area in order to facilitate such use.

(2) Definition. - For purposes of paragraph (1), the term "wheelchair" means a device designed solely for use by a mobility­-impaired person for locomotion, that is suitable for use in an indoor pedestrian area.

TRANSVESTITES

SEC. 12208. [Section 509]

For the purposes of this chapter, the term "disabled" or "disability" shall not apply to an individual solely because that individual is a transvestite.

COVERAGE OF CONGRESS AND THE AGENCIES OF THE LEGISLATIVE BRANCH

SEC. 12209. [Section 510]

(a) Coverage of the Senate. -

(1) Commitment to Rule XLII. - The Senate reaffirms its commitment to Rule XLII of the Standing Rules of the Senate which provides as follows:

"No member, officer, or employee of the Senate shall, with respect to employment by the Senate or any office thereof-

"(a) fail or refuse to hire an individual;

"(b) discharge an individual; or

"(c) otherwise discriminate against an individual with respect to promotion, compensation, or terms, conditions, or privileges of employment on the basis of such individual's race, color, religion, sex, national origin, age, or state of physical handicap."

(2) Matters other than employment. -

(A) In general. - The rights and protections under this chapter shall, subject to subparagraph (B), apply with respect to the conduct of the Senate regarding matters other than employment.

(B) Remedies. - The Architect of the Capitol shall establish remedies and procedures to be utilized with respect to the rights and protections provided pursuant to subparagraph (A). Such remedies and procedures shall apply exclusively, after approval in accordance with subparagraph (C).

(C) Proposed remedies and procedures. - For purposes of subparagraph (B), the Architect of the Capitol shall submit proposed remedies and procedures to the Senate Committee on Rules and Administration. The remedies and procedures shall be effective upon the approval of the Committee on Rules and Administration.

(3) Exercise of rulemaking power. - Notwithstanding any other provision of law, enforcement and adjudication of the rights and protections referred to in paragraph (2)(A) shall be within the exclusive jurisdiction of the United States Senate. The provisions of paragraph (1), (2) are enacted by the Senate as an exercise of the rulemaking power of the Senate, with full recognition of the right of the Senate to change its rules, in the same manner, and to the same extent, as in the case of any other rule of the Senate.

(b) Coverage of the House of Representatives. -

(1) In general. - Notwithstanding any other provision of this chapter or of law, the purposes of this chapter shall, subject to paragraphs (2) and (3), apply in their entirety to the House of Representatives.

(2) Employment in the House. -

(A) Application. - The rights and protections under this chapter shall, subject to subparagraph (B), apply with respect to any employee in an employment position in the House of Representatives and any employing authority of the House of Representatives.

(B) Administration. -

(i) In general. - In the administration of this paragraph, the remedies and procedures made applicable pursuant to the resolution described in clause (ii) shall apply exclusively.

(ii) Resolution. - The resolution referred to in clause (i) is House Resolution 15 of the One Hundred First Congress, as agreed to January 3, 1989, or any other provision that continues in effect the provisions of, or is a successor to, the Fair Employment Practices Resolution (House Resolution 558 of the One Hundredth Congress, as agreed to October 4, 1988).

(C) Exercise of rulemaking power. - The provisions of subparagraph (B) are enacted by the House of Representatives as an exercise of the rulemaking power of the House of Representatives, with full recognition of the right of the House to change its rules, in the same manner, and to the same extent as in the case of any other rule of the House.

(3) Matters other than employment. -

(A) In general. - The rights and protections under this chapter shall, subject to subparagraph (B), apply with respect to the conduct of the House of Representatives regarding matters other than employment.

(B) Remedies. - The Architect of the Capitol shall establish remedies and procedures to be utilized with respect to the rights and protections provided pursuant to subparagraph (A). Such remedies and procedures shall apply exclusively, after approval in accordance with subparagraph (C).

(C) Approval. - For purposes of subparagraph (B), the Architect of the Capitol shall submit proposed remedies and procedures to the Speaker of the House of Representatives. The remedies and procedures shall be effective upon the approval of the Speaker, after consultation with the House Office Building Commission.

(c) Instrumentalities of Congress. -

(1) In general. - The rights and protections under this chapter shall, subject to paragraph (2), apply with respect to the conduct of each instrumentality of the Congress.

(2) Establishment of remedies and procedures by instrumentalities. - The chief official of each instrumentality of the Congress shall establish remedies and procedures to be utilized with respect to the rights and protections provided pursuant to paragraph (1). Such remedies and procedures shall apply exclusively, except for the employees who are defined as Senate employees, in section 201(c)(1) of the Civil Rights Act of 1991.

(3) Report to Congress. - The chief official of each instrumentality of the Congress shall, after establishing remedies and procedures for purposes of paragraph (2), submit to the Congress a report describing the remedies and procedures.

(4) Definition of instrumentalities. - For purposes of this section, instrumentalities of the Congress include the following: the Architect of the Capitol, the Congressional Budget Office, the General Accounting Office, the Government Printing Office, the Library of Congress, the Office of Technology Assessment, and the United States Botanic Garden.

(5) Construction. - Nothing in this section shall alter the enforcement procedures for individuals with disabilities provided in the General Accounting Office Personnel Act of 1980 [31 U.S.C. 731 et seq.] and regulations promulgated pursuant to that Act.

ILLEGAL USE OF DRUGS

SEC. 12210. [Section 511]

(a) In general. - For purposes of this chapter, the term "individual with a disability" does not include an individual who is currently engaging in the illegal use of drugs, when the covered entity acts on the basis of such use.

(b) Rules of construction. - Nothing in subsection (a) of this section shall be construed to exclude as an individual with a disability an individual who-

(1) has successfully completed a supervised drug rehabilitation program and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully and is no longer engaging in such use;

(2) is participating in a supervised rehabilitation program and is no longer engaging in such use; or

(3) is erroneously regarded as engaging in such use, but is not engaging in such use; except that it shall not be a violation of this chapter for a covered entity to adopt or administer reasonable policies or procedures, including but not limited to drug testing, designed to ensure that an individual described in paragraph (1) or (2) is no longer engaging in the illegal use of drugs; however, nothing in this section shall be construed to encourage, prohibit, restrict, or authorize the conducting of testing for the illegal use of drugs.

(c) Health and other services. - Notwithstanding subsection (a) of this section and section 12211(b)(3) of this title [section 512(b)(3)], an individual shall not be denied health services, or services provided in connection with drug rehabilitation, on the basis of the current illegal use of drugs if the individual is otherwise entitled to such services.

(d) Definition of illegal use of drugs. -

(1) In general. - The term "illegal use of drugs" means the use of drugs, the possession or distribution of which is unlawful under the Controlled Substances Act (21 U.S.C. 812). Such term does not include the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law.

(2) Drugs

The term "drug" means a controlled substance, as defined in schedules I through V of section 202 of the Controlled Substances Act [21 U.S.C. 812].

DEFINITIONS

SEC. 12211. [Section 512]

(a) Homosexuality and bisexuality. - For purposes of the definition of "disability" in section 12102(2) of this title [section 3(2)], homosexuality and bisexuality are not impairments and as such are not disabilities under this chapter.

(b) Certain conditions. - Under this chapter, the term "disability" shall not include-

(1) transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, gender identity disorders not resulting from physical impairments, or other sexual behavior disorders;

(2) compulsive gambling, kleptomania, or pyromania; or

(3) psychoactive substance use disorders resulting from current illegal use of drugs.

ALTERNATIVE MEANS OF DISPUTE RESOLUTION

SEC. 12212. [Section 514]

Where appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including settlement negotiations, conciliation, facilitation, mediation, factfinding, minitrials, and arbitration, is encouraged to resolve disputes arising under this chapter.

SEVERABILITY

SEC. 12213. [Section 515]

Should any provision in this chapter be found to be unconstitutional by a court of law, such provision shall be severed from the remainder of the chapter, and such action shall not affect the enforceability of the remaining provisions of the chapter.

[Approved July 26, 1990]

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Copyright Law of the United States (Title 17)
+ and Related Laws Contained in Title 17 of the United States Code

+ + +
+
Copyright Law of the United States (Title 17) cover
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+

This publication contains the text of Title 17 of the United States Code, including all amendments enacted by Congress through December 23, 2024. It includes the Copyright Act of 1976 and all subsequent amendments to copyright law; the Semiconductor Chip Protection Act of 1984, as amended; and the Vessel Hull Design Protection Act, as amended. The Copyright Office is responsible for registering intellectual property claims under all three.

+

The United States copyright law is contained in chapters 1 through 8 and 10 through 12 of Title 17 of the United States Code. The Copyright Act of 1976, which provides the basic framework for the current copyright law, was enacted on October 19, 1976, as Pub. L. No. 94-553, 90 Stat. 2541. The 1976 Act was a comprehensive revision of the copyright law in Title 17. Listed below in chronological order of their enactment are the Copyright Act of 1976 and subsequent amendments to Title 17.

+

This edition adds three pieces of copyright legislation enacted since the last printed edition of the circular in May 2021: the Artistic Recognition for Talented Students Act, signed into law in October 2022, the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023, signed into law in December 2022, and the Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025, signed into law in December 2024.

