Finance Act 2003

2003 c. 14

An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

Enacted[10th July 2003]

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and to grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—^C14^C21^C43

Part 1 Excise duties¶

Tobacco products duty¶

1 Rates of tobacco products duty¶

1 For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute—

2 This section shall be deemed to have come into force at 6 o'clock in the evening of 9th April 2003.

Alcoholic liquor duties¶

2 Rate of duty on beer¶

1 In section 36(1AA)(a) of the Alcoholic Liquor Duties Act 1979 (c. 4) (rate of duty on beer), for “£11.89” substitute “ £12.22 ”.

2 This section shall be deemed to have come into force at midnight on 13th April 2003.

3 Rates of duty on wine and made-wine¶

1 For Part 1 of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (rates of duty on wine and made-wine) substitute—

Part 1 Wine and made-wine of a strength not exceeding 22 per cent

Description of wine or made-wine	Rates of duty per hectolitre
	£
Wine or made-wine of a strength not exceeding 4 per cent	48.91
Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent	67.25
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling	158.69
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent	166.70
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent	220.54
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent	211.58

2 This section shall be deemed to have come into force at midnight on 13th April 2003.

Hydrocarbon oil duties¶

4 Rates of hydrocarbon oil duties¶

1 In section 6(1A) of the Hydrocarbon Oil Duties Act 1979 (c. 5) (rates of duty)—

a in paragraph (a) (ultra low sulphur petrol) for “£0.4582” substitute “ £0.4710 ”,

b in paragraph (b) (other light oil) for “£0.5468” substitute “ £0.5620 ”,

c in paragraph (c) (ultra low sulphur diesel) for “£0.4582” substitute “ £0.4710 ”, and

d in paragraph (d) (other heavy oil) for “£0.5182” substitute “ £0.5327 ”.

2 In section 6AA(3) of that Act (biodiesel duty) for “£0.2582” substitute “ £0.2710 ”.

3 In section 13A(1) of that Act (rebate on unleaded petrol) for “£0.0586” substitute “ £0.0601 ”.

4 This section shall come into force on 1st October 2003.

5 Rebates on hydrocarbon oil duties¶

1 In section 11(1) of the Hydrocarbon Oil Duties Act 1979 (rebate on heavy oil)—

a in paragraph (a) (fuel oil) for “£0.0274” substitute “ £0.0382 ”,

b in paragraph (b) (gas oil: general) for “£0.0313” substitute “ £0.0422 ”, and

c in paragraph (ba) (ultra low sulphur diesel) for “£0.0313” substitute “ £0.0422 ”.

2 In section 14(1) of that Act (furnace fuel) for “£0.0274” substitute “ £0.0382 ”.

3 This section shall be deemed to have come into force at 6 o'clock in the evening of 9th April 2003.

Betting and gaming duties¶

6 General betting duty and pool betting duty: relief for losses¶

1 Part 1 of the Betting and Gaming Duties Act 1981 (c. 63) (betting duties) is amended as follows.

2 In section 5 (net stake receipts) at the end of subsection (3) (negative net stake receipts to be disregarded) insert “ except as provided for by section 5AA ”.

3 After that section insert—

5AA Relief for losses

1 This section applies where the amount of a person’s net stake receipts for an accounting period in respect of a class of bets (calculated in accordance with section 5(1)) is a negative amount.

2 That amount shall be carried forward to the following accounting period and, to the extent that it does not exceed it, deducted from the amount of the person’s net stake receipts in respect of the same class of bets for that period.

3 If the amount of those net stake receipts for that following accounting period—

a is not a positive amount, or

b is less than the amount carried forward,

the amount carried forward or, as the case may be, the balance of it shall be treated for the purposes of this section as if it were a negative amount of net stake receipts for that period in respect of the same class of bets.

4 Omit section 5A (multiple bets) (which becomes unnecessary as a result of the amendment made by subsection (3) above).

5 After section 7 (duty charged on net pool betting receipts) insert—

6 The amendments made by this section apply in relation to any accounting period beginning on or after 1st September 2003 for which the net stake receipts in respect of a particular class of bets, or (as the case may be) the net pool betting receipts, is a negative amount.

7 General betting duty: betting exchanges¶

1 Part 1 of the Betting and Gaming Duties Act 1981 (c. 63) (betting duties) is amended as follows.

2 After section 5AA (inserted by section 6 above) insert—

5AB Betting exchanges

1 This section applies where—

a one person makes a bet with another person using facilities provided by a third person in the course of a business, and

b that business is one that does not involve the provision of premises for use by persons making or taking bets.

2 General betting duty shall be charged on the amounts (“commission charges”) that the parties to the bet are charged, whether by deduction from winnings or otherwise, for using those facilities.

3 No deductions shall be allowed from commission charges.

4 The amount of duty charged under this section in respect of bets determined in an accounting period shall be 15 per cent of the commission charges relating to those bets.

5 For the purposes of this section, and section 5B(4) so far as relating to this section, a person who arranges for facilities relating to a bet to be provided by another person shall be treated as providing them himself (and the other person shall not).

3 In section 5B (liability to pay)—

a for subsection (1) substitute—

;

b in subsection (4), after “section 4(1) to (3)” insert “ or 5AB ”.

4 In section 5C (bet-brokers)—

a in paragraph (a) of subsection (1) (application of section) after “in the course of a business” insert “ , other than a betting-exchange business, ”;

b at the end of that subsection insert— “ In paragraph (a) “betting-exchange business” means a business such as is mentioned in section 5AB(1). ”;

c omit subsections (2) (bet treated as made between bettor and bet-broker) and (3) (subsection (2) not to apply to off-course bets where bet-taker is a bookmaker);

d in subsection (4) omit the words “In the case of a bet which is excluded from subsection (2) by virtue of subsection (3),”.

5 The amendments made by this section apply in relation to any accounting period beginning on or after 1st June 2003.

6 Those amendments do not apply in relation to a bet (a “straddling bet”) that is—

a made, using facilities provided by a person (“the broker”), in an accounting period of the broker beginning before 1st June 2003, but

b not determined until an accounting period of the broker beginning on or after that date.

7 Any winnings paid in respect of a straddling bet to which section 5AB of the Betting and Gaming Duties Act 1981 (c. 63) would apply but for subsection (6) above shall be treated for the purposes of that Act as paid in the broker’s accounting period in which the bet was made (“the earlier accounting period”).

8 Subsection (7) shall not have effect to reduce the general betting duty payable by the broker for the earlier accounting period; but the amount of the reduction that would (but for this subsection) have been made for that period shall be set against any liability of the broker to general betting duty for accounting periods in the following three years, taking earlier periods before later ones until the amount is exhausted.

8 General betting duty: restriction of exemption for on-course bets¶

1 In section 12(4) of the Betting and Gaming Duties Act 1981 (general betting duty: supplementary provisions), in the definition of “on-course bet” for “a meeting” substitute “ a horse or dog race meeting ”.

2 This section applies to bets made on or after 1st September 2003.

^F12999 Bingo duty¶

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10 Amusement machines not operated by coins or tokens¶

1 In section 21 of the Betting and Gaming Duties Act 1981 (amusement machine licences), for subsections (3B) to (3D) (meaning of “fifty-penny machine”) substitute—

2 In section 25(1) of that Act (definition of “amusement machine”), in paragraph (c) for “coin or token” substitute “ coin, token or other thing ”.

3 In section 26(2) of that Act (interpretation), for the definitions of “two-penny machine”, “five-penny machine” and “ten-penny machine” substitute—

4 In the following provisions of the Value Added Tax Act 1994 (c. 23)—

a the definition of “gaming machine” in section 23(4), and

b Note (3) (definition of “gaming machine”) to Group 4 of Schedule 9,

for “coin or token” substitute “ coin, token or other thing ”.

11 Amusement machines: use of currencies other than sterling¶

1 In section 26 of the Betting and Gaming Duties Act 1981 (c. 63) (interpretation etc), omit the definition of “coin” in subsection (2).

2 After that section insert—

26A Amounts in currencies other than sterling

1 Any reference in this Part of this Act to a amount in sterling, in the context of—

a the cost of playing a game, or

b the amount of the prize for a game,

includes a reference to the equivalent amount in another currency.

2 The equivalent amount in another currency, in relation to any day, shall be determined by reference to the London closing exchange rate for the previous day.

3 For the purposes of determining what duty is payable on an amusement machine licence in a case where this section applies, the equivalent in another currency of an amount in sterling shall be taken to be its equivalent on the day on which the application for the licence is received by the Commissioners, or the due date in the case of a default licence.

4 In subsection (3) above—

“default licence” means a licence granted under paragraph 3(1) of Schedule 4A to this Act;
“due date” has the meaning given by paragraph 2(4) of that Schedule.

3 This section does not apply in relation to any amusement machine licence granted before the day on which this Act is passed or to anything done under such a licence.

12 Responsibility for unlicensed amusement machines¶

1 In section 24(5) of the Betting and Gaming Duties Act 1981 (c. 63) (penalty for unlicensed amusement machines), for paragraph (c) (liability of person responsible for, inter alia, issuing or exchanging coins etc for amusement machine) substitute—

2 In Schedule 4A to that Act (unlicensed amusement machines), for paragraph (c) of paragraph 7(3) (which makes similar provision) substitute—

13 Rates of gaming duty¶

1 For the Table in section 11(2) of the Finance Act 1997 (c. 16) (rates of gaming duty) substitute—

Table

Part of gross gaming yield	Rate
The first £502,500	2.5 per cent.
The next £1,115,500	12.5 per cent.
The next £1,115,500	20 per cent.
The next £1,953,000	30 per cent.
The remainder	40 per cent.

2 This section has effect in relation to accounting periods beginning on or after 1st April 2003.

Vehicle excise duty¶

14 Vehicle excise duty: rates¶

1 In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 (c. 22) (the general rate)—

^F131a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b in sub-paragraph (2A) (general rate of duty in case of vehicle with engine with cylinder capacity not exceeding 1,549 cubic centimetres) for “£105” substitute “ £110 ”.

^F1322 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 In paragraph 1J of that Schedule (rates of duty applicable to light goods vehicles first registered on or after 1st March 2001)—

a in paragraph (a) (vehicle which is not a lower-emission van) for “£160” substitute “ £165 ”;

b in paragraph (b) (vehicle which is a lower-emission van) for “£105” substitute “ £110 ”.

4 This section applies to any licence taken out on or after 17th April 2003 for a period beginning on or after 1st May 2003.

15 Disclosure for exemptions: Northern Ireland¶

In section 22ZA of the Vehicle Excise and Registration Act 1994 (c. 22) (nil licences for vehicles for disabled persons: disclosure of information) in subsection (1)(a) (which provides that the section applies to certain information held by the Secretary of State or a person providing services to him) in sub-paragraphs (i) and (ii), after “the Secretary of State” insert “ or a Northern Ireland department ”.

16 Duty at higher rate: exception for tractive units¶

1 After section 15 of the Vehicle Excise and Registration Act 1994 insert—

15A Exception for tractive units from charge at higher rate

1 Where—

a a vehicle licence has been taken out for a tractive unit, and

b the licence was taken out at a rate of vehicle excise duty applicable to a tractive unit which is to be used with semi-trailers with a minimum number of axles,

duty at a higher rate does not become chargeable under section 15 by reason only that while the licence is in force the tractive unit is used with a semi-trailer with fewer axles than that minimum number, if the condition in subsection (2) is satisfied.

2 The condition is that the rate of duty at which the licence was taken out is equal to or exceeds the rate which would have been applicable if the revenue weight of the tractive unit had been a weight equal to the actual laden weight, at the time of the use, of the articulated vehicle consisting of the tractive unit and the semi-trailer.

2 Section 16 of that Act (which makes provision, in the case of tractive units, for exemptions from the charge to vehicle excise duty at a higher rate on a basis different from that set out in new section 15A) shall cease to have effect.

3 This section has effect in relation to the use of a tractive unit on or after 9th April 2003.

Part 2 Value added tax¶

17 Requirement of evidence or security¶

1 The Value Added Tax Act 1994 (c. 23) is amended as follows.

2 In section 24(6)(a) (regulations about input tax etc: requirement of documentary evidence) after “documents” insert “ or other information ”.

3 In paragraph 4 of Schedule 11 (power to require security and production of documents) for sub-paragraph (1) substitute—

4 For sub-paragraph (2) of that paragraph substitute—

5 In section 72(11) (penalty for supplying goods in contravention of paragraph 4(2) of Schedule 11) after “supplies” insert “ or is supplied with ”.

6 In section 83(l) (right of appeal against requirement of security under paragraph 4(2) of Schedule 11 etc) for “paragraph 4(2)” substitute “ paragraph 4(1A) or (2) ”.

7 In section 84 (further provisions relating to appeals) after subsection (4D) insert—

8 This section shall be deemed to have come into force on 10th April 2003.

^I118 Joint and several liability for unpaid VAT of another trader¶

1 In Part 4 of the Value Added Tax Act 1994 (c. 23) (administration, collection and enforcement), after section 77 insert—

Liability for unpaid VAT of another

77A Joint and several liability of traders in supply chain where tax unpaid

1 This section applies to goods of any of the following descriptions—

a telephones and any other equipment, including parts and accessories, made or adapted for use in connection with telephones or telecommunication;

b computers and any other equipment, including parts, accessories and software, made or adapted for use in connection with computers or computer systems.

2 Where—

a a taxable supply of goods to which this section applies has been made to a taxable person, and

b at the time of the supply the person knew or had reasonable grounds to suspect that some or all of the VAT payable in respect of that supply, or on any previous or subsequent supply of those goods, would go unpaid,

the Commissioners may serve on him a notice specifying the amount of the VAT so payable that is unpaid, and stating the effect of the notice.

3 The effect of a notice under this section is that—

a the person served with the notice, and

b the person liable, apart from this section, for the amount specified in the notice,

are jointly and severally liable to the Commissioners for that amount.

4 For the purposes of subsection (2) above the amount of VAT that is payable in respect of a supply is the lesser of—

a the amount chargeable on the supply, and

b the amount shown as due on the supplier’s return for the prescribed accounting period in question (if he has made one) together with any amount assessed as due from him for that period (subject to any appeal by him).

5 The reference in subsection (4)(b) above to assessing an amount as due from a person includes a reference to the case where, because it is impracticable to do so, the amount is not notified to him.

6 For the purposes of subsection (2) above, a person shall be presumed to have reasonable grounds for suspecting matters to be as mentioned in paragraph (b) of that subsection if the price payable by him for the goods in question—

a was less than the lowest price that might reasonably be expected to be payable for them on the open market, or

b was less than the price payable on any previous supply of those goods.

7 The presumption provided for by subsection (6) above is rebuttable on proof that the low price payable for the goods was due to circumstances unconnected with failure to pay VAT.

8 Subsection (6) above is without prejudice to any other way of establishing reasonable grounds for suspicion.

9 The Treasury may by order amend subsection (1) above; and any such order may make such incidental, supplemental, consequential or transitional provision as the Treasury think fit.

10 For the purposes of this section—

a “goods” includes services;

b an amount of VAT counts as unpaid only to the extent that it exceeds the amount of any refund due.

2 In section 83 of that Act (appeals) after paragraph (r) insert—

3 In section 84(3) of that Act (appeals not to be entertained unless the VAT has been paid or deposited, except where that would cause hardship) for “or (q)” substitute “ , (q) or (ra) ”.

4 This section shall be deemed to have come into force on 10th April 2003 except subsection (3) which applies in relation to any appeal notice of which is given on or after the day on which this Act is passed.

19 Face-value vouchers¶

Schedule 1 to this Act (VAT: face-value vouchers) has effect.

20 Supplies arising from prior grant of fee simple¶

1 In section 96 of the Value Added Tax Act 1994 (c. 23) (interpretative provisions), after subsection (10A) (time for determining status of supplies arising from prior grant of interest etc) insert—

2 This section applies in relation to any supply that arises for the purposes of the Value Added Tax Act 1994 (c. 23) from the prior grant of a fee simple made on or after 9th April 2003.

21 Business gifts¶

1 In Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply of goods or services), paragraph 5 (business gifts etc) is amended as follows.

2 In sub-paragraph (2) (cases where sub-paragraph (1) does not apply), for paragraph (a) substitute—

3 After that sub-paragraph insert—

4 This section applies in relation to gifts made on or after 1st October 2003.

^F23722 Non-business use of business property¶

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^F107323 Supply of electronic services in member States: special accounting scheme¶

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^C40^C41Part 3 Taxes and duties on importation and exportation: penalties¶

Preliminary¶

^I224 ^C40^C41Introductory¶

^I891 This Part makes provision for and in connection with the imposition of liability to a penalty where a person—

a engages in any conduct for the purpose of evading any relevant tax or duty, or

b engages in any conduct by which he contravenes a duty, obligation, requirement or condition imposed by or under legislation relating to any relevant tax or duty.

^I892 For the purposes of this Part “relevant tax or duty” means any of the following—

a customs duty;

^F1062b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1063c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d import VAT;

^F1064e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^I893 In this Part—

“appeal tribunal” means a the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal;
“the Commissioners” means the Commissioners of Customs and Excise;
^F1018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^F1018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^F1018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“contravene” includes fail to comply with;
^F1059...
“demand notice” means a demand notice within the meaning of section 30;
“HMRC” means “Her Majesty’s Revenue and Customs.
“import VAT” means value added tax chargeable by virtue of section 1(1)(c) of the Value Added Tax Act 1994 (c. 23) (importation of goods into the United Kingdom);
“notice” means notice in writing;
^F1059...
“prescribed” means specified in, or determined in accordance with, regulations made by the Treasury;
“relevant rule”, in relation to any relevant tax or duty, has the meaning given by subsection (8) of section 26 (as read with subsection (9) of that section);
“representative”, in relation to any person, means—
1. his personal representative,
2. his trustee in bankruptcy or interim or permanent trustee,
3. any receiver or liquidator appointed in relation to that person or any of his property,
or any other person acting in a representative capacity in relation to that person.

“Union Customs Code” means Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code;
“Union export duty” means export duty, as defined in Article 5(21) of the Union Customs Code;
“Union import duty” means import duty, as defined in Article 5(20) of the Union Customs Code.

^F10584 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F10585 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F10586 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 Except for this subsection and section 41 (which accordingly come into force on the passing of this Act), this Part comes into force on such day as the Treasury may by order appoint.

The penalties¶

^I9025 ^C40^C41Penalty for evasion¶

1 In any case where—

a a person engages in any conduct for the purpose of evading any relevant tax or duty, and

b his conduct involves dishonesty (whether or not such as to give rise to any criminal liability),

that person is liable to a penalty of an amount equal to the amount of the tax or duty evaded or, as the case may be, sought to be evaded.

2 Subsection (1) is subject to the following provisions of this Part.

^F10653 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Any reference in this section to a person’s “evading” any relevant tax or duty includes a reference to his obtaining or securing, without his being entitled to it,—

a any repayment, rebate or drawback of any relevant tax or duty,

b any relief or exemption from, or any allowance against, any relevant tax or duty, or

c any deferral or other postponement of his liability to pay any relevant tax or duty or of the discharge by payment of any such liability,

and also includes a reference to his evading the cancellation of any entitlement to, or the withdrawal of, any such repayment, rebate, drawback, relief, exemption or allowance.

5 In relation to any such evasion of any relevant tax or duty as is mentioned in subsection (4), the reference in subsection (1) to the amount of the tax or duty evaded or sought to be evaded is a reference to the amount of—

a the repayment, rebate or drawback,

b the relief, exemption or allowance, or

c the payment which, or the liability to make which, is deferred or otherwise postponed,

as the case may be.

6 Where, by reason of conduct falling within subsection (1) in the case of any relevant tax or duty, a person—

a is convicted of an offence,

b is given, and has not had withdrawn, a demand notice in respect of a penalty to which he is liable under section 26, or

c is liable to a penalty imposed upon him under any other provision of the law relating to that relevant tax or duty,

that conduct does not also give rise to liability to a penalty under this section in respect of that relevant tax or duty.

^I91^C3526 ^C40^C41Penalty for contravention of relevant rule¶

1 If, in the case of any relevant tax or duty, a person of a prescribed description engages in any conduct by which he contravenes—

a a prescribed relevant rule, or

b a relevant rule of a prescribed description,

he is liable to a penalty under this section of a prescribed amount.

2 Subsection (1) is subject to the following provisions of this Part.

3 The power conferred by subsection (1) to prescribe a description of person includes power to prescribe any person (without further qualification) as such a description.

4 Different penalties may be prescribed under subsection (1) for different cases or different circumstances.

5 Any amount prescribed under subsection (1) as the amount of a penalty must not be more than £2,500.

5A Where the conduct constituting a contravention of a relevant rule is a contravention of a condition imposed under regulations under section 20(1A), 20B(2), 22(1A) or 25(1A) of the Customs and Excise Management Act 1979—

a the Treasury may by regulations provide that, in prescribed circumstances, there are to be deemed for the purposes of subsection (1) of this section to be further separate contraventions of the rule, and

b the provision that may be made by the regulations includes provision replicating or applying, with or without modifications, any provision made by section 20A(1A) or (1B), 22A(1A) or (1B) or 25A(1A) or (1B) of the Customs and Excise Management Act 1979.

6 The Treasury may by order amend subsection (5) by substituting a different amount for the amount for the time being specified in that subsection.

7 A statutory instrument containing an order under subsection (6) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.

8 In this Part “relevant rule”, in relation to any relevant tax or duty, means any duty, obligation, requirement or condition imposed by or under any of the following—

za Part 1 and sections 40A and 40B of the Taxation (Cross-border Trade) Act 2018, as they apply in relation to the relevant tax or duty;

a the Customs and Excise Management Act 1979 (c. 2), as it applies in relation to the relevant tax or duty;

b any other Act, or any statutory instrument, as it applies in relation to the relevant tax or duty;

^F1066c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1075d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1067e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f any relevant international rules applying in relation to the relevant tax or duty.

9 In subsection (8)—

^F1068...
“relevant international rules” means international agreements so far as applying in relation to a relevant tax or duty and having effect as part of the law of any part of the United Kingdom by virtue of—
1. any Act or statutory instrument, ^F1069...
2. ^F1069...

^I92^C3527 Exceptions from section 26¶

1 A person is not liable to a penalty under section 26 if he satisfies—

a the Commissioners, or

b on appeal, an appeal tribunal,

that there is a reasonable excuse for his conduct.

2 For the purposes of subsection (1) none of the following is a reasonable excuse—

a an insufficiency of funds available to any person for paying any relevant tax or duty or any penalty due;

b that reliance was placed by any person on another to perform any task;

c that the contravention is attributable, in whole or in part, to the conduct of a person on whom reliance to perform any task was so placed.

3 Where, by reason of conduct falling within subsection (1) of section 26 in the case of any relevant tax or duty, a person—

a is prosecuted for an offence,

b is given, and has not had withdrawn, a demand notice in respect of a penalty to which he is liable under section 25, or

c is liable to a penalty imposed upon him under any other provision of the law relating to that relevant tax or duty,

that conduct does not also give rise to liability to a penalty under section 26 in respect of that relevant tax or duty.

4 A person is not liable to a penalty under section 26 in respect of any conduct, so far as relating to import VAT, if in respect of that conduct—

a he is liable to a penalty under any of sections 62 to 69A of the Value Added Tax Act 1994 (c. 23) (penalty for contravention of statutory requirements as to VAT), or

b he would be so liable but for section 62(4), 63(11), 64(6), 67(9), 69(9) or 69A(7) of that Act (conduct resulting in conviction, different penalty etc).

^I9328 Liability of directors etc where body corporate liable to penalty for evasion¶

1 Where it appears to the Commissioners—

a that a body corporate is liable to a penalty under section 25, and

b that the conduct giving rise to the penalty is, in whole or in part, attributable to the dishonesty of a person who is, or at the material time was, a director or managing officer of the body corporate (a “relevant officer”),

the Commissioners may give a notice under this section to the body corporate (or its representative) and to the relevant officer (or his representative).

2 A notice under this section must state—

a the amount of the penalty referred to in subsection (1)(a) (the “basic penalty”), and

b that the Commissioners propose, in accordance with this section, to recover from the relevant officer such portion (which may be the whole) of the basic penalty as is specified in the notice.

3 If a notice is given under this section, this Part shall apply in relation to the relevant officer as if he were personally liable under section 25 to a penalty which corresponds to that portion of the basic penalty specified in the notice.

4 If a notice is given under this section—

a the amount which may be recovered from the body corporate under this Part is limited to so much (if any) of the basic penalty as is not recoverable from the relevant officer by virtue of subsection (3), and

b the body corporate is to be treated as discharged from liability for so much of the basic penalty as is so recoverable from the relevant officer.

5 In this section “managing officer”, in relation to a body corporate, means—

a a manager, secretary or other similar officer of the body corporate, or

b a person purporting to act in any such capacity or as a director.

6 Where the affairs of a body corporate are managed by its members, this section applies in relation to the conduct of a member in connection with his functions of management as if he were a director of the body corporate.

Reduction of amount of penalty¶

^I94^C3329 Reduction of penalty under section 25 or 26¶

1 Where a person is liable to a penalty under section 25 or 26—

a the Commissioners (whether originally or on review) or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper; and

b the Commissioners on a review, or an appeal tribunal on an appeal, relating to a penalty reduced by the Commissioners under this subsection may cancel the whole or any part of the reduction previously made by the Commissioners.

2 In exercising their powers under subsection (1), neither the Commissioners nor an appeal tribunal are entitled to take into account any of the matters specified in subsection (3).

3 Those matters are—

a the insufficiency of the funds available to any person for paying any relevant tax or duty or the amount of the penalty,

b the fact that there has, in the case in question or in that case taken with any other cases, been no or no significant loss of any relevant tax or duty,

c the fact that the person liable to the penalty, or a person acting on his behalf, has acted in good faith.

Demand notices¶

^I95^C3330 Demands for penalties¶

1 Where a person is liable to a penalty under this Part, the Commissioners may give to that person or his representative a notice in writing (a “demand notice”) demanding payment of the amount due by way of penalty.

2 An amount demanded as due from a person or his representative in accordance with subsection (1) is recoverable as if it were an amount due from the person or, as the case may be, the representative as an amount of customs duty.This subsection is subject to—

a any appeal under section 33 (appeals to tribunal); and

b subsection (3).

3 An amount so demanded is not recoverable if or to the extent that—

a the demand has subsequently been withdrawn; or

b the amount has been reduced under section 29.

^I96^C3331 Time limits for demands for penalties¶

1 A demand notice may not be given—

a in the case of a penalty under section 25, more than 20 years after the conduct giving rise to the liability to the penalty ceased, or

b in the case of a penalty under section 26, more than 3 years after the conduct giving rise to the liability to the penalty ceased.

2 A demand notice may not be given more than 2 years after there has come to the knowledge of the Commissioners evidence of facts sufficient in the opinion of the Commissioners to justify the giving of the demand notice.

3 A demand notice—

a may be given in respect of a penalty to which a person was liable under section 25 or 26 immediately before his death, but

b in the case of a penalty to which the deceased was so liable under section 25, may not be given more than 3 years after his death.

^I97^C3332 ^C40^C41No prosecution after demand notice for penalty under section 26¶

1 Where a demand notice is given demanding payment of an amount due by way of penalty under section 26 in respect of any conduct of a person, no proceedings may be brought against that person for any offence constituted by that conduct (whether or not the demand notice is subsequently withdrawn).

2 Nothing in subsection (1) prevents the bringing of proceedings against a person for an offence under section 20A(1A), 22A(1A) or 25A(1A) of the Customs and Excise Management Act 1979 in circumstances where it is alleged that the person is liable to a penalty of an enhanced amount.

Appeals and reviews¶

^I98^C3333 Right to appeal against certain decisions¶

1 If, in the case of any relevant tax or duty, HMRC give a person or his representative a notice informing him—

a that they have decided that the person has engaged in conduct by which he contravenes a relevant rule, and

b that the person is, in consequence, liable to a penalty under section 26, but

c that they do not propose to give a demand notice in respect of the penalty,

the person or his representative may make an appeal to an appeal tribunal in respect of the decision mentioned in paragraph (a).

2 Where HMRC give a demand notice to a person or his representative, the person or his representative may make an appeal to an appeal tribunal in respect of —

a their decision that the person is liable to a penalty under section 25 or 26, or

b their decision as to the amount of the liability.

3 Where HMRC give a notice under section 28 to a body corporate and to a relevant officer—

a subsection (2) does not apply to any demand notice given in respect of the liability of either of them to a penalty under this Part in respect of the conduct in question, but

b subsections (4) and (5) have effect instead in relation to any such demand notice.

4 Where HMRC give a demand notice to the relevant officer or his representative for a penalty which corresponds to the portion of the basic penalty specified in the notice under section 28, the relevant officer or his representative may make an appeal to an appeal tribunal in respect of —

a their decision that the conduct of the body corporate referred to in section 28(1)(b) is, in whole or in part, attributable to the relevant officer’s dishonesty, or

b their decision as to the portion of the basic penalty which the HMRC are seeking to recover from the relevant officer or his representative.

5 Where HMRC give a demand notice to the body corporate or its representative for so much of the basic penalty as is not recoverable from the relevant officer by virtue of section 28(3), the body corporate or its representative may make an appeal to an appeal tribunal in respect of —

a their decision that the body corporate is liable to a penalty under section 25, or

b their decision as to amount of the basic penalty as if it were the amount specified in the demand notice.

6 The powers of an appeal tribunal on an appeal under this section include—

a power to quash or vary a decision; and

b power to substitute the tribunal’s own decision for any decision so quashed.

