Where does a .32 pistol for humane dispatch fall in the Firearms Act?

A: Curiously, you are both correct. “Short firearms,” as the Firearms (Amendment) Act 1997 describes them, were prohibited and added to Section 5 alongside machine guns, mortar bombs, hand grenades and such. So your mate is right, and they do fall under Section 5.

However, if you have one on your firearm certificate for use in connection with one of the approved purposes, then it must fall under Section 1 because the certificate only allows you to possess firearms under that Section. You cannot possess prohibited firearms on an ordinary firearm certificate. So we are left with the anomaly that your pistol is Section 1 as far as you are concerned but Section 5 for anyone else, even including a registered firearms dealer.

There is a similar anomaly in the case of antiques. They are exempt from the licensing system unless you want to fire them, in which case they must go on your firearm or shotgun certificate. At that point they are either Section 1 or Section 2 firearms for you, but the rest of the population can still buy and sell them as freely as any other antique.

There is yet another anomaly here because Condition 4 on your certificate requires you to store guns securely “so as to prevent, so far as is reasonably practicable, access to the firearms by an unauthorised person.” In the case of an antique firearm there are no unauthorised persons, so there is no legal requirement to keep them locked up.