+ U.S. Copyright Law, December 2024 [size 5 MB]
+
+
+
+
+
+ +
+
+

Preface

+

Preface: Amendments to Title 17 since 1976

+

Chapters

+

Title 17 of the United States Code

+
+
Chapter 1:
+
Subject Matter and Scope of Copyright
+
Chapter 2:
+
Copyright Ownership and Transfer
+
Chapter 3:
+
Duration of Copyright
+
Chapter 4:
+
Copyright Notice, Deposit, and Registration
+
Chapter 5:
+
Copyright Infringement and Remedies
+
Chapter 6:
+
Importation and Exportation
+
Chapter 7:
+
Copyright Office
+
Chapter 8:
+
Proceedings by Copyright Royalty Judges
+
Chapter 9:
+
Protection of Semiconductor Chip Products
+
Chapter 10:
+
Digital Audio Recording Devices and Media
+
Chapter 11:
+
Sound Recordings and Music Videos
+
Chapter 12:
+
Copyright Protection and Management Systems
+
Chapter 13:
+
Protection of Original Designs
+
Chapter 14:
+
Unauthorized Use of Pre-1972 Sound Recordings
+
Chapter 15:
+
Copyright Small Claims
+
+
+
+

Appendices

+

Transitional and Related Statutory Provisions

+
+
Appendix A:
+
The Copyright Act of 1976
+
Appendix B:
+
The Digital Millennium Copyright Act of 1998
+
Appendix C:
+
The Copyright Royalty and Distribution Reform Act of 2004
+
Appendix D:
+
The Satellite Home Viewer Extension and Reauthorization Act of 2004
+
Appendix E:
+
The Intellectual Property Protection and Courts Amendments Act of 2004
+
Appendix F:
+
The Prioritizing Resources and Organization for Intellectual Property Act of 2008
+
Appendix G:
+
The Satellite Television Extension and Localism Act of 2010
+
Appendix H:
+
The Unlocking Consumer Choice and Wireless Competition Act
+
Appendix I:
+
The STELA Reauthorization Act of 2014
+
Appendix J:
+
Marrakesh Treaty Implementation Act
+
Appendix K:
+
Orrin G. Hatch–Bob Goodlatte Music Modernization Act
+
Appendix L:
+
Satellite Television Community Protection and Promotion Act of 2019, Title X of the Further Consolidated Appropriations Act, 2020 +
Appendix M:
+
Copyright Alternative in Small-Claims Enforcement Act of 2020
+ +
+
+
+

 

+

Related United States Code Provisions

+
+
Appendix N:
+
Title 18 — Crimes and Criminal + Procedure, U.S. Code
+
Appendix O:
+
Title 28 — Judiciary and Judicial + Procedure, U.S. Code
+
Appendix P:
+
Title 44 — Public Printing and + Documents, U.S. Code
+
+

Related International Provisions

+
+
Appendix Q:
+
The Berne Convention Implementation + Act of 1988
+
Appendix R:
+
The Uruguay Round Agreements Act + of 1994
+
Appendix S:
+
GATT/Trade-Related Aspects of + Intellectual Property Rights (TRIPs) + Agreement, Part II
+
Appendix T:
+
Definition of “Berne Convention Work”
+
+
+
+
+
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Copyright Law of the United States (Title 17)
+ and Related Laws Contained in Title 17 of the United States Code

+ + +
+
Copyright Law of the United States (Title 17) cover
+
+
+
+

This publication contains the text of Title 17 of the United States Code, including all amendments enacted by Congress through December 23, 2024. It includes the Copyright Act of 1976 and all subsequent amendments to copyright law; the Semiconductor Chip Protection Act of 1984, as amended; and the Vessel Hull Design Protection Act, as amended. The Copyright Office is responsible for registering intellectual property claims under all three.

+

The United States copyright law is contained in chapters 1 through 8 and 10 through 12 of Title 17 of the United States Code. The Copyright Act of 1976, which provides the basic framework for the current copyright law, was enacted on October 19, 1976, as Pub. L. No. 94-553, 90 Stat. 2541. The 1976 Act was a comprehensive revision of the copyright law in Title 17. Listed below in chronological order of their enactment are the Copyright Act of 1976 and subsequent amendments to Title 17.

+

This edition adds three pieces of copyright legislation enacted since the last printed edition of the circular in May 2021: the Artistic Recognition for Talented Students Act, signed into law in October 2022, the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023, signed into law in December 2022, and the Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025, signed into law in December 2024.

+ U.S. Copyright Law, December 2024 [size 5 MB]
+
+
+
+
+
+ +
+
+

Preface

+

Preface: Amendments to Title 17 since 1976

+

Chapters

+

Title 17 of the United States Code

+
+
Chapter 1:
+
Subject Matter and Scope of Copyright
+
Chapter 2:
+
Copyright Ownership and Transfer
+
Chapter 3:
+
Duration of Copyright
+
Chapter 4:
+
Copyright Notice, Deposit, and Registration
+
Chapter 5:
+
Copyright Infringement and Remedies
+
Chapter 6:
+
Importation and Exportation
+
Chapter 7:
+
Copyright Office
+
Chapter 8:
+
Proceedings by Copyright Royalty Judges
+
Chapter 9:
+
Protection of Semiconductor Chip Products
+
Chapter 10:
+
Digital Audio Recording Devices and Media
+
Chapter 11:
+
Sound Recordings and Music Videos
+
Chapter 12:
+
Copyright Protection and Management Systems
+
Chapter 13:
+
Protection of Original Designs
+
Chapter 14:
+
Unauthorized Use of Pre-1972 Sound Recordings
+
Chapter 15:
+
Copyright Small Claims
+
+
+
+

Appendices

+

Transitional and Related Statutory Provisions

+
+
Appendix A:
+
The Copyright Act of 1976
+
Appendix B:
+
The Digital Millennium Copyright Act of 1998
+
Appendix C:
+
The Copyright Royalty and Distribution Reform Act of 2004
+
Appendix D:
+
The Satellite Home Viewer Extension and Reauthorization Act of 2004
+
Appendix E:
+
The Intellectual Property Protection and Courts Amendments Act of 2004
+
Appendix F:
+
The Prioritizing Resources and Organization for Intellectual Property Act of 2008
+
Appendix G:
+
The Satellite Television Extension and Localism Act of 2010
+
Appendix H:
+
The Unlocking Consumer Choice and Wireless Competition Act
+
Appendix I:
+
The STELA Reauthorization Act of 2014
+
Appendix J:
+
Marrakesh Treaty Implementation Act
+
Appendix K:
+
Orrin G. Hatch–Bob Goodlatte Music Modernization Act
+
Appendix L:
+
Satellite Television Community Protection and Promotion Act of 2019, Title X of the Further Consolidated Appropriations Act, 2020 +
Appendix M:
+
Copyright Alternative in Small-Claims Enforcement Act of 2020
+ +
+
+
+

 

+

Related United States Code Provisions

+
+
Appendix N:
+
Title 18 — Crimes and Criminal + Procedure, U.S. Code
+
Appendix O:
+
Title 28 — Judiciary and Judicial + Procedure, U.S. Code
+
Appendix P:
+
Title 44 — Public Printing and + Documents, U.S. Code
+
+

Related International Provisions

+
+
Appendix Q:
+
The Berne Convention Implementation + Act of 1988
+
Appendix R:
+
The Uruguay Round Agreements Act + of 1994
+
Appendix S:
+
GATT/Trade-Related Aspects of + Intellectual Property Rights (TRIPs) + Agreement, Part II
+
Appendix T:
+
Definition of “Berne Convention Work”
+
+
+
+
+
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  3. California Consumer Privacy Act (CCPA)
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Updated on March 13, 2024

+ + +

The California Consumer Privacy Act of 2018 (CCPA) gives consumers more control over the personal information that businesses collect about them and the CCPA regulations provide guidance on how to implement the law. This landmark law secures new privacy rights for California consumers, including: +

+

+ +

In November of 2020, California voters approved Proposition 24, the CPRA, which amended the CCPA and added new additional privacy protections that began on January 1, 2023. As of January 1, 2023, consumers have new rights in addition to those above, such as: +

    +
  • The right to correct inaccurate personal information that a business has about them; and +
  • The right to limit the use and disclosure of sensitive personal information collected about them. +
+

+ +

Businesses that are subject to the CCPA have several responsibilities, including responding to consumer requests to exercise these rights and giving consumers certain notices explaining their privacy practices. The CCPA applies to many businesses, including data brokers.

+ +

CPRA amends the CCPA; it does not create a separate, new law. As a result, our office typically refers to the law as “CCPA” or “CCPA, as amended.”

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Frequently Asked Questions (FAQs)

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These FAQs provide general consumer information about the CCPA and how you can exercise your rights under the CCPA. They are not legal advice, regulatory guidance, or an opinion of the Attorney General. We will update this information periodically.

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A. GENERAL INFORMATION ABOUT THE CCPA

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If you are a California resident, you may ask businesses to disclose what personal information they have about you and what they do with that information, to delete your personal information, to direct businesses not to sell or share your personal information, to correct inaccurate information that they have about you, and to limit businesses’ use and disclosure of your sensitive personal information: +

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  • Right to know: You can request that a business disclose to you: (1) the categories and/or specific pieces of personal information they have collected about you, (2) the categories of sources for that personal information, (3) the purposes for which the business uses that information, (4) the categories of third parties with whom the business discloses the information, and (5) the categories of information that the business sells or discloses to third parties. You can make a request to know up to twice a year, free of charge.
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  • Right to delete: You can request that businesses delete personal information they collected from you and tell their service providers to do the same, subject to certain exceptions (such as if the business is legally required to keep the information).
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  • Right to opt-out of sale or sharing: You may request that businesses stop selling or sharing your personal information (“opt-out”), including via a user-enabled global privacy control. Businesses cannot sell or share your personal information after they receive your opt-out request unless you later authorize them to do so again.
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  • Right to correct: You may ask businesses to correct inaccurate information that they have about you.
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  • Right to limit use and disclosure of sensitive personal information: You can direct businesses to only use your sensitive personal information (for example, your social security number, financial account information, your precise geolocation data, or your genetic data) for limited purposes, such as providing you with the services you requested.
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You also have the right to be notified, before or at the point businesses collect your personal information, of the types of personal information they are collecting and what they may do with that information. Generally, businesses cannot discriminate against you for exercising your rights under the CCPA. Businesses cannot make you waive these rights, and any contract provision that says you waive these rights is unenforceable.

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Only California residents have rights under the CCPA. A California resident is a natural person (as opposed to a corporation or other business entity) who resides in California, even if the person is temporarily outside of the state.

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Personal information is information that identifies, relates to, or could reasonably be linked with you or your household. For example, it could include your name, social security number, email address, records of products purchased, internet browsing history, geolocation data, fingerprints, and inferences from other personal information that could create a profile about your preferences and characteristics.

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Sensitive personal information is a specific subset of personal information that includes certain government identifiers (such as social security numbers); an account log-in, financial account, debit card, or credit card number with any required security code, password, or credentials allowing access to an account; precise geolocation; contents of mail, email, and text messages; genetic data; biometric information processed to identify a consumer; information concerning a consumer’s health, sex life, or sexual orientation; or information about racial or ethnic origin, religious or philosophical beliefs, or union membership. Consumers have the right to also limit a business’s use and disclosure of their sensitive personal information.