7 On an appeal under this section—

a the burden of proof as to the matters mentioned in section 25(1) or 26(1) lies on HMRC; but

b it is otherwise for the appellant to show that the grounds on which any such appeal is brought have been established.

^C3333A Offer of review¶

1 HMRC must offer a person (P) a review of a decision that has been notified to P if an appeal lies under section 33 in respect of the decision.

2 The offer of the review must be made by notice given to P at the same time as the decision is notified to P.

3 This section does not apply to the notification of the conclusions of a review.

^C3333B Review by HMRC¶

1 HMRC must review a decision if—

a they have offered a review of the decision under section 33A, and

b P notifies HMRC accepting the offer within 30 days from the date of the document containing the notification of the offer.

2 But P may not notify acceptance of the offer if P has already appealed to the appeal tribunal under section 33F.

3 HMRC shall not review a decision if P has appealed to the appeal tribunal under section 33F in respect of the decision.

^C3333C Extensions of time¶

1 If under section 33A, HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended.

2 If notice is given the relevant period is extended to the end of 30 days from—

a the date of the notice, or

b any other date set out in the notice or a further notice.

3 In this section “relevant period” means—

a the period of 30 days referred to in section 33B(1)(b), or

b if notice has been given under subsection (1) that period as extended (or as most recently extended) in accordance with subsection (2).

^C3333D Review out of time¶

1 This section applies if—

a HMRC have offered a review of a decision under section 33A, and

b P does not accept the offer within the time allowed under section 33B(1)(b) or 33C(2).

2 HMRC must review the decision under section 33B if—

a after the time allowed, P notifies HMRC in writing requesting a review out of time,

b HMRC are satisfied that P had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and

c HMRC are satisfied that P made the request without unreasonable delay after the excuse had ceased to apply.

3 HMRC shall not review a decision if P has appealed to the appeal tribunal under section 33F in respect of the decision.

^C3333E Nature of review etc¶

1 This section applies if HMRC are required to undertake a review under section 33B or 33D.

2 The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

3 For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—

a by HMRC in reaching the decision, and

b by any person in seeking to resolve disagreement about the decision.

4 The review must take account of any representations made by P at a stage which gives HMRC a reasonable opportunity to consider them.

5 The review may conclude that the decision is to be—

a upheld,

b varied, or

c cancelled.

6 HMRC must give P notice of the conclusions of the review and their reasoning within—

a a period of 45 days beginning with the relevant date, or

b such other period as HMRC and P may agree.

7 In subsection (6) “relevant date” means—

a the date HMRC received P’s notification accepting the offer of a review (in a case falling within section 33A), or

b the date on which HMRC decided to undertake the review (in a case falling within section 33D).

8 Where HMRC are required to undertake a review but do not give notice of the conclusions within the period specified in subsection (6), the review is to be treated as having concluded that the decision is upheld.

9 If subsection (8) applies, HMRC must notify P of the conclusions which the review is treated as having reached.

^C3333F Bringing of appeals¶

1 An appeal under section 33 is to be made to the appeal tribunal before—

a the end of the period of 30 days beginning with the date of the document notifying the decision to which the appeal relates, or

b if later, the end of the relevant period (within the meaning of section 33C).

2 But that is subject to subsections (3) to (5).

3 In a case where HMRC are required to undertake a review under section 33B —

a an appeal may not be made until the conclusion date, and

b any appeal is to be made within the period of 30 days beginning with the conclusion date.

4 In a case where HMRC are requested to undertake a review in accordance with section 33D—

a an appeal may not be made to an appeal tribunal—

i unless HMRC have notified P as to whether or not a review will be undertaken, and

ii if HMRC have notified P that a review will be undertaken, until the conclusion date;

b any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date;

c if HMRC have notified P that a review will not be undertaken, an appeal may be made only if the appeal tribunal gives permission to do so.

5 In a case where section 33E(8) applies, an appeal may be made at any time from the end of the period specified in section 33E(6) to the date 30 days after the conclusion date.

6 An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if an appeal tribunal gives permission to do so.

7 In this section “conclusion date” means the date of the document notifying the conclusions of the review.

^F41534 Time limit and right to further review¶

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

^F41535 Powers of Commissioners on a review¶

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

^F41536 Appeals to a tribunal¶

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

^C3337 Appeal tribunals¶

Section 85 of the Value Added Tax Act 1994 (settling appeals by agreement) has effect as if the reference to section 83 of that Act included a reference to section 33 above.

Evidence¶

^I99^C3338 ^C40^C41Admissibility of certain statements and documents¶

1 Statements made or documents produced by or on behalf of a person are not inadmissible in—

a any criminal proceedings against that person in respect of any offence in connection with or in relation to any relevant tax or duty, or

b any proceedings against that person for the recovery of any sum due from him in connection with or in relation to any relevant tax or duty,

by reason only that any of the matters specified in subsection (2) has been drawn to his attention and that he was, or may have been, induced by that matter having been brought to his attention to make the statements or produce the documents.

2 The matters mentioned in subsection (1) are—

a that the Commissioners have power, in relation to any relevant tax or duty, to demand by means of a written notice an amount by way of a civil penalty, instead of instituting criminal proceedings;

b that it is the Commissioners' practice, without being able to give an undertaking as to whether they will make such a demand in any case, to be influenced in determining whether to make such a demand by the fact (where it is the case) that a person has made a full confession of any dishonest conduct to which he has been a party and has given full facilities for an investigation;

c that the Commissioners or, on appeal, an appeal tribunal have power to reduce a penalty under section 25, as provided in subsection (1) of section 29; and

d that, in determining the extent of such a reduction in the case of any person, the Commissioners or tribunal will have regard to the extent of the co-operation which he has given to the Commissioners in their investigation.

^F10703 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous and supplementary¶

^I100^C3339 Service of notices¶

Any notice to be given to any person for the purposes of this Part may be given by sending it by post in a letter addressed to that person or his representative at the last or usual residence or place of business of that person or representative.

^F42940 Penalties not to be deducted for income tax or corporation tax purposes¶

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

^C3341 Regulations and orders¶

1 Any power conferred on the Treasury by this Part to make regulations or an order includes power—

a to make different provision for different cases, and

b to make incidental, consequential, supplemental or transitional provision or savings.

2 Any power conferred on the Treasury by this Part to make regulations or an order shall be exercisable by statutory instrument.

3 Any statutory instrument containing regulations under this Part shall be subject to annulment in pursuance of a resolution of the House of Commons.

^C3^C11^C23^C34^C39^C42^C64^C63Part 4 Stamp duty land tax¶

Introduction¶

42 ^I3The tax¶

1 A tax (to be known as “stamp duty land tax”) shall be charged in accordance with this Part on land transactions.

2 The tax is chargeable—

a whether or not there is any instrument effecting the transaction,

b if there is such an instrument, whether or not it is executed in the United Kingdom, and

c whether or not any party to the transaction is present, or resident, in the United Kingdom.

3 The tax is under the care and management of the Commissioners of Inland Revenue (referred to in this Part as “the Board”).

Land transactions¶

43 ^I4Land transactions¶

1 In this Part a “land transaction” means any acquisition of a chargeable interest. As to the meaning of “chargeable interest” see section 48.

2 Except as otherwise provided, this Part applies however the acquisition is effected, whether by act of the parties, by order of a court or other authority, by or under any statutory provision or by operation of law.

3 For the purposes of this Part—

a the creation of a chargeable interest is—

i an acquisition by the person becoming entitled to the interest created, and

ii a disposal by the person whose interest or right is subject to the interest created;

b the surrender or release of a chargeable interest is—

i an acquisition of that interest by any person whose interest or right is benefitted or enlarged by the transaction, and

ii a disposal by the person ceasing to be entitled to that interest; ^F66...

c the variation of a chargeable interest (other than a lease) is—

i an acquisition of a chargeable interest (other than a lease) by the person benefitting from the variation, and

ii a disposal of a chargeable interest (other than a lease) by the person whose interest is subject to or limited by the variation.

d the variation of a lease is an acquisition and disposal of a chargeable interest only where

i it takes effect, or is treated for the purposes of this Part, as the grant of a new lease, or

ii paragraph 15A of Schedule 17A (reduction of rent or term) applies.

4 References in this Part to the “purchaser” and “vendor”, in relation to a land transaction, are to the person acquiring and the person disposing of the subject-matter of the transaction.These expressions apply even if there is no consideration given for the transaction.

5 A person is not treated as a purchaser unless he has given consideration for, or is a party to, the transaction.

6 References in this Part to the subject-matter of a land transaction are to the chargeable interest acquired (the “main subject-matter”), together with any interest or right appurtenant or pertaining to it that is acquired with it.

44 ^I5Contract and conveyance¶

1 This section applies where a contract for a land transaction is entered into under which the transaction is to be completed by a conveyance.

2 A person is not regarded as entering into a land transaction by reason of entering into the contract, but the following provisions have effect.

3 If the transaction is completed without previously having been substantially performed, the contract and the transaction effected on completion are treated as parts of a single land transaction. In this case the effective date of the transaction is the date of completion.

4 If the contract is substantially performed without having been completed, the contract is treated as if it were itself the transaction provided for in the contract.In this case the effective date of the transaction is when the contract is substantially performed.

5 A contract is “substantially performed” when—

a the purchaser, or a person connected with the purchaser, takes possession of the whole, or substantially the whole, of the subject-matter of the contract, or

b a substantial amount of the consideration is paid or provided.

6 For the purposes of subsection (5)(a)—

a possession includes receipt of rents and profits or the right to receive them, and

b it is immaterial whether possession is taken under the contract or under a licence or lease of a temporary character.

7 For the purposes of subsection (5)(b) a substantial amount of the consideration is paid or provided—

a if none of the consideration is rent, where the whole or substantially the whole of the consideration is paid or provided;

b if the only consideration is rent, when the first payment of rent is made;

c if the consideration includes both rent and other consideration, when—

i the whole or substantially the whole of the consideration other than rent is paid or provided, or

ii the first payment of rent is made.

^C48^C54^C66^C69^C658 Where subsection (4) applies and the contract is subsequently completed by a conveyance—

a both the contract and the transaction effected on completion are notifiable transactions, and

b tax is chargeable on the latter transaction to the extent (if any) that the amount of tax chargeable on it is greater than the amount of tax chargeable on the contract.

9 Where subsection (4) applies and the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of that subsection shall (to that extent) be repaid by the Inland Revenue.Repayment must be claimed by amendment of the land transaction return made in respect of the contract.

9A Where—

a paragraph 12A of Schedule 17A applies (agreement for lease), or

^F675b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

it applies in place of subsections (4), (8) and (9).

^C47^C55^C67^C6810 In this section—

a references to completion are to completion of the land transaction proposed, between the same parties, in substantial conformity with the contract; and

b “contract” includes any agreement and “conveyance” includes any instrument.

11 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this section.

44A Contract providing for conveyance to third party¶

1 This section applies where a contract is entered into under which a chargeable interest is to be conveyed by one party to the contract (A) at the direction or request of the other (B)—

a to a person (C) who is not a party to the contract, or

b either to such a person or to B.

2 B is not regarded as entering into a land transaction by reason of entering into the contract, but the following provisions have effect.

3 If the contract is substantially performed B is treated for the purposes of this Part as acquiring a chargeable interest, and accordingly as entering into a land transaction.The effective date of the transaction is when the contract is substantially performed.

4 Where the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of subsection (3) shall (to that extent) be repaid by the Inland Revenue.Repayment must be claimed by amendment of the land transaction return made in respect of the contract.

5 Subject to subsection (6), section 44 (contract and conveyance) does not apply (except so far as it defines “substantial performance”) in relation to the contract.

6 Where—

a this section applies by virtue of subsection (1)(b), and

b by reason of B’s direction or request, A becomes obliged to convey a chargeable interest to B,

section 44 applies to that obligation as it applies to a contract for a land transaction that is to be completed by a conveyance.

7 Section 44 applies in relation to any contract between B and C, in respect of the chargeable interest referred to in subsection (1) above, that is to be completed by a conveyance.References to completion in that section, as it so applies, include references to conveyance by A to C of the subject matter of the contract between B and C.

8 In this section “contract” includes any agreement and “conveyance” includes any instrument.

45 ^I6Transactions entered into before completion of contract¶

Schedule 2A contains—

a provision about the application of section 44 (contract and conveyance) in certain cases where an assignment of rights, subsale or other transaction is entered into without the contract having been completed, and

b other provision about such cases.

45A Contract providing for conveyance to third party: effect of transfer of rights¶

1 This section applies where—

a a contract (“the original contract”) is entered into under which a chargeable interest is to be conveyed by one party to the contract (A) at the direction or request of the other (B)—

i to a person (C) who is not a party to the contract, or

ii either to such a person or to B,

and

b there is an assignment or other transaction (relating to the whole or part of the subject-matter of the original contract) as a result of which a person (D) becomes entitled to exercise any of B’s rights under the original contract in place of B.

References in the following provisions of this section to a transfer of rights are to any such assignment or other transaction.

2 D is not regarded as entering into a land transaction by reason of the transfer of rights, but section 44A (contract providing for conveyance to third party) has effect in accordance with the following provisions of this section.

3 That section applies as if—

a D had entered into a contract (a “secondary contract”) in the same terms as the original contract except with D as a party instead of B, and

b the consideration due from D under the secondary contract were—

i so much of the consideration under the original contract as is referable to the subject-matter of the transfer of rights and is to be given (directly or indirectly) by D or a person connected with him, and

ii the consideration given for the transfer of rights.

4 The substantial performance of the original contract shall be disregarded if—

a it occurs at the same time as, and in connection with, the substantial performance of the secondary contract, or

b it occurs after the transfer of rights.

5 Where there are successive transfers of rights, subsection (3) has effect in relation to each of them.

6 The substantial performance of the secondary contract arising from an earlier transfer of rights shall be disregarded if—

a it occurs at the same time as, and in connection with, the substantial performance of the secondary contract arising from a subsequent transfer of rights, or

b it occurs after that subsequent transfer.

7 Where a transfer of rights relates to only part of the subject matter of the original contract, or to only some of the rights under that contract—

a a reference in subsection (3)(a) or (4) to the original contract, or a reference in subsection (6) to the secondary contract arising from an earlier transfer, is to that contract so far as relating to that part or those rights, and

b that contract so far as not relating to that part or those rights shall be treated as a separate contract.

8 The effective date of a land transaction treated as entered into by virtue of subsection (3) is not earlier than the date of the transfer of rights.

9 In relation to a such a transaction—

a references in Schedule 7 (group relief) to the vendor shall be read as references to A;

b other references in this Part to the vendor shall be read, where the context permits, as referring to either A or B.

10 Section 1122 of the Corporation Tax Act 2010 (connected persons) applies for the purposes of subsection (3)(b).

11 In this section “contract” includes any agreement.

46 ^I7Options and rights of pre-emption¶

1 The acquisition of—

a an option binding the grantor to enter into a land transaction, or

b a right of pre-emption preventing the grantor from entering into, or restricting the right of the grantor to enter into, a land transaction,is a land transaction distinct from any land transaction resulting from the exercise of the option or right.

They may be “linked transactions” (see section 108).

2 The reference in subsection (1)(a) to an option binding the grantor to enter into a land transaction includes an option requiring the grantor either to enter into a land transaction or to discharge his obligations under the option in some other way.

3 The effective date of the transaction in the case of the acquisition of an option or right such as is mentioned in subsection (1) is when the option or right is acquired (as opposed to when it becomes exercisable).

4 Nothing in this section applies to so much of an option or right of pre-emption as constitutes or forms part of a land transaction apart from this section.

47 ^I8Exchanges¶

1 Where a land transaction is entered into by the purchaser (alone or jointly) wholly or partly in consideration of another land transaction being entered into by him (alone or jointly) as vendor, this Part applies in relation to each transaction as if each were distinct and separate from the other (and they are not linked transactions within the meaning of section 108).

2 A transaction is treated for the purposes of this Part as entered into by the purchaser wholly or partly in consideration of another land transaction being entered into by him as vendor in any case where an obligation to give consideration for a land transaction that a person enters into as purchaser is met wholly or partly by way of that person entering into another transaction as vendor.

3 As to the amount of the chargeable consideration in the case of exchanges and similar transactions, see—

paragraphs 5 and 6 of Schedule 4 (exchanges, partition etc),^F76...
paragraph 17 of that Schedule (arrangements involving public or educational bodies), and
^F76...

Chargeable interests, chargeable transactions and chargeable consideration¶

^C57^C64^C6348 ^I9Chargeable interests¶

1 In this Part “chargeable interest” means—

a an estate, interest, right or power in or over land in England ^F1016... or Northern Ireland, or

b the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power,

other than an exempt interest.

1A See section 48A regarding land which is partly in England and partly in Wales.

2 The following are exempt interests—

a any security interest;

b a licence to use or occupy land;

c ^F672...—

i a tenancy at will;

ii an advowson, franchise or manor.

3 In subsection (2)—

a “security interest” means an interest or right (other than a rentcharge) held for the purpose of securing the payment of money or the performance of any other obligation; and

b “franchise” means a grant from the Crown such as the right to hold a market or fair, or the right to take tolls.

3A Section 73B makes additional provision about exempt interests in relation to alternative finance arrangements.

^F6734 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 The Treasury may by regulations provide that any other description of interest or right in relation to land in England ^F1005... or Northern Ireland is an exempt interest.

6 The regulations may contain such supplementary, incidental and transitional provision as appears to the Treasury to be appropriate.

7 This section has effect subject to subsection (3) of section 44A (contract and conveyance to third party) and to paragraph 15A of Schedule 17A (reduction of rent or term of lease).

48A Interests, transactions and consideration where land in England and Wales¶

1 This section sets out how this Part applies to a transaction which is the acquisition of—

a an estate, interest, right or power in or over land, or

b the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power,

where the land is partly in England and partly in Wales.

2 The transaction is to be treated as if it were two transactions, one relating to the land in England (“the English transaction”) and the other relating to the land in Wales.

3 The consideration for the transaction is to be apportioned between those two transactions on a just and reasonable basis.

4 Accordingly, the English transaction is to be treated as a land transaction within the meaning of this Part (being the acquisition of a chargeable interest relating to the land in England).

5 But subsection (4) does not apply in the case of an exempt interest.

6 See section 9 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (anaw 0) as to the application of that Act to the transaction relating to the land in Wales.

49 ^I10Chargeable transactions¶

1 A land transaction is a chargeable transaction if it is not a transaction that is exempt from charge.

2 Schedule 3 provides for certain transactions to be exempt from charge.Other transactions are exempt from charge under other provisions of this Part.

50 ^I11Chargeable consideration¶

1 Schedule 4 makes provision as to the chargeable consideration for a transaction.

2 The Treasury may by regulations amend or repeal the provisions of this Part relating to chargeable consideration and make such other provision as appears to them appropriate with respect to—

a what is to count as chargeable consideration, or

b the determination of the amount of chargeable consideration.

3 The regulations may make different provision in relation to different descriptions of transaction or consideration and different circumstances.

51 ^I12Contingent, uncertain or unascertained consideration¶

1 Where the whole or part of the chargeable consideration for a transaction is contingent, the amount or value of the consideration shall be determined for the purposes of this Part on the assumption that the outcome of the contingency will be such that the consideration is payable or, as the case may be, does not cease to be payable.

2 Where the whole or part of the chargeable consideration for a transaction is uncertain or unascertained, its amount or value shall be determined for the purposes of this Part on the basis of a reasonable estimate.

3 In this Part—

“contingent”, in relation to consideration, means—
1. that it is to be paid or provided only if some uncertain future event occurs, or
2. that it is to cease to be paid or provided if some uncertain future event occurs; and
“uncertain”, in relation to consideration, means that its amount or value depends on uncertain future events.

4 This section has effect subject to—

section 80 (adjustment where contingency ceases or consideration is ascertained), and
section 90 (application to defer payment in case of contingent or uncertain consideration).

5 This section applies in relation to chargeable consideration consisting of rent only to the extent that it is applied by paragraph 7 of Schedule 17A.

52 ^I13Annuities etc: chargeable consideration limited to twelve years' payments¶

1 This section applies to so much of the chargeable consideration for a land transaction as consists of an annuity payable—

a for life, or

b in perpetuity, or

c for an indefinite period, or

d for a definite period exceeding twelve years.

2 For the purposes of this Part the consideration to be taken into account is limited to twelve years' annual payments.

3 Where the amount payable varies, or may vary, from year to year, the twelve highest annual payments shall be taken.No account shall be taken for the purposes of this Schedule of any provision for adjustment of the amount payable in line with the retail price index.

4 References in this section to annual payments are to payments in respect of each successive period of twelve months beginning with the effective date of the transaction.

5 For the purposes of this section the amount or value of any payment shall be determined (if necessary) in accordance with section 51 (contingent, uncertain or unascertained consideration).

6 References in this section to an annuity include any consideration (other than rent) that falls to be paid or provided periodically. References to payment shall be read accordingly.

7 Where this section applies—

a section 80 (adjustment where contingency ceases or consideration is ascertained) does not apply, and

b no application may be made under section 90 (application to defer payment in case of contingent or uncertain consideration).

53 ^I14Deemed market value where transaction involves connected company¶

1 This section applies where the purchaser is a company and—

a the vendor is connected with the purchaser, or

b some or all of the consideration for the transaction consists of the issue or transfer of shares in a company with which the vendor is connected.

1A The chargeable consideration for the transaction shall be taken to be not less than—

a the market value of the subject-matter of the transaction as at the effective date of the transaction, and

b if the acquisition is the grant of a lease at a rent, that rent.

^I1012 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this section.

3 In this section—

“company” means any body corporate;
“shares” includes stock and the reference to shares in a company includes a reference to securities issued by a company.

4 Where this section applies paragraph 1 of Schedule 3 (exemption of transactions for which there is no chargeable consideration) does not apply.But this section has effect subject to any other provision affording exemption or relief from stamp duty land tax.

5 This section is subject to the exceptions provided for in section 54.

54 ^I15Exceptions from deemed market value rule¶

1 Section 53 (chargeable consideration: transaction with connected company) does not apply in the following cases.In the following provisions “the company” means the company that is the purchaser in relation to the transaction in question.

2 Case 1 is where immediately after the transaction the company holds the property as trustee in the course of a business carried on by it that consists of or includes the management of trusts.

3 Case 2 is where—

a immediately after the transaction the company holds the property as trustee, and

b the vendor is connected with the company only because of section 1122(6) of the Corporation Tax Act 2010.

4 Case 3 is where—

a the vendor is a company and the transaction is, or is part of, a distribution of the assets of that company (whether or not in connection with its winding up), and

b it is not the case that—

i the subject-matter of the transaction, or

ii an interest from which that interest is derived,

has, within the period of three years immediately preceding the effective date of the transaction, been the subject of a transaction in respect of which group relief was claimed by the vendor.

Amount of tax chargeable¶

55 ^I16Amount of tax chargeable: general¶

1 The amount of tax chargeable in respect of a chargeable transaction to which this section applies is determined in accordance with subsections (1B) and (1C).

1A This section applies to any chargeable transaction other than a transaction to which paragraph 3 of Schedule 4A or step 4 of section 74(1A) (higher rate for certain transactions) applies.

^C44^C501B If ^F905... the transaction is not one of a number of linked transactions, the amount of tax chargeable is determined as follows—

Step 1 Apply the rates specified in the second column of the appropriate table below to the parts of the relevant consideration specified in the first column of the appropriate table.
“The “appropriate table” is—
(a) Table A, if the relevant land consists entirely of residential property, and
(b) Table B, if the relevant land consists of or includes land that is not residential property.

Step 2 Add together the amounts calculated at Step 1 (if there are two or more such amounts).

TABLE A: RESIDENTIAL

Part of relevant consideration	Rate
So much as does not exceed £125,000	0%
So much as exceeds £125,000 but does not exceed £250,000	2%
So much as exceeds £250,000 but does not exceed £925,000	5%
So much as exceeds £925,000 but does not exceed £1,500,000	10%
The remainder (if any)	12%

Table B: Non-residential or mixed

Relevant consideration	Percentage
So much as does not exceed £150,000	0%
So much as exceeds £150,000 but does not exceed £250,000	2%
The remainder (if any)	5%

1C If ^F909... the transaction is one of a number of linked transactions, the amount of tax chargeable in respect of the particular transaction under consideration is determined as follows—

Step 1 Apply the rates specified in the second column of the appropriate table in subsection (1B) to the parts of the relevant consideration specified in the first column of the appropriate table.
“The “appropriate table” is—
(a) Table A, if the relevant land consists entirely of residential property, and
(b) Table B, if the relevant land consists of or includes land that is not residential property.
Step 2 Add together the amounts calculated at Step 1 (if there are two or more such amounts).
Step 3 Multiply the amount given by Step 1 or Step 2, as the case may be, by—
$\frac{C}{R}$
where—
C is the chargeable consideration for the transaction, and
R is the relevant consideration.

^F8992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 For the purposes of subsection (1B) —

a the relevant land is the land an interest in which is the main subject-matter of the transaction, and

b the relevant consideration is the chargeable consideration for the transaction

^F913. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^C124 For the purposes of subsection (1C) —

a the relevant land is any land an interest in which is the main subject-matter of any of the linked transactions, and

b the relevant consideration is the total of the chargeable consideration for all those transactions.

4A Schedule 4ZA (higher rates for additional dwellings and dwellings purchased by companies) modifies this section as it applies for the purpose of determining the amount of tax chargeable in respect of certain transactions involving major interests in dwellings.

5 This section has effect subject to—

section 74(1B) (exercise of collective rights by tenants of flats), ^F684...
^F684. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(which provides for the amount of tax to be determined by reference to a fraction of the relevant consideration).

6 In the case of a transaction for which the whole or part of the chargeable consideration is rent this section has effect subject to section 56 and Schedule 5 (amount of tax chargeable: rent).

^F8627 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55A Amount of tax chargeable: higher rate for certain transactions¶

Schedule 4A provides for the calculation of the tax chargeable in respect of certain transactions involving higher threshold interests in dwellings.

56 ^I17Amount of tax chargeable: rent¶

Schedule 5 provides for the calculation of the tax chargeable where the chargeable consideration for a transaction consists of or includes rent.

Reliefs¶

^F73357 ^I18Disadvantaged areas relief¶

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

57A Sale and leaseback arrangements¶

1 The leaseback element of a sale and leaseback arrangement is exempt from charge if the qualifying conditions specified below are met.

2 A “sale and leaseback”arrangement means an arrangement under which—

a A transfers or grants to B a major interest in land (the “sale”), and

b out of that interest B grants a lease to A (the “leaseback”).

3 The qualifying conditions are—

a that the sale transaction is entered into wholly or partly in consideration of the leaseback transaction being entered into,

aa that the sale transaction is entered into wholly or partly in consideration of the leaseback transaction being entered into,

b that the only other consideration (if any) for the sale is the payment of money or the assumption, satisfaction or release of a debt (or both),

c that the sale is not a transfer of rights within the meaning of ^F792... 45A (contract providing for conveyance to third party: effect of transfer of rights) or a pre-completion transaction within the meaning of Schedule 2A (transactions entered into before completion of contract), and

d where A and B are both bodies corporate at the effective date of the leaseback transaction, that they are not members of the same group for the purposes of group relief (see paragraph 1 of Schedule 7) at that date.

e where A and B are both bodies corporate at the effective date of the leaseback transaction, that they are not members of the same group for the purposes of group relief (see paragraph 1 of Schedule 7) at that date.

^F824 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F99257AA First-time buyers¶

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

57B First-time buyers¶

1 Schedule 6ZA provides relief for first-time buyers.

2 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return.

58A Relief for certain acquisitions of residential property¶

Schedule 6A provides for relief in the case of certain acquisitions of residential property.

58B Relief for new zero-carbon homes¶

1 The Treasury may make regulations granting relief on the first acquisition of a dwelling which is a “zero-carbon home”.

2 For the purposes of this section—

a a building, or a part of a building, is a dwelling if it is constructed for use as a single dwelling, and

b “first acquisition”, in relation to a dwelling, means its acquisition when it has not previously been occupied.

3 For the purpose of subsection (2) land occupied or enjoyed with a dwelling as a garden or grounds is part of the dwelling.

4 The regulations shall define “zero-carbon home” by reference to specified aspects of the energy efficiency of a building; for which purpose “energy efficiency” includes—

a consumption of energy,

b conservation of energy, and

c generation of energy.

5 The relief may take the form of—

a exemption from charge, or

b a reduction in the amount of tax chargeable.

6 Regulations under this section shall not have effect in relation to acquisitions on or after 1st October 2012.

7 The Treasury may by order—

a substitute a later date for the date in subsection (6);

b make transitional provision, or provide savings, in connection with the effect of subsection (6).

58C Relief for new zero-carbon homes: supplemental¶

1 Regulations under section 58B—

a shall include provision about the method of claiming relief (including documents or information to be provided), and

b in particular, shall include provision about the evidence to be adduced to show that a dwelling satisfies the definition of “zero-carbon home”.

2 Regulations made by virtue of subsection (1)(b) may, in particular—

a refer to a scheme or process established by or for the purposes of an enactment about building;

b establish or provide for the establishment of a scheme or process of certification;

c specify, or provide for the approval of, one or more schemes or processes for certifying energy efficiency.

d provide for the charging of fees of a reasonable amount in respect of services provided as part of a scheme or process of certification.

3 In defining “zero-carbon home” regulations under section 58B may include requirements which may be satisfied in relation to a dwelling either—

a by features of the building which, or part of which, constitutes the dwelling, or

b by other installations or utilities.

4 Regulations under section 58B may modify the effect of section 108, or another provision of this Part about linked transactions, in relation to a set of transactions of which at least one is the first acquisition of a dwelling which is a zero-carbon home.

5 In determining whether section 116(7) applies, and in the application of section 116(7), a transaction shall be disregarded if or in so far as it involves the first acquisition of a dwelling which is a zero-carbon home.

6 Regulations under section 58B—

a may provide for relief to be wholly or partly withdrawn if a dwelling ceases to be a zero-carbon home, and

b may provide for the reduction or withholding of relief where a person acquires more than one zero-carbon home within a specified period.

7 Regulations under section 58B may include provision for relief to be granted in respect of acquisitions occurring during a specified period before the regulations come into force.

58D Transfers involving multiple dwellings¶

1 Schedule 6B provides for relief in the case of transfers involving multiple dwellings.

2 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return.

60 ^I19Compulsory purchase facilitating development¶

1 A compulsory purchase facilitating development is exempt from charge.

2 In this section “compulsory purchase facilitating development” means—

a in relation to England ^F1007... ^F691..., the acquisition by a person of a chargeable interest in respect of which that person has made a compulsory purchase order for the purpose of facilitating development by another person;

b in relation to Northern Ireland, the acquisition by a person of a chargeable interest by means of a vesting order made for the purpose of facilitating development by a person other than the person who acquires the interest.

3 For the purposes of subsection (2)(a) it does not matter how the acquisition is effected (so that provision applies where the acquisition is effected by agreement).

4 In subsection (2)(b) a “vesting order” means an order made under any statutory provision to authorise the acquisition of land otherwise than by agreement.

5 In this section “development”—

a in relation to England ^F1008..., has the same meaning as in the Town and Country Planning Act 1990 (c. 8) (see section 55 of that Act);

^F692b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c in relation to Northern Ireland, has the same meaning as in the Planning Act (Northern Ireland) 2011 (see section 23 of that Act).

61 ^I20Compliance with planning obligations¶

1 A land transaction that is entered into in order to comply with a planning obligation or a modification of a planning obligation is exempt from charge if—

a the planning obligation or modification is enforceable against the vendor,

b the purchaser is a public authority, and

c the transaction takes place within the period of five years beginning with the date on which the planning obligation was entered into or modified.

2 In this section—

a in relation to England and Wales—

“planning obligation” means either of the following—
1. a planning obligation within the meaning of section 106 of the Town and Country Planning Act 1990 that is entered into in accordance with subsection (9) of that section, or
2. a planning obligation within the meaning of section 299A of that Act that is entered into in accordance with subsection (2) of that section; and
“modification” of a planning obligation means modification as mentioned in section 106A(1) of that Act;

^F680b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c in relation to Northern Ireland—

“planning obligation” means a planning agreement within the meaning of section 76 of the Planning Act (Northern Ireland) 2011 that is entered into in accordance with subsection (10) of that section, and
“modification of a planning obligation” means modification as mentioned in section 77(1) of that Act.

3 The following are public authorities for the purposes of subsection (1)(b)—

Government
A Minister of the Crown or government department
^F676. . .
A Northern Ireland department
The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government

Local government: England
A county or district council constituted under section 2 of the Local Government Act 1972 (c. 70)
The council of a London borough
The Common Council of the City of London
The Greater London Authority
Transport for London
The Council of the Isles of Scilly

Local government: Wales
A county or county borough council constituted under section 21 of the Local Government Act 1972

^F677. . .

Local government: Northern Ireland
A district council within the meaning of the Local Government Act (Northern Ireland) 1972 (c. 9 (N.I.))

Health: England and Wales
A Strategic Health Authority established under section 13 of the National Health Service Act 2006
A Special Health Authority established under section 28 of that Act or section 22 of the National Health Service (Wales) Act 2006
A Primary Care Trust established under section 18 of the National Health Service Act 2006
A Local Health Board established under section 11 of the National Health Service (Wales) Act 2006
A National Health Service Trust established under section 25 of the National Health Service Act 2006 or section 18 of the National Health Service (Wales) Act 2006

^F678. . .

Health: Northern Ireland
The Regional Agency for Public Health and Social Well-being
A Health and Social Care trust established under Article 10 of the Health and Personal Social Services (Northern Ireland) Order 1991 (S.I. 1991/194 (N.I. 1))

Other planning authorities

Any other authority that—

is a local planning authority within the meaning of the Town and Country Planning Act 1990 (c. 8), ^F679...
^F679...

Prescribed persons
A person prescribed for the purposes of this section by Treasury order

61A Relief for special tax sites¶

1 Schedule 6C provides for relief in the case of transactions relating to land in a special tax site.

2 In that Schedule—

a Part 1 contains definitions,

b Part 2 makes provision about the relief,

c Part 3 makes provision about the withdrawal of the relief,

d Part 4 makes provision about cases involving alternative finance arrangements, and

e Part 5 confers power to change the cases in which the relief is available.

3 Relief under that Schedule is available only in relation to a land transaction with an effective date falling on or before the applicable sunset date in relation to the special tax site concerned (as to which see section 332(4) and (5) of the Finance (No.2) Act 2023).

4 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return.

5 A claim for relief under that Schedule must—

a be made on or before the period of one year and 14 days beginning with the end of the applicable sunset date in relation to the special tax site in which the transaction land is situated, and

b include, or be accompanied by, such information as HMRC may require.

6 In this section and Schedule 6C, “special tax site” means an area for the time being designated under section 113 of the Finance Act 2021.

62 ^I21Group relief and reconstruction or acquisition relief¶

1 Schedule 7 provides for relief from stamp duty land tax.

2 In that Schedule—

Part 1 makes provision for group relief,
Part 2 makes provision for reconstruction and acquisition reliefs.

3 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return.

63 ^I22Demutualisation of insurance company¶

1 A land transaction is exempt from charge if it is entered into for the purposes of or in connection with a qualifying transfer of the whole or part of the business of a mutual insurance company (“the mutual”) to a company that has share capital (“the acquiring company”).

2 A transfer is a qualifying transfer if—

a it is a transfer of business consisting of the effecting or carrying out of contracts of insurance and takes place under an insurance business transfer scheme, or

b it is a transfer of business of a general insurance company carried on through a permanent establishment in the United Kingdom and takes place in accordance with authorisation granted outside the United Kingdom for the purposes of the Solvency 2 Directive, and the requirements of subsection (3) and (4) are met in relation to the shares of a company (“the issuing company”) which is either the acquiring company or a company of which the acquiring company is a wholly-owned subsidiary.

3 Shares in the issuing company must be offered, under the scheme, to at least 90% of the persons who are members of the mutual immediately before the transfer.

4 Under the scheme all of the shares in the issuing company that will be in issue immediately after the transfer has been made, other than shares that are to be or have been issued pursuant to an offer to the public, must be offered to the persons who (at the time of the offer) are—

a members of the mutual,

b persons who are entitled to become members of the mutual, or

c employees, former employees or pensioners of—

i the mutual, or

ii a wholly-owned subsidiary of the mutual.

5 The Treasury may by regulations—

a amend subsection (3) by substituting a lower percentage for the percentage mentioned there;

b provide that any or all of the references in subsections (3) and (4) to members shall be construed as references to members of a class specified in the regulations.

Regulations under paragraph (b) may make different provision for different cases.

6 For the purposes of this section a company is the wholly-owned subsidiary of another company (“the parent”) if the company has no members except the parent and the parent’s wholly-owned subsidiaries or persons acting on behalf of the parent or the parent’s wholly-owned subsidiaries.

7 In this section—

“contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);
“employee”, in relation to a mutual insurance company or its wholly-owned subsidiary, includes any officer or director of the company or subsidiary and any other person taking part in the management of the affairs of the company or subsidiary;
“general insurance company” means a company that has permission under Part 4A of the Financial Services and Markets Act 2000 (c. 8) ^F1076... to effect or carry out contracts of insurance;
“insurance company” means a company that carries on the business of effecting or carrying out contracts of insurance;
“insurance business transfer scheme” has the same meaning as in Part 7 of the Financial Services and Markets Act 2000;
^F889. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“mutual insurance company” means an insurance company carrying on business without having any share capital;
^F890. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“pensioner”, in relation to a mutual insurance company or its wholly-owned subsidiary, means a person entitled (whether presently or prospectively) to a pension, lump sum, gratuity or other like benefit referable to the service of any person as an employee of the company or subsidiary.
“the Solvency 2 Directive” means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II).

64 ^I23Demutualisation of building society¶

A land transaction effected by section 97(6) or (7) of the Building Societies Act 1986 (c. 53) (transfer of building society’s business to a commercial company) is exempt from charge.

^F17464A Initial transfer of assets to trustees of unit trust scheme¶

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

65 ^I24Incorporation of limited liability partnership¶

1 A transaction by which a chargeable interest is transferred by a person (“the transferor”) to a limited liability partnership in connection with its incorporation is exempt from charge if the following three conditions are met.

2 The first condition is that the effective date of the transaction is not more than one year after the date of incorporation of the limited liability partnership.

3 The second condition is that at the relevant time the transferor—

a is a partner in a partnership comprised of all the persons who are or are to be members of the limited liability partnership (and no-one else), or

b holds the interest transferred as nominee or bare trustee for one or more of the partners in such a partnership.

4 The third condition is that—

a the proportions of the interest transferred to which the persons mentioned in subsection (3)(a) are entitled immediately after the transfer are the same as those to which they were entitled at the relevant time, or

b none of the differences in those proportions has arisen as part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to any duty or tax.

5 In this section “the relevant time” means—

a where the transferor acquired the interest after the incorporation of the limited liability partnership, immediately after he acquired it, and

b in any other case, immediately before its incorporation.

6 In this section “limited liability partnership” means a limited liability partnership formed under the Limited Liability Partnerships Act 2000 (c. 12) or the Limited Liability Partnerships Act (Northern Ireland) 2002 (c. 12 (N. I.)).

65A Seeding relief¶

1 Schedule 7A provides for relief from stamp duty land tax.

2 In that Schedule—

a Part 1 makes provision for relief for property authorised investment funds (PAIF seeding relief), and

b Part 2 makes provision for relief for co-ownership authorised contractual schemes and Reserved Investor Funds (Contractual Schemes) (co-ownership scheme seeding relief).

3 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return, and must be accompanied by a notice to HMRC referring to the claim.

4 In the case of a claim for PAIF seeding relief, the notice must confirm that the purchaser is—

a a property AIF as defined in paragraph 2(2) of Schedule 7A, or

b a company treated as a property AIF by virtue of paragraph 2(5) of Schedule 7A (equivalent EEA funds).

5 In the case of a claim for co-ownership scheme seeding relief, the notice must confirm that the purchaser is—

a a co-ownership authorised contractual scheme or a Reserved Investor Fund (Contractual Scheme) as defined in section 102A(8), or

b an entity treated as a co-ownership authorised contractual scheme by virtue of section 102A(7) (equivalent EEA schemes).

6 The notice must be in such form, and contain such further information, as HMRC may require.

7 Co-ownership scheme seeding relief may not be claimed where the purchaser is a Reserved Investor Fund (Contractual Scheme) if the scheme—

a has previously claimed such relief, and

b following that claim ceased, at any time, to be a Reserved Investor Fund (Contractual Scheme).

66 ^C23^I25Transfers involving public bodies¶

1 A land transaction entered into on, or in consequence of, or in connection with, a reorganisation effected by or under a statutory provision is exempt from charge if the purchaser and vendor are both public bodies.

2 The Treasury may by order provide that a land transaction that is not entered into as mentioned in subsection (1) is exempt from charge if—

a the transaction is effected by or under a prescribed statutory provision, and

b either the purchaser or the vendor is a public body.

In this subsection “prescribed” means prescribed in an order made under this subsection.

3 A “reorganisation” means changes involving—

a the establishment, reform or abolition of one or more public bodies,

b the creation, alteration or abolition of functions to be discharged or discharged by one or more public bodies, or

c the transfer of functions from one public body to another.

^C244 The following are public bodies for the purposes of this section—

Government, Parliament etc
- A Minister of the Crown
- The Scottish Ministers
- A Northern Ireland department
- The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government
- The Corporate Officer of the House of Lords
- The Corporate Officer of the House of Commons
- The Scottish Parliamentary Corporate Body
- The Northern Ireland Assembly Commission
- The National Assembly for Wales Commission
Local government: England
- A county or district council constituted under section 2 of the Local Government Act 1972 (c. 70)
- The council of a London borough
- The Greater London Authority
- The Common Council of the City of London
- The Council of the Isles of Scilly
Local government: Wales
- A county or county borough council constituted under section 21 of the Local Government Act 1972
Local government: Scotland
- A council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 (c. 39)
Local government: Northern Ireland
- A district council within the meaning of the Local Government Act (Northern Ireland) 1972 (c. 9 (N.I.))
Health: England and Wales
- A Strategic Health Authority established under section 13 of the National Health Service Act 2006
- A Special Health Authority established under section 28 of that Act or section 22 of the National Health Service (Wales) Act 2006
- A Primary Care Trust established under section 18 of the National Health Service Act 2006
- A Local Health Board established under section 11 of the National Health Service (Wales) Act 2006
- A National Health Service Trust established under section 25 of the National Health Service Act 2006 or section 18 of the National Health Service (Wales) Act 2006
Health: Scotland
- The Common Services Agency established under section 10(1) of the National Health Service (Scotland) Act 1978 (c. 29)
- A Health Board established under section 2(1)(a) of that Act
- A National Health Service Trust established under section 12A(1) of that Act
- A Special Health Board established under section 2(1)(b) of that Act
Health: Northern Ireland
- The Regional Agency for Public Health and Social Well-being
- A Health and Social Care trust established under Article 10 of the Health and Personal Social Services (Northern Ireland) Order 1991 (S.I. 1991/194 (N.I. 1))
Other planning authorities
- Any other authority that—
  1. is a local planning authority within the meaning of the Town and Country Planning Act 1990 (c. 8), or
  2. is the planning authority for any of the purposes of the planning Acts within the meaning of the Town and Country Planning (Scotland) Act 1997 (c. 8)
- ^F1081...
Statutory bodies
- 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
Prescribed persons
- A person prescribed for the purposes of this section by Treasury order

5 In this section references to a public body include—

a a company in which all the shares are owned by such a body, and

b a wholly-owned subsidiary of such a company.

6 In this section “company” means a company as defined by section 1 of the Companies Act 2006 ^F525....

66A Resolution of financial institutions¶

1 A land transaction is exempt from charge if it is effected by—

a an instrument listed in subsection (2), or

b an instrument made under an instrument listed in subsection (2).

2 The instruments are—

a a property transfer instrument made in accordance with section 12(2) of the Banking Act 2009 (transfer to a bridge bank),

b a property transfer instrument made in accordance with section 12ZA(3) of that Act (transfer to asset management vehicle),

c a supplemental property transfer instrument made in accordance with section 42(2) of that Act where the original instrument was made in accordance with section 12(2), 12ZA(3) or 41A(2) of that Act,

d a property transfer instrument made in accordance with section 41A(2) of that Act (transfer of property subsequent to resolution instrument),

e a bridge bank supplemental property transfer instrument made in accordance with section 44D(2) of that Act,

f a property transfer order made in accordance with section 45(2) of that Act (temporary public ownership: property transfer), ^F1168...

g a third-country instrument made in accordance with section 89H(2) or 89I(4) of that Act.

h a property transfer instrument made in accordance with paragraph 29(3) (bridge central counterparty) of Schedule 11 to the Financial Services and Markets Act 2023 (central counterparties),

i a property transfer instrument made in accordance with paragraph 66(2) of that Schedule (transfer of property subsequent to resolution instrument),

j a supplemental property transfer instrument made in accordance with paragraph 67(2) of that Schedule (supplemental instruments) where the original instrument was made in accordance with paragraph 29(3) of that Schedule,

k a property transfer instrument made in accordance with paragraph 71(2) (transfer of ownership and private sector purchaser: property transfer) where the original instrument was made in accordance with paragraph 30(2) of that Schedule (transfer of ownership), or

l a third-country instrument made in accordance with paragraph 145(2) (third-country resolution actions) or 146(4) (effects of recognition on third-country resolution action) of that Schedule.

3 References in subsection (2) to a provision of the Banking Act 2009 include references to that provision as applied by or under any other provision of that Act (including where it is applied with modifications or in a substituted form).

67 ^I26Transfer in consequence of reorganisation of parliamentary constituencies¶

1 Where—

a an Order in Council is made under the Parliamentary Constituencies Act 1986 (c. 56) (orders specifying new parliamentary constituencies), and

b an existing local constituency association transfers a chargeable interest to—

i a new association that is a successor to the existing association, or

ii a related body that as soon as practicable transfers the interest or right to a new association that is a successor to the existing association,

the transfer, or where paragraph (b)(ii) applies each of the transfers, is exempt from charge.

2 In relation to any such order as is mentioned in subsection (1)(a)—

a “the date of the change” means the date on which the order comes into operation;

b “former parliamentary constituency” means an area that, for the purposes of parliamentary elections, was a constituency immediately before that date but is no longer such a constituency after that date;

c “new parliamentary constituency” means an area that, for the purposes of parliamentary elections, is such a constituency after that date but was not such a constituency immediately before that date.

3 In relation to the date of the change—

a “existing local constituency association” means a local constituency association whose area was the same, or substantially the same, as the area of a former parliamentary constituency or two or more such constituencies, and

b “new association” means a local constituency association whose area is the same, or substantially the same, as that of a new parliamentary constituency or two or more such constituencies.

4 In this section—

a “local constituency association” means an unincorporated association (whether described as an association, a branch or otherwise) whose primary purpose is to further the aims of a political party in an area that at any time is or was the same or substantially the same as the area of a parliamentary constituency or two or more parliamentary constituencies, and

b “related body”, in relation to such an association, means a body (whether corporate or unincorporated) that is an organ of the political party concerned.

5 For the purposes of this section a new association is a successor to an existing association if any part of the existing association’s area is comprised in the new association’s area.

67A Acquisitions by certain health service bodies¶

1 A land transaction is exempt from charge if the purchaser is any of the following—

a NHS England;

b an integrated care board established under section 14Z25 of the National Health Service Act 2006;

ba an NHS trust established under section 25 of the National Health Service Act 2006;

c an NHS foundation trust;

d a Local Health Board established under section 11 of the National Health Service (Wales) Act 2006;

e a National Health Service trust established under section 18 of that Act;

f a Health and Social Services trust established under the Health and Personal Social Services (Northern Ireland) Order 1991.

2 Any relief under this section must be claimed in a land transaction return or an amendment of such a return.

68 ^I27Charities relief¶

1 Schedule 8 provides for relief from stamp duty land tax for acquisitions by charities.

2 Any relief under that Schedule must be claimed in a land transaction return or an amendment of such a return.

69 ^I28Acquisition by bodies established for national purposes¶

A land transaction is exempt from charge if the purchaser is any of the following—

a the Historic Buildings and Monuments Commission for England;

^F657b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c the Trustees of the British Museum;

d the Trustees of the National Heritage Memorial Fund;

e the Trustees of the Natural History Museum.

70 ^I29Right to buy transactions, shared ownership leases etc¶

Schedule 9 makes provision for relief in the case of right to buy transactions, shared ownership leases and certain related transactions.

71 ^I30Certain acquisitions by registered providers of social housing etc ¶

A1 A land transaction under which the purchaser is a profit-making registered provider of social housing is exempt from charge if the transaction is funded with the assistance of a public subsidy.

1 A land transaction under which the purchaser is a relevant housing provider is exempt from charge if—

a the purchaser is a non-profit registered provider of social housing controlled by its tenants,

b the vendor is a qualifying body, or

c the transaction is funded with the assistance of a public subsidy.

1A In this section “relevant housing provider” means—

a a non-profit registered provider of social housing, ^F1191...

b a housing association registered in the register maintained under Article 14 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15)), or

c an English local authority that is a registered provider of social housing.

2 The reference in subsection (1)(a) to a non-profit registered provider of social housing “controlled by its tenants” is to a non-profit registered provider of social housing the majority of whose board members are tenants occupying properties owned or managed by it.

“Board member”, in relation to a non-profit registered provider of social housing, means—
1. if it is a company, a director of the company,
2. if it is a body corporate whose affairs are managed by its members, a member,
3. if it is body of trustees, a trustee,
4. if it is not within paragraphs (a) to (c), a member of the committee of management or other body to which is entrusted the direction of the affairs of the non-profit registered provider of social housing.

3 In subsection (1)(b) “qualifying body” means—

a a relevant housing provider,

^F1193b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c a principal council within the meaning of the Local Government Act 1972 (c. 70),

d the Common Council of the City of London,

^F1199e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1199f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1199g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

h the Department for Communities in Northern Ireland, or

i the Northern Ireland Housing Executive.

4 In this section “public subsidy” means any grant or other financial assistance—

a made or given by way of a distribution pursuant to section 25 of the National Lottery etc. Act 1993 (c. 39) (application of money by distributing bodies),

^F1195b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c under section 126 of the Housing Grants, Construction and Regeneration Act 1996 (c. 53) (financial assistance for regeneration and development),

ca under section 19 of the Housing and Regeneration Act 2008 (financial assistance by the Homes and Communities Agency),

cb made or given by the Greater London Authority,

^F1196d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or

e under Article 33 or 33A of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15)).

5 In this section “public subsidy” also means —

a any amount that is receipts of the disposal of social housing, provided the purchaser is entitled to use the amount for the purpose of the provision of social housing, or

b any grant under section 31 of the Local Government Act 2003 (grants towards expenditure incurred or to be incurred by local authorities) towards expenditure incurred or to be incurred on the provision of social housing ^F1198....

6 In subsection (5) “social housing” has the meaning it has in Part 2 of the Housing and Regeneration Act 2008 (see, in particular, section 68 of that Act).

7 In this section “English local authority” means—

a a principal council within the meaning of the Local Government Act 1972, or

b the Common Council of the City of London.

71A Alternative property finance: land sold to financial institution and leased to person ¶

1 This section applies where arrangements are entered into between a person and a financial institution under which—

a the institution purchases a major interest in land or an undivided share of a major interest in land (“the first transaction”),

b where the interest purchased is an undivided share, the major interest is held on trust for the institution and the person as beneficial tenants in common,

c the institution (or the person holding the land on trust as mentioned in paragraph (b)) grants to the person out of the major interest a lease (if the major interest is freehold) or a sub-lease (if the major interest is leasehold) (“the second transaction”), and

d the institution and the person enter into an agreement under which the person has a right to require the institution or its successor in title to transfer to the person (in one transaction or a series of transactions) the whole interest purchased by the institution under the first transaction.

2 The first transaction is exempt from charge if the vendor is—

a the person, or

b another financial institution by whom the interest was acquired under arrangements of the kind mentioned in subsection (1) entered into between it and the person.

3 The second transaction is exempt from charge if the provisions of this Part relating to the first transaction are complied with (including the payment of any tax chargeable).

4 Any transfer to the person that results from the exercise of the right mentioned in subsection (1)(d) (“a further transaction”) is exempt from charge if—

a the provisions of this Part relating to the first and second transactions are complied with, and

b at all times between the second transaction and the further transaction—

i the interest purchased under the first transaction is held by a financial institution so far as not transferred by a previous further transaction, and

ii the lease or sub-lease granted under the second transaction is held by the person.

5 The agreement mentioned in subsection (1)(d) is not to be treated—

a as substantially performed unless and until the whole interest purchased by the institution under the first transaction has been transferred (and accordingly section 44(5) does not apply), or

b as a distinct land transaction by virtue of section 46 (options and rights of pre-emption).

6 The requirements of subsection (1), or (4)(b)(ii), are not met if—

a the person enters into the arrangement, or holds the lease or sub-lease, as trustee and any beneficiary of the trust is not a person, or

b the person enters into the arrangements, or holds the lease or sub-lease, as partner and any of the other partners is not a person.

7 A further transaction that is exempt from charge by virtue of subsection (4) is not a notifiable transaction unless the transaction involves the transfer to the person of the whole interest purchased by the institution under the first transaction, so far as not transferred by a previous further transaction.

^F6428 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9 References in this section to a person shall be read, in relation to times after the death of the person concerned, as references to his personal representatives.

^F69310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F69472 Alternative property finance in Scotland: land sold to financial institution and leased to person ¶

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

^F69072A Alternative property finance in Scotland: land sold to financial institution and person in common¶

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

73 ^I31Alternative property finance: land sold to financial institution and re-sold to person ¶

1 This section applies where arrangements are entered into between a person and a financial institution under which—

a the institution—

i purchases a major interest in land (“the first transaction”), and

ii sells that interest to the person (“the second transaction”), and

b the person grants the institution a legal mortgage over that interest.

2 The first transaction is exempt from charge if the vendor is—

a the person concerned, or

b another financial institution by whom the interest was acquired under other arrangements of the kind mentioned in section 71A(1)^F695... entered into between it and the person.

3 The second transaction is exempt from charge if the financial institution complies with the provisions of this Part relating to the first transaction (including the payment of any tax chargeable on a chargeable consideration that is not less than the market value of the interest and, in the case of the grant of a lease at a rent, the rent.).

4 This section does not apply if—

a the person enters into the arrangements as trustee and any beneficiary of the trust is not a person, or

b the person enters into the arrangements as partner and any of the other partners is not a person.

5 In this section—

^F645a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b “legal mortgage”—

i in relation to land in England ^F1009..., means a legal mortgage as defined in section 205(1)(xvi) of the Law of Property Act 1925 (c. 20);

^F696ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

iii in relation to land in Northern Ireland, means a mortgage by conveyance of a legal estate or by demise or sub-demise or a charge by way of legal mortgage.

6 References in this section to a person shall be read, in relation to times after the death of the person concerned, as references to his personal representatives.

73A Sections 71A to 73: relationship with Schedule 7¶

Sections 71A to 73 do not apply to arrangements in which the first transaction is exempt from charge by virtue of Schedule 7.

73AB Section 71A : arrangements to transfer control of financial institution¶

1 Section 71A^F698... does not apply to alternative finance arrangements if those arrangements, or any connected arrangements, include arrangements for a person to acquire control of the relevant financial institution.

2 That includes arrangements for a person to acquire control of the relevant financial institution only if one or more conditions are met (such as the happening of an event or doing of an act).

3 In this section—

“alternative finance arrangements” means the arrangements referred to in section 71A(1)^F699...;
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“connected arrangements” means any arrangements entered into in connection with the making of the alternative finance arrangements (including arrangements involving one or more persons who are not parties to the alternative finance arrangements);
“relevant financial institution” means the financial institution which enters into the alternative finance arrangements.

4 Section 1124 of the Corporation Tax Act 2010 applies for the purposes of determining who has control of the relevant financial institution.

73B Exempt interests¶

1 An interest held by a financial institution as a result of the first transaction within the meaning of section 71A(1)(a)^F663... is an exempt interest for the purposes of stamp duty land tax.

2 That interest ceases to be an exempt interest if—

a the lease or agreement mentioned in section 71A(1)(c)^F664... ceases to have effect, or

b the right under section 71A(1)(d)^F665... ceases to have effect or becomes subject to a restriction.

3 Subsection (1) does not apply if the first transaction is exempt from charge by virtue of Schedule 7.

4 Subsection (1) does not make an interest exempt in respect of—

a the first transaction itself, or

b a further transaction or third transaction within the meaning of section 71A(4)^F700....

73BA Meaning of “financial institution”¶

1 In sections 71A to 73B “financial institution” has the meaning given by section 564B of the Income Tax Act 2007.

2 For this purpose section 564B(1) applies as if paragraph (d) were omitted.

3 In sections 71A, 73AB and 73B, “financial institution” also includes a person with permission under Part 4A of the Financial Services and Markets Act 2000 to carry on the regulated activity specified in Article 63F(1) of the Financial Services and Markets Act (Regulated Activities) Order 2001 (S.I. 2001/544) (entering into regulated home purchase plans as home purchase provider).

73C Alternative finance investment bonds¶

Schedule 61 to the Finance Act 2009 makes provision for relief from charge in the case of arrangements to which section 564G of the Income Tax Act 2007 or section 151N of the Taxation of Chargeable Gains Act 1992 (investment bond arrangements) applies.

^F99373CA Sections 71A to 73: first-time buyers¶

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

74 ^C16^I32Exercise of collective rights by tenants of flats¶

1 This section applies where a chargeable transaction is entered into by a person or persons nominated or appointed by qualifying tenants of flats contained in premises in exercise of—

a a right under Part 1 of the Landlord and Tenant Act 1987 (right of first refusal), or

b a right under Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (right to collective enfranchisement).

1A The amount of tax is determined as follows.

Step 1 Determine the fraction of the relevant consideration produced by dividing the total amount of that consideration by the number of qualifying flats contained in the premises.
Step 2 If the amount produced by step 1 is £500,000 or less, determine the amount of tax chargeable in accordance with subsection (1B).
Step 3 If the amount produced by step 1 is more than £500,000 and the condition in paragraph 3(3) of Schedule 4A is not met with respect to the transaction, determine the amount of tax chargeable in accordance with subsection (1B).
Step 4 If the amount produced by step 1 is more than £500,000 and the condition in paragraph 3(3) of Schedule 4A is met with respect to the transaction, subsection (1B) does not apply, and the amount of tax chargeable in respect of the transaction is 17% of the chargeable consideration for the transaction.

1B Where step 2 or 3 of subsection (1A) requires the amount of tax chargeable to be determined in accordance with this subsection, it is determined as follows.