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Personal information does not include publicly available information (including public real estate/property records) and certain types of information.

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Personal information does not include publicly available information that is from federal, state, or local government records, such as professional licenses and public real estate/property records. The definition of publicly available information also includes information that a business has a reasonable basis to believe is lawfully made available to the general public by the consumer or from widely distributed media, or certain information disclosed by a consumer and made available if the consumer has not restricted the information to a specific audience.

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The CCPA also exempts certain types of information such as certain medical information and consumer credit reporting information.

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The CCPA applies to for-profit businesses that do business in California and meet any of the following: +

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  • Have a gross annual revenue of over $25 million;
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  • Buy, sell, or share the personal information of 100,000 or more California residents or households; or
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The CCPA generally does not apply to nonprofit organizations or government agencies.

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You cannot sue businesses for most CCPA violations. You can only sue a business under the CCPA if there is a data breach, and even then, only under limited circumstances. You can sue a business if your nonencrypted and nonredacted personal information was stolen in a data breach as a result of the business’s failure to maintain reasonable security procedures and practices to protect it. If this happens, you can sue for the amount of monetary damages you actually suffered from the breach or “statutory damages” of up to $750 per incident. Before suing, you must give the business written notice of which CCPA sections it violated and allow 30 days to respond in writing that it has cured the violations and that no further violations will occur. If the business is able to actually cure the violation and gives you its written statement that it has done so, you cannot sue the business, unless it continues to violate the CCPA contrary to its statement.

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For all other violations of the CCPA, only the Attorney General or the California Privacy Protection Agency may take legal action against non-compliant entities. The Attorney General does not represent individual California consumers. Using consumer complaints and other information, the Attorney General may identify patterns of misconduct that may lead to investigations and actions on behalf of the collective legal interests of the people of California. If you believe a business has violated the CCPA, you may file a consumer complaint with the Office of the Attorney General. If you choose to file a complaint with our office, explain exactly how the business violated the CCPA, and describe when and how the violation occurred. Please note that the Attorney General cannot represent you or give you legal advice on how to resolve your individual complaint. Starting on July 1, 2023, you also will be able to file complaints with the California Privacy Protection Agency for violations of the CCPA, as amended, occurring on or after that date.

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You can only sue businesses under the CCPA if certain conditions are met. The type of personal information that must have been stolen is your first name (or first initial) and last name in combination with any of the following: +

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  • Your fingerprint, retina or iris image, or other unique biometric data used to identify a person's identity (but not including photographs unless used or stored for facial recognition purposes)
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This personal information must have been stolen in nonencrypted and nonredacted form. In addition, the personal information must have been stolen in a data breach as a result of the business’s failure to maintain reasonable security procedures and practices to protect it. If this happens, you can sue for the amount of monetary damages you actually suffered from the breach or “statutory damages” of up to $750 per incident. Before suing, you must give the business written notice of which CCPA sections it violated and allow 30 days to respond in writing that it has cured the violations and that no further violations will occur. If the business is able to actually cure the violation and gives you its written statement that it has done so, you cannot sue the business, unless it continues to violate the CCPA contrary to its statement.

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Yes. As of January 1, 2023, the CPRA’s amendments to the CCPA are in effect, and businesses are required to comply with all express statutory requirements. Businesses are also required to comply with those CCPA regulations currently in effect.

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Yes. The California Department of Justice promulgated an initial round of regulations implementing the CCPA on August 14, 2020 and further amended on March 15, 2021. Those regulations were recently updated by the California Privacy Protection Agency. These regulations appear in Title 11, Division 6, Section 7001 et seq. of the California Code of Regulations and were effective on March 29, 2023.

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No. The exemptions for employment-related personal information and personal information reflecting business-to-business transactions described in Civil Code Sec. 1798.145(m)-(n) expired on December 31, 2022.

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Yes. You may authorize another person to submit a CCPA request on your behalf. You may also authorize a business entity registered with the California Secretary of State to submit a request on your behalf.

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Please note that if you use an authorized agent, businesses may require more information from either the authorized agent or from you to verify that you are the person directing the agent. For example, for requests to know or delete your personal information, the business may require the authorized agent to provide proof that you gave that agent signed permission to submit the request. Businesses may also require you to verify your identity directly with the business or directly confirm with the business that you gave the authorized agent permission to submit the request.

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B. RIGHT TO OPT-OUT OF SALE OR SHARING

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You may request that businesses stop selling or sharing your personal information (“opt-out”). Note that sharing refers specifically to sharing for cross-context behavioral advertising, which is the targeting of advertising to a consumer based on the consumer’s personal information obtained from the consumer’s online activity across numerous websites. With some exceptions, businesses cannot sell or share your personal information after they receive your opt-out request unless you later provide authorization allowing them to do so again. Businesses must wait at least 12 months before asking you to opt back in to the sale or sharing of your personal information.

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Businesses can only sell the personal information of a child that they know to be under the age of 16 if they get affirmative authorization (“opt-in”) for the sale of the child’s personal information. For children under the age of 13, that opt-in must come from the child’s parent or guardian. For children who are at least 13 years old but under the age of 16, the opt-in can come from the child.

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Businesses that sell personal information are subject to the CCPA's requirement to provide a clear and conspicuous “Do Not Sell or Share My Personal Information” link on their website that allows you to submit an opt-out request. Businesses cannot require you to create an account in order to submit your request. Businesses also should not require you to verify your identity, though they can ask you basic questions to identify which personal information is associated with you.

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You can also submit an opt-out request via a user-enabled global privacy control, like the GPC, discussed in FAQ 8 & 9 below. If you can’t find a business’s “Do Not Sell or Share My Personal Information” link, review its privacy policy to see if it sells or shares personal information. If the business does, it must also include that link in its privacy policy.

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If a business’s "Do Not Sell My Personal Information" link or other designated method of submitting opt-out requests is not working or difficult to find, you may report the business to our office (https://oag.ca.gov/contact/consumer-complaint-against-business-or-company).

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Businesses must respond as soon as feasibly possible to your request, up to a maximum of 15 business days from the date they received your request to opt-out.

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While businesses are not required to verify that the person submitting an opt-out request is really the consumer for whom the business has personal information, they may need to ask you for additional information to make sure they stop selling the right person’s personal information. If the business asks for personal information to verify your identity, it can only use that information for this verification purpose.

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There are some exceptions to the opt-out right. Common reasons why businesses may refuse to stop selling your personal information include: +

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If you do not know why a business denied your opt-out request, follow up with the business to ask it for its reasons.

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Many businesses use other businesses to provide services for them. For example, a retailer may contract with a payment card processor to process customer credit card transactions or a shipping company to deliver orders. These entities may qualify as “service providers” under the CCPA.

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The CCPA treats service providers differently than the businesses they serve. It is the business that is responsible for responding to consumer requests. If you submit a request to opt-out to a service provider of a business instead of the business itself, the service provider may deny the request. You must submit your request to the business itself.

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If a service provider has said that it does not or cannot act on your request because it is a service provider, you may follow up to ask who the business is. However, sometimes the service provider will not be able to provide that information. You may be able to determine who the business is based on the services that the service provider provides, although sometimes this may be difficult or impossible.

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Businesses that sell or share personal information must offer two or more methods for consumers to submit requests to opt-out of the sale of their personal information. For businesses that collect personal information from consumers online, one acceptable method for consumers to opt-out of sales or sharing is via a user-enabled global privacy control, like the GPC. Developed in response to the CCPA and to enhance consumer privacy rights, the GPC is a ‘stop selling or sharing my data switch’ that is available on some internet browsers, like Mozilla Firefox, Duck Duck Go, and Brave, or as a browser extension. It is a proposed technical standard that reflects what the CCPA regulations contemplated – some consumers want a comprehensive option that broadly signals their opt-out request, as opposed to making requests on multiple websites on different browsers or devices. Opting out of the sale or sharing of personal information should be easy for consumers, and the GPC is one option for consumers who want to submit requests to opt-out of the sale or sharing of personal information via a user-enabled global privacy control. Under law, it must be honored by covered businesses as a valid consumer request to stop the sale or sharing of personal information.

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To learn more about the GPC, you can also visit https://oag.ca.gov/privacy/ccpa/gpc +

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To learn more about the GPC, you can visit its website here. Developers have begun to innovate around the GPC and created different mechanisms for consumers, such as EFF’s Privacy Badger extension or the Brave Privacy Browser.

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C. REQUESTS TO KNOW

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You may request that businesses disclose to you what personal information they have collected, used, shared, or sold about you, and why they collected, used, shared, or sold that information. Specifically, you may request that businesses disclose: +

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Businesses must provide you this information for the 12-month period preceding your request. They must provide this information to you free of charge.

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Businesses must designate at least two methods for you to submit your request—for example, an email address, website form, or hard copy form. One of those methods has to be a toll-free phone number and, if the business has a website, one of those methods has to be through its website. However, if a business operates exclusively online, it only needs to provide an email address for submitting requests to know.

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Businesses cannot make you create an account just to submit a request to know, but if you already have an account with the business, it may require you to submit your request through that account.

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Make sure you submit your request to know through one of the business’s designated methods, which may be different from its normal customer service contact information. If you can’t find a business’s designated methods, review its privacy policy, which must include instructions on how you can submit your request.

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If a business’s designated method of submitting requests to know is not working, notify the business in writing and consider submitting your request through another designated method if possible.

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Businesses must respond to your request within 45 calendar days. They can extend that deadline by another 45 days (90 days total) if they notify you.

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If you submitted a request to know and have not received any response within the timeline, check the business’s privacy policy to make sure you submitted your request through the designated way. Follow up with the business to see if the business is subject to the CCPA and to follow up on your request.

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Businesses must verify that the person making a request to know is the consumer about whom the business has personal information. Businesses may need to ask you for additional information for verification purposes. If the business asks for personal information to verify your identity, it can only use that information for this verification purpose.

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There are some exceptions to the right to know. Common reasons why businesses may refuse to disclose your personal information include: +

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If you do not know why a business denied your request to know, follow up with the business to ask it for its reasons.

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Many businesses use other businesses to provide services for them. For example, a retailer may contract with a payment card processor to process customer credit card transactions or a shipping company to deliver orders. These entities may qualify as “service providers” under the CCPA.