Step 1 Determine the amount of tax chargeable under section 55 as if the relevant consideration for the chargeable transaction were the fraction of the relevant consideration calculated under step 1 of subsection (1A).
Step 2 Multiply the amount determined at step 1 by the number of qualifying flats contained in the premises.

4 In this section—

“flat” and “qualifying tenant” have the same meaning as in the Chapter or Part of the Act conferring the right being exercised;
“qualifying flat” means a flat that is held by a qualifying tenant who is participating in the exercise of the right.

5 References in this section to the relevant consideration have the same meaning as in section 55.

^F70175 Crofting community right to buy¶

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

Increased rates for non-resident transactions¶

75ZA Increased rates for non-resident transactions¶

1 In its application for the purpose of determining the amount of tax chargeable in respect of a chargeable transaction that is a non-resident transaction, this Part has effect as if 2% were added to each rate specified in the rate-specifying provisions.

2 The “rate-specifying provisions” are—

a in section 55(1B), Table A;

b in Schedule 4ZA, in paragraph 1(2), Table A;

c in Schedule 4A, paragraph 3(1)(a);

d in Schedule 5, in paragraph 2(3), Table A;

e in Schedule 6ZA, in paragraph 4, Table A;

f in section 74(1A), Step 4.

3 Schedule 9A defines “non-resident transaction” and makes further provision in connection with this section.

Anti-avoidance¶

75A Anti-avoidance¶

1 This section applies where—

a one person (V) disposes of a chargeable interest and another person (P) acquires either it or a chargeable interest deriving from it,

b a number of transactions (including the disposal and acquisition) are involved in connection with the disposal and acquisition (“the scheme transactions”), and

c the sum of the amounts of stamp duty land tax payable in respect of the scheme transactions is less than the amount that would be payable on a notional land transaction effecting the acquisition of V's chargeable interest by P on its disposal by V.

2 In subsection (1) “transaction” includes, in particular—

a a non-land transaction,

b an agreement, offer or undertaking not to take specified action,

c any kind of arrangement whether or not it could otherwise be described as a transaction, and

d a transaction which takes place after the acquisition by P of the chargeable interest.

3 The scheme transactions may include, for example—

a the acquisition by P of a lease deriving from a freehold owned or formerly owned by V;

b a sub-sale to a third person;

c the grant of a lease to a third person subject to a right to terminate;

d the exercise of a right to terminate a lease or to take some other action;

e an agreement not to exercise a right to terminate a lease or to take some other action;

f the variation of a right to terminate a lease or to take some other action.

4 Where this section applies—

a any of the scheme transactions which is a land transaction shall be disregarded for the purposes of this Part, but

b there shall be a notional land transaction for the purposes of this Part effecting the acquisition of V's chargeable interest by P on its disposal by V.

5 The chargeable consideration on the notional transaction mentioned in subsections (1)(c) and (4)(b) is the largest amount (or aggregate amount)—

a given by or on behalf of any one person by way of consideration for the scheme transactions, or

b received by or on behalf of V (or a person connected with V within the meaning of section 1122 of the Corporation Tax Act 2010) by way of consideration for the scheme transactions.

6 The effective date of the notional transaction is—

a the last date of completion for the scheme transactions, or

b if earlier, the last date on which a contract in respect of the scheme transactions is substantially performed.

7 This section does not apply where subsection (1)(c) is satisfied only by reason of—

a sections 71A to 73, or

b a provision of Schedule 9.

75B Anti-avoidance: incidental transactions¶

1 In calculating the chargeable consideration on the notional transaction for the purposes of section 75A(5), consideration for a transaction shall be ignored if or in so far as the transaction is merely incidental to the transfer of the chargeable interest from V to P.

2 A transaction is not incidental to the transfer of the chargeable interest from V to P—

a if or in so far as it forms part of a process, or series of transactions, by which the transfer is effected,

b if the transfer of the chargeable interest is conditional on the completion of the transaction, or

c if it is of a kind specified in section 75A(3).

3 A transaction may, in particular, be incidental if or in so far as it is undertaken only for a purpose relating to—

a the construction of a building on property to which the chargeable interest relates,

b the sale or supply of anything other than land, or

c a loan to P secured by a mortgage, or any other provision of finance to enable P, or another person, to pay for part of a process, or series of transactions, by which the chargeable interest transfers from V to P.

4 In subsection (3)—

a paragraph (a) is subject to subsection (2)(a) to (c),

b paragraph (b) is subject to subsection (2)(a) and (c), and

c paragraph (c) is subject to subsection (2)(a) to (c).

5 The exclusion required by subsection (1) shall be effected by way of just and reasonable apportionment if necessary.

6 In this section a reference to the transfer of a chargeable interest from V to P includes a reference to a disposal by V of an interest acquired by P.

75C Anti-avoidance: supplemental¶

1 A transfer of shares or securities shall be ignored for the purposes of section 75A if but for this subsection it would be the first of a series of scheme transactions.

2 The notional transaction under section 75A attracts any relief under this Part which it would attract if it were an actual transaction (subject to the terms and restrictions of the relief).

3 The notional transaction under section 75A is a land transaction entered into for the purposes of or in connection with the transfer of an undertaking or part for the purposes of paragraphs 7 and 8 of Schedule 7, if any of the scheme transactions is entered into for the purposes of or in connection with the transfer of the undertaking or part.

4 In the application of section 75A(5) no account shall be taken of any amount paid by way of consideration in respect of a transaction to which any of sections 60, 61, 63, 64, 65, 66, 67, 69, 71 and 74, or a provision of Schedule 6A, 7A or 8, applies.

5 In the application of section 75A(5) an amount given or received partly in respect of the chargeable interest acquired by P and partly in respect of another chargeable interest shall be subjected to just and reasonable apportionment.

6 Section 53 applies to the notional transaction under section 75A.

7 Paragraph 5 of Schedule 4 applies to the notional transaction under section 75A.

8 For the purposes of section 75A—

a an interest in a property-investment partnership (within the meaning of paragraph 14 of Schedule 15) is a chargeable interest in so far as it concerns land owned by the partnership, ^F618...

^F618b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8A Nothing in Part 3 of Schedule 15 applies to the notional transaction under section 75A.

9 For the purposes of section 75A a reference to an amount of consideration includes a reference to the value of consideration given as money's worth.

10 Stamp duty land tax paid in respect of a land transaction which is to be disregarded by virtue of section 75A(4)(a) is taken to have been paid in respect of the notional transaction by virtue of section 75A(4)(b).

11 The Treasury may by order provide for section 75A not to apply in specified circumstances.

12 An order under subsection (11) may include incidental, consequential or transitional provision and may make provision with retrospective effect.

Returns and other administrative matters¶

^I33^C23^C2576 Duty to deliver land transaction return¶

1 In the case of every notifiable transaction the purchaser must deliver a return (a “land transaction return”) to the Inland Revenue before the end of the period of 14 days after the effective date of the transaction.

2 The Inland Revenue may by regulations amend subsection (1) so as to require a land transaction return to be delivered before the end of such shorter period after the effective date of the transaction as may be prescribed or, if the regulations so provide, on that date.

3 A land transaction return in respect of a chargeable transaction must—

a include an assessment (a “self-assessment”) of the tax that, on the basis of the information contained in the return, is chargeable in respect of the transaction, ^F252...

^F252b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77 Notifiable transactions¶

1 A land transaction is notifiable if it is—

a an acquisition of a major interest in land that does not fall within one or more of the exceptions in section 77A,

b an acquisition of a chargeable interest other than a major interest in land where there is chargeable consideration in respect of any part of which tax is chargeable at a rate of more than 0% or would be so chargeable but for a relief,

c a land transaction that a person is treated as entering into by virtue of section 44A(3), ^F802...

d a notional land transaction under section 75A or

e a notional or additional land transaction under paragraph 5 of Schedule 2A.

2 This section has effect subject to—

a sections 71A(7) ^F705..., and

b paragraph 30 of Schedule 15.

3 In this section “relief” does not include an exemption from charge under Schedule 3.

77A Exceptions for certain acquisitions of major interests in land¶

1 The exceptions referred to in section 77(1)(a) are as follows.

1 An acquisition which is exempt from charge under Schedule 3.

2 An acquisition (other than the grant, assignment or surrender of a lease) where the chargeable consideration for that acquisition, together with the chargeable consideration for any linked transactions, is less than £40,000.

3 The grant of a lease for a term of 7 years or more where—

a any chargeable consideration other than rent is less than £40,000, and

b the relevant rent is less than £1,000.

4 The assignment or surrender of a lease where—

a the lease was originally granted for a term of 7 years or more, and

b the chargeable consideration for the assignment or surrender is less than £40,000.

5 The grant of a lease for a term of less than 7 years where the chargeable consideration does not exceed the zero rate threshold.

6 The assignment or surrender of a lease where—

a the lease was originally granted for a term of less than 7 years, and

b the chargeable consideration for the assignment or surrender does not exceed the zero rate threshold.

2 Chargeable consideration for an acquisition does not exceed the zero rate threshold if it does not consist of or include—

a any amount in respect of which tax is chargeable at a rate of more than 0%, or

b any amount in respect of which tax would be so chargeable but for a relief.

3 In this section—

“annual rent” has the meaning given in paragraph 9A of Schedule 5,
“relevant rent” means—
1. the annual rent, or
2. in the case of the grant of a lease to which paragraph 11 or 19 of Schedule 15 applies, the relevant chargeable proportion of the annual rent (as calculated in accordance with that paragraph), and
“relief” does not include an exemption from charge under Schedule 3.

78 ^I34Returns, enquiries, assessments and related matters¶

1 Schedule 10 has effect with respect to land transaction returns, assessments and related matters.

2 In that Schedule—

Part 1 contains general provisions about returns;
Part 2 imposes a duty to keep and preserve records;
Part 3 makes provision for enquiries into returns;
Part 4 provides for a Revenue determination if no return is delivered;
Part 5 provides for Revenue assessments;
Part 6 provides for relief in case of excessive assessment; and
Part 7 provides for appeals against Revenue decisions on tax.

3 The Treasury may by regulations make such amendments of that Schedule, and such consequential amendments of any other provisions of this Part, as appear to them to be necessary or expedient from time to time.

78A Disclosure of information contained in land transaction returns¶

1 Relevant information contained in land transaction returns delivered under section 76 (whether before or after the commencement of this section) is to be available for use—

a by listing officers appointed under section 20 of the Local Government Finance Act 1992, for the purpose of facilitating the compilation and maintenance by them of valuation lists in accordance with Chapter 2 of Part 1 of that Act,

b as evidence in an appeal by virtue of section 24(6) of that Act to a valuation tribunal ^F527...,

c by the Commissioner of Valuation for Northern Ireland, for the purpose of maintaining a valuation list prepared, and from time to time altered, by him in accordance with Part 3 of the Rates (Northern Ireland) Order 1977, and

d by such other persons or for such other purposes as the Treasury may by regulations prescribe.

2 In this section, “relevant information” means any information of the kind mentioned in paragraph 1(4) of Schedule 10 (information corresponding to particulars required under previous legislation).

3 The Treasury may by regulations amend the definition of relevant information in subsection (2).

4 In this section “valuation tribunal” means—

a in relation to England: the Valuation Tribunal for England;

b in relation to Wales: a valuation tribunal established under paragraph 1 of Schedule 11 to the Local Government Finance Act 1988.

79 ^I35Registration of land transactions etc¶

1 A land transaction to which this section applies, or (as the case may be) a document effecting or evidencing a land transaction to which this section applies, shall not be registered, recorded or otherwise reflected in an entry made—

a in England and Wales, in the register of title maintained by the Chief Land Registrar,

^F681b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c in Northern Ireland, in any register maintained by the Land Registry of Northern Ireland or in the Registry of Deeds for Northern Ireland,unless there is produced, together with the relevant application, a certificate as to compliance with the requirements of this Part in relation to the transaction or such information about compliance as the Commissioners for Her Majesty's Revenue and Customs may specify in regulations. This does not apply where the entry is required to be made without any application or so far as the entry relates to an interest or right other than the chargeable interest acquired by the purchaser under the land transaction that gives rise to the application.

2 This section applies to every notifiable land transaction other than a transaction treated as taking place—

a under subsection (4) of section 44 (contract and conveyance) or under that section as it applies by virtue of—

^F805i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ii paragraph 12B of Schedule 17A (assignment of agreement for lease),

b under subsection (3) of section 44A (contract providing for conveyance to third party) or under that section as it applies by virtue of section 45A (contract providing for conveyance to third party: effect of transfer of rights).

ba under paragraph 5 of Schedule 2A (transactions entered into before completion of contract),

c under paragraph 12A(2) ^F682... of Schedule 17A (agreement for lease), or

d under paragraph 13 (increase of rent) or 15A (reduction of rent or term) of that Schedule.

In this subsection “contract” includes any agreement and “conveyance” includes any instrument.

2A Subsection (1), so far as relating to the entry of a notice under section 34 of the Land Registration Act 2002 or section 38 of the Land Registration Act (Northern Ireland) 1970 (notice in respect of interest affecting registered land), does not apply where the land transaction in question is the variation of a lease.

3 The certificate referred to in subsection (1) must be ^F317...—

a a certificate by the Inland Revenue (a “Revenue certificate”) that a land transaction return has been delivered in respect of the transaction, ^F318...

^F318b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 The Inland Revenue may make provision by regulations about Revenue certificates. The regulations may, in particular—

a make provision as to the conditions to be met before a certificate is issued;

b prescribe the form and content of the certificate;

c make provision about the issue of duplicate certificates if the original is lost or destroyed;

d provide for the issue of multiple certificates where a return is made relating to more than one transaction.

5 Part 2 of Schedule 11 imposes a duty to keep and preserve records in respect of transactions that are not notifiable.

6 The registrar ^F683...—

a shall allow the Inland Revenue to inspect any certificates ^F320... produced to him under this section and in his possession, and

b may enter into arrangements for affording the Inland Revenue other information and facilities for verifying that the requirements of this Part have been complied with.

^C180 ^I36Adjustment where contingency ceases or consideration is ascertained¶

1 Where section 51 (contingent, uncertain or unascertained consideration) applies in relation to a transaction and—

a in the case of contingent consideration, the contingency occurs or it becomes clear that it will not occur, or

b in the case of uncertain or unascertained consideration, an amount relevant to the calculation of the consideration, or any instalment of consideration, becomes ascertained,

the following provisions have effect to require or permit reconsideration of how this Part applies to the transaction (and to any transaction in relation to which it is a linked transaction).

2 If the effect of the new information is that a transaction becomes notifiable, the purchaser must make a return to HMRC within 14 days.

2A If the effect of the new information is that—

a tax is payable in respect of a transaction where none was payable before and subsection (2) does not apply, or

b additional tax is payable in respect of a transaction,

the purchaser must make a further return to HMRC within 30 days.

2B For the purposes of subsections (2) and (2A), any tax or additional tax payable is calculated according to the effective date of the transaction.

2C If a purchaser is required to make a return under subsection (2) or a further return under subsection (2A)—

a that return must contain a self-assessment of the tax chargeable in respect of the transaction on the basis of the information contained in the return, and

b the tax or additional tax payable must be paid not later than the filing date for that return.

3 The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a return under section 76 (general requirement to make land transaction return), subject to the adaptation that references to the effective date of the transaction shall be read as references to the date of the event as a result of which the return is required.

4 If the effect of the new information is that less tax is payable in respect of a transaction (calculated according to its effective date) than has already been paid,

a the purchaser may, within the period allowed for amendment of the land transaction return, amend the return accordingly;

b after the end of that period he may (if the land transaction return is not so amended) make a claim to the Inland Revenue for repayment of the amount overpaid.

4A Where the transaction (“the relevant transaction”) is the grant or assignment of a lease, no claim may be made under subsection (4)—

a in respect of the repayment (in whole or part) of any loan or deposit that is treated by paragraph 18A of Schedule 17A as being consideration given for the relevant transaction, or

b in respect of the refund of any of the consideration given for the relevant transaction, in a case where the refund—

i is made under arrangements that were made in connection with the relevant transaction, and

ii is contingent on the determination or assignment of the lease or on the grant of a chargeable interest out of the lease.

5 This section does not apply so far as the consideration consists of rent (see paragraph 8 of Schedule 17A).

81 ^I37Further return where relief withdrawn¶

1 Where relief is withdrawn to any extent under—

za paragraph 11 of Schedule 6A (relief for certain acquisitions of residential property),

a Part 1 of Schedule 7 (group relief),

b Part 2 of that Schedule (reconstruction or acquisition relief), ^F944...

ba paragraph 5, 7 or 8 of Schedule 7A (PAIF seeding relief),

bb paragraph 13, 17 or 18 of Schedule 7A (co-ownership scheme seeding relief), or

c Schedule 8 (charities relief),

the purchaser must deliver a further return before the end of the period of 30 days after the date on which the disqualifying event occurred.

1A Where relief is withdrawn to any extent under—

a any of paragraphs 5G to 5L of Schedule 4A (relief from higher rate under Schedule 4A (higher rate for certain transactions)),

aa Part 3 of Schedule 6C (relief for special tax sites), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies,

b paragraph 6 of Schedule 7A (PAIF seeding relief), or

c paragraph 14 or 16 of Schedule 7A (co-ownership scheme seeding relief),

the purchaser must deliver a further return before the end of the period of 30 days after the relevant date.

1B In subsection (1A) “the relevant date” means—

a in the case of relief under paragraph 5 of Schedule 4A (businesses of letting, trading in or redeveloping properties), the first day in the period mentioned in paragraph 5G(2) on which a requirement under paragraph 5G(3) was not met in the case of the chargeable interest in question;

b in the case of relief under paragraph 5B of that Schedule (trades involving making a dwelling available to the public), the first day in the period mentioned in paragraph 5H(2) on which a requirement under paragraph 5H(3) was not met in the case of the chargeable interest in question;

c in the case of relief under paragraph 5C of that Schedule (financial institutions acquiring dwellings in the course of lending), the first day in the period mentioned in paragraph 5I(2) on which a requirement under paragraph 5I(3) was not met in the case of the chargeable interest in question;

ca in the case of relief under paragraph 5CA of that Schedule (acquisition under a regulated home reversion plan), the first day in the period mentioned in paragraph 5IA(2) of that Schedule on which the purchaser holds the higher threshold interest otherwise than for the purposes of the regulated home reversion plan, unless paragraph 5IA(3)(a) and (b) applies;

d in the case of relief under paragraph 5D of that Schedule (dwellings for occupation by certain employees etc), the first day in the period mentioned in paragraph 5J(2) on which a requirement under paragraph 5J(3) was not met in the case of the chargeable interest in question;

da in the case of relief under paragraph 5EA of that Schedule (acquisition by management company of flat for occupation by caretaker), the first day in the period mentioned in paragraph 5JA(2) of that Schedule on which the purchaser holds the higher threshold interest otherwise than for the purpose of making the flat available for use as caretaker accommodation;

e in the case of relief under paragraph 5F of that Schedule (farmhouses), the first day in the period mentioned in paragraph 5K(2) on which a requirement under paragraph 5K(3) was not met in the case of the chargeable interest in question.

ea in the case of relief under paragraph 5FA of that Schedule (qualifying housing co-operatives), the date determined in accordance with subsection (1C);

eb in the case of relief under Schedule 6C (relief for special tax sites), the last day in the control period on which the qualifying land is used exclusively in a qualifying manner;

f in the case of relief under paragraph 6 of Schedule 7A (PAIF seeding relief: portfolio test)—

i where relief is withdrawn under paragraph 6(1), the last day of the seeding period (see paragraph 3 of that Schedule), or

ii where relief is withdrawn under paragraph 6(3), the first time mentioned in paragraph 6(3)(a) or (b) at which the portfolio test was not met;

g in the case of relief under paragraph 14 of Schedule 7A (co-ownership scheme seeding relief: genuine diversity of ownership condition), the first time mentioned in paragraph 14(1) at which the genuine diversity of ownership condition was not met;

h in the case of relief under paragraph 16 of Schedule 7A (co-ownership scheme seeding relief: portfolio test)—

i where relief is withdrawn under paragraph 16(1), the last day of the seeding period (see paragraph 11 of that Schedule), or

ii where relief is withdrawn under paragraph 16(3), the first time mentioned in paragraph 16(3)(a) or (b) at which the portfolio test was not met.

1C For the purposes of subsection (1B)(ea) (relief under paragraph 5FA of Schedule 4A withdrawn because the conditions in paragraph 5L(3) of that Schedule are met), the date is—

a where paragraph 5L(4) of Schedule 4A does not apply, the first day in the period mentioned in paragraph 5L(3)(a) of that Schedule on which the purchaser is not a qualifying housing body;

b where paragraph 5L(4) or (7) of that Schedule applies and relief is withdrawn because condition A in paragraph 5L(5) of that Schedule is met, the day of succession of the relevant successor;

c where paragraph 5L(4) or (7) of that Schedule applies and relief is withdrawn because condition B in paragraph 5L(6) of that Schedule is met, the first day in the part of the control period that falls after the day of succession of the relevant successor on which the relevant successor is not a qualifying housing body.

1D Where relief is withdrawn to any extent under paragraph 5L of Schedule 4A in a case to which paragraph 5L(4) or (7) applies, the reference in subsection (1A) to the purchaser is to be read as a reference to the relevant successor.

2 The return must—

a include a self-assessment of the amount of tax chargeable, ^F253...

^F253b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2A Where subsection (1) or (1A) applies any tax payable must be paid not later than the filing date for the return.

3 The provisions of Schedule 10 (returns, assessments and other matters) apply for the purposes of this section with the following modifications—

a references to a return under section 76 (general requirement to deliver land transaction return) are to be read as references to a return under subsection (1) or (1A);

b references to the transaction to which a return relates are to be read as references to the withdrawal of relief in respect of which the return is required under subsection (1) or (1A);

c references to a chargeable transaction to which (as yet) no return relates are to be read as references to the withdrawal of relief under any of the provisions mentioned in subsection (1) or (1A);

d references to the effective date of a transaction—

i in relation to the withdrawal of relief under any of the provisions mentioned in subsection (1), are to be read as references to the date on which the disqualifying event occurs, and

ii in relation to the withdrawal of relief under any of the provisions mentioned in subsection (1A), are to be read as references to the relevant date (see subsections (1B) and (1C));

e where, by virtue of subsection (1D), a return is to be made by the relevant successor, references to the purchaser are to be read as references to the relevant successor;

f paragraph 36(5A) is to be read as if it also permitted an appeal under paragraph 35(1)(e) on the ground that no further return is required.

4 In this section “the disqualifying event” means—

za in relation to the withdrawal of relief under Schedule 6A, an event mentioned in paragraph (a), (b) or (c) of paragraph 11(2), (3), (4) or (5) of that Schedule;

a in relation to the withdrawal of group relief, the purchaser ceasing to be a member of the same group as the vendor within the meaning of Part 1 of Schedule 7;

b in relation to the withdrawal of reconstruction or acquisition relief, the change of control of the acquiring company mentioned in paragraph 9(1)(a) of Schedule 7 or, as the case may be, the event mentioned in paragraph 11(1)(a) or (2)(a) of that Schedule;

ba in relation to the withdrawal of PAIF seeding relief—

i the purchaser ceasing to be a property AIF as mentioned in paragraph 5 of Schedule 7A,

ii a person making a relevant disposal of units as mentioned in paragraph 7 of that Schedule, or

iii the grant of permission to a non-qualifying individual to occupy a dwelling as mentioned in paragraph 8 of that Schedule;

bb in relation to the withdrawal of co-ownership scheme seeding relief—

i the purchaser ceasing to be a co-ownership ^F1217... contractual scheme as mentioned in paragraph 13 of Schedule 7A,

ii a person making a relevant disposal of units as mentioned in paragraph 17 of that Schedule, or

iii the grant of permission to a non-qualifying individual to occupy a dwelling as mentioned in paragraph 18 of that Schedule;

c in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraph 2(3) or 3(2) of Schedule 8.

4A Terms used in paragraph (eb) of subsection (1B) which are defined for the purposes of Schedule 6C have the same meaning in that paragraph as they have in that Schedule.

4B Paragraph 10 of Schedule 6C applies for the purposes of subsection (1B)(eb) as it applies for the purposes of paragraph 8 of that Schedule.

^F10955 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 In subsections (1C), (1D) and (3)(e) (which relate to the withdrawal of relief under paragraph 5L of Schedule 4A) “the relevant successor” means the person who is the most recent successor in the chain of succession at the time relief is withdrawn (and that person could be the first successor, the second successor or a subsequent successor).

7 Terms used in subsections (1C) and (6) which are defined for the purposes of paragraph 5L of Schedule 4A have the same meaning in those subsections as they have in that paragraph.

^C3281ZA Alternative finance arrangements: return where relief withdrawn¶

1 Where relief given in respect of a transaction entered into under alternative finance arrangements is withdrawn to any extent under any of paragraphs 6D, 6F, 6G , 6H or 6I of Schedule 4A (higher rate of tax: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for special tax sites) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies—

a the relevant person must deliver a return to HMRC before the end of the period of 30 days after the date of the disqualifying event;

b the return must contain a self-assessment of the additional tax chargeable as a result of the withdrawal of the relief;

c the tax so chargeable is calculated according to the effective date of the transaction in respect of which the relief was allowed.

2 The provisions of Schedule 10 (returns, assessments and other matters) apply for the purposes of this section with the following modifications—

a references to a return under section 76 (general requirement to deliver land transaction return) are to be read as references to a return under subsection (1);

b references to the transaction to which a return relates are to be read as references to the withdrawal of relief in respect of which the return is required under subsection (1);

c references to a chargeable transaction to which (as yet) no return relates are to be read as references to the withdrawal of relief under any of the provisions mentioned in subsection (1);

d references to the effective date of a transaction are to be read as references to the date of the disqualifying event;

e references to the purchaser are to be read as references to the relevant person so far as that is necessary as a result of subsection (1) of this section or section 85(3) (payment of additional tax by relevant person where relief withdrawn);

f paragraph 36(5A) is to be read as if it also permitted an appeal under paragraph 35(1)(e) on the ground that no further return is required.

3 In this section “the date of the disqualifying event” means —

a where the relief was given under paragraph 5, 5B, 5C, 5D or 5F of Schedule 4A, the first day in the control period on which a relevant requirement was not met;

b where the relief was given under paragraph 5FA of Schedule 4A, the date determined in accordance with subsection (5A).

c where the relief was given under Part 2 of Schedule 6C, the last day in the control period on which the qualifying land is used exclusively in a qualifying manner.

4 In subsection (3)(a) “relevant requirement” means—

a where the relief was given under paragraph 5 of Schedule 4A (businesses of letting, trading in or redeveloping properties), a requirement under paragraph 5G(3) of that Schedule;

b where the relief was given under paragraph 5B of that Schedule (trades involving making a dwelling available to the public), a requirement under paragraph 5H(3) of that Schedule;

c where the relief was given under paragraph 5C of that Schedule (financial institutions acquiring dwellings in the course of lending), a requirement under paragraph 5I(3) of that Schedule;

d where the relief was given under paragraph 5D of that Schedule (dwellings for occupation by certain employees etc), a requirement under paragraph 5J(3) of that Schedule;

e where the relief was given under paragraph 5F of that Schedule (farmhouses), a requirement under paragraph 5K(3) of that Schedule.

5 In subsection (3)(a) “the control period” has the same meaning as in paragraph 5G, 5H, 5I, 5J or 5K (as the case requires) of Schedule 4A.

5A For the purposes of subsection (3)(b) (relief withdrawn because the conditions in paragraph 6I(2) of Schedule 4A are met), the date is—

a where paragraph 6I(3) of Schedule 4A does not apply, the first day in the period mentioned in paragraph 6I(2)(a) of that Schedule on which the relevant person is not a qualifying housing body;

b where paragraph 6I(3) or (6) of that Schedule applies and relief is withdrawn because condition A in paragraph 6I(4) of that Schedule is met, the day of succession of the relevant successor;

c where paragraph 6I(3) or (6) of that Schedule applies and relief is withdrawn because condition B in paragraph 6I(5) of that Schedule is met, the first day in the part of the control period that falls after the day of succession of the relevant successor on which the relevant successor is not a qualifying housing body.

6 In this section—

“alternative finance arrangements” means any arrangements such as are mentioned in section 71A, 72, 72A or 73;
“the relevant person” means—
1. the person (other than the financial institution) who entered into the arrangements in question, or
2. where relief is withdrawn to any extent under paragraph 6I of Schedule 4A in a case to which paragraph 6I(3) or (6) applies, the relevant successor;
“the relevant successor” means the person who is the most recent successor in the chain of succession at the time relief is withdrawn (and that person could be the first successor, the second successor or a subsequent successor).

6A Terms used in paragraph (c) of subsection (3) which are defined for the purposes of Schedule 6C have the same meaning in that paragraph as they have in that Schedule (as modified by paragraph 11 of that Schedule).

6B Paragraph 10 of Schedule 6C (as modified by paragraph 11 of that Schedule) applies for the purposes of subsection (3)(c) as it applies for the purposes of paragraph 8 of that Schedule.

7 Terms used in subsection (5A), and in the definition of “the relevant successor” in subsection (6), which are defined for the purposes of paragraph 6I of Schedule 4A have the same meaning in those provisions as they have in that paragraph.

81A Return or further return in consequence of later linked transaction¶

1 Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that the earlier transaction becomes notifiable, the purchaser under the earlier transaction must deliver a return in respect of that transaction before the end of the period of 14 days after the effective date of the later transaction.

1A Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that—

a tax is payable in respect of the earlier transaction where none was payable before and subsection (1) does not apply, or

b additional tax is payable in respect of the earlier transaction,

the purchaser under the earlier transaction must deliver a further return in respect of that transaction before the end of the period of 30 days after the effective date of the later transaction.