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The CCPA treats service providers differently than the businesses they serve. It is the business that is responsible for responding to consumer requests. If you submit a request to know to a service provider of a business instead of the business itself, the service provider may deny the request. You must submit your request to the business itself.

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If a service provider has said that it does not or cannot act on your request because it is a service provider, you may follow up to ask who the business is. However, sometimes the service provider will not be able to provide that information. You may be able to determine who the business is based on the services that the service provider provides, although sometimes this may be difficult or impossible.

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D. REQUESTS TO DELETE

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You may request that businesses delete personal information they collected from you and to tell their service providers to do the same. However, there are many exceptions (see FAQ D.5) that allow businesses to keep your personal information.

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Review the business’s privacy policy, which must include instructions on how you can submit your request to delete.

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Businesses must designate at least two methods for you to submit your request—for example, a toll-free number, email address, website form, or hard copy form. However, if a business operates exclusively online, it only needs to provide an email address for submitting requests.

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Businesses cannot make you create an account just to submit a deletion request, but if you already have an account with the business, it may require you to submit your request through that account.

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Make sure you submit your deletion request through one of the business’s designated methods, which may be different from its normal customer service contact information.

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If a business’s designated method of submitting requests to delete is not working, notify the business in writing and consider submitting your request through another designated method if possible.

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Businesses must respond to your request within 45 calendar days. They can extend that deadline by another 45 days (90 days total) if they notify you.

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If you submitted a request to delete and have not received any response within the timeline, check the business’s privacy policy to make sure you submitted your request through the designated way. Follow up with the business to see if the business is subject to the CCPA and to follow up on your request.

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Businesses must verify that the person making a request to delete is the consumer about whom the business has personal information. Businesses may need to ask you for additional information for verification purposes. If the business asks for personal information to verify your identity, it can only use that information for this verification purpose.

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There are exceptions to the right to delete. Common reasons why businesses may keep your personal information include: +

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If you do not know why a business denied your request to delete, follow up with the business to ask it for its reasons.

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The CCPA treats service providers differently than the businesses they serve. It is the business that is responsible for responding to consumer requests. If you submit a request to delete to a service provider of a business instead of the business itself, the service provider may deny the request. You must submit your request to the business itself.

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If a service provider has said that it does not or cannot act on your request because it is a service provider, you may follow up to ask who the business is. However, sometimes the service provider will not be able to provide that information. You may be able to determine who the business is based on the services that the service provider provides, although sometimes this may be difficult or impossible.

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Creditors, collection agencies, and other debt collectors can still try to collect debts that you owe even if you asked them to delete your personal information. Learn more about debt collectors—including what they can and can’t do—here.

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Credit reporting agencies like Equifax, Experian, and TransUnion can still collect and disclose your credit information, subject to regulation under the Fair Credit Reporting Act. Learn more about your rights under the Fair Credit Reporting Act here. Learn more about how to check and fix your credit report here.

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E. REQUESTS TO CORRECT + (RIGHT TO CORRECT) +

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You may ask businesses to correct inaccurate information that they have about you.

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The California Privacy Protection Agency is currently engaged in a formal rulemaking process and has proposed CCPA regulations pertaining to the right to correct, but these are not currently final or effective. +

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Review the business’s privacy policy, which should include instructions on how you can submit your request to correct.

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Businesses must designate at least two methods for you to submit your request—for example, a toll-free number, email address, website form, or hard copy form. However, if a business operates exclusively online, it only needs to provide an email address for submitting requests.

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Businesses cannot make you create an account just to submit a correction request, but if you already have an account with the business, it may require you to submit your request through that account.

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Make sure you submit your correction request through one of the business’s designated methods, which may be different from its normal customer service contact information.

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If a business’s designated method of submitting requests to correct is not working, notify the business in writing and consider submitting your request through another designated method if possible.

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Businesses must respond to your request within 45 calendar days. They can extend that deadline by another 45 days (90 days total) if they notify you.

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If you submitted a request to correct and have not received any response within the timeline, check the business’s privacy policy to make sure you submitted your request through the designated way. Follow up with the business to see if the business is subject to the CCPA and to follow up on your request.

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Businesses must verify that the person making a request to correct is the consumer about whom the business has personal information. Businesses may need to ask you for additional information for verification purposes. If the business asks for personal information to verify your identity, it can only use that information for this verification purpose.

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There are exceptions to the right to correct. Common reasons why businesses may deny your request to correct include: +

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If you do not know why a business denied your request to correct, follow up with the business to ask it for its reasons.

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F. REQUESTS TO LIMIT USE OF PERSONAL INFORMATION (RIGHT TO LIMIT)

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You can direct businesses to only use your sensitive personal information (for example, your social security number, financial account information, your precise geolocation data, or your genetic data) for limited purposes, such as providing you with the services you requested.

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The California Privacy Protection Agency is currently engaged in a formal rulemaking process and has proposed CCPA regulations pertaining to the right to limit, but these are not currently final or effective.

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G. RIGHT TO NON-DISCRIMINATION

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Businesses cannot deny goods or services, charge you a different price, or provide a different level or quality of goods or services just because you exercised your rights under the CCPA.

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However, if you refuse to provide your personal information to a business or ask it to delete or stop selling your personal information, and that personal information or sale is necessary for the business to provide you with goods or services, the business may not be able to complete that transaction.

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Businesses can also offer you promotions, discounts and other deals in exchange for collecting, keeping, or selling your personal information. But they can only do this if the financial incentive offered is reasonably related to the value of your personal information. If you ask a business to delete or stop selling your personal information, you may not be able to continue participating in the special deals they offer in exchange for personal information. If you are not sure how your request may affect your participation in a special offer, ask the business.

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H. REQUIRED NOTICES

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The CCPA requires businesses to give consumers certain information in a “notice at collection.” A notice at collection must list the categories of personal information businesses collect about consumers and the purposes for which they use the categories of information. (To find out how you can learn what specific information a business has collected about you, see the Right to Know section.) If the business sells consumers’ personal information, then the notice at collection must include a Do Not Sell or Share link. The notice must also contain a link to the business’s privacy policy, where consumers can get a fuller description of the business’s privacy practices and of their privacy rights.

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This notice must be provided at or before the point at which the business collects your personal information. For example, you might find a link to the notice at collection on a website’s homepage and on a webpage where you place an order or enter your personal information for another reason. On a mobile app, you might find a link to the notice in the settings menu. In a retail store, you might find the notice on a printed form used to collect your personal information.

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A business’s privacy policy is a written statement that gives a broad picture of its online and offline practices for the collection, use, sharing, and sale of consumers’ personal information. The CCPA requires business privacy policies to include information on consumers’ privacy rights and how to exercise them: the +Right to Know, the +Right to Delete, the +Right to Opt-Out of Sale, the +the Right to Correct, the +the Right to Limit, and the +Right to Non-Discrimination.

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Most businesses post their privacy policy on their websites. A link to it can usually be found at the bottom of the homepage and other webpages. The link’s title may include “Privacy” or “California Privacy Rights.” In a mobile app, the privacy policy may be linked on the download page for the app or in the app’s settings menu.

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I. DATA BROKERS AND THE CCPA

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Another California law, Civil Code section 1798.99.80, defines a data broker as “a business that knowingly collects and sells to third parties the personal information of a consumer with whom the business does not have a direct relationship.” This law exempts certain businesses that are regulated by other laws from this definition. Exempted businesses include consumer reporting agencies (commonly known as credit bureaus) and certain financial institutions and insurance companies.

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Data brokers collect information about consumers from many sources including websites, other businesses, and public records. The data broker analyzes and packages the data for sale to other businesses.

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The California law on data brokers requires data brokers covered by the law to register with the Attorney General and to provide certain information on their practices. The Data Broker Registry can be found on the Attorney General’s website at https://oag.ca.gov/data-brokers.

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Data brokers are subject to the CCPA. On the Data Broker Registry website, you will find contact information and a website link for each registered data broker, as well as additional information to help you exercise your CCPA rights.

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You can click on the “View Full Submission” link on the Data Broker Registry to get instructions on how to opt-out of the sale of your personal information. However, you may not be able to stop the sale of all of your information. The CCPA’s definition of “personal information” does not include information lawfully made available from government records, which are often sources used by data brokers.

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You can also go to a data broker’s website through the link posted on the Registry and find the broker’s privacy policy to learn more about its privacy practices and how to exercise your CCPA rights.

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Back To Top


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Other Consumer Resources on CCPA

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California Privacy Protection Agency’s FAQ on the CCPA

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Consumer-Action.org +

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+ + + + + diff --git a/raw/us_state/choice-of-law b/raw/us_state/choice-of-law new file mode 100644 index 0000000..1566c5f --- /dev/null +++ b/raw/us_state/choice-of-law @@ -0,0 +1,304 @@ + + + + + + + Delaware Code Online + + + + + + + + + + + + + +
+
+
+

The Delaware Code Online

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+
+
+
+
+
+
+
+ Title 6 + Authenticated PDF +

Commerce and Trade

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+
+ +
+

+ Subtitle II

+

Other Laws Relating to Commerce and Trade

+
+ Chapter 12. DELAWARE FALSE CLAIMS AND REPORTING ACT
+
+ Chapter 12A. UNIFORM ELECTRONIC TRANSACTIONS ACT
+
+ Chapter 12B. COMPUTER SECURITY BREACHES
+
+ Chapter 12C. ONLINE AND PERSONAL PRIVACY PROTECTION
+
+ Chapter 12D. Delaware Personal Data Privacy Act
+
+ Chapter 13. FRAUDULENT TRANSFERS
+
+ Chapter 13A. DISHONOR OF CHECKS, DRAFTS OR ORDERS
+
+ Chapter 14. DELAWARE WORKERS COOPERATIVE ACT
+
+ Chapter 15. DELAWARE REVISED UNIFORM PARTNERSHIP ACT
+
+ Chapter 17. LIMITED PARTNERSHIPS
+
+ Chapter 18. LIMITED LIABILITY COMPANY ACT
+
+ Chapter 19. DELAWARE UNIFORM UNIN- CORPORATED NONPROFIT ASSOCIATION ACT
+
+ Chapter 20. TRADE SECRETS
+
+ Chapter 21. ANTITRUST
+
+ Chapter 22. CREDIT AND IDENTITY THEFT PROTECTION
+
+ Chapter 23. INTEREST
+
+ Chapter 24. CREDIT SERVICES ORGANIZATIONS
+
+ Chapter 24A. DEBT-MANAGEMENT SERVICES
+
+ Chapter 24B. FORECLOSURE CONSULTANTS AND RECONVEYANCES
+
+ Chapter 24C. MORTGAGE LOAN MODIFICATION SERVICES
+
+ Chapter 25. PROHIBITED TRADE PRACTICES
+
+ Chapter 25A. TELEMARKETING REGISTRATION AND FRAUD PREVENTION
+
+ Chapter 25B. DELAWARE RESIDENTIAL WATER TREATMENT SYSTEM SALES
+
+ Chapter 25C. TOY SAFETY
+
+ Chapter 25D. DELAWARE SERVICEMEMBERS CIVIL RELIEF ACT
+
+ Chapter 25E. Delaware Federal Employees Civil Relief Act
+
+ Chapter 25F. Patient Brokering
+
+ Chapter 25G. Chemical Flame Retardant Restrictions
+
+ Chapter 25H. Consumer Equal Access Protection Act
+
+ Chapter 25I. Sealed Container Defense in Product Liability
+
+ Chapter 25J. Medical Debt Protection Act
+
+ Chapter 25K. Dementia Care Services Mandatory Disclosure [For application of this chapter, see 84 Del. Laws, c. 328, § 2]
+
+ Chapter 25L. Gift Card Fraud
+
+ Chapter 25M. Limited Services Medical Facilities
+
+ Chapter 26. UNFAIR CIGARETTE SALES ACT
+
+ Chapter 27. CONTRACTS
+
+ Chapter 27A. ASSET-BACKED SECURITIES FACILITATION ACT
+
+ Chapter 28. CAMPGROUND RESORTS MEMBERSHIP AND VACATION TIME-SHARING PLANS SALES ACT
+
+ Chapter 29. RETAIL SALES OF MOTOR FUEL
+
+ Chapter 31. Registration of Trade Names
+
+ Chapter 33. TRADEMARKS, BRANDS AND LABELS
+
+ Chapter 33A. TRUTH IN MUSIC
+
+ Chapter 34. CONTRACTS FOR PROVIDING SERVICE AND FUEL FOR RESIDENTIAL HEATING SYSTEMS
+
+ Chapter 35. BUILDING CONSTRUCTION PAYMENTS
+
+ Chapter 36. HOME CONSTRUCTION AND IMPROVEMENT PROTECTION
+
+ Chapter 37. SALE OF SECONDHAND WATCHES
+
+ Chapter 38. BROADCASTING SUPPLEMENTARY PUBLIC NOTICES
+
+ Chapter 39. NEWSPAPERS
+
+ Chapter 40. PET WARRANTIES
+
+ Chapter 41. DRY CLEANERS AND LAUNDERERS
+
+ Chapter 42. HEALTH SPA REGULATION
+
+ Chapter 43. RETAIL INSTALLMENT SALES
+
+ Chapter 44. HOME SOLICITATION SALES
+
+ Chapter 45. EQUAL ACCOMMODATIONS
+
+ Chapter 46. FAIR HOUSING ACT
+
+ Chapter 47. TRANSIENT RETAILERS
+
+ Chapter 48. SHOPPING CENTERS
+
+ Chapter 49. MOTOR VEHICLE FRANCHISING PRACTICES
+
+ Chapter 49A. AUTO REPAIR FRAUD PREVENTION
+
+ Chapter 49B. Rental Car Companies [For application of this chapter, see 84 Del. Laws, c. 363, § 3]
+
+ Chapter 50. AUTOMOBILE WARRANTIES
+
+ Chapter 50A. FARM EQUIPMENT WARRANTIES
+
+ Chapter 50B. ASSISTIVE TECHNOLOGY DEVICE WARRANTIES AND CONSUMER PROTECTION
+
+ Chapter 50C. SAFE DESTRUCTION OF RECORDS CONTAINING PERSONAL IDENTIFYING INFORMATION
+
+ Chapter 50D. Abandoned Cultural Property Act
+
+ Chapter 50E. Certification of Adoption of Transparency and Sustainability standards by Delaware Business Entities
+
+ + +
+
+
+ \ No newline at end of file diff --git a/raw/us_state/contract-law b/raw/us_state/contract-law new file mode 100644 index 0000000..01fefe2 --- /dev/null +++ b/raw/us_state/contract-law @@ -0,0 +1,116 @@ + + + + + + + Delaware Code Online + + + + + + + + + + + + + +
+
+
+

The Delaware Code Online

+ +
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+
+
+ Title 6 + > + + Chapter 27 + Authenticated PDF +

CONTRACTS

+
+
+ +
+ + \ No newline at end of file diff --git a/raw/us_state/freelance-isn-t-free-act-nyc b/raw/us_state/freelance-isn-t-free-act-nyc new file mode 100644 index 0000000..3e56b97 --- /dev/null +++ b/raw/us_state/freelance-isn-t-free-act-nyc @@ -0,0 +1,288 @@ + + + + +Freelance Isn't Free Act - DCWP + + + + + + + + + + + + + + + + + + + + + +
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+Consumer and Worker Protection311Search all NYC.gov websites +
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+Worker Protection & Workplace Laws +
+

Freelance Isn't Free Act

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+ Print +
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+ + + + + +
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DCWP Announces Settlement With BuzzFeed Over Late Payments to Freelancers! Freelancers who performed work for BuzzFeed and were not paid on time between May 8, 2019 and August 15, 2024 should file a claim promptly to participate in this settlement.

+
+

Freelance Isn't Free Act

+

On May 15, 2017, Local Law 140 of 2016 took effect. The law establishes and enhances protections for freelance workers, specifically the right to:

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    +
  • A written contract
    • +
  • Timely and full payment
    • +
  • Protection from retaliation
    • +
+

The law establishes penalties for violations of these rights, including statutory damages, double damages, injunctive relief, and attorney’s fees.

+

Individual causes of action will be adjudicated in state court.

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Where there is evidence of a pattern or practice of violations, the Corporation Counsel may bring civil action to recover a civil penalty of not more than $25,000.

+

This law also requires OLPS to receive complaints, create a court navigation program, and gather data and report on the effectiveness of the law.

+

Are you a freelance worker in NYC? Know your rights

+

Do you hire freelance workers? Know your responsibilities

+

Laws and Rules

+

New York City Administrative Code > Title 20: Consumer and Worker Protection > Chapter 10: Freelance Workers

+

Rules of the City of New York > Title 6: Department of Consumer and Worker Protection > Chapter 7: Office of Labor Policy and Standards > Subchapter E: Freelance Workers

+

+

Press Releases and Reports

+

06/05/2025: Read release: DCWP Announces Settlement With BuzzFeed Over Late Payments to Freelancers

+

03/01/2024: Read release: Department of Consumer and Worker Protection Releases Workers' Bill of Rights: A One-Stop-Shop for Understanding Your Labor Rights in NYC

+

11/01/2023: Read report: 5-Year Report on NYC's Freelance Isn't Free Act

+

10/26/2023: Read press release: Department of Consumer and Worker Protection and Freelancers Union Celebrate Launch of NYC Free Tax Prep Services for Self-Employed Filers

+

07/12/2023: Read release: Mayor Adams Announces Settlement With Media Company L’Officiel USA Over Violations of Freelance Isn't Free Act

+

09/28/2022: Read press release: Freelancers Union Opens Its Doors: A Hub for NYC's Independent Workforce

+

05/15/2018: Read press release: New York City Sues French Fashion Media Company L'Officiel USA for Failing to pay NYC Freelancers

+

05/15/2018: Read report: Demanding Rights in an On-Demand Economy: Key Findings from Year One of NYC’s Freelance Isn’t Free Act

+

05/15/2018: Read press release: Freedom for Freelancers: Department of Consumer Affairs Releases Report Marking the First Year of the Freelance Isn't Free Act

+

05/15/2017: Read press release: Freelancers Aren't Free: Mayor Announces First in Nation Protections for Freelance Workers

+

11/16/2016: Read press release: Mayor Bill de Blasio Signs Legislation Strengthening Protections for Freelance Workers

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+ diff --git a/raw/us_state/freelance-isn-t-free-act-state b/raw/us_state/freelance-isn-t-free-act-state new file mode 100644 index 0000000..59aae66 --- /dev/null +++ b/raw/us_state/freelance-isn-t-free-act-state @@ -0,0 +1,388 @@ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + Freelance Isn't Free Act | Department of Labor + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
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Freelance Isn't Free Act +

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+ +
+ +

On August 28, 2024, the “Freelance Isn’t Free” Act added Article 44-A to the General Business Law to provide protections to freelance workers, including contractual requirements and a formal enforcement process.

The Department of Labor has developed a model contract that can be used to meet the contract requirements of the Freelance Isn’t Free Act.

If you are a freelance worker and you believe your rights under the law have been violated, you can file a complaint with the New York State Attorney General.

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+ + \ No newline at end of file diff --git a/raw/us_state/healthcare-non-compete b/raw/us_state/healthcare-non-compete new file mode 100644 index 0000000..4040ed7 --- /dev/null +++ b/raw/us_state/healthcare-non-compete @@ -0,0 +1,628 @@ + + + + + + TLO + + + + + + + + + + + + + + + + + + + + + +  + +   + +
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This entry was published on 2021-04-09
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NOTE: The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
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CHAPTER 24-A

+

General Obligations

+
+ + +
+ +
+ +
CHAPTER 576
AN ACT to reconsolidate laws relating to the creation, definition,

enforcement, transfer, modification, discharge and revival of various

civil obligations, constituting chapter twenty-four-a of the

consolidated laws
Became a law April 23, 1963, with the approval of the Governor. Passed,

by a majority vote, three-fifths being present

The People of the State of New York, represented in Senate and
Assembly, do enact as follows:

CHAPTER TWENTY-FOUR-A OF THE CONSOLIDATED LAWS

GENERAL OBLIGATIONS LAW
Article 1. Short title; construction; applicability of certain

sections. (§§ 1-101--1-203.)

3. Capacity; effect of status or of certain relationships or

occupations upon the creation, definition or enforcement

of obligations. (§§ 3-101--3-503.)