1B For the purposes of subsections (1) and (1A), any tax or additional tax payable is calculated according to the effective date of the earlier transaction.

1C Where a purchaser is required to deliver a return under subsection (1) or a further return under subsection (1A)—

a that return must include a self-assessment of the amount of tax chargeable as a result of the later transaction, and

b the tax or additional tax payable must be paid not later than the filing date for that return.

2 The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a return under section 76 (general requirement to deliver land transaction return), with the following adaptations—

a in paragraph 5 (formal notice to deliver return), the requirement in sub-paragraph (2)(a) that the notice specify the transaction to which it relates shall be read as requiring both the earlier and later transactions to be specified;

b references to the effective date of the transaction to which the return relates shall be read as references to the effective date of the later transaction.

3 This section does not affect any requirement to make a return under section 76 in respect of the later transaction.

81B Declaration by person authorised to act on behalf of individual¶

1 This section applies to the declaration mentioned in paragraph 1(1)(c) of Schedule 10 ^F314... (declaration that return ^F314... is correct and complete).

2 The requirement that an individual make such a declaration (alone or jointly with others) is treated as met if a declaration to that effect is made by a person authorised to act on behalf of that individual in relation to the matters to which the return or certificate relates.

3 For the purposes of this section a person is not regarded as authorised to act on behalf of an individual unless he is so authorised by a power of attorney in writing, signed by that individual.In this subsection as it applies in Scotland “power of attorney” includes factory and commission.

4 Nothing in this section affects the making of a declaration in accordance with—

a section 100(2) (persons through whom a company acts), or

^F746b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82 ^I38Loss or destruction of, or damage to, return etc¶

1 This section applies where—

a a return delivered to the Inland Revenue, or

b any other document relating to tax made by or provided to the Inland Revenue,

has been lost or destroyed, or been so defaced or damaged as to be illegible or otherwise useless.

2 The Inland Revenue may treat the return as not having been delivered or the document as not having been made or provided.

3 Anything done on that basis shall be as valid and effective for all purposes as it would have been if the return had not been made or the document had not been made or provided.

4 But if as a result a person is charged with tax and he proves to the satisfaction of the tribunal that he has already paid tax in respect of the transaction in question, relief shall be given, by reducing the charge or by repayment as the case may require.

82A Claims not included in returns¶

Schedule 11A has effect with respect to claims not included in returns.

83 ^I39Formal requirements as to assessments, penalty determinations etc¶

1 An assessment, determination, notice or other document required to be used in assessing, charging, collecting and levying tax or determining a penalty under this Part must be in accordance with the forms prescribed from time to time by the Board and a document in the form so prescribed and supplied or approved by the Board is valid and effective.

2 Any such assessment, determination, notice or other document purporting to be made under this Part is not ineffective—

a for want of form, or

b by reason of any mistake, defect or omission in it,

if it is substantially in conformity with this Part and its intended effect is reasonably ascertainable by the person to whom it is directed.

3 The validity of an assessment or determination is not affected—

a by any mistake in it as to—

i the name of a person liable, or

ii the amount of the tax charged, or

b by reason of any variance between the notice of assessment or determination and the assessment or determination itself.

84 ^I40Delivery and service of documents¶

1 A notice or other document to be served under this Part on a person may be delivered to him or left at his usual or last known place of abode.

2 A notice or other document to be given, served or delivered under this Part may be served by post.

3 For the purposes of section 7 of the Interpretation Act 1978 (c. 30) (general provisions as to service by post) any such notice or other document to be given or delivered to, or served on, any person by the Inland Revenue is properly addressed if it is addressed to that person—

a in the case of an individual, at his usual or last known place of residence or his place of business;

b in the case of a company—

i at its principal place of business,

ii if a liquidator has been appointed, at his address for the purposes of the liquidation, or

iii at any place prescribed by regulations made by the Inland Revenue.

Liability for and payment of tax¶

85 ^I41Liability for tax¶

1 The purchaser is liable to pay the tax in respect of a chargeable transaction.

2 As to the liability of purchasers acting jointly see—

section 103(2)(c) (joint purchasers);
Part 2 of Schedule 15 (partners); and
paragraph 5 of Schedule 16 (trustees).

2A Where relief is withdrawn to any extent under paragraph 5L of Schedule 4A (qualifying housing co-operatives) in a case to which paragraph 5L(4) or (7) applies—

a subsection (1) does not apply in relation to the additional tax payable as a result of the withdrawal of the relief, and

b the relevant successor is liable to pay that additional tax.

2B In subsection (2A) “the relevant successor” has the same meaning as it has in subsections (1C), (1D) and (3)(e) of section 81 (see subsections (6) and (7) of that section).

3 Where relief given in respect of a transaction entered into under alternative finance arrangements is withdrawn to any extent under any of paragraphs 6D, 6F, 6G , 6H and 6I of Schedule 4A (higher rate: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for special tax sites) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies—

a subsection (1) does not apply in relation to the additional tax payable as a result of the withdrawal of the relief, and

b the relevant person is liable to pay that additional tax.

4 In subsection (3) “the relevant person” has the same meaning as in section 81ZA (see subsections (6) and (7) of that section).

86 ^I42Payment of tax¶

1 Tax payable in respect of a land transaction must be paid not later than the filing date for the land transaction return relating to the transaction.

2 Tax payable as a result of the withdrawal of relief under—

za any of paragraphs 5G to 5L of Schedule 4A (higher rate for certain transactions),

zb Part 3 of Schedule 6C (relief for special tax sites), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies,

a Part 1 of Schedule 7 (group relief),

b Part 2 of that Schedule (reconstruction or acquisition relief), ^F916...

ba Part 1 of Schedule 7A (PAIF seeding relief),

bb Part 2 of Schedule 7A (co-ownership scheme seeding relief), or

c Schedule 8 (charities relief),

must be paid not later than the filing date for the return relating to the withdrawal (see section 81).

2A Tax payable as a result of a withdrawal of relief under any of paragraphs 6D, 6F, 6G , 6H and 6I of Schedule 4A (higher rate: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for special tax sites) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies must be paid not later than the filing date for the return relating to the withdrawal (see section 81ZA(1)).

3 Tax payable as a result of the amendment of a return must be paid forthwith or, if the amendment is made before the filing date for the return, not later than that date.

4 Tax payable in accordance with a determination or assessment by the Inland Revenue must be paid within 30 days after the determination or assessment is issued.

5 The above provisions are subject to—

a section 90 (application to defer payment of tax in case of contingent or uncertain consideration), ^F1219...

b paragraphs 39 and 40 of Schedule 10 (postponement of payment pending determination of appeal) , and

c regulation 31 of the Co-ownership Contractual Schemes (Tax) Regulations 2025 (withdrawal of seeding relief: application to postpone payment of tax where appeal against relevant decisions).

5A The above provisions are also subject to paragraph 7 of Schedule 61 to the Finance Act 2009 (payment of tax where land ceases to qualify for relief in respect of alternative finance investment bonds).

6 This section does not affect the date from which interest is payable (as to which, see section 87).

87 ^I43Interest on unpaid tax¶

1 Interest is payable on the amount of any unpaid tax from the end of the period of 30 days after the relevant date until the tax is paid.

1A But where the relevant date is determined by subsection (3)(aa), (aaa), (ab) or (c) or section 87A(4) or (6), and a return is required to be delivered before the end of the period of 14 days after that relevant date, interest is instead payable on the amount of any unpaid tax from the end of that period until the tax is paid.

2 The Inland Revenue may by regulations amend subsection (1) or (1A) so as to make interest run from the end of such shorter period after the relevant date as may be prescribed or, if the regulations so provide, from that date.

3 For the purposes of this section “the relevant date” is—

za in the case of an amount payable because relief is withdrawn under any of paragraphs 5G to 5L of Schedule 4A (higher rate for certain transactions), the date which is the relevant date for the purposes of section 81(1A);

zb in the case of an amount payable because relief is withdrawn under any of paragraphs 6D, 6F, 6G, 6H and 6I of Schedule 4A, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section);

a in the case of an amount payable because relief is withdrawn under—

ia Schedule 6A (relief for certain acquisitions of residential property),

i Part 1 of Schedule 7 (group relief),

ii Part 2 of that Schedule (reconstruction or acquisition relief), ^F896...

iia paragraph 5, 7 or 8 of Schedule 7A (PAIF seeding relief),

iib paragraph 13, 17 or 18 of Schedule 7A (co-ownership scheme seeding relief), or (except in a case to which section 87A applies)

iii Schedule 8 (charities relief),

the date of the disqualifying event;

^F1173aza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

azaa in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for special tax sites), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies, the date which is the relevant date for the purposes of section 81(1A);

azab in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for special tax sites) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section);

azb in the case of an amount payable under paragraph 6(3) of Schedule 7A (PAIF seeding relief: portfolio test), the first time mentioned in paragraph 6(3)(a) or (b) at which the portfolio test was not met;

azc in the case of an amount payable under paragraph 14(1) of Schedule 7A (co-ownership scheme seeding relief: genuine diversity of ownership condition) because the genuine diversity of ownership condition was not met at a time mentioned in paragraph 14(1)(b) or (c), the first time mentioned in paragraph 14(1)(b) or (c) at which that condition was not met;

azd in the case of an amount payable under paragraph 16(3) of Schedule 7A (co-ownership scheme seeding relief: portfolio test), the first time mentioned in paragraph 16(3)(a) or (b) at which the portfolio test was not met;

aa in the case of an amount payable under section 81A in respect of an earlier transaction because of the effect of a later linked transaction, the effective date of the later transaction;

aaa in the case of an amount payable under paragraph 3(3) of Schedule 17A (leases that continue after a fixed term) by reason of the continuation of a lease for a period (or further period) under paragraph 3(2) or (6) of that Schedule, the final day of the period (or further period),

ab in the case of an amount payable under paragraph ^F807... 4(3) of Schedule 17A (^F807... treatment of leases for an indefinite term), the day on which the lease becomes treated as being for a longer fixed term;

b in the case of a deferred payment under section 90, the date when the deferred payment is due;

c in any other case, the effective date of the transaction.

4 In subsection (3)(a) “the disqualifying event” has the same meaning as in section 81(4) (except in a case to which section 87A applies).

5 Subsection (3)(c) applies in a case within section 51 (contingent, uncertain or unascertained consideration) if payment is not deferred under section 90, with the result that interest on any tax payable under section 80 (adjustment where contingency ceases or consideration is ascertained) runs from the effective date of the transaction.

6 If an amount is lodged with the Inland Revenue in respect of the tax, the amount on which interest is payable is reduced by that amount.

7 Interest is calculated at the rate applicable under section 178 of the Finance Act 1989 (c. 26) (power of Treasury to prescribe rates of interest).

87A Interest on unpaid tax: cases involving Reserved Investor Fund (Contractual Schemes)¶

1 This section makes provision about the meaning of “relevant date” for the purposes of section 87 in the cases set out below where co-ownership seeding relief in relation to a land transaction has been withdrawn under paragraph 13 of Schedule 7A as a result of the purchaser ceasing to be a Reserved Investor Fund (Contractual Scheme) (and, accordingly, ceasing to be a co-ownership contractual scheme).

2 In those cases this section applies instead of section 87(3)(a)(iib) for the purposes of determining the relevant date.

3 The first case is where—

a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of breaching the ownership requirement or the restriction requirement, and

b the effective date of the relevant land transaction fell before the start of the cure period that applied in relation to the breach,

and in such a case the “relevant date” is the date on which the breach mentioned in paragraph (a) first occurred.

4 The second case is where—

a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of breaching the ownership requirement or the restriction requirement, and

b the effective date of the relevant land transaction fell within the cure period that applied in relation to the breach,

and in such a case the “relevant date” is the effective date of the relevant land transaction.

5 The third case is where—

a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) as a result of ceasing to meet the UK property rich condition in regulation 12 of the 2025 Regulations, and

b regulation 19 of those Regulations applied in relation to the scheme,

and in such a case the “relevant date” means the date on which regulation 19 first applied in relation to the scheme.

6 The fourth case is where—

a the purchaser ceases to be a Reserved Investor Fund (Contractual Scheme) by virtue of the scheme no longer being able to rely on regulation 9 of the 2025 Regulations to meet the ownership requirement, and

b the effective date of the relevant land transaction fell at a time when the scheme was relying on that regulation to meet the ownership requirement,

and in such a case the “relevant date” means the effective date of the relevant land transaction.

7 In this section—

“the 2025 Regulations” means the Co-ownership Contractual Schemes (Tax) Regulations 2025;
“cure period”—
1. in relation to a breach of the ownership requirement, means—
  1. “the 9 month period” that applies in relation to the breach under regulation 16 of the 2025 Regulations (as defined in that regulation), or
  2. if a notice is given in relation to the breach under paragraph (2) of that regulation, the period beginning with the day on which the breach occurred and ending on the day on which the notice is given;
2. in relation to a breach of the restriction requirement, means—
  1. “the 9 month period” that applies in relation to a breach under regulation 18 of the 2025 Regulations (as defined in that regulation), or
  2. if a notice is given in relation to the breach under paragraph (3) of that regulation, the period beginning with the day on which the breach occurred and ending on the day on which the notice is given;
“ownership requirement” has the meaning given in regulation 5 of the 2025 Regulations;
“relevant land transaction” means the land transaction to which the withdrawal of seeding relief relates;
“restriction requirement” has the meaning given in regulation 10(1) of the 2025 Regulations;
“UK property rich condition” has the meaning given in regulation 12 of the 2025 Regulations.

88 ^I44Interest on penalties¶

A penalty under this Part shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the date it is determined until payment.

89 ^I45Interest on repayment of tax overpaid etc¶

1 A repayment by the Inland Revenue to which this section applies shall be made with interest at the rate applicable under section 178 of the Finance Act 1989 for the period between the relevant time (as defined below) and the date when the order for repayment is issued.

2 This section applies to—

a any repayment of tax, and

b any repayment of a penalty under this Part.

In that case the relevant time is the date on which the payment of tax or penalty was made.

3 This section also applies to a repayment by the Inland Revenue of an amount lodged with them in respect of the tax payable in respect of a transaction. In that case the relevant time is the date on which the amount was lodged with them.

4 No interest is payable under this section in respect of a payment made in consequence of an order or judgment of a court having power to allow interest on the payment.

5 Interest paid to any person under this section is not income of that person for any tax purposes.

90 ^I46Application to defer payment in case of contingent or uncertain consideration¶

1 The purchaser may apply to the Inland Revenue to defer payment of tax in a case where the amount payable depends on the amount or value of chargeable consideration that—

a at the effective date of the transaction is contingent or uncertain, and

b falls to be paid or provided on one or more future dates of which at least one falls, or may fall, more than six months after the effective date of the transaction.

2 The Inland Revenue may make provision by regulations for carrying this section into effect.

3 The regulations may in particular—

a specify when an application is to be made;

b impose requirements as to the form and contents of an application;

c require the applicant to provide such information as the Inland Revenue may reasonably require for the purposes of determining whether to accept an application;

d specify the grounds on which an application may be refused;

e specify the procedure for reaching a decision on an application;

f make provision for postponing payment of tax when an application has been made;

g provide for an appeal to the tribunal against a refusal to accept an application, and make provision in relation to such an appeal corresponding to any provision made in relation to appeals under Part 7 of Schedule 10 (appeals against Revenue decisions on tax);

h provide for the effect of accepting an application;

i require the purchaser to make a return or further return, and to make such payments or further payments of tax as may be specified, in such circumstances as may be specified.

4 The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a land transaction return.

5 An application under this section does not affect the purchaser’s obligations as regards payment of tax in respect of chargeable consideration that has already been paid or provided or is not contingent and whose amount is ascertained or ascertainable at the time the application is made.This applies as regards both the time of payment and the calculation of the amount payable.

6 Regulations under this section may provide that where—

a a payment is made as mentioned in subsection (5), and

b an application under this section is accepted in respect of other chargeable consideration taken into account in calculating the amount of that payment,

section 80 (adjustment where contingency ceases or consideration is ascertained) does not apply in relation to the payment and, instead, any necessary adjustment shall be made in accordance with the regulations.

7 This section does not apply so far as the consideration consists of rent.

91 ^I47Collection and recovery of tax etc¶

1 The provisions of Schedule 12 have effect with respect to the collection and recovery of tax.

In that Schedule—

Part 1 contains general provisions, and
Part 2 relates to court proceedings.

2 The provisions of that Schedule have effect in relation to the collection and recovery of any unpaid amount by way of—

a penalty under this Part, or

b interest under this Part (on unpaid tax or penalty),

as if it were an amount of unpaid tax.

92 ^I48Payment by cheque¶

For the purposes of this Part where—

a payment to the Inland Revenue is made by cheque, and

b the cheque is paid on its first presentation to the banker on whom it is drawn,

the payment is treated as made on the day on which the cheque was received by the Inland Revenue.

Compliance¶

93 ^I49Information powers¶

1 Schedule 13 has effect with respect to the powers of the Inland Revenue to call for documents and information for the purposes of stamp duty land tax.

2 In that Schedule—

^F548. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^F548. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^F778...
^F778...
^F548. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part 6 provides for an order of a judicial authority for the delivery of documents;
^F548. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part 8 relates to falsification etc of documents.

^F7793 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7795 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7796 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F58794 Power to inspect premises¶

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

95 ^I50Offence of fraudulent evasion of tax¶

1 A person commits an offence if he is knowingly concerned in the fraudulent evasion of tax by him or any other person.

2 A person guilty of an offence under this section is liable—

a on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;

b on conviction on indictment, to imprisonment for a term not exceeding 14 years or a fine, or both.

^F78196 Penalty for assisting in preparation of incorrect return etc¶

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

97 ^I51Power to allow further time and reasonable excuse for failure¶

1 For the purposes of this Part a person shall be deemed not to have failed to do anything required to be done within a limited time if he did it within such further time, if any, as the Inland Revenue may allow.

2 Where a person had a reasonable excuse for not doing anything required to be done for the purposes of this Part—

a he shall be deemed not to have failed to do it unless the excuse ceased, and

b after the excuse ceased, he shall be deemed not to have failed to do it if he did it without unreasonably delay after the excuse had ceased.

98 ^I52Admissibility of evidence not affected by offer of settlement etc¶

1 Statements made or documents produced by or on behalf of a person are not inadmissible in proceedings to which this section applies by reason only that it has been drawn to his attention—

a that where serious tax fraud has been committed the Board may accept a money settlement and that the Board will accept such a settlement, and will not pursue a criminal prosecution, if he makes a full confession of all tax irregularities, or

b that the extent to which he is helpful and volunteers information is a factor that will be taken into account in determining the amount of any penalty,

and that he was or may have been induced thereby to make the statements or produce the documents.

2 The proceedings to which this section applies are—

a any criminal proceedings against the person in question for any form of fraudulent conduct in connection with or in relation to tax;

b any proceedings against him for the recovery of any tax due from him;

c any proceedings for a penalty or on appeal against the determination of a penalty.

99 ^I53General provisions about penalties¶

1 Schedule 14 has effect with respect to the determination of penalties under this Part and related appeals.

2 The Board may in their discretion mitigate a penalty under this Part, or stay or compound any proceedings for the recovery of such a penalty.They may also, after judgment, further mitigate or entirely remit the penalty.

2A Where a person is liable to more than one tax-related penalty in respect of the same land transaction, each penalty after the first shall be reduced so that his liability to such penalties, in total, does not exceed the amount of whichever is (or, but for this subsection, would be) the greatest one.

3 Nothing in the provisions of this Part relating to penalties affects any criminal proceedings for an offence.

Application of provisions¶

100 ^I54Companies¶

1 In this Part “company”, except as otherwise expressly provided, means any body corporate or unincorporated association, but does not include a partnership.

2 Everything to be done by a company under this Part shall be done by the company acting through—

a the proper officer of the company, or

b another person having for the time being having the express, implied or apparent authority of the company to act on its behalf for the purpose.

Paragraph (b) does not apply where a liquidator has been appointed for the company.

3 Service on a company of any document under or in pursuance of this Part may be effected by serving it on the proper officer.

4 Tax due from a company that—

a is not a body corporate, or

b is incorporated under the law of a country or territory outside the United Kingdom,

may, without prejudice to any other method of recovery, be recovered from the proper officer of the company.

5 The proper officer may retain out of any money coming into his hands on behalf of the company sufficient sums to pay that tax and, so far as he is not so reimbursed, he is entitled to be indemnified by the company in respect of the liability imposed on him.

6 For the purposes of this Part—

a the proper officer of a body corporate is the secretary, or person acting as secretary, of the company, and

b the proper officer of an unincorporated association, or of a body corporate that does not have a proper officer within paragraph (a), is the treasurer, or person acting as treasurer, of the company.

This subsection does not apply if a liquidator or administrator has been appointed for the company.

7 If a liquidator or administrator has been appointed for the company, then, for the purposes of this Part—

a the liquidator or, as the case may be, the administrator is the proper officer, and

b if two or more persons are appointed to act jointly or concurrently as the administrator of the company, the proper officer is—

i such one of them as is specified in a notice given to the Inland Revenue by those persons for the purposes of this section, or

ii where the Inland Revenue is not so notified, such one or more of those persons as the Inland Revenue may designate as the proper officer for those purposes.

101 ^I55Unit trust schemes¶

1 This Part (with the exception of the provision mentioned in subsection (7) below) applies in relation to a unit trust scheme as if—

a the trustees were a company, and

b the rights of the unit holders were shares in the company.

2 Each of the parts of an umbrella scheme is regarded for the purposes of this Part as a separate unit trust scheme and the scheme as a whole is not so regarded.

3 An “umbrella scheme” means a unit trust scheme—

a that provides arrangements for separate pooling of the contributions of participants and the profits or income out of which payments are to be made for them, and

b under which the participants are entitled to exchange rights in one pool for rights in another.

A “part” of an umbrella scheme means such of the arrangements as relate to a separate pool.

4 In this Part, subject to any regulations under subsection (5)—

“unit trust scheme” has the same meaning as in the Financial Services and Markets Act 2000 (c. 8), and
“unit holder” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme.

5 The Treasury may by regulations provide that a scheme of a description specified in the regulations is to be treated as not being a unit trust scheme for the purposes of this Part.Any such regulations may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.

6 Section 620 of the Corporation Tax Act 2010 (court investment funds treated as authorised unit trusts) applies for the purposes of this Part as it applies for the purposes of that Act, with the substitution for references to an authorised unit trust of references to a unit trust scheme.

7 An unit trust scheme is not to be treated as a company for the purposes of—

^F179...
Schedule 7 (group relief, reconstruction relief or acquisition relief) , or
Schedule 9A (increased rates for non-resident transactions).

102 ^I56Open-ended investment companies¶

1 The Treasury may by regulations make such provision as they consider appropriate for securing that the provisions of this Part have effect in relation to—

a open-ended investment companies of such description as may be prescribed in the regulations, and

b transactions involving such companies,

in a manner corresponding, subject to such modifications as the Treasury consider appropriate, to the manner in which they have effect in relation to unit trust schemes and transactions involving such trusts.

2 The regulations may, in particular, make provision—

a modifying the operation of any prescribed provision in relation to open-ended investment companies so as to secure that arrangements for treating the assets of such a company as assets comprised in separate pools are given an effect corresponding to that of equivalent arrangements constituting the separate parts of an umbrella scheme;

b treating the separate parts of the undertaking of an open-ended investment company in relation to which such provision is made as distinct companies for the purposes of this Part.

3 Regulations under this section may—

a make different provision for different cases, and

b contain such incidental, supplementary, consequential and transitional provision as the Treasury think fit.

4 In this section—

“open-ended investment company” has the meaning given by section 236 of the Financial Services and Markets Act 2000 (c. 8);
“prescribed” means prescribed by regulations under this section; and
“unit trust scheme” and “umbrella scheme” have the same meaning as in section 101.

102A Co-ownership ^F1200... contractual schemes¶

1 This section has effect for the purposes of this Part.

2 This Part, with the exception of Schedule 7 (see subsection (10)), applies in relation to a co-ownership ^F1227... contractual scheme as if—

a the scheme were a company, and

b the rights of the participants were shares in the company.

2A In this Part, a “co-ownership contractual scheme” means—

a a co-ownership authorised contractual scheme, or

b a Reserved Investor Fund (Contractual Scheme).

3 An “umbrella scheme” means a co-ownership ^F1230... contractual scheme—

a whose arrangements provide for separate pooling of the contributions of the participants and the profits or income out of which payments are made to them (“pooling arrangements”), and

b under which the participants are entitled to exchange rights in one pool for rights in another.

4 A “sub-scheme”, in relation to an umbrella scheme, means such of the pooling arrangements as relate to a separate pool.

5 Each of the sub-schemes of an umbrella scheme is regarded as a separate co-ownership ^F1233... contractual scheme, and the umbrella scheme as a whole is not so regarded.

6 In relation to a sub-scheme of an umbrella scheme—

a references to chargeable interests are references to such of the chargeable interests as under the pooling arrangements form part of the separate pool to which the sub-scheme relates, and

b references to the scheme documents are references to such parts of the documents as apply to the sub-scheme.

7 References to a co-ownership authorised contractual scheme are treated as including a collective investment scheme which—

a is constituted under the law of an EEA State ^F1077... by a contract,

b is managed by a body corporate incorporated under the law of any part of the United Kingdom or of an EEA State, and

c is authorised under the law of the EEA State mentioned in paragraph (a) in a way which makes it, under that law, the equivalent of a co-ownership authorised contractual scheme as defined in subsection (8),

provided that, apart from this section, no charge to tax is capable of arising to the scheme under this Part.

8 Subject to any regulations under subsection (9)—

“co-ownership authorised contractual scheme” means a co-ownership scheme which is authorised for the purposes of FSMA 2000 by an authorisation order in force under section 261D(1) of that Act;
“co-ownership scheme” has the same meaning as in FSMA 2000 (see section 235A of that Act);
“Reserved Investor Fund (Contractual Scheme)” has the meaning given by section 20 of the Finance (No.2) Act 2024.

9 The Treasury may by regulations provide that a scheme of a description specified in the regulations is to be treated as not being a co-ownership authorised contractual scheme or a Reserved Investor Fund (Contractual Scheme) for the purposes of this Part.Any such regulations may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.

10 A co-ownership ^F1237... contractual scheme is not to be treated as a company for the purposes of Schedule 7 (group relief, reconstruction relief or acquisition relief).

11 In relation to a land transaction in respect of which a co-ownership ^F1238... contractual scheme is treated as the purchaser by virtue of this section, references to the purchaser in the following provisions are to be read as references to the operator of the scheme—

a sections 76, 80, 81, 81A and 108(2) and Schedule 10 (provisions about land transaction returns and further returns, enquiries, assessments and related matters),

b section 85 (liability for tax), and

c section 90 (application to defer payment in case of contingent or unascertained consideration).

12 In this section—

“collective investment scheme” has the meaning given by section 235 of FSMA 2000;
“FSMA 2000” means the Financial Services and Markets Act 2000;
“operator”—
1. in relation to a co-ownership ^F1239... contractual scheme constituted under the law of the United Kingdom, has the meaning given by section 237(2) of FSMA 2000, and
2. in relation to a collective investment scheme treated as a co-ownership authorised contractual scheme by virtue of subsection (7) (equivalent EEA schemes), means the corporate body responsible for the management of the scheme (however described);
“participant” is to be read in accordance with section 235 of FSMA 2000.

103 ^I57Joint purchasers¶

1 This section applies to a land transaction where there are two or more purchasers who are or will be jointly entitled to the interest acquired.

2 The general rules are that—

a any obligation of the purchaser under this Part in relation to the transaction is an obligation of the purchasers jointly but may be discharged by any of them,

b anything required or authorised by this Part to be done in relation to the purchaser must be done by or in relation to all of them, and

c any liability of the purchaser under this Part in relation to the transaction (in particular, any liability arising by virtue of the failure to fulfil an obligation within paragraph (a)), is a joint and several liability of the purchasers.

These rules are subject to the following provisions.

3 If the transaction is a notifiable transaction, a single land transaction return is required.

4 The declaration required by paragraph 1(1)(c) of Schedule 10 ^F321... (declaration that return ^F321... is complete and correct) must be made by all the purchasers.

5 If the Inland Revenue give notice of an enquiry into the return ^F322...—

a the notice must be given to each of the purchasers,

b the powers of the Inland Revenue as to the production of documents and provision of information for the purposes of the enquiry are exercisable separately (and differently) in relation to each of the purchasers,

c any of the purchasers may apply for a direction that a closure notice be given (and all of them are entitled to to be parties to the application), and

d the closure notice must be given to each of the purchasers.

6 A Revenue determination or discovery assessment relating to the transaction must be made against all the purchasers and is not effective against any of them unless notice of it is given to each of them whose identity is known to the Inland Revenue.

7 In the case of an appeal arising from proceedings under this Part relating to the transaction—

a the appeal may be brought by any of the purchasers,

b notice of the appeal must be given to any of them by whom it is not brought,

c the agreement of all the purchasers is required if the appeal is to be settled by agreement,

d if it is not settled, and is notified to the tribunal, any of them are entitled to be parties to the appeal, and

e the tribunal’s decision on the appeal binds all of them.

7A In a case where subsection (7) applies and some (but not all) of the purchasers require HMRC to undertake a review under paragraph 36B or 36C of Schedule 10—

a notification of the review must be given by HMRC to each of the other purchasers whose identity is known to HMRC,

b any of the other purchasers may be a party to the review if they notify HMRC in writing,

c the notice of HMRC’s conclusions must be given to each of the other purchasers whose identity is known to HMRC,

d paragraph 36F of Schedule 10 (effect of conclusions of review) applies in relation to all of the purchasers, and

e any of the purchasers may notify the appeal to the tribunal under paragraph 36G.