5. Creation, definition and enforcement of contractual

obligations. (§§ 5-101--5-1709.)

7. Obligations relating to property received as security.

(§§ 7-101--7-401.)

9. Obligations of care. (§§ 9-101--9-107.)

11. Obligations to make compensation or restitution.

(§§ 11-100--11-107.)

12. Drug dealer liability act. (§§ 12-101--12-110.)

13. Transfer of obligations and rights. (§§ 13-101--13-109.)

15. Modification and discharge of obligations.

(§§ 15-101--15-702.)

17. Revival or extension; waiver of defense or bar.

(§§ 17-101--17-107.)

18. Safety in skiing code. (§§ 18-101--18-108.)

18-A. Specifications of liability for employers and

employees. (§ 18-201.)

18-B. Safety in agricultural tourism. (§§ 18-301--18-303.)

18-C Libor discontinuance. (§§ 18-400--18-403)

19. Laws repealed; effective date. (§§ 19-101--19-103.)
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Today's Schedule

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Pursuant to Section 10248.5 of the Government Code, the information described in subdivision (a) of Section 10248 of the Government Code and made available on this Web site is within the public domain and the State of California retains no copyright or other proprietary interest in the information. +
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+ + \ No newline at end of file diff --git a/requirements.txt b/requirements.txt new file mode 100644 index 0000000..7fcd6fa --- /dev/null +++ b/requirements.txt @@ -0,0 +1,8 @@ +requests>=2.31.0 +httpx>=0.27.0 +pandas>=2.2.2 +pypdf>=4.2.0 +chromadb>=0.5.3 +beautifulsoup4>=4.12.3 +python-slugify>=8.0.4 + diff --git a/scripts/__pycache__/download_austlii.cpython-312.pyc b/scripts/__pycache__/download_austlii.cpython-312.pyc new file mode 100644 index 0000000..ed8b218 Binary files /dev/null and b/scripts/__pycache__/download_austlii.cpython-312.pyc differ diff --git a/scripts/__pycache__/download_canlii.cpython-312.pyc b/scripts/__pycache__/download_canlii.cpython-312.pyc new file mode 100644 index 0000000..ba57a37 Binary files /dev/null and b/scripts/__pycache__/download_canlii.cpython-312.pyc differ diff --git a/scripts/__pycache__/download_courtlistener.cpython-312.pyc b/scripts/__pycache__/download_courtlistener.cpython-312.pyc new file mode 100644 index 0000000..cfaa0f4 Binary files 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Binary files /dev/null and b/scripts/__pycache__/download_govinfo.cpython-312.pyc differ diff --git a/scripts/__pycache__/download_http.cpython-312.pyc b/scripts/__pycache__/download_http.cpython-312.pyc new file mode 100644 index 0000000..81a014a Binary files /dev/null and b/scripts/__pycache__/download_http.cpython-312.pyc differ diff --git a/scripts/download_all.py b/scripts/download_all.py new file mode 100644 index 0000000..40921c5 --- /dev/null +++ b/scripts/download_all.py @@ -0,0 +1,342 @@ +"""Orchestrator for downloading items listed in LEGAL_CORPUS_IMPORT_LIST.md.""" +from __future__ import annotations + +import argparse +import csv +import datetime as dt +import os +import re +from typing import Dict, List + +from slugify import slugify + +import download_http +from download_austlii import download_austlii +from download_canlii import download_canlii +from download_courtlistener import download_courtlistener +from download_datasets import download_dataset +from download_ecfr import download_ecfr +from download_eurlex import download_eurlex +from download_govinfo import download_govinfo + + +def _infer_subdir(inventory_path: str) -> str: + """Infer a raw/ subdirectory from the inventory section path.""" + inventory_path = inventory_path.lower() + if inventory_path.startswith("1. us federal law"): + return "us_federal" + if inventory_path.startswith("2. us state law"): + return "us_state" + if inventory_path.startswith("3. european union"): + return "eu" + if inventory_path.startswith("4. germany"): + return "germany" + if inventory_path.startswith("5. france"): + return "france" + if inventory_path.startswith("6. canada"): + return "canada" + if inventory_path.startswith("7. australia"): + return "australia" + if inventory_path.startswith("8. united kingdom"): + return "uk" + if inventory_path.startswith("9. contract datasets"): + return "datasets" + if inventory_path.startswith("10. landmark case law"): + return "caselaw" + if inventory_path.startswith("11. industry standards"): + return "industry" + return "misc" + + +def parse_inventory(path: str) -> List[Dict]: + """Parse the markdown inventory into a list of items. + + The parser walks headings and markdown tables, extracting any row with an HTTP(S) URL. + """ + items: List[Dict] = [] + if not os.path.exists(path): + return items + + current_section = "" + current_subsection = "" + headers: List[str] = [] + + def parse_row(line: str) -> List[str]: + return [cell.strip() for cell in line.strip().strip("|").split("|")] + + with open(path, "r", encoding="utf-8") as f: + for raw_line in f: + line = raw_line.rstrip("\n") + stripped = line.strip() + + if stripped.startswith("## "): + current_section = stripped[3:].strip() + current_subsection = "" + headers = [] + continue + if stripped.startswith("### "): + current_subsection = stripped[4:].strip() + headers = [] + continue + + if not stripped.startswith("|"): + continue + + # Separator row like |-----|----| + if set(stripped.replace("|", "").replace("-", "").replace(" ", "")) == set(): + continue + + cells = parse_row(stripped) + # Header row + if headers == []: + headers = cells + continue + + # Data row + row = dict(zip(headers, cells)) + + def clean(value: str) -> str: + return re.sub(r"\*\*", "", value).strip() + + row = {k: clean(v) for k, v in row.items()} + + # Extract URL + url = "" + for key, value in row.items(): + if "http://" in value or "https://" in value: + # Take the first URL-like token + match = re.search(r"https?://\S+", value) + if match: + url = match.group(0).rstrip(")") + break + + # Build document name from common column names + doc_name = ( + row.get("Document") + or row.get("Dataset") + or row.get("Case") + or row.get("Article") + or row.get("Section") + or row.get(headers[0], "document") + ) + subject = row.get("Subject") or row.get("Key Issue") or row.get("Standard") + if subject: + doc_name = f"{doc_name} - {subject}" + + inventory_path = " / ".join(p for p in (current_section, current_subsection) if p) + subdir = _infer_subdir(current_section or "") + + item: Dict = { + "inventory_path": inventory_path or "unspecified", + "document_name": doc_name, + "url": url, + "priority": row.get("Priority", ""), + "subdir": subdir, + } + + if "CELEX ID" in row: + item["celex_id"] = row["CELEX ID"] + + # Flag datasets for special handling + if current_section.lower().startswith("9. contract datasets"): + item["type"] = "dataset" + + # For rows without URLs (for example, many case law entries), keep them so they + # appear in the manifest with `no_direct_link`. + if not url: + item["no_direct_link"] = True + + items.append(item) + + return items + + +def write_manifest_row(manifest_path: str, result: Dict[str, str]) -> None: + exists = os.path.exists(manifest_path) + with open(manifest_path, "a", newline="", encoding="utf-8") as f: + fieldnames = [ + "inventory_path", + "document_name", + "url_used", + "local_path", + "status", + "bytes", + "sha256", + "notes", + ] + writer = csv.DictWriter(f, fieldnames=fieldnames) + if not exists: + writer.writeheader() + writer.writerow({k: result.get(k, "") for k in fieldnames}) + + +def log_download(log_path: str, result: Dict[str, str]) -> None: + exists = os.path.exists(log_path) + with open(log_path, "a", newline="", encoding="utf-8") as f: + fieldnames = [ + "timestamp", + "inventory_path", + "document_name", + "url_used", + "local_path", + "status", + "bytes", + "sha256", + "notes", + ] + writer = csv.DictWriter(f, fieldnames=fieldnames) + if not exists: + writer.writeheader() + row = {k: result.get(k, "") for k in fieldnames if k != "timestamp"} + row["timestamp"] = dt.datetime.utcnow().isoformat() + writer.writerow(row) + + +def choose_downloader(item: Dict) -> str: + url = item.get("url", "") or "" + if item.get("type") == "dataset": + return "dataset" + if "courtlistener" in url: + return "courtlistener" + if "govinfo.gov" in url: + return "govinfo" + if "ecfr.gov" in url: + return "ecfr" + if "eur-lex.europa.eu" in url: + return "eurlex" + if "canlii.org" in url: + return "canlii" + if "austlii.edu.au" in url or "austlii" in url: + return "austlii" + return "http" + + +def process_item(item: Dict, args) -> Dict[str, str]: + inventory_path = item.get("inventory_path", "unspecified") + document_name = item.get("document_name", "document") + url = item.get("url", "") + + # Items like many case law entries have no direct link yet. + if item.get("no_direct_link") and not url: + from download_http import DownloadResult + + result = DownloadResult( + inventory_path=inventory_path, + document_name=document_name, + url="", + local_path="", + status="no_direct_link", + notes="No direct URL in inventory; extend downloader to handle by citation or identifier.", + ) + return result.to_dict() + + downloader = choose_downloader(item) + safe_name = slugify(document_name) or "document" + subdir = item.get("subdir") or _infer_subdir(inventory_path) + base_dir = os.path.join("raw", subdir) + os.makedirs(base_dir, exist_ok=True) + filename = safe_name + # Preserve file extension when URL ends with something obvious + for ext in (".pdf", ".html", ".htm", ".xml", ".json"): + if url.lower().endswith(ext): + filename = f"{safe_name}{ext}" + break + local_path = os.path.join(base_dir, filename) + item["local_path"] = local_path + + if downloader == "http": + result = download_http.safe_http_download(url, local_path, inventory_path, document_name) + elif downloader == "govinfo": + result = download_govinfo(item, api_key=args.govinfo_api_key) + elif downloader == "ecfr": + result = download_ecfr(item) + elif downloader == "eurlex": + # Prefer CELEX-based download if CELEX ID is present. + if item.get("celex_id"): + result = download_eurlex(item) + else: + result = download_http.safe_http_download(url, local_path, inventory_path, document_name) + elif downloader == "canlii": + result = download_canlii(item) + elif downloader == "austlii": + result = download_austlii(item) + elif downloader == "courtlistener": + result = download_courtlistener(item, token=args.courtlistener_token) + elif downloader == "dataset": + result = download_dataset(item) + else: + from download_http import DownloadResult + + result = DownloadResult( + inventory_path, + document_name, + url, + local_path, + "error", + notes="Unknown downloader", + ) + return result.to_dict() + + +def main() -> None: + parser = argparse.ArgumentParser(description="Download legal corpus inventory") + parser.add_argument( + "--inventory", + default="LEGAL_CORPUS_IMPORT_LIST.md", + help="Inventory markdown file", + ) + parser.add_argument( + "--concurrency", + type=int, + default=1, + help="Not used yet; reserved for future parallelism", + ) + parser.add_argument( + "--retry-status", + default=None, + help="If set, only retry items with this status", + ) + parser.add_argument( + "--govinfo-api-key", + dest="govinfo_api_key", + default=os.environ.get("GOVINFO_API_KEY"), + ) + parser.add_argument( + "--courtlistener-token", + dest="courtlistener_token", + default=os.environ.get("COURTLISTENER_TOKEN"), + ) + args = parser.parse_args() + + inventory_items = parse_inventory(args.inventory) + manifest_path = "manifests/download_manifest.csv" + log_path = "logs/download_log.csv" + + if not inventory_items: + placeholder = { + "inventory_path": "pending_inventory", + "document_name": "pending_inventory", + "url_used": "", + "local_path": "", + "status": "pending_inventory", + "bytes": "", + "sha256": "", + "notes": "Inventory missing; provide LEGAL_CORPUS_IMPORT_LIST.md", + } + write_manifest_row(manifest_path, placeholder) + log_download(log_path, placeholder) + print("Inventory missing; wrote placeholder manifest row.") + return + + os.makedirs(os.path.dirname(manifest_path), exist_ok=True) + os.makedirs(os.path.dirname(log_path), exist_ok=True) + + for item in inventory_items: + result = process_item(item, args) + write_manifest_row(manifest_path, result) + log_download(log_path, result) + print(f"Processed {item.get('document_name')}: {result.get('status')}") + + +if __name__ == "__main__": + main() diff --git a/scripts/download_austlii.py b/scripts/download_austlii.py new file mode 100644 index 0000000..2d2a707 --- /dev/null +++ b/scripts/download_austlii.py @@ -0,0 +1,26 @@ +"""Downloader stub for AustLII content.""" +from __future__ import annotations + +from typing import Dict + +from download_http import DownloadResult, safe_http_download + + +def download_austlii(item: Dict) -> DownloadResult: + inventory_path = item.get("inventory_path", "australia") + document_name = item.get("document_name", "unknown") + url = item.get("url") + local_path = item.get("local_path", "raw/australia/unknown") + if not url: + return DownloadResult( + inventory_path, + document_name, + "", + local_path, + "no_direct_link", + notes="Provide AustLII URL; ensure robots.txt allows access.", + ) + return safe_http_download(url, local_path, inventory_path, document_name) + + +__all__ = ["download_austlii"] diff --git a/scripts/download_canlii.py b/scripts/download_canlii.py new file mode 100644 index 0000000..6b25452 --- /dev/null +++ b/scripts/download_canlii.py @@ -0,0 +1,27 @@ +"""Downloader stub for CanLII.""" +from __future__ import annotations + +from typing import Dict + +from download_http import DownloadResult, safe_http_download + + +def download_canlii(item: Dict) -> DownloadResult: + inventory_path = item.get("inventory_path", "canada") + document_name = item.get("document_name", "unknown") + url = item.get("url") + local_path = item.get("local_path", "raw/canada/unknown") + if not url: + return DownloadResult( + inventory_path, + document_name, + "", + local_path, + "no_direct_link", + notes="Provide CanLII download URL or API parameters.", + ) + # Respect robots/terms; full implementation should call official APIs when available. + return safe_http_download(url, local_path, inventory_path, document_name) + + +__all__ = ["download_canlii"] diff --git a/scripts/download_courtlistener.py b/scripts/download_courtlistener.py new file mode 100644 index 0000000..5e48cbe --- /dev/null +++ b/scripts/download_courtlistener.py @@ -0,0 +1,87 @@ +"""Downloader for CourtListener opinions.""" +from __future__ import annotations + +import json +import os +from typing import Dict, Optional + +import requests + +from download_http import DownloadResult + +COURTLISTENER_BASE = "https://www.courtlistener.com/api/rest/v3/opinions/" + + +def download_courtlistener(item: Dict, token: Optional[str] = None) -> DownloadResult: + inventory_path = item.get("inventory_path", "caselaw") + document_name = item.get("document_name", "unknown") + opinion_id = item.get("opinion_id") + url = item.get("url") or (f"{COURTLISTENER_BASE}{opinion_id}/" if opinion_id else None) + local_path = item.get("local_path", f"raw/caselaw/{document_name}.json") + if not url: + return DownloadResult( + inventory_path, + document_name, + "", + local_path, + "no_direct_link", + notes="Provide CourtListener opinion_id or url", + ) + + headers = {"User-Agent": "if-legal-corpus/0.1"} + if token: + headers["Authorization"] = f"Token {token}" + try: + resp = requests.get(url, headers=headers, timeout=30) + if resp.status_code in {401, 403}: + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "requires_login", + http_status=resp.status_code, + notes="CourtListener token required for this request", + ) + if resp.status_code == 429: + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "rate_limited", + http_status=429, + notes=resp.headers.get("Retry-After", "Rate limited"), + ) + resp.raise_for_status() + except requests.exceptions.RequestException as exc: # type: ignore[attr-defined] + return DownloadResult(inventory_path, document_name, url, local_path, "error", notes=str(exc)) + + os.makedirs(os.path.dirname(local_path), exist_ok=True) + try: + data = resp.json() + except ValueError: + return DownloadResult(inventory_path, document_name, url, local_path, "error", notes="Non-JSON response") + + with open(local_path, "w", encoding="utf-8") as f: + json.dump(data, f) + pretty_path = f"{local_path}.pretty.json" + with open(pretty_path, "w", encoding="utf-8") as f: + json.dump(data, f, indent=2) + + import hashlib + + h = hashlib.sha256(resp.content) + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "success", + bytes=len(resp.content), + sha256=h.hexdigest(), + http_status=resp.status_code, + ) + + +__all__ = ["download_courtlistener"] diff --git a/scripts/download_datasets.py b/scripts/download_datasets.py new file mode 100644 index 0000000..bec621d --- /dev/null +++ b/scripts/download_datasets.py @@ -0,0 +1,30 @@ +"""Downloader for open datasets (e.g., CUAD, LEDGAR).""" +from __future__ import annotations + +import os +from typing import Dict + +from download_http import DownloadResult, safe_http_download + + +def download_dataset(item: Dict) -> DownloadResult: + inventory_path = item.get("inventory_path", "datasets") + document_name = item.get("document_name", "dataset") + url = item.get("url") + filename = item.get("filename") or ( + document_name.replace(" ", "_") + (".zip" if url and url.endswith(".zip") else "") + ) + local_path = item.get("local_path") or os.path.join("raw/datasets", filename) + if not url: + return DownloadResult( + inventory_path, + document_name, + "", + local_path, + "no_direct_link", + notes="Add dataset URL to proceed", + ) + return safe_http_download(url, local_path, inventory_path, document_name) + + +__all__ = ["download_dataset"] diff --git a/scripts/download_ecfr.py b/scripts/download_ecfr.py new file mode 100644 index 0000000..3208c09 --- /dev/null +++ b/scripts/download_ecfr.py @@ -0,0 +1,72 @@ +"""Downloader for the eCFR v1 API or HTML endpoints.""" +from __future__ import annotations + +from typing import Dict + +import requests + +from download_http import DownloadResult + + +def download_ecfr(item: Dict, api_base: str = "https://api.ecfr.gov/v1") -> DownloadResult: + inventory_path = item.get("inventory_path", "us_federal") + document_name = item.get("document_name", "unknown") + path = item.get("path") or item.get("url") + local_path = item.get("local_path", "raw/us_federal/ecfr_unknown.json") + + url = path if path and path.startswith("http") else f"{api_base}{path}" if path else api_base + params = item.get("params") or {} + try: + resp = requests.get(url, params=params, timeout=30) + if resp.status_code == 429: + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "rate_limited", + http_status=429, + notes=resp.headers.get("Retry-After", "Rate limited"), + ) + resp.raise_for_status() + except requests.exceptions.RequestException as exc: # type: ignore[attr-defined] + return DownloadResult(inventory_path, document_name, url, local_path, "error", notes=str(exc)) + + import os + + os.makedirs(os.path.dirname(local_path), exist_ok=True) + try: + # Try JSON first, fall back to raw text + try: + content = resp.json() + import json + + with open(local_path, "w", encoding="utf-8") as f: + json.dump(content, f) + pretty_path = f"{local_path}.pretty.json" + with open(pretty_path, "w", encoding="utf-8") as f: + json.dump(content, f, indent=2) + raw_bytes = resp.content + except ValueError: + with open(local_path, "w", encoding="utf-8") as f: + f.write(resp.text) + raw_bytes = resp.content + except Exception as exc: # noqa: BLE001 + return DownloadResult(inventory_path, document_name, url, local_path, "error", notes=str(exc)) + + import hashlib + + h = hashlib.sha256(raw_bytes) + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "success", + bytes=len(raw_bytes), + sha256=h.hexdigest(), + http_status=resp.status_code, + ) + + +__all__ = ["download_ecfr"] diff --git a/scripts/download_eurlex.py b/scripts/download_eurlex.py new file mode 100644 index 0000000..fe4021e --- /dev/null +++ b/scripts/download_eurlex.py @@ -0,0 +1,87 @@ +"""Downloader for EUR-Lex content using SPARQL metadata.""" +from __future__ import annotations + +from typing import Dict + +import requests + +from download_http import DownloadResult + +SPARQL_ENDPOINT = "https://eur-lex.europa.eu/sparql" + + +def