8 This section has effect subject to—

the provisions of Schedule 15 relating to partnerships, and
the provisions of Schedule 16 relating to trustees.

104 ^I58Partnerships¶

1 Schedule 15 has effect with respect to the application of this Part in relation to partnerships.

2 In that Schedule—

Part 1 defines “partnership” and contains other general provisions, and
Part 2 deals with ordinary partnership transactions, and
Part 3 makes special provision for certain transactions.

105 ^I59Trustees¶

Schedule 16 has effect with respect to the application of this Part in relation to trustees.

106 ^I60Persons acting in a representative capacity etc¶

^F7371 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7382 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 The personal representatives of a person who is the purchaser under a land transaction—

a are responsible for discharging the obligations of the purchaser under this Part in relation to the transaction, and

b may deduct any payment made by them under this Part out of the assets and effects of the deceased person.

4 A receiver appointed by a court in the United Kingdom having the direction and control of any property is responsible for discharging any obligations under this Part in relation to a transaction affecting that property as if the property were not under the direction and control of the court.

107 ^I61Crown application¶

1 This Part binds the Crown, subject to the following provisions of this section.

2 A land transaction under which the purchaser is any of the following is exempt from charge:

Government
A Minister of the Crown
The Scottish Ministers
A Northern Ireland department
The Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government

Parliament etc
The Corporate Officer of the House of Lords
The Corporate Officer of the House of Commons
The Scottish Parliamentary Corporate Body
The Northern Ireland Assembly Commission
The National Assembly for Wales Commission

3 The powers conferred by Part 7 of Schedule 13 (entry with warrant to obtain information) are not exercisable in relation to premises occupied for the purposes of the Crown.

4 Nothing in this section shall be read as making the Crown liable to prosecution for an offence.

Supplementary provisions¶

108 ^I62Linked transactions¶

^I1021 Transactions are “linked” for the purposes of this Part if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them. Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this subsection

1A A transaction is not a linked transaction if —

a the transaction relates to land in Scotland, or

b the transaction relates to land in Wales (whether by virtue of section 48A(2) or otherwise).

2 Where there are two or more linked transactions with the same effective date, the purchaser, or all of the purchasers if there is more than one, may make a single land transaction return as if all of those transactions that are notifiable were a single notifiable transaction.

3 Where two or more purchasers make a single return in respect of linked transactions, section 103 (joint purchasers) applies as if—

a the transactions in question were a single transaction, and

b those purchasers were purchasers acting jointly.

4 This section is subject to section 47(1).

109 ^I63General power to vary this Part by regulations¶

1 The Treasury may if they consider it expedient in the public interest make provision by regulations for the variation of this Part in its application to land transactions of any description.

2 The power conferred by this section includes, in particular, power to alter—

a the descriptions of land transaction that are chargeable or notifiable;

b the descriptions of land transaction in respect of which tax is chargeable at any existing rate or amount, or in respect of which tax is calculated in accordance with any particular provision.

2A The power under subsection (2)(b) includes power to alter the conditions for the application to a chargeable transaction of paragraph 3 of Schedule 4A (higher rate for certain transactions), other than the condition that the transaction must be a high-value residential transaction.

3 The power conferred by this section does not, except as mentioned in subsections (2)(b) and (2A), include power to vary any threshold, rate or amount specified in—

a section 55 (amount of tax chargeable: general), ^F727...

aa section 74(1A) (exercise of collective rights by tenants of flats),

ab Schedule 4A (amount of tax chargeable: high-value interests in dwellings), or

b Schedule 5 (amount of tax chargeable: rent).

4 This section has effect subject to section 110 (approval of regulations by House of Commons).

5 Regulations under this section do not apply in relation to any transaction of which the effective date is after the end of—

a the period of 18 months beginning with the day on which the regulations were made, or

b such shorter period as may be specified in the regulations.

This does not affect the power to make further provision by regulations under this section to the same or similar effect.

6 Regulations under this section may include such supplementary, transitional and incidental provision as appears to the Treasury to be necessary or expedient.

7 The power conferred by this section may be exercised at any time after the passing of this Act.

110 ^I64Approval of regulations under general power¶

1 An instrument containing regulations under section 109 (general power to vary this Part by regulations) must be laid before the House of Commons after being made.

2 If the regulations are not approved by the House of Commons before the end of the period of 28 days beginning with the day on which they are made, they shall cease to have effect at the end of that period (if they have not already ceased to have effect under subsection (3)).

3 If on any day during that period of 28 days the House of Commons, in proceedings on a motion that (or to the effect that) the regulations be approved, comes to a decision rejecting the regulations, they shall cease to have effect at the end of that day.

4 In reckoning any such period of 28 days take no account of any time during which—

a Parliament is prorogued or dissolved, or

b the House of Commons is adjourned for more than four days.

5 Where regulations cease to have effect under this section, their ceasing to have effect is without prejudice to anything done in reliance on them.As to claims for repayment, see section 111.

^F9956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 This section does not apply to regulations containing only provision varying Schedule 6ZA or paragraph 16 of Schedule 9 which does not increase any person's liability to tax.

111 ^I65Claim for repayment if regulations under general power not approved¶

1 Where regulations cease to have effect under section 110, a claim may be made to the Inland Revenue for repayment of any tax, interest or penalty that would not have been payable but for the regulations.

2 Section 89 (interest on repayment of tax overpaid etc) applies to a repayment under this section.

3 A claim for repayment must be made within two years after the effective date of the transaction in question.

4 The Inland Revenue may make provision by regulations—

a for varying the time limit for making a claim;

b as to any other conditions that must be met before repayment is made.

112 ^I66Power to amend certain provisions before implementation¶

1 The Treasury may by regulations amend the following provisions of this Part—

a Schedule 5 (amount of tax chargeable: rent);

b subsection (2) of section 55 (amount of tax chargeable: general) so far as relating to the thresholds at which different rates of tax become payable.

^F7472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 A statutory instrument containing regulations under this section shall not be made unless a draft of the instrument has been laid before and approved by resolution of the House of Commons.

4 The power conferred by this section is not exercisable after the implementation date.

113 ^I67Functions conferred on “the Inland Revenue”¶

1 References in this Part to “the Inland Revenue” are to any officer of the Board, except as otherwise provided.

2 Any power of the Inland Revenue to make regulations is exercisable only by the Board.

3 In Schedule 10 (returns, assessments and other administrative matters)—

a functions of the Inland Revenue under these provisions are exercisable by the Board or an officer of the Board—

i paragraph 28 (discovery assessment),

ii paragraph 29 (assessment to recover excessive repayment);

b functions of the Inland Revenue under these provisions are functions of the Board—

i paragraph 33 (relief in case of double assessment),

^F621ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3A The following functions of the Inland Revenue under Schedule 11A (claims not included in returns) are functions of the Board—

a functions under paragraph 2(1) (form of claims),

b functions relating to a claim made to the Board.

4 Nothing in this section affects any provision of this Part that expressly confers functions on the Board, an officer of the Board, a collector or a specific officer of the Board.

114 ^I68Orders and regulations made by the Treasury or the Inland Revenue¶

1 Except as otherwise provided, any power of the Treasury or the Inland Revenue to make an order or regulations under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), is exercisable by statutory instrument.

2 Subsection (1) does not apply in relation to the power conferred by—

paragraph 8 of Schedule 5 to this Act (tax chargeable in respect of rent: power to prescribe temporal discount rate),
section 178(5) of the Finance Act 1989 (c. 26) (power to prescribe rates of interest).

^C23 Except as otherwise provided, a statutory instrument containing any order or regulations made by the Treasury or the Inland Revenue under this Part, or under any other enactments relating to stamp duty land tax (including enactments passed after this Act), shall be subject to annulment in pursuance of a resolution of the House of Commons.

4 Subsection (3) does not apply to a statutory instrument made under the power conferred by—

section 61(3) (compliance with planning obligations: power to add to list of public authorities);
paragraph 1(3) of Schedule 9 (right to buy transactions: power to add to list of relevant public sector bodies);
paragraph 2(2) of Schedule 19 (commencement and transitional provisions: power to appoint implementation date).

5 The first set of regulations under section 58B (new zero-carbon homes) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.

6 An order or regulations under this Part—

a may make provision having effect generally or only in specified cases or circumstances,

b may make different provision for different cases or circumstances, and

c may include incidental, consequential or transitional provision or savings.

^F468115 General and Special Commissioners, appeals and other proceedings¶

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

Interpretation etc¶

116 ^C23^I69Meaning of “residential property”¶

1 In this Part “residential property” means—

a a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use, and

b land that is or forms part of the garden or grounds of a building within paragraph (a) (including any building or structure on such land), or

c an interest in or right over land that subsists for the benefit of a building within paragraph (a) or of land within paragraph (b);and “non-residential property” means any property that is not residential property.This is subject to the rule in subsection (7) in the case of a transaction involving six or more dwellings.

2 For the purposes of subsection (1) a building used for any of the following purposes is used as a dwelling—

a residential accommodation for school pupils;

b residential accommodation for students, other than accommodation falling with subsection (3)(b);

c residential accommodation for members of the armed forces;

d an institution that is the sole or main residence of at least 90% of its residents and does not fall within any of paragraphs (a) to (f) of subsection (3).

3 For the purposes of subsection (1) a building used for any of the following purposes is not used as a dwelling—

a a home or other institution providing residential accommodation for children;

b a hall of residence for students in further or higher education;

c a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder;

d a hospital or hospice;

e a prison or similar establishment;

f a hotel or inn or similar establishment.

4 Where a building is used for a purpose specified in subsection (3), no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use.

5 Where a building that is not in use is suitable for use for at least one of the purposes specified in subsection (2) and at least one of those specified in subsection (3)—

a if there is one such use for which it is most suitable, or if the uses for which it is most suitable are all specified in the same sub-paragraph, no account shall be taken for the purposes of subsection (1)(a) of its suitability for any other use,

b otherwise, the building shall be treated for those purposes as suitable for use as a dwelling.

6 In this section “building” includes part of a building.

7 Where six or more separate dwellings are the subject of a single transaction involving the transfer of a major interest in, or the grant of a lease over, them, then, for the purposes of this Part as it applies in relation to that transaction, those dwellings are treated as not being residential property.

8 The Treasury may by order—

^C26a amend subsections (2) and (3) so as to change or clarify the cases where use of a building is, or is not to be, use of a building as a dwelling for the purposes of subsection (1);

b amend or repeal subsection (7) and the reference to that subsection in subsection (1).

Any such order may contain such incidental, supplementary, consequential or transitional provision as appears to the Treasury to be necessary or expedient.

117 ^I70Meaning of “major interest” in land¶

1 References in this Part to a “major interest” in land shall be construed as follows.

2 In relation to land in England ^F1011... , the references are to—

a an estate in fee simple absolute, or

b a term of years absolute,

whether subsisting at law or in equity.

^F7073 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 In relation to land in Northern Ireland, the references are to—

a any freehold estate, or

b any leasehold estate,

whether subsisting at law or in equity.

118 ^I71Meaning of “market value”¶

1 For the purposes of this Part “market value” shall be determined as for the purposes of the Taxation of Chargeable Gains Act 1992 (c. 12) (see sections 272 to 274 of that Act).

2 This is subject to paragraphs 7(7) and 17(7) of Schedule 7A (which define “market value” for certain purposes of PAIF seeding relief and co-ownership scheme seeding relief).

119 ^I72Meaning of “effective date” of a transaction¶

1 Except as otherwise provided, the effective date of a land transaction for the purposes of this Part is

a the date of completion, or

b such alternative date as the Commissioners for Her Majesty's Revenue and Customs may prescribe by regulations.

2 Other provision as to the effective date of certain descriptions of land transaction is made by—

section 44(4) (contract and conveyance: contract substantially performed without having been completed), ^F56...
section 44A(3) (contract providing for conveyance to third party),
section 45A(8) (contract providing for conveyance to third party: effect of transfer of rights),
section 46(3) (options and rights of pre-emption).
paragraph 5 of Schedule 2A,
paragraph 3(4) of Schedule 17A (leases that continue after a fixed term),
paragraph 12A(2) of Schedule 17A (agreement for lease followed by substantial performance),
paragraph 12B(3) of that Schedule (assignment of agreement for lease occurring after agreement substantially performed), and
^F708...

120 Further provisions relating to leases¶

Schedule 17A contains further provisions relating to leases.

121 ^I73Minor definitions¶

In this Part—

^F666. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^F667. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“employee” includes an office-holder and related expressions have a corresponding meaning;
“HMRC” means Her Majesty’s Revenue and Customs;
“jointly entitled” means—
1. in England ^F1012... , beneficially entitled as joint tenants or tenants in common,
2. ^F668. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. in Northern Ireland, beneficially entitled as joint tenants, tenants in common or coparceners;
“land” includes—
1. buildings and structures, and
2. land covered by water;
^F1174. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
^F669. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“statutory provision” means any provision made by or under an Act of Parliament, an Act of the Scottish Parliament or any Northern Ireland legislation;
^F670. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“tax”, unless the context otherwise requires, means tax under this Part.
“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

122 ^I74Index of defined expressions¶

In this Part the expressions listed below are defined or otherwise explained by the provisions indicated—

acquisition relief	Schedule 7, paragraph 8(1)
^F686. . .	^F686. . .
bare trust	Schedule 16, paragraph 1(2)
the Board (in relation to the Inland Revenue)	section 42(3)
chargeable consideration	section 50 and Schedule 4
chargeable interest	section 48(1)
chargeable transaction	section 49
charities relief	Schedule 8, paragraph 1(1)
closure notice	Schedule 10, paragraph 23(1) (in relation to a land transaction return); ^F323...
co-ownership scheme seeding relief	Schedule 7A, paragraph 10(1)
co-ownership authorised contractual scheme	section 102A
co-ownership contractual scheme	section 102A
company	section 100 (except as otherwise expressly provided)
^F687. . .	^F687. . .
contingent (in relation to consideration)	section 51(3)
delivery (in relation to a land transaction return)	Schedule 10, paragraph 2(2)
discovery assessment	Schedule 10, paragraph 28(1)
effective date (in relation to a land transaction)	section 119
employee	section 121
exempt interest	section 48(2) to (5)
filing date (in relation to a land transaction return)	Schedule 10, paragraph 2(1)
implementation date	Schedule 19, paragraph 2(2)
the Inland Revenue	section 113
jointly entitled	section 121
land	section 121
land transaction	section 43(1)
land transaction return	section 76(1)
lease (and related expressions)	Schedule 17A
linked transactions	section 108
main subject-matter (in relation to a land transaction)	section 43(6)
major interest (in relation to land)	section 117
market value	section 118
non-resident transaction	Schedule 9A, paragraph 2
notice of enquiry	Schedule 10, paragraph 12(1) (in relation to a land transaction return); ^F324...
notifiable (in relation to a land transaction)	section 77 (see too sections 71A(7) and 72A(7)) and paragraph 30 of Schedule 15
operator (in relation to a co-ownership authorised contractual scheme)	section 102A
PAIF seeding relief	Schedule 7A, paragraph 1(1)
partnership (and related expressions)	Schedule 15, paragraphs 1 to 4
purchaser	section 43(4)
^F874. . .	^F874. . .
reconstruction relief	Schedule 7, paragraph 7(1)
^F1175. . .	^F1175. . .
Reserved Investor Fund (Contractual Scheme)	section 102A
residential property	section 116
Revenue certificate	section 79(3)(a)
Revenue determination	Schedule 10, paragraph 25(1)
self-assessment	section 76(3)(a)
^F326. . .	^F326. . .
settlement	Schedule 16, paragraph 1(1) (except as otherwise expressly provided)
^F688. . .	^F688. . .
statutory provision	section 121
subject-matter (in relation to a land transaction)	section 43(6)
substantial performance (in relation to a contract)	section 44(5) to (7)
^F689. . .	^F689. . .
tax	section 121
tribunal	section 121
uncertain (in relation to consideration)	section 51(3)
unit holder	section 101(4)
unit trust scheme	section 101(4)
vendor	section 43(4) (see too section 45A(9) and paragraphs 8, 10 and 11 of Schedule 2A)

Final provisions¶

123 ^I75Consequential amendments¶

1 Schedule 18 contains certain amendments consequential on the provisions of this Part.

2 The Treasury may by regulations make such other amendments and repeals as appear to them appropriate in consequence of the provisions of this Part.

3 The regulations may, in particular, make such provision as the Treasury think fit for reproducing in relation to stamp duty land tax the effect of enactments providing for exemption from stamp duty.

124 ^I76Commencement and transitional provisions¶

Schedule 19 makes provision for and in connection with the coming into force of the provisions of this Part.

Part 5 Stamp duty¶

125 Abolition of stamp duty except on instruments relating to stock or marketable securities¶

1 Stamp duty is chargeable under Schedule 13 of the Finance Act 1999 (c. 16) only on instruments relating to stock or marketable securities.

2 Section 12 of the Finance Act 1895 (c. 16) (collection of stamp duty in cases of property vested by Act or purchased under statutory powers) does not apply to property other than stock or marketable securities.

3 This section shall be construed as one with the Stamp Act 1891 (c. 39).

4 Part 1 of Schedule 20 to this Act contains provisions supplementing this section and Part 2 of that Schedule provides for consequential amendments and repeals.

5 This section and that Schedule have effect—

a in relation to an instrument effecting a land transaction (or any duplicate or counterpart of such an instrument), if the transaction—

i is an SDLT transaction within the meaning of Schedule 19 to this Act (stamp duty land tax: commencement and transitional provisions), or

ii would be such a transaction but for an exemption or relief from stamp duty land tax;

b in relation to an instrument effecting a transaction other than a land transaction (or any duplicate or counterpart of such an instrument), if the instrument is executed on or after the implementation date for the purposes of stamp duty land tax (see paragraph 2(2) of that Schedule).

For this purpose an instrument effecting both a land transaction and a transaction other than a land transaction (or any duplicate or counterpart of such an instrument) is treated as if it were two instruments to which paragraph (a) and paragraph (b) above respectively applied.

6 Where in the case of an instrument effecting both a land transaction and a transaction other than a land transaction the result of applying subsection (5) is that stamp duty is chargeable on either or both of the deemed instruments, the enactments relating to stamp duty have effect as if—

a there were two instruments as mentioned in the closing words of that subsection,

b the consideration had been apportioned between them in a just and reasonable manner, and

c the amount found on that apportionment to be attributable to the chargeable instrument, or (as the case may be) to each of them, had been set forth distinctly in that instrument.

7 In subsections (5) and (6) “land transaction” has the same meaning as in Part 4 of this Act.

8 This section and Schedule 20 have effect subject to paragraph 31 of Schedule 15 to this Act (continued application of stamp duty in relation to certain partnership transactions).

126 Circumstances in which group relief withdrawn¶

1 Section 111 of the Finance Act 2002 (c. 23) (stamp duty: withdrawal of group relief) is amended as follows.

2 In subsection (1)(b) (circumstances in which relief withdrawn: transferee company ceasing to be member of group within two years) for “two years” substitute “ three years ”.

3 In subsection (1)(c) (circumstances in which relief withdrawn: transferee company holding estate or interest when it ceases to be member of group)—

a in the opening words—

i for “it ceases” substitute “ the transferee company ceases ”, and

ii for “it holds” substitute “ it or a relevant associated company holds ”;

b in sub-paragraph (i) for “to it” substitute “ to the transferee company ”; and

c for the closing words substitute “ and that has not subsequently been transferred at market value by a duly stamped instrument on which ad valorem duty was paid and in respect of which group relief was not claimed ”.

4 In subsection (3)—

a after “transferred” insert “ to the transferee company ”, and

b for “what the transferee company holds at the time it ceases to be a member” substitute “ what is held by that company or, as the case may be, that company and any relevant associated companies, at the time it or they cease to be members ”.

5 After subsection (4) insert—

6 In paragraph 4(3) of Schedule 34 to the Finance Act 2002 (c. 23) (withdrawal of group relief: supplementary provisions), in paragraph (b)—

a in the opening words—

i for “it ceases” substitute “ the transferee company ceases ”, and

ii for “it holds” substitute “ it or a relevant associated company (as defined in sub-paragraph (4) below) holds ”;

b in sub-paragraph (i) for “to it” substitute “ to the transferee company ”; and

7 In the closing words of that sub-paragraph, for the words from “as if” to the end substitute “ as if the transferee had then ceased to be a member of the same group as the transferor company and had then held the estate or interest referred to in paragraph (b). ”.

8 After that sub-paragraph insert—

9 This section applies to instruments executed after 14th April 2003.

10 But this section does not apply to an instrument giving effect to a contract made on or before 9th April 2003, unless—

a the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or

b the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract because of an assignment (or, in Scotland, assignation) or further contract made after that date.

11 This section shall be deemed to have come into force on 15th April 2003.

^F748127 Circumstances in which relief for company acquisitions withdrawn¶

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

^F749128 Exemption of certain leases granted by registered social landlords¶

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

^F750129 Relief for certain leases granted before section 128 has effect¶

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

130 Registered social landlords: treatment of certain leases granted between 1st January 1990 and 27 March 2000¶

1 This section applies to a lease in relation to which the following conditions are met—

a it is a lease of a dwelling to one or more individuals;

b it is for an indefinite term or is terminable by notice of a month or less;

c it was executed on or after 1st January 1990 and before 28th March 2000;

d at the time it was executed the rate or average rate of the rent (whether reserved as a yearly rent or not) was £5,000 a year or less; and

e the landlord’s interest has at any time before 26th June 2003 been held by a registered social landlord.

2 A lease to which this section applies (whether or not presented for stamping) shall be treated—

a for the purposes of section 14 of the Stamp Act 1891 (c. 39) (production of instrument in evidence) as it applies in relation to proceedings begun after the day on which this Act is passed, and

b for the purposes of section 17 of that Act (enrolment etc of instrument) as it applies to any act done after that day,

as if it had been duly stamped in accordance with the law in force at the time when it was executed.

^F7403 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7404 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7405 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 This section shall be construed as one with the Stamp Act 1891.

8 The reference in subsection (1) above to the landlord’s interest being held by a “registered social landlord” is to its being held by a body that—

a is registered in a register maintained under—

i Article 124 of the Housing (Northern Ireland) Order 1981 (S.I. 1981/156 (N.I. 3)),

ii section 3(1) of the Housing Associations Act 1985 (c. 69),

iii Article 14 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15)),

iv section 1(1) of the Housing Act 1996 (c. 52), or

v section 57 of the Housing (Scotland) Act 2001 (asp 10), or

b is a body corporate whose objects correspond to those of a housing association and which, pursuant to a contract with Scottish Homes, is registered in a register kept for the purposes by Scottish Homes.

^F7399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 6 Income tax and corporation tax: charge and rate bands¶

Income tax¶

^F220131 Charge and rates for 2003-04¶

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

^F221132 Indexed rate bands for 2003-04: PAYE deductions etc¶

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

Corporation tax¶

133 Charge and main rate for financial year 2004¶

Corporation tax shall be charged for the financial year 2004 at the rate of 30%.

^F589134 Small companies' rate and fraction for financial year 2003¶

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

135 Corporation tax starting rate and fraction for financial year 2003¶

For the financial year 2003—

a the corporation tax starting rate shall be 0%, and

b the fraction mentioned in section 13AA of the Taxes Act 1988 (marginal relief for small companies) shall be 19/400ths.

Part 7 Income tax, corporation tax and capital gains tax: general¶

Chargeable gains¶

157 Life insurance policies and deferred annuity contracts¶

1 For section 210 of the Taxation of Chargeable Gains Act 1992 (c. 12) substitute—

210 Life insurance and deferred annuities

1 This section has effect in relation to any policy of insurance or contract for a deferred annuity on the life of any person.

2 A gain accruing on a disposal of, or of an interest in, the rights conferred by the policy of insurance or contract for a deferred annuity is not a chargeable gain unless subsection (3) below applies.

3 This subsection applies if—

a (in the case of a disposal of the rights) the rights or any interest in the rights, or

b (in the case of a disposal of an interest in the rights) the rights, the interest or any interest from which the interest directly or indirectly derives (in whole or in part),

have or has at any time been acquired by any person for actual consideration (as opposed to consideration deemed to be given by any enactment relating to the taxation of chargeable gains).

4 For the purposes of subsection (3) above —

a (in the case of a policy of insurance) amounts paid under the policy by way of premiums, and

b (in the case of a contract for a deferred annuity) amounts paid under the contract, whether by way of premiums or as lump sum consideration,

do not constitute actual consideration.

5 And for those purposes actual consideration for—

a a disposal which is made by one spouse to the other or is an approved post-marriage disposal, or

b a disposal to which section 171(1) applies,

is to be treated as not constituting actual consideration.

6 For the purposes of subsection (5)(a) above a disposal is an approved post-marriage disposal if—

a it is made in consequence of the dissolution or annulment of a marriage by one person who was a party to the marriage to the other,

b it is made with the approval, agreement or authority of a court (or other person or body) having jurisdiction under the law of any country or territory or pursuant to an order of such a court (or other person or body), and

c the rights disposed of were, or the interest disposed of was, held by the person by whom the disposal is made immediately before the marriage was dissolved or annulled.

7 Subsection (8) below applies for the purposes of tax on chargeable gains where—

a (if that subsection did not apply) a loss would accrue on a disposal of, or of an interest in, the rights conferred by the policy of insurance or contract for a deferred annuity, but

b if sections 37 and 39 were disregarded, there would accrue on the disposal a loss of a smaller amount, a gain or neither a loss nor a gain.

8 If (disregarding those sections) a loss of a smaller amount would accrue, that smaller amount is to be taken to be the amount of the loss accruing on the disposal; and in any other case, neither a loss nor a gain is to be taken to accrue on the disposal.

9 But subsection (8) above does not affect the treatment for the purposes of tax on chargeable gains of the person who acquired rights, or an interest in rights, on the disposal.

10 The occasion of—

a the receipt of the sum or sums assured by the policy of insurance,

b the transfer of investments or other assets to the owner of the policy of insurance in accordance with the policy, or

c the surrender of the policy of insurance,

is for the purposes of tax on chargeable gains an occasion of a disposal of the rights (or of all of the interests in the rights) conferred by the policy of insurance.

11 The occasion of—

a the receipt of the first instalment of the annuity under the contract for a deferred annuity, or

b the surrender of the rights conferred by the contract for a deferred annuity,

is for the purposes of tax on chargeable gains an occasion of a disposal of the rights (or of all of the interests in the rights) conferred by the contract for a deferred annuity.

12 Where there is a disposal on the occasion of the receipt of the first instalment of the annuity under the contract for a deferred annuity—

a in the case of a disposal of the rights conferred by the contract, the consideration for the disposal is the aggregate of the amount or value of the first instalment and the market value at the time of the disposal of the right to receive the further instalments of the annuity, and

b in the case of a disposal of an interest in the rights, the consideration for the disposal is such proportion of that aggregate as is just and reasonable;

and no gain accruing on any subsequent disposal of, or of any interest in, the rights is a chargeable gain (even if subsection (3) above applies).

13 In this section “interest”, in relation to rights conferred by a policy of insurance or contract for a deferred annuity, means an interest as a co-owner of the rights (whether the rights are owned jointly or in common and whether or not the interests of the co-owners are equal).

2 This section has effect in relation to disposals on or after 9th April 2003.

158 Application of market value rule in case of exercise of option¶

1 In Chapter 3 of Part 4 of the Taxation of Chargeable Gains Act 1992 (c. 12) (miscellaneous provisions relating to options and other matters), after section 144 insert—

144ZA Application of market value rule in case of exercise of option

1 This section applies where—

a an option is exercised, so that by virtue of section 144(2) or (3) the grant or acquisition of the option and the transaction resulting from its exercise are treated as a single transaction, and

b section 17(1) (“the market value rule”) applies, or would apply but for this section, in relation to—

i the grant of the option,

ii the acquisition of the option (whether directly from the grantor or not) by the person exercising it, or

iii the transaction resulting from its exercise.

2 If the option binds the grantor to sell—

a the market value rule does not apply for determining the consideration for the sale, except, where the rule applies for determining the consideration for the option, to that extent (in accordance with section 144(2)(a));

b the market value rule does not apply for determining the cost to the person exercising the option of acquiring what is sold, except, where the rule applies for determining the cost of acquiring the option, to that extent (in accordance with section 144(3)(a)).

3 If the option binds the grantor to buy—

a the market value rule does not apply for determining the cost of acquisition incurred by the grantor, but without prejudice to its application (in accordance with section 144(2)(b)) where the rule applies for determining the consideration for the option;

b the market value rule does not apply for determining the consideration for the disposal of what is bought, but without prejudice to its application (in accordance with section 144(3)(b)) where the rule applies for determining the cost of the option.

4 To the extent that, by virtue of this section, the market value rule does not apply for determining an amount or value, the amount or value to be taken into account is (subject to section 120) the actual amount or value.

5 In this section “option” has the same meaning as in section 144.

2 This section applies in relation to the exercise of an option on or after 10th April 2003.

159 Reporting limits and annual exempt amount¶

1 The Taxation of Chargeable Gains Act 1992 (c. 12) is amended in accordance with Schedule 28 to this Act.

2 In that Schedule—

Part 1 makes provision as to the cases in which a return of information about chargeable gains is required,
Part 2 contains minor and consequential amendments of the provisions relating to the annual exempt amount, and
Part 3 provides for commencement.