fetch_metadata(celex_id: str) -> Dict: + query = f""" +PREFIX cdm: +SELECT ?work ?pdf WHERE {{ + ?work cdm:resource_legal_id_celex "{celex_id}" . + OPTIONAL {{ ?expression cdm:expression_belongs_to_work ?work . + ?manifestation cdm:manifestation_manifests_expression ?expression . + ?pdf cdm:manifestation_file_type 'pdf' . + ?pdf cdm:manifestation_access_url ?pdf }} +}} +""" + resp = requests.get(SPARQL_ENDPOINT, params={"format": "json", "query": query}, timeout=30) + resp.raise_for_status() + return resp.json() + + +def download_eurlex(item: Dict) -> DownloadResult: + inventory_path = item.get("inventory_path", "eu") + document_name = item.get("document_name", item.get("celex_id", "unknown")) + celex_id = item.get("celex_id") + local_path = item.get("local_path", f"raw/eu/{document_name}.pdf") + if not celex_id: + return DownloadResult(inventory_path, document_name, "", local_path, "error", notes="Missing celex_id") + + try: + metadata = fetch_metadata(celex_id) + except requests.exceptions.RequestException as exc: # type: ignore[attr-defined] + return DownloadResult(inventory_path, document_name, "", local_path, "error", notes=f"SPARQL error: {exc}") + + pdf_url = None + bindings = metadata.get("results", {}).get("bindings", []) + if bindings: + pdf_url = bindings[0].get("pdf", {}).get("value") + if not pdf_url: + return DownloadResult( + inventory_path, + document_name, + "", + local_path, + "no_direct_link", + notes="No PDF link found in SPARQL metadata", + ) + + try: + info = requests.get(pdf_url, stream=True, timeout=30) + info.raise_for_status() + except requests.exceptions.RequestException as exc: # type: ignore[attr-defined] + return DownloadResult(inventory_path, document_name, pdf_url, local_path, "error", notes=str(exc)) + + import os + + os.makedirs(os.path.dirname(local_path), exist_ok=True) + import hashlib + + h = hashlib.sha256() + bytes_written = 0 + with open(local_path, "wb") as f: + for chunk in info.iter_content(32768): + if chunk: + f.write(chunk) + h.update(chunk) + bytes_written += len(chunk) + return DownloadResult( + inventory_path, + document_name, + pdf_url, + local_path, + "success", + bytes=bytes_written, + sha256=h.hexdigest(), + http_status=info.status_code, + ) + + +__all__ = ["download_eurlex"] diff --git a/scripts/download_govinfo.py b/scripts/download_govinfo.py new file mode 100644 index 0000000..9b67795 --- /dev/null +++ b/scripts/download_govinfo.py @@ -0,0 +1,80 @@ +"""Downloader for GovInfo bulk/REST endpoints.""" +from __future__ import annotations + +from typing import Dict, Optional + +import requests + +from download_http import DownloadResult + + +def download_govinfo(item: Dict, api_key: Optional[str] = None) -> DownloadResult: + """Attempt to download a GovInfo item. + + ``item`` should include ``inventory_path``, ``document_name``, ``url`` (or ``api_endpoint``) and ``local_path``. + """ + url = item.get("url") or item.get("api_endpoint") + inventory_path = item.get("inventory_path", "us_federal") + document_name = item.get("document_name", "unknown") + local_path = item.get("local_path", "raw/us_federal/unknown") + headers = {} + if api_key: + headers["X-Api-Key"] = api_key + try: + resp = requests.get(url, headers=headers, stream=True, timeout=30) + if resp.status_code in {401, 403}: + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "requires_login", + http_status=resp.status_code, + notes="GovInfo requires API key; set GOVINFO_API_KEY.", + ) + if resp.status_code == 429: + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "rate_limited", + http_status=429, + notes=resp.headers.get("Retry-After", "Rate limited"), + ) + resp.raise_for_status() + except requests.exceptions.RequestException as exc: # type: ignore[attr-defined] + return DownloadResult(inventory_path, document_name, url, local_path, "error", notes=str(exc)) + + # Stream to disk + bytes_written = 0 + sha256 = "" + try: + import hashlib + import os + + os.makedirs(os.path.dirname(local_path), exist_ok=True) + h = hashlib.sha256() + for chunk in resp.iter_content(32768): + if chunk: + with open(local_path, "ab") as f: + f.write(chunk) + h.update(chunk) + bytes_written += len(chunk) + sha256 = h.hexdigest() + except Exception as exc: # noqa: BLE001 + return DownloadResult(inventory_path, document_name, url, local_path, "error", notes=str(exc)) + + return DownloadResult( + inventory_path, + document_name, + url, + local_path, + "success", + bytes=bytes_written, + sha256=sha256, + http_status=resp.status_code, + ) + + +__all__ = ["download_govinfo"] diff --git a/scripts/download_http.py b/scripts/download_http.py new file mode 100644 index 0000000..4167bbc --- /dev/null +++ b/scripts/download_http.py @@ -0,0 +1,104 @@ +"""HTTP downloader helper.""" +from __future__ import annotations + +import hashlib +import os +from dataclasses import asdict, dataclass +from typing import Dict, Optional + +import requests + + +@dataclass +class DownloadResult: + inventory_path: str + document_name: str + url: str + local_path: str + status: str + bytes: int = 0 + sha256: str = "" + notes: str = "" + http_status: Optional[int] = None + + def to_dict(self) -> Dict[str, str]: + data = asdict(self) + # Align field name with manifest expectation + data["url_used"] = data.pop("url") + return data + + +def download_file(url: str, out_path: str, timeout: int = 30) -> Dict[str, str]: + """Download a file over HTTP to ``out_path`` with SHA-256 integrity. + + Returns a manifest-friendly dictionary with status and metadata. + """ + resp = requests.get(url, stream=True, timeout=timeout) + resp.raise_for_status() + os.makedirs(os.path.dirname(out_path), exist_ok=True) + h = hashlib.sha256() + bytes_written = 0 + with open(out_path, "wb") as f: + for chunk in resp.iter_content(32768): + if chunk: + f.write(chunk) + h.update(chunk) + bytes_written += len(chunk) + return { + "url": url, + "local_path": out_path, + "bytes": bytes_written, + "sha256": h.hexdigest(), + "status": "success", + "notes": "", + } + + +def safe_http_download(url: str, out_path: str, inventory_path: str, document_name: str) -> DownloadResult: + try: + info = download_file(url, out_path) + return DownloadResult( + inventory_path=inventory_path, + document_name=document_name, + url=url, + local_path=out_path, + status="success", + bytes=info.get("bytes", 0), + sha256=info.get("sha256", ""), + notes=info.get("notes", ""), + http_status=200, + ) + except requests.exceptions.HTTPError as exc: + status_code = exc.response.status_code if exc.response else None + status = "requires_login" if status_code and status_code in {401, 403} else "error" + return DownloadResult( + inventory_path=inventory_path, + document_name=document_name, + url=url, + local_path=out_path, + status=status, + notes=f"HTTP error: {exc}", + http_status=status_code, + ) + except requests.exceptions.SSLError as exc: + return DownloadResult( + inventory_path=inventory_path, + document_name=document_name, + url=url, + local_path=out_path, + status="error", + notes=f"SSL error: {exc}", + ) + except requests.exceptions.RequestException as exc: + return DownloadResult( + inventory_path=inventory_path, + document_name=document_name, + url=url, + local_path=out_path, + status="error", + notes=f"Request error: {exc}", + ) + + +__all__ = ["download_file", "safe_http_download", "DownloadResult"] + diff --git a/scripts/ingest_chromadb.py b/scripts/ingest_chromadb.py new file mode 100644 index 0000000..398f439 --- /dev/null +++ b/scripts/ingest_chromadb.py @@ -0,0 +1,93 @@ +"""ChromaDB ingestion for the legal corpus.""" +from __future__ import annotations + +import argparse +import csv +import json +import os +from pathlib import Path +from typing import List + +import chromadb +from bs4 import BeautifulSoup +from chromadb.config import Settings +from pypdf import PdfReader + + +def read_manifest(manifest_path: str) -> List[dict]: + with open(manifest_path, newline="", encoding="utf-8") as f: + reader = csv.DictReader(f) + return list(reader) + + +def extract_text(path: Path) -> str: + if path.suffix.lower() == ".pdf": + reader = PdfReader(str(path)) + return "\n".join(page.extract_text() or "" for page in reader.pages) + if path.suffix.lower() == ".json": + with path.open("r", encoding="utf-8") as f: + data = json.load(f) + return json.dumps(data) + if path.suffix.lower() in {".html", ".xml", ".htm"}: + with path.open("r", encoding="utf-8") as f: + soup = BeautifulSoup(f, "html.parser") + return soup.get_text("\n") + with path.open("r", encoding="utf-8", errors="ignore") as f: + return f.read() + + +def chunk_text(text: str, chunk_size: int = 1500, overlap: int = 200) -> List[str]: + chunks: List[str] = [] + start = 0 + while start < len(text): + end = min(len(text), start + chunk_size) + chunks.append(text[start:end]) + start += max(1, chunk_size - overlap) + return chunks + + +def ingest(manifest_path: str, db_dir: str) -> None: + records = read_manifest(manifest_path) + os.makedirs(db_dir, exist_ok=True) + client = chromadb.PersistentClient( + path=db_dir, + settings=Settings(anonymized_telemetry=False), + ) + collection = client.get_or_create_collection("if_legal_corpus") + for record in records: + if record.get("status") != "success": + continue + local_path = record.get("local_path") + if not local_path or not os.path.exists(local_path): + continue + text = extract_text(Path(local_path)) + for idx, chunk in enumerate(chunk_text(text)): + doc_id = f"{record.get('document_name')}-{record.get('sha256')}-{idx}" + metadata = { + "inventory_path": record.get("inventory_path"), + "document_name": record.get("document_name"), + "local_path": local_path, + "sha256": record.get("sha256"), + } + collection.upsert(ids=[doc_id], documents=[chunk], metadatas=[metadata]) + client.persist() + + +def main() -> None: + parser = argparse.ArgumentParser(description="Ingest downloaded corpus into ChromaDB") + parser.add_argument( + "--manifest", + default="manifests/download_manifest.csv", + help="Path to manifest CSV", + ) + parser.add_argument( + "--db-dir", + default="indexes/chromadb", + help="ChromaDB directory", + ) + args = parser.parse_args() + ingest(args.manifest, args.db_dir) + + +if __name__ == "__main__": + main()