^F328160 Taper relief: assets qualifying as business assets¶

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

161 Earn-out rights to be treated as securities unless contrary election¶

1 Section 138A of the Taxation of Chargeable Gains Act 1992 (c. 12) (use of earn-out rights for exchange of securities) is amended as follows.

2 In subsection (2) (seller’s right to elect for earn-out right to be treated as security of new company)—

a at the end of paragraph (a) insert “ and ”; and

b omit paragraph (c) (the seller’s right of election) and the word “and” immediately preceding it.

3 After subsection (2) insert—

4 In subsection (4) (election for corresponding treatment where old right extinguished in consideration of new right)—

a at the end of paragraph (c) insert “ and ”;

b omit paragraph (e) (right of election of person on whom the new right is conferred) and the word “and” immediately preceding it; and

c in the closing words, for “that person” substitute “ the person on whom the new right is conferred ”.

5 After subsection (4) insert—

6 The amendments made by this section have effect in relation to rights conferred on or after 10th April 2003.

162 Deferred unascertainable consideration: election for treatment of loss¶

1 After section 279 of the Taxation of Chargeable Gains Act 1992 insert—

279A Deferred unascertainable consideration: election for treatment of loss

1 Where—

a a person (“the taxpayer”) makes a disposal of a right to which this section applies (see subsection (2) below),

b on that disposal an allowable loss (“the relevant loss”) would, apart from section 279C, accrue to him in any year (“the year of the loss”), and

c the year of the loss is a year in which the taxpayer is within the charge to capital gains tax (see section 279B(1)),

the taxpayer may make an election under this section for the relevant loss to be treated as accruing in an earlier year in accordance with section 279C if condition 1 in subsection (3) below and condition 2 in subsection (5) below are satisfied.

2 This section applies to a right if each of the following conditions is satisfied—

a the right was, in whole or in part, acquired by the taxpayer as the whole or part of the consideration for a disposal (the “original disposal”) by him of another asset (the “original asset”),

b the original disposal was made in a year (“the year of the original disposal”) earlier than the year in which the disposal mentioned in subsection (1)(a) above is made (“the year of the right’s disposal”),

c where the right was acquired by the taxpayer as the whole or part of the consideration for two or more disposals (each of which is accordingly an “original disposal”), the condition in paragraph (b) above is satisfied with respect to each of those disposals (the “original disposals”),

d on the taxpayer’s acquisition of the right, there was no corresponding disposal of it,

e the right is a right to unascertainable consideration (see section 279B(2) to (6)).

3 Condition 1 for making an election in relation to the relevant loss is that a chargeable gain accrued to the taxpayer on any one or more of the following events—

a the original disposal,

b an earlier disposal of the original asset by the taxpayer in the year of the original disposal,

c a later disposal of the original asset by the taxpayer in a year earlier than the year of the right’s disposal,

or would have so accrued but for paragraph 2(2)(a) of Schedule 5B or 5C (postponement of original gain). This subsection is subject to subsection (4) below.

4 If the right to which this section applies was acquired by the taxpayer as the whole or part of the consideration for two or more original disposals (including cases where there are two or more original assets (the “original assets”))—

a any reference in subsection (3) above to the original disposal is a reference to any of the original disposals,

b any reference in that subsection to the original asset is a reference to the asset which is the original asset in relation to that original disposal, and

c any reference in that subsection to the year of the original disposal shall be construed accordingly.

5 Condition 2 for making an election in relation to the relevant loss is that there is a year (an “eligible year”)—

a which is earlier than the year of the loss but not earlier than the year 1992-93,

b in which a chargeable gain falling within subsection (3) above or subsection (6) below accrued to the taxpayer, and

c for which, immediately before the election, there remains a relevant amount on which capital gains tax is chargeable (see subsection (7) below).

6 A chargeable gain falling within this subsection accrues to the taxpayer in a year if—

a in that year a chargeable gain (the “revived gain”) is treated as accruing to the taxpayer in accordance with paragraphs 4 and 5 of Schedule 5B or 5C (chargeable gain accruing to person on chargeable event), and

b the gain which, in determining the amount of the revived gain in accordance with those paragraphs, is the original gain consists of or represents the whole or some part of a gain that would have accrued as mentioned in subsection (3) above but for paragraph 2(2)(a) of Schedule 5B or 5C.

7 For the purposes of subsection (5)(c) above, a year is one for which, immediately before an election, there remains a relevant amount on which capital gains tax is chargeable if, immediately before the making of that election, there remains an amount in respect of which the taxpayer is chargeable to capital gains tax for the year—

a after taking account of any previous elections made by the taxpayer under this section,

b after excluding any amounts that fall to be brought into account for that year under section 2(4)(b) by virtue of section 2(5)(b), and

c on the assumption that no part of the relevant loss (or of any other loss in respect of which an election under this section may be, but has not been, made) falls to be deducted in consequence of an election under this section from the chargeable gains accruing to the taxpayer in that year.

8 In this section “year” means year of assessment.

9 This section and sections 279B to 279D are to be construed as one.

279B Provisions supplementary to section 279A

1 For the purposes of section 279A(1)(c) a person is within the charge to capital gains tax in any year if—

a he is chargeable to capital gains tax in respect of chargeable gains accruing to him in that year, or

b on the assumption that there accrue to him in that year any chargeable gains (excluding amounts in relation to which section 2(4)(a) applies), he would be so chargeable apart from—

i any deductions that fall to be made from the total amount referred to in section 2(2), and

ii section 3 (annual exempt amount).

2 Subsections (3) to (6) below have effect for the purposes of section 279A(2)(e) (right to unascertainable consideration).

3 A right is a right to unascertainable consideration if, and only if,—

a it is a right to consideration the amount or value of which is unascertainable at the time when the right is conferred, and

b that amount or value is unascertainable at that time on account of its being referable, in whole or in part, to matters which are uncertain at that time because they have not yet occurred.

This subsection is subject to subsections (4) to (6) below.

4 The amount or value of any consideration is not to be regarded as being unascertainable by reason only—

a that the right to receive the whole or any part of the consideration is postponed or contingent, if the consideration or, as the case may be, that part of it is, in accordance with section 48, brought into account in the computation of the gain accruing to the taxpayer on the disposal of an asset, or

b in a case where the right to receive the whole or any part of the consideration is postponed and is to be, or may be, to any extent satisfied by the receipt of property of one description or property of some other description, that some person has a right to select the property, or the description of property, that is to be received.

5 A right is not to be taken to be a right to unascertainable consideration by reason only that either the amount or the value of the consideration has not been fixed, if—

a the amount will be fixed by reference to the value, and the value is ascertainable, or

b the value will be fixed by reference to the amount, and the amount is ascertainable.

6 A right which is by virtue of subsection (2) or (4) of section 138A (use of earn-out rights for exchange of securities) assumed in accordance with subsection (3)(a) of that section to be a security, within the definition in section 132, is not to be regarded as a right to unascertainable consideration.

7 For the purposes of section 279A, any question as to—

a whether a chargeable gain or a loss is one that accrues (or would, apart from any particular provision, accrue) on a particular disposal or a disposal of any particular description, or

b the time at which, or year in which, any particular disposal takes place,

is to be determined without regard to section 10A(2) (chargeable gains and losses accruing during temporary non-residence to be treated as accruing in year of return). This subsection is subject to subsection (8) below.

8 Subsection (7) above does not affect the determination of any question—

a as to the year in which the chargeable gain or loss is, by virtue of section 10A(2), to be treated as accruing (apart from section 279C), or

b where (apart from section 279C) a loss is to be treated by virtue of section 10A(2) as accruing in a particular year, whether the loss is an allowable loss.

279C Effect of election under section 279A

1 This section applies where an election is made under section 279A by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section.

2 Where this section applies, the relevant loss shall be treated for the purposes of capital gains tax as if it were a loss accruing to the taxpayer in the earliest year which is an eligible year (the “first eligible year”), instead of in the year of the loss (but subject to, and in accordance with, the following provisions of this section).

3 The amount of the relevant loss that falls to be deducted from chargeable gains of the first eligible year in accordance with section 2(2)(a) is limited to the amount (the “first year limit”) found by taking the following steps—

Step 1: take the total amount of chargeable gains accruing to the taxpayer in the first eligible year,
Step 2: exclude from that amount any amounts that fall to be disregarded in accordance with section 2(4)(a) for that year,
Step 3: deduct from the amount remaining any amounts in respect of allowable losses (other than the relevant loss or any part of it) that fall to be deducted from that amount in accordance with section 2(2) otherwise than by virtue of section 2(5)(aa)(i) (taking account of any previous elections under section 279A).

The amount so found is the first year limit, unless the first eligible year is a year in relation to which section 2(5)(aa) has effect, in which case the further steps in subsection (4) below must also be taken.

4 Those further steps are—

Step 4: add to the amount found by taking steps 1 to 3 in subsection (3) above every amount which is treated by virtue of section 77 or 86 as an amount of chargeable gains accruing to the taxpayer for the first eligible year (the “attributed amounts”),
Step 5: deduct from the resulting amount any amounts (other than the relevant loss or any part of it) that fall to be deducted from the attributed amounts in accordance with section 2(5)(aa)(i) (taking account of any previous elections under section 279A).

The amount so found is the first year limit in a case where section 2(5)(aa) applies in relation to the first eligible year.

5 As respects any later year before the year of the loss, the relevant loss (so far as not previously allowed as a deduction from chargeable gains accruing in any previous year) falls to be deducted in accordance with section 2(2)(b) only if that later year is an eligible year.

6 The amount of the relevant loss that falls to be deducted from chargeable gains of that later eligible year in accordance with section 2(2)(b) is limited to the amount (the “later year limit”) in respect of which the taxpayer would be chargeable to capital gains tax for that later year—

a on the assumption in subsection (7) below,

b taking account of any previous elections under section 279A, and

c apart from the provisions specified in subsection (8) below.

7 The assumption is that no part of—

a the relevant loss, or

b any loss in respect of which an election under section 279A may be, but has not been, made,

falls to be deducted, in consequence of an election under section 279A, from any chargeable gains accruing to the taxpayer in that later eligible year.The assumption falls to be made immediately after the making of the election in respect of the relevant loss.

8 The provisions are—

a section 2(5)(a)(ii) (taper relief),

b section 2(5)(aa)(ii) (taper relief),

c section 2(5)(b) (addition of certain amounts treated as amounts of chargeable gains), and

d section 2A (taper relief),

except that paragraphs (b) and (d) above are not to affect the operation of section 2(7) for the purposes of subsection (6) above.

9 All such adjustments shall be made, whether by discharge or repayment of tax, the making of assessments or otherwise, as are required to give effect to the election under section 279A made by the taxpayer for the relevant loss to be treated as accruing in an earlier year in accordance with this section.

10 Any reference in this section or section 279D to deduction in accordance with section 2(2)(a), section 2(2)(b) or section 2(2) includes a reference to such deduction by virtue of section 2(5)(a)(i) or (aa)(i).

279D Elections under section 279A

1 An election under section 279A is irrevocable.

2 Any election under that section must be made by giving a notice in accordance with this section.

3 The notice must be given to an officer of the Board.

4 Subsections (5) to (8) below have effect in relation to the notice given by the taxpayer in respect of the relevant loss.

5 The notice must specify each of the following—

a the amount of the relevant loss;

b the right disposed of;

c the year of the right’s disposal;

d the year of the loss (if different from the year of the right’s disposal);

e the year in which the right was acquired;

f the original asset or assets.

6 The notice must also specify each of the following—

a the eligible year in which the relevant loss is to be treated in accordance with section 279C(2) as accruing to the taxpayer;

b the first year limit (see section 279C(3) and (4));

c how much of the relevant loss falls to be deducted in accordance with section 2(2)(a) from chargeable gains accruing to the taxpayer in that year.

7 If, in accordance with section 279C, any part of the relevant loss falls to be deducted in accordance with section 2(2)(b) from chargeable gains accruing to the taxpayer in any later eligible year, the notice must also specify—

a each such year;

b in the case of each such year, the later year limit (see section 279C(6));

c how much of the relevant loss falls to be deducted in accordance with section 2(2)(b) in each such year from chargeable gains accruing to the taxpayer in that year.

8 The notice must be given on or before the first anniversary of the 31st January next following the year of the loss.

9 An election under section 279A is made on the date on which the notice of the election is given.

10 Different notices must be given in respect of different losses.

11 Where a person makes two or more elections under section 279A on the same day, the notices must specify the order in which the elections are made.

12 For the purposes of any provisions of sections 279A to 279C whose operation is affected by the order in which any elections under section 279A are made, elections made by a person on the same day shall be treated as made at different times and in the order specified in accordance with subsection (11) above.

2 Where—

a on the disposal of a right to which section 279A of the Taxation of Chargeable Gains Act 1992 (c. 12) applies, an allowable loss would, apart from section 279C of that Act, accrue to a person in any year of assessment,

b an election is made under section 279A of that Act for the loss to be treated as accruing in an earlier year in accordance with section 279C, and

c the right is an earn-out right, within the meaning of section 138A of that Act, which was conferred before 10th April 2003,

no election may be made under section 138A of that Act (election for earn-out right to be treated as security etc) in respect of the right, whether at the same time as the election under section 279A or subsequently.

3 The amendment made by subsection (1) has effect in relation to allowable losses that would, apart from that amendment, accrue on or after 10th April 2003.For this purpose, losses that would, apart from that amendment, be treated by virtue of section 10A of the Taxation of Chargeable Gains Act 1992 as accruing in the year 2003-04 shall be treated as so accruing on or after 10th April 2003.

4 Subsection (2) shall be deemed to have come into force on 10th April 2003.

163 Transfers of value: attribution of gains to beneficiaries¶

1 For section 85A of the Taxation of Chargeable Gains Act 1992 (c. 12) substitute—

85A Transfers of value: attribution of gains to beneficiaries and treatment of losses

1 Schedule 4C to this Act has effect with respect to the attribution of gains to beneficiaries where there has been a transfer of value to which Schedule 4B applies.

2 Sections 86A to 95 have effect subject to the provisions of Schedule 4C.

3 No account shall be taken of any chargeable gains or allowable losses accruing by virtue of Schedule 4B in computing the trust gains for a year of assessment in accordance with sections 87 to 89, except in computing for the purposes of paragraph 7A(2) of Schedule 4C the amount on which the trustees would have been chargeable to tax under section 2(2) if they had been resident or ordinarily resident in the United Kingdom.

4 No account shall be taken of any chargeable gains or allowable losses to which sections 87 to 89 apply in computing the gains or losses accruing by virtue of Schedule 4B.

2 Schedule 4C to that Act (transfers of value: attribution of gains to beneficiaries) is amended in accordance with Schedule 29 to this Act.

^F3293 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 The following provisions have effect with respect to the coming into force of the amendments made by this section and Schedule 29—

a the amendments apply where the trustees of a settlement have made a transfer to which Schedule 4B applies at any time on or after 21st March 2000;

b where there has been a transfer of value to which Schedule 4B applies before 9th April 2003, the transferor settlement shall be treated as having a Schedule 4C pool as from that date containing such Schedule 4C gains as would fall to be included in the pool if—

i a year of assessment had ended with 8th April 2003, and

ii the reference in paragraph 1(2)(b) of Schedule 4C as amended to the end of the year of assessment in which the transfer of value was made were to that date;

c where a transferor settlement ceased to exist on or after 21st March 2000 and before 9th April 2003, Schedule 4C as amended applies as if it had ceased to exist on 8th April 2003 (so that paragraph (b) above applies);

d so much of Schedule 4C as amended as provides—

i that gains treated as accruing to beneficiaries who are not chargeable to tax are treated as outstanding section 87/89 gains, or

ii that gains in a settlement’s Schedule 4C pool are not to be treated as accruing to such beneficiaries,

applies only in relation to capital payments made on or after 9th April 2003;

e gains included in a settlement’s Schedule 4C pool by virtue of paragraph 1(2)(b) of that Schedule as amended shall only be attributed in accordance with the provisions of that Schedule to beneficiaries who receive capital payments on or after 9th April 2003.

5 Paragraph 8A(3) and (4) of Schedule 4C, inserted by paragraph 4 of Schedule 29 to this Act, applies only where the transfer referred to in that provision occurs on or after 9th April 2003.

6 Expressions used in subsection (4) that are defined for the purposes of Schedule 4C to the Taxation of Chargeable Gains Act 1992 (c. 12) as amended by Schedule 29 to this Act have the same meaning as in that Schedule.

Capital allowances and related matters¶

164 Avoidance affecting proceeds of balancing event¶

1 In Chapter 5 of Part 12 of the Capital Allowances Act 2001 (c. 2) (miscellaneous supplementary provisions), after section 570 insert—

Anti-avoidance

570A Avoidance affecting proceeds of balancing event

1 This section applies where an event occurs in relation to an asset (a “balancing event”) as a result of which a balancing allowance would (but for this section) fall to be made to a person (“the taxpayer”) under Part 3, 4, 4A, 5 or 10.

2 The taxpayer is not entitled to any balancing allowance if, as a result of a tax avoidance scheme, the amount to be brought into account as the proceeds from the event is less than it would otherwise have been.

3 In subsection (2) a “tax avoidance scheme” means a scheme or arrangement the main purpose, or one of the main purposes, of which is the obtaining of a tax advantage by the taxpayer.

4 Where this section applies to deny a balancing allowance, the residue of qualifying expenditure immediately after the balancing event is nevertheless calculated as if the balancing allowance had been made.

5 In this section as it applies for the purposes of Part 5 (mineral extraction allowances)—

a the references to the proceeds from the balancing event that are to be brought into account shall be read as references to the disposal value to be brought into account, and

b the reference to the residue of qualifying expenditure shall be read as a reference to the unrelieved qualifying expenditure.

2 This section applies in relation to any balancing event (within the meaning of section 570A, inserted by subsection (1) above) occurring on or after 27th November 2002, except where the event—

a occurs in pursuance of a contract entered into before that date, and

b does not occur in consequence of the exercise on or after that date of an option, right of pre-emption or similar right.

^F330165 Extension of first-year allowances for ICT expenditure by small enterprises¶

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^F331166 Expenditure on software for sub-licensing¶

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167 First-year allowances for expenditure on environmentally beneficial plant or machinery¶

Schedule 30 to this Act (first-year allowances for expenditure on environmentally beneficial plant or machinery) has effect in relation to expenditure incurred on or after 1st April 2003.

^F483168 Relief for research and development¶

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169 Tonnage tax: extension of capital allowance restrictions on lessors of ships¶

Schedule 32 to this Act (tonnage tax: restrictions on capital allowances for lessors of ships) has effect.

Life insurance and pensions¶

170 Insurance companies¶

Schedule 33 to this Act (which makes provision about the taxation of insurance companies, including companies which have ceased to be insurance companies after a transfer of business) has effect.

^F332171 Policies of life insurance etc: miscellaneous amendments¶

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172 Charges under life insurance policies for exceptional risk of disability¶

1 In Schedule 15 to the Taxes Act 1988 (provisions for determining whether an insurance policy is a “qualifying policy”)—

a in paragraph 12(a) (disregard of so much of premium as is charged on the grounds of exceptional risk of death), and

b in paragraph 12(b) (disregard of provision in policy charging, on those grounds, a sum as a debt against capital sum guaranteed on death),

after “death” insert “ or disability ”.

2 Accordingly, in the heading before paragraph 12 of that Schedule, for “mortality risk” substitute “ risk of death or disability ”.

3 In paragraph 3 of that Schedule (friendly society policies), omit paragraphs (b)(iii) and (c) of sub-paragraph (8) (which make provision corresponding to paragraph 12(a) and (b) but are unnecessary).

4 In paragraph 18 of that Schedule (rules about substituted policies applied where policies are varied) insert after sub-paragraph (3)—

5 In section 460 of that Act (registered friendly societies: exemption from tax in respect of life or endowment business), in subsection (3)(b) (which makes provision corresponding to paragraph 12(a) of Schedule 15) after “death” insert “ or disability ”.

6 The amendments made by this section shall be deemed always to have had effect; but this section shall be disregarded to the extent that it would prevent a policy from being a qualifying policy at any time before 9th April 2003.

173 Gains on policies of life insurance etc: rate of tax¶

1 Schedule 35 to this Act (which makes provision for and in connection with charging certain gains on policies of life insurance etc at the lower rate) has effect.

2 The amendments made by that Schedule have effect in relation to gains treated as arising under Chapter 2 of Part 13 of the Taxes Act 1988 on the happening of chargeable events on or after 6th April 2004.

^F170174 Personal pension arrangements: limit on contributions¶

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Miscellaneous¶

^F123175 Payments to adopters¶

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^F124176 Foster carers¶

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177 Currency contracts and currency options¶

1 This section applies in any case where at any time on or after 30th September 2002—

a a qualifying company becomes party to a qualifying contract which is a currency contract or currency option, or

b the terms of such a qualifying contract held by such a company are varied,

and the conditions in subsection (2) are, or subsequently become, satisfied.

2 The conditions are that—

a in accordance with generally accepted accounting practice, the company in preparing its statutory accounts uses the exchange rate implied by the qualifying contract (“the accounting rate”);

b there is a difference between the accounting rate and the final payment rate; and

c the difference between those exchange rates is more than 1 per cent of the final payment rate.

3 In subsection (2) “the final payment rate” means the exchange rate found by reference only to the amounts which fall or would, apart from this section and the provisions specified in subsection (4), fall to be regarded for the purposes of subsection (2) or, as the case may be, (7) of section 150 of the Finance Act 1994 (c. 9) as the amounts of the currency to be received, and the currency to be paid in exchange, under the qualifying contract as mentioned in that subsection.

4 Where this section first applies in relation to the qualifying contract in an accounting period of the company which begins before 1st October 2002 (“the relevant contract period”), the following provisions of the Finance Act 2002 (c. 23), namely—

a section 79(1)(b) (repeal of forex),

b section 80 and Schedule 24 (corporation tax: currency), and

c section 83 and Schedules 26 and 27 (derivative contracts),

shall be taken to have effect in the case of the company, so far as relating to that contract, in relation to that accounting period and any subsequent accounting periods.

4A In relation to a subsequent accounting period ending on or after 1 April 2009, the reference in subsection (4)(c) to Schedule 26 is to be read as a reference to Part 7 of the Corporation Tax Act 2009.

5 Where—

a the qualifying contract is a currency contract which arises from the exercise of a currency option which is or was itself a qualifying contract (or a series of such currency options), and

b that currency option was entered into or varied on or after 30th September 2002 (or, in the case of a series of currency options, any of them was entered into or varied on or after that date),

the provisions specified in subsection (4) shall be taken to have effect in the case of the company, so far as relating to the currency option (or, in the case of a series of currency options, each of the options entered into or varied on or after 30th September 2002), in relation to the earliest accounting period (“the relevant options period”) in which the option (or any of the options) was so entered into or varied and any subsequent accounting periods.

6 Where the provisions specified in subsection (4) have effect by virtue of this section in relation to a currency contract or currency option the following provisions of the Finance Act 2002, namely—

a section 81 (transitional provision), so far as relating to section 80 and Schedule 24, and

b Schedule 28 (derivative contracts: transitional provisions etc),

shall have effect accordingly.

7 In the application of Schedule 28 to the Finance Act 2002 by virtue of this section, any reference to the company’s commencement day is to be taken—

a in the case of a currency contract, as a reference to the first day of the relevant contract period; or

b in the case of a currency option, as a reference to the first day of the relevant options period.

8 This section does not apply in relation to any contract entered into or varied in an accounting period beginning on or after 1st October 2002 unless the contract arises from the exercise of a currency option which was entered into or varied on or after 30th September 2002 and in an accounting period beginning on or before that date.

9 In this section the following expressions, namely—

a qualifying company,

b qualifying contract,

c currency contract,

d currency option,

have the same meaning as in Chapter 2 of Part 4 of the Finance Act 1994 (c. 9), (disregarding for this purpose the provisions specified in subsection (4)) and references to the exercise of an option shall be construed accordingly.

10 In this section “statutory accounts” has the meaning given by paragraph 52 of Schedule 26 to the Finance Act 2002 (c. 23).

11 This section shall be deemed to have come into force on 30th September 2002.

^F485178 Loan relationships: amendments¶

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^F486179 Derivative contracts: transactions within groups¶

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180 Contributions to urban regeneration companies¶

^F4871 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 In section 828(4) of the Taxes Act 1988 (orders or regulations under specified provisions not to be subject to Commons negative resolution parliamentary procedure) after “section 1(6),” insert “ 79B(5), ”.

181 Repos etc¶

Schedule 38 to this Act (which contains amendments relating to arrangements for the sale and repurchase of securities etc) has effect.

182 Relevant discounted securities: withdrawal of relief for costs and losses, etc¶

Schedule 39 to this Act (relevant discounted securities: withdrawal of relief for costs and losses, and extension of definition of “strip”) has effect.

^F595183 Court common investment funds¶

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^F488184 Intangible fixed assets: tax avoidance arrangements and related parties¶

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Part 8 Other taxes¶

Inheritance tax ¶

185 Gifts with reservation¶

1 Section 102 of the Finance Act 1986 (c. 41) (gifts with reservation) is amended as follows.

2 In subsection (5) (section not to apply where disposal is an exempt transfer by virtue of any of the provisions of the Inheritance Tax Act 1984 specified in the paragraphs of that subsection) at the end of paragraph (a) (section 18: transfers between spouses) insert “ , except as provided by subsections (5A) and (5B) below ”.

3 After subsection (5) insert—

5A Subsection (5)(a) above does not prevent this section from applying if or, as the case may be, to the extent that—

a the property becomes settled property by virtue of the gift,

b by reason of the donor’s spouse (“the relevant beneficiary”) becoming beneficially entitled to an interest in possession in the settled property, the disposal is or, as the case may be, is to any extent an exempt transfer by virtue of section 18 of the 1984 Act in consequence of the operation of section 49 of that Act (treatment of interests in possession),

c at some time after the disposal, but before the death of the donor, the relevant beneficiary’s interest in possession comes to an end, and

d on the occasion on which that interest comes to an end, the relevant beneficiary does not become beneficially entitled to the settled property or to another interest in possession in the settled property.

5B If or, as the case may be, to the extent that this section applies by virtue of subsection (5A) above, it has effect as if the disposal by way of gift had been made immediately after the relevant beneficiary’s interest in possession came to an end.

5C For the purposes of subsections (5A) and (5B) above—

a section 51(1)(b) of the 1984 Act (disposal of interest in possession treated as coming to end of interest) applies as it applies for the purposes of Chapter 2 of Part 3 of that Act; and

b references to any property or to an interest in any property include references to part of any property or interest.

4 The amendments made by this section have effect in relation to disposals made on or after 20th June 2003.

186 Authorised unit trusts, OEICs and common investment funds¶

1 The Inheritance Tax Act 1984 (c. 51) is amended as follows.

2 In section 6 (excluded property), after subsection (1) insert—

3 In section 48 (settlements: excluded property), after subsection (3) insert—

4 In section 178(1) (sale of shares etc from deceased’s estate: preliminary)—

a in the definition of “qualifying investments”, after “authorised unit trust” insert “ , shares in an open-ended investment company ”, and

b for “section 1 of the Administration of Justice Act 1965” substitute “ section 42 of the Administration of Justice Act 1982 ”.

5 Section 272 (general interpretation) is amended as follows.

6 After the definition of “amount” insert—

7 After the definition of “mortgage” insert—

8 This section has effect in relation to transfers of value or other events occurring on or after 16th October 2002.

Landfill tax¶

187 Rate of landfill tax¶

In section 42 of the Finance Act 1996 (c. 8) (amount of landfill tax), for the amount specified in subsection (1)(a), and the corresponding amount in subsection (2), substitute—

a “£14” in relation to taxable disposals made, or treated as made, on or after 1st April 2003 and before 1st April 2004;

b “£15” in relation to taxable disposals made, or treated as made, on or after 1st April 2004.

Climate change levy¶

^F753188 Exemption for fuel used in recycling processes¶

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

^I108189 CHP exemption to be based on current efficiency¶

1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows.

2 In paragraph 15 (exemption for supplies to combined heat and power stations)—

a for paragraph (b) of sub-paragraph (4) substitute—

;

b omit sub-paragraph (5).

3 In paragraph 148 (meaning of “combined heat and power station” etc)—

a in sub-paragraphs (2)(c) and (3)(c), for “complying with sub-paragraph (6) and (so far as applicable)” substitute “ complying (so far as applicable) with ”;

b omit sub-paragraph (6) (efficiency percentage to be stated on certificate of full or partial exemption).

4 In paragraph 149(1) (determination of efficiency percentages for combined heat and power stations) omit “the percentage that is to be stated in a certificate under paragraph 148 as”.

5 This section has effect in relation to supplies made on or after such day as the Treasury may by order made by statutory instrument appoint.

^I109190 Supplies not known to be taxable when made, etc¶

1 In Schedule 6 to the Finance Act 2000 (climate change levy), paragraph 24 (deemed supply: change of circumstances or intentions) is amended as follows.

2 In the heading, for “change of circumstances or intentions” substitute “ change of circumstances etc ”.

3 For sub-paragraphs (1) and (2) substitute—

1 This paragraph applies in the following cases.

1A The first case is where—

a a supply of a taxable commodity has been made,

b the supply was not a taxable supply, and

c there is such a change in circumstances or any person’s intentions that, if the changed circumstances or intentions had existed at the time the supply was made, the supply would have been a taxable supply.

1B The second case is where—

a a supply of a taxable commodity has been made,

b the supply was made on the basis that it was not a taxable supply, and

c it is later determined that the supply was (to any extent) a taxable supply.

2 This paragraph does not apply where the reason that—

a the supply was not a taxable supply, or

b the supply was made on the basis that it was not a taxable supply,

is that it was, or was thought to be, exempt from the levy under paragraph 19 or 20A (exemption for supply of electricity produced from renewable sources or in combined heat and power stations) (but see paragraph 20 or 20B).

4 In sub-paragraph (3), at the beginning insert “ Where this paragraph applies, ”.

5 After that sub-paragraph insert—

6 In sub-paragraph (5) for “sub-paragraph (1)(c)” substitute “ sub-paragraph (1A)(c) ”.

7 In paragraph 34(3) of that Act (time when deemed supply under paragraph 24 treated as made) at the end insert “ or, as the case may be, upon the later determination ”.

8 This section has effect in relation to supplies made on or after such day as the Treasury may by order made by statutory instrument appoint.

191 Deemed supplies¶

1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows.

2 In paragraph 5(3) (levy chargeable on deemed supply of electricity) for “paragraph 23(3)” substitute “ paragraph 20(6)(a), 20B(6)(a), 23(3) or 24 ”.

3 In paragraph 6 (supplies of gas)—

a after sub-paragraph (2) insert—

;

b in sub-paragraph (3) for “sub-paragraphs (1) and (2)” substitute “ sub-paragraph (1), (2) or (2A) ”.

4 Subsection (2) has effect in relation to supplies deemed to be made on or after 31st March 2003, and subsection (3) in relation to supplies deemed to be made on or after the day on which this Act is passed.

192 Amendments about registration, payment etc¶

1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows.

2 In paragraph 41 (returns and payment of levy)—

a for paragraph (a) of sub-paragraph (1) (liability to account for levy by reference to accounting periods) substitute—

;

b in sub-paragraph (1)(c) (liability to pay) omit “for any period”;

c after sub-paragraph (2) insert—

3 In paragraph 53 (requirement to be registered), after sub-paragraph (3) insert—

4 In paragraph 62(2)(b) (provision in regulations about bringing tax credit into account) for “levy due from him for such accounting period or periods” substitute “ such levy due from him ”.

5 In paragraph 78 (assessments of amounts of levy due), after sub-paragraph (1) insert—

6 In paragraph 91 (interpretation etc of Part 7) at the end insert—

5 In relation to cases where, by virtue of regulations under paragraph 41(1)(a)(ii), a person is liable to account for levy otherwise than by reference to accounting periods, this Part of this Schedule shall have effect as if—

a references to levy due for “an” or “any” accounting period were references simply to levy due;

b references to levy due for a specified accounting period were references to the levy in question;

c references to an assessment for a specified accounting period were references to an assessment in respect of the levy in question;

d any time limit framed by reference to the end of the accounting period for which levy is due were framed by reference to the date on which payment of the levy is due;

e references to the making of a return for an accounting period were references to the payment of the levy in question;

f references to the amount shown in such a return were references to the amount of levy paid;

g paragraph 88(8) and (9) were omitted.

7 In paragraph 93(4) (criminal penalty for false return)—

a in paragraph (a) after “return” insert “ or other notification ”;

b in paragraph (b), and in the words after that paragraph, after “return” insert “ or notification ”.

^F4898 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9 In paragraph 125(1) (obligation to keep records) for “persons who are, or are required to be, registered” substitute

10 In paragraph 135(1)(c) (Commissioners' certificate as evidence of non-payment of levy shown as due in a return) after “return” insert “ or other notification ”.

193 Electricity from renewable sources etc¶

1 Schedule 6 to the Finance Act 2000 (c. 17) (climate change levy) is amended as follows.

2 In paragraph 20 (exemption under paragraph 19: averaging periods) for sub-paragraphs (6) to (8) substitute—

3 In paragraph 20B (exemption under paragraph 20A: averaging periods) for sub-paragraphs (6) to (8) substitute—

4 The amendment made by subsection (2) has effect where the end of the balancing period referred to in paragraph (a) of the sub-paragraph (6) substituted by that subsection falls on or after 31st March 2003.

5 The amendment made by subsection (3) has effect where the end of the balancing period referred to in paragraph (a) of the sub-paragraph (6) substituted by that subsection falls on or after 1st April 2003.

Insurance premium tax¶

194 Higher rate of tax: divided companies¶

1 In Schedule 6A to the Finance Act 1994 (c. 9) (insurance premium tax: premiums liable to tax at higher rate), insert after paragraph 3—

3A Insurance provided by divided company

1 A premium under a taxable insurance contract relating to a motor car or motor cycle also falls within paragraph 2 above if—

a the insurance to be provided under the contract is provided by a divided company, and

b any division of that company would, if it were a separate company, be a person connected with a supplier of motor cars or motor cycles.

2 A premium under a taxable insurance contract relating to relevant goods also falls within paragraph 3 above if—

a the insurance to be provided under the contract is provided by a divided company, and

b any division of that company would, if it were a separate company, be a person connected with a supplier of relevant goods.

3 Sub-paragraph (1) or (2) above does not apply if the insurance is provided to the insured free of charge.

4 A premium falls within paragraph 2 above by virtue of this paragraph only to the extent that it is attributable to cover for a risk which relates to a motor car or motor cycle supplied by a supplier of motor cars or motor cycles with whom the division in question would, if it were a separate company, be connected.

5 A premium falls within paragraph 3 above by virtue of this paragraph only to the extent that it is attributable to cover for a risk which relates to relevant goods supplied by a supplier of relevant goods with whom the division would, if it were a separate company, be connected.

6 For the purposes of this paragraph—

a a company is a “divided company” if under the law under which the company is formed, under the company’s constitution or under arrangements entered into by or in relation to the company—

i some or all of the assets of the company are available primarily, or only, to meet particular liabilities of the company, and

ii some or all of the members of the company, and some or all of its creditors, have rights primarily, or only, in relation to particular assets of the company;

b a “division” of such a company means an identifiable part of it (by whatever name known) that carries on distinct business activities and to which particular assets and liabilities of the company are primarily or wholly attributable.

7 In this paragraph “provided to the insured free of charge” has the meaning given by sub-paragraph (5) of paragraph 2 or 3 above.In determining for this purpose whether a divided company by whom insurance is provided is a person falling within sub-paragraph (2) of paragraph 2 or 3 above, the company shall be treated as connected with any person with whom a division of that company would be connected if it were a separate company.

8 Other expressions defined for the purposes of paragraph 2 or 3 above have the same meaning in this paragraph.

2 Subsection (1) applies in relation to a premium that falls to be regarded for the purposes of Part 3 of the Finance Act 1994 (c. 9) (insurance premium tax) as received under a taxable insurance contract by an insurer on or after the day on which this Act is passed.

Part 9 Miscellaneous and supplementary provisions¶

Provisions consequential on changes to company law¶

^I103195 Companies acquiring their own shares¶

1 This section applies for the purposes of the Taxes Acts and the Inheritance Tax Act 1984 (c. 51) where a company acquires any of its own shares (whether by purchase, the issuing of bonus shares or otherwise).

2 The acquisition of any of those shares by the company is not to be treated as the acquisition of an asset.

3 The company is not, by virtue of the acquisition or holding of any of those shares or its being entered in the company’s register of members in respect of any of them, to be treated as a member of itself.

4 Subject to subsection (5)—

a the company’s issued share capital is to be treated as if it had been reduced by the nominal value of the shares acquired,

b such of those shares as are not cancelled on acquisition are to be treated as if they had been so cancelled, and

c any subsequent cancellation by the company of any of those shares is to be disregarded (and, accordingly, is not the disposal of an asset and does not give rise to an allowable loss within the meaning of the Taxation of Chargeable Gains Act 1992 (c. 12)).

5 Where the shares are issued to the company as bonus shares, subsection (4)(a) and (b) does not apply and the shares are to be treated as if they had not been issued.

6 Where, disregarding subsections (2) to (5)—

a a company holds any of its own shares, and

b the company issues bonus shares in respect of those shares or any class of those shares (“the existing shares”),

nothing in this section prevents the existing shares being the company’s holding of shares for the purposes of the application of section 126 of the Taxation of Chargeable Gains Act 1992 (application of sections 127 to 131 of that Act (company reorganisations etc)).

7 In subsection (6) the reference to the application of section 126 of the Taxation of Chargeable Gains Act 1992 does not include a reference to the application of that section in a modified form by virtue of any enactment relating to chargeable gains.

8 Where a company disposes of any of its own shares to a person in circumstances where, but for subsections (2) to (5), it would be regarded as holding the shares immediately before the disposal—

a subsections (4)(b) and (c) and (5) cease to apply in relation to the shares disposed of (“the relevant shares”),

b the relevant shares are to be treated as having been issued as new shares to that person by the company at the time of the disposal (and not as having been disposed of by the company at that time),

c that person is to be treated as having subscribed for the relevant shares,

d an amount equal to the amount or value of the consideration (if any) payable for the disposal of the relevant shares is to be treated as the amount subscribed for those shares,

e if the amount or value of that consideration does not exceed the nominal value of those shares, the share capital of those shares is to be treated for the purposes of Part 23 of the Corporation Tax Act 2010 as if it were an amount equal to the amount or value of that consideration, and

f if the amount or value of that consideration exceeds their nominal value, the relevant shares are to be treated as if they had been issued at a premium representing that excess.

9 Where—

a a company purchases its own shares, and

b the price payable by a company for the shares is taken into account in computing the profits of the company which are chargeable to tax under Chapter 2 of Part 3 of the Corporation Tax Act 2009,

subsections (2) to (7) do not apply and subsection (8) does not apply in relation to any disposal by the company of any of the shares.

10 Schedule 40 to this Act (which makes amendments relating to the acquisition and disposal by a company of its own shares) has effect.

11 For the purposes of this section—

a a company issues “bonus shares” if it issues share capital as paid up otherwise than by the receipt of new consideration (within the meaning of section 1115 of the Corporation Tax Act 2010), and

b “the Taxes Acts” has the same meaning as in the Taxes Management Act 1970 (c. 9),

and in this section references to a “company” are to a company with a share capital.

12 The preceding provisions of this section and the provisions of Schedule 40 to this Act have effect in relation to any acquisition of shares by a company on or after such day as the Treasury may by order made by statutory instrument appoint.

196 Companies in administration¶

Schedule 41 to this Act (provisions relating to the treatment, for tax purposes, of companies in administration) has effect.

International matters¶

^F771197 Exchange of information between tax authorities of member States¶

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

^F180198 Arrangements for mutual exchange of tax information¶

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

^F596199 Savings income: Community obligations and international arrangements¶

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

200 Controlled foreign companies: exempt activities¶

1 Schedule 42 to this Act (which amends Part 2 of Schedule 25 to the Taxes Act 1988 (exempt activities)) shall have effect.

2 The amendments made by that Schedule have effect in relation to accounting periods of a controlled foreign company beginning on or after 27th November 2002.

3 In this section “accounting period” and “controlled foreign company” have the same meaning as in Chapter 4 of Part 17 of the Taxes Act 1988.

4 This section shall be taken to have come into force on 27th November 2002.

201 Application of CFC provisions to Hong Kong and Macao companies¶

1 In Part 2 (exempt activities) of Schedule 25 to the Taxes Act 1988 (cases where section 747(3) does not apply), in paragraph 5 insert after sub-paragraph (2)—

2 This section shall be deemed to have had effect—

a as from 1st July 1997, so far as relating to the Hong Kong Special Administrative Region;

b as from 20th December 1999, so far as relating to the Macao Special Administrative Region.

Administrative matters¶

^F224202 Deduction of tax from interest: recognised clearing houses etc¶

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

203 Authorised unit trusts: interest distributions paid gross¶

1 Chapter 3 of Part 12 of the Taxes Act 1988 (unit trust schemes) is amended as follows.

2 In section 468L(4) (obligation to deduct tax from interest distributions to be subject to provision made by sections 468M and 468N), for “sections 468M and 468N” substitute “ section 468M ”.

3 For sections 468M and 468N substitute—

4 Section 468O (residence condition) is amended as follows.

5 In subsection (1), for “sections 468M and 468N” substitute “ section 468M ”.

6 After that subsection insert—

1A For the purposes of section 468M, the reputable intermediary condition is fulfilled with respect to a unit holder if—

a the interest distribution is paid on behalf of the unit holder to a company,

b the company either is subject to the EC Money Laundering Directive, or to equivalent non-EC provisions, or is an associated company resident in a regulating country or territory of a company which is so subject, and

c the trustees of the authorised unit trust have reasonable grounds for believing that the unit holder is not ordinarily resident in the United Kingdom.

1B For the purposes of subsection (1A)(b) above—

a a company is subject to the EC Money Laundering Directive if it is a credit institution or financial institution as defined by Article 1 of Directive 91/308/EEC, as amended by Directive 2001/97/EC,

b a company is subject to equivalent non-EC provisions if it is required by the law of any country or territory which is not a member State to comply with requirements similar to those which, under Article 3 of that Directive (as so amended), member States must ensure are complied with by credit institutions and financial institutions,

c a company is to be treated as another’s associated company if it would be so treated for the purposes of Part 11 (see section 416), and

d a country or territory is a regulating country or territory if it either is a member State or imposes requirements similar to those which, under Article 3 of that Directive (as so amended), member States must ensure are complied with by credit institutions and financial institutions.

1C If Directive 91/308/EEC ceases to have effect, or is further amended, the Treasury may by order make consequential amendments in subsections (1A) and (1B) above.

7 In the sidenote, insert at the end “ and reputable intermediary condition ”.

8 In section 468P(1) (residence declarations)—

a for “468O” substitute “ 468O(1) ”, and

b for “subsections (2) to (4)” substitute “ subsection (2) or (3) ”.

9 After section 468P insert—

468PA Section 468O(1A): consequences of reasonable but incorrect belief

Where—

a an interest distribution is made to a unit holder by the trustees of an authorised unit trust,

b the trustees, in reliance on the reputable intermediary condition being fulfilled with respect to the unit holder, do not comply with the obligation under section 349(2) to make a deduction from the interest distribution,

c that obligation would apply but for that condition being so fulfilled, and

d (contrary to the belief of the trustees) the unit holder is in fact ordinarily resident in the United Kingdom,

section 350 and Schedule 16 have effect as if that obligation applied.

468PB Regulations supplementing sections 468M to 468PA

1 The Board may by regulations make provision for giving effect to sections 468M to 468PA.

2 The regulations may, in particular, include provision modifying the application of those sections in relation to interest distributions made to or received under a trust.

3 The regulations may, in particular, include provision for the giving by officers of the Board of notices requiring trustees of authorised unit trusts to supply information and make available books, documents and other records for inspection on behalf of the Board.

4 The regulations may—

a make provision in relation to times before they are made,

b make different provision for different cases, and

c make such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.

10 Section 98 of the Taxes Management Act 1970 (c. 9) (penalties: provisions requiring information etc in response to notices) is amended as follows.

11 In subsection (4A)(b), for “or (4D)” substitute “ , (4D) or (4E) ”.

12 After subsection (4D) insert—

13 In the first column of the Table, after the entry relating to regulations under section 431E(1) or 441A(3) of the principal Act, insert— “ section 468P(6); regulations under section 468PB(3); ”.

14 This section has effect in relation to interest distributions made on or after 16th October 2002.

204 Mandatory electronic payment¶

1 The Commissioners for Her Majesty's Revenue and Customs may make regulations requiring a person to use electronic means in making specified payments under legislation relating to a tax (or duty) for which the Commissioners are responsible.

2 The regulations may provide for exceptions.

3 Regulations under this section may make provision—

a as to conditions that must be complied with in connection with the use of electronic means for the making of any payment;

b for treating a payment as not having been made unless conditions imposed by any of the regulations are satisfied;

c for determining the time when payment is to be taken to have been made.

4 Regulations under this section may also make provision (which may include provision for the application of conclusive or other presumptions) as to the manner of proving for any purpose—

a whether any use of electronic means for making a payment is to be taken as having resulted in the payment being made;

b the time of the making of any payment for the making of which electronic means have been used;

c any other matter for which provision may be made by regulations under this section.

5 Regulations under this section may—

a allow any authorisation or requirement for which the regulations may provide to be given or imposed by means of a specific or general direction given by the Commissioners;

b provide that the conditions of any such authorisation or requirement are to be taken to be satisfied only where Her Majesty's Revenue and Customs are satisfied as to specified matters.

6 Regulations under this section may contain provision—

a requiring Her Majesty's Revenue and Customs to notify persons appearing to them to be, or to have become, a person required to use electronic means for the making of any payments in accordance with the regulations;

b enabling a person so notified to have the question whether he is such a person determined in the same way as an appeal.

7 Regulations under this section may confer power on the Commissioners to give specific or general directions—

a suspending, for any period during which the use of electronic means for the making of payments is impossible or impractical, any requirements imposed by the regulations relating to the use of such means;

b substituting alternative requirements for the suspended ones;

c making any provision that is necessary in consequence of the imposition of the substituted requirements.

8 The power to make provision by regulations under this section includes power—

a to provide for a contravention by a large employer of, or any failure by a large employer to comply with, the regulations (a “default”) to attract a surcharge of a specified amount;

b to provide that specified enactments relating to penalties imposed for the purposes of any matter relating to a tax (or duty) for which the Commissioners are responsible (including enactments relating to assessments, review and appeal) apply, with or without modifications, in relation to surcharges under the regulations.

9 The regulations may specify the surcharge for each default as—

a a specified percentage, depending on the circumstances but not exceeding 10%, of the amount of the payment to which the default relates, or

b a specified percentage, depending on the circumstances but not exceeding 0.83%, of the total amount of tax due for the accounting period, year of assessment or other specified period of twelve months during which the default occurred;

but, in either case, they may specify £30 if it is more.

10 Regulations under this section may—

a make different provision for different cases;

b make such incidental, supplemental, consequential and transitional provision in connection with any provision contained in any of the regulations as the Commissioners think fit.

11 Regulations under this section shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

12 In this section—

“Her Majesty's Revenue and Customs” includes a person acting under the authority of the Commissioners in relation to payment by electronic means;
“large employer” means a person paying PAYE income to 250 or more recipients (and regulations under this section may make provision as to the date or period by reference to which this is to be determined and the circumstances in which a person is to be treated as paying PAYE income to a recipient);
“legislation” means any enactment, EU or subordinate legislation;
“specified” means specified by or under regulations under this section;
“subordinate legislation” has the same meaning as in the Interpretation Act 1978 (c. 30).

13 Regulations under section 95(1) of the Finance Act 2007 (payment by cheque) may, in particular, provide for a payment which is made by cheque in contravention of regulations under this section to be treated as made when the cheque clears, as defined in the regulations under that section.

205 Use of electronic means of payment under other provisions¶

1 Any power to make subordinate legislation for or in connection with the making of payments conferred in relation to a taxation (or duty) matter on—

a the Commissioners for Her Majesty's Revenue and Customs, or

b the Treasury,

includes power to make any such provision in relation to the making of those payments as could be made in exercise of the power conferred by section 204.

2 Provision as to means of payment made in exercise of the powers conferred by section 204 or subsection (1) above has effect notwithstanding so much of any enactment or subordinate legislation as would otherwise allow payment to be made by any other means.

3 Expressions used in this section and section 204 have the same meaning in this section as in that section.

4 Nothing in this section shall be read as restricting the generality of the power conferred by section 204.

206 Admissibility of evidence not affected by offer of settlement etc¶

1 In section 105(1) of the Taxes Management Act 1970 (c. 9) (evidence in cases of fraudulent conduct), for paragraphs (a) and (b) and the word “that” preceding them substitute—

2 For the heading to that section substitute “ Admissibility of evidence not affected by offer of settlement etc ”.

3 In paragraph 3(1) of Schedule 18 to the Finance Act 1999 (c. 16) (which makes corresponding provision in relation to stamp duty), for paragraphs (a) and (b) substitute—

4 For the heading before that paragraph substitute “ Admissibility of evidence not affected by offer of settlement etc ”.

5 The above amendments have effect in relation to statements made, or documents produced, after the passing of this Act.

207 Consequential claims etc¶

1 In Part 4 of the Taxes Management Act 1970 (assessment and claims), after section 43B insert—

43C Consequential claims etc

1 Where—

a a return is amended under section 28A(2)(b), 28B(2)(b) or 28B(4), and

b the amendment is made for the purpose of making good to the Crown any loss of tax attributable to fraudulent or negligent conduct on the part of the taxpayer or a person acting on his behalf,

sections 36(3) and 43(2) apply in relation to the amendment as they apply in relation to any assessment under section 29.

2 Where—

a a return is amended under section 28A(2)(b), 28B(2)(b) or 28B(4), and

b the amendment is not made for the purpose mentioned in subsection (1)(b) above,

sections 43(2), 43A and 43B apply in relation to the amendment as they apply in relation to any assessment under section 29.

3 References to an assessment in sections 36(3), 43(2), 43A and 43B, as they apply by virtue of subsection (1) or (2) above, shall accordingly be read as references to the amendment of the return.

4 Where it is necessary to make any adjustment by way of an assessment on any person—

a in order to give effect to a consequential claim, or

b as a result of allowing a consequential claim,

the assessment is not out of time if it is made within one year of the final determination of the claim.For this purpose a claim is not taken to be finally determined until it, or the amount to which it relates, can no longer be varied, on appeal or otherwise.

5 In subsection (4) above “consequential claim” means any claim, supplementary claim, election, application or notice that may be made or given under section 36(3), 43(2) or 43A (as it applies by virtue of subsection (1) or (2) above or otherwise).

2 In section 43A of that Act (further assessments: claims etc), in subsection (2A) (elections to which extension of time limit does not apply) for the words from “an election under” to the end substitute

3 So far as it applies in relation to an amendment of a return, this section applies only where the notice of the amendment is issued after the day on which this Act is passed.

National Savings¶

208 Ordinary accounts and investment accounts¶

1 The National Savings Bank Act 1971 (c. 29) is amended as follows.

2 In section 3 (ordinary and investment deposits), after subsection (1) insert—

3 Section 6 (interest on investment deposits) is amended as follows.

4 In subsection (2), for “Director of Savings may from time to time determine with the consent of the Treasury” substitute “ Treasury may from time to time determine ”.

5 After that subsection insert—

6 In subsection (3), after “description” insert “ (other than one occasioned by the operation of a formula) ”.

7 After that subsection insert—

8 Section 8 (regulations as to particular matters) is amended as follows.

9 In subsection (1), after paragraph (b) insert—

10 After subsection (2) insert—

3 Regulations under section 2 of this Act may also make provision—

a prohibiting the opening of ordinary accounts after a prescribed date;

b prohibiting the opening of investment accounts of a prescribed description after a date prescribed in relation to that description of accounts;

c prohibiting the making of ordinary deposits after a prescribed date;

d prohibiting the making of deposits in investment accounts of a prescribed description after a date prescribed in relation to that description of accounts;

e requiring the withdrawal of all of the money deposited in any dormant account of a prescribed description if any of the money deposited in it is withdrawn after a date prescribed in relation to that description of account;

f for the transfer to investment accounts of a prescribed description of deposits in dormant accounts of a prescribed description;

g for the transfer to a special Director’s account of deposits in dormant accounts of a prescribed description or in accounts to which deposits have been transferred pursuant to provision made by virtue of paragraph (f) above.

4 In subsection (3) above—

“dormant account” means an account in which deposits may not be made because of provision made by virtue of paragraph (c) or (d) of that subsection; and“special Director’s account” means an investment account in the name of the Director of Savings in which deposits are held on behalf of the persons entitled to them.

11 After section 9 insert—

209 Abolition of accounting requirements relating to investment deposits¶

In section 120 of the Finance Act 1980 (c. 48) (investment deposits with National Savings Bank: accounting provisions etc), omit subsections (4) and (5) (which require the Director of Savings to keep an account of investment deposits etc and transmit annual statements to the Comptroller and Auditor General for examination etc).

Other financial matters¶

210 Payments for service of national debt¶

1 Section 15 of the National Loans Act 1968 (c. 13) (payments for service of national debt) is amended as follows.

2 In subsection (1) (payments to be made out of Consolidated Fund into National Loans Fund), for “charges on the National Loans Fund for the service of national debt over” substitute

3 Omit subsection (3) (which defines “charges on the National Loans Fund for the service of national debt”).

4 In paragraph 13 of Schedule 5A to that Act (Debt Management Account: payments to be made out of National Loans Fund into Debt Management Account), omit sub-paragraph (2) (payments to be treated as charges on the National Loans Fund for the service of national debt).

211 Definition of liabilities and assets of National Loans Fund¶

In section 19(4) of the National Loans Act 1968 (c. 13) (which defines as the liabilities of the National Loans Fund the nominal amount of the debt outstanding to it and as its assets its balance and loans etc outstanding to it), for the words from “of the National Loans Fund” onwards substitute “ and assets of the National Loans Fund shall be as determined by the Treasury. ”.

212 Accounts of Consolidated Fund and National Loans Fund¶

1 Section 21 of the National Loans Act 1968 (accounts of Consolidated Fund and National Loans Fund) is amended as follows.

2 In subsection (1) (annual accounts of payments in and out), for the words from “in such form” onwards substitute “ an account relating to the Consolidated Fund, and an account relating to the National Loans Fund, in such form and containing such information as the Treasury consider appropriate. ”.

^I773 Omit subsection (3) (statements of additional information regarding transactions, assets and liabilities of Consolidated Fund and National Loans Fund).

4 Subsection (2) has effect for the financial year ending with 31st March 2004 and subsequent financial years.

5 Subsection (3) has effect for such financial year as the Treasury may by order made by statutory instrument appoint and subsequent financial years.

213 Debt Management Account: abolition of borrowing cap¶

In Schedule 5A to the National Loans Act 1968 (Debt Management Account), omit paragraph 8 (borrowings otherwise than from National Loans Fund not to exceed total standing to credit of that Account in that Fund and at Bank of England).

214 Payments in error from or to National Loans Fund¶

In paragraph 11 of Schedule 5A to the National Loans Act 1968 (c. 13) (payments between National Loans Fund and Debt Management Account in respect of difference between assets and liabilities of that Account), insert at the end—

Supplementary¶

215 Interpretation¶

In this Act “the Taxes Act 1988” means the Income and Corporation Taxes Act 1988 (c. 1).

216 Repeals¶

1 The enactments mentioned in Schedule 43 to this Act (which include provisions that are spent or of no practical utility) are repealed to the extent specified.

2 The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained or referred to in the notes set out in that Schedule.

217 Short title¶

This Act may be cited as the Finance Act 2003.

SCHEDULES

SCHEDULE 1 ¶

VAT: face-value vouchers

Section 19

1In Part 3 of the Value Added Tax Act 1994 (c. 23) (application of Act in particular cases) insert after section 51A—

2After Schedule 10 to that Act insert—

SCHEDULE 10A

Face-value vouchers

Meaning of “face-value voucher” etc

1 In this Schedule “face-value voucher” means a token, stamp or voucher (whether in physical or electronic form) that represents a right to receive goods or services to the value of an amount stated on it or recorded in it.

2 References in this Schedule to the “face value” of a voucher are to the amount referred to in sub-paragraph (1) above.

Nature of supply

2The issue of a face-value voucher, or any subsequent supply of it, is a supply of services for the purposes of this Act.

Treatment of credit vouchers

1 This paragraph applies to a face-value voucher issued by a person who—

a is not a person from whom goods or services may be obtained by the use of the voucher, and

b undertakes to give complete or partial reimbursement to any such person from whom goods or services are so obtained.

Such a voucher is referred to in this Schedule as a “credit voucher”.

2 The consideration for any supply of a credit voucher shall be disregarded for the purposes of this Act except to the extent (if any) that it exceeds the face value of the voucher.

3 Sub-paragraph (2) above does not apply if any of the persons from whom goods or services are obtained by the use of the voucher fails to account for any of the VAT due on the supply of those goods or services to the person using the voucher to obtain them.

Treatment of retailer vouchers

1 This paragraph applies to a face-value voucher issued by a person who—

a is a person from whom goods or services may be obtained by the use of the voucher, and

b if there are other such persons, undertakes to give complete or partial reimbursement to those from whom goods or services are so obtained.

Such a voucher is referred to in this Schedule as a “retailer voucher”.

2 The consideration for the issue of a retailer voucher shall be disregarded for the purposes of this Act except to the extent (if any) that it exceeds the face value of the voucher.

3 Sub-paragraph (2) above does not apply if—

a the voucher is used to obtain goods or services from a person other than the issuer, and

b that person fails to account for any of the VAT due on the supply of those goods or services to the person using the voucher to obtain them.

4 Any supply of a retailer voucher subsequent to the issue of it shall be treated in the same way as the supply of a voucher to which paragraph 6 below applies.

Treatment of postage stamps

5The consideration for the supply of a face-value voucher that is a postage stamp shall be disregarded for the purposes of this Act except to the extent (if any) that it exceeds the face value of the stamp.

Treatment of other kinds of face-value voucher

1 This paragraph applies to a face-value voucher that is not a credit voucher, a retailer voucher or a postage stamp.

2 A supply of such a voucher is chargeable at the rate in force under section 2(1) (standard rate) except where sub-paragraph (3), (4) or (5) below applies.

3 Where the voucher is one that can only be used to obtain goods or services in one particular non-standard rate category, the supply of the voucher falls in that category.

4 Where the voucher is used to obtain goods or services all of which fall in one particular non-standard rate category, the supply of the voucher falls in that category.

5 Where the voucher is used to obtain goods or services in a number of different rate categories—

a the supply of the voucher shall be treated as that many different supplies, each falling in the category in question, and

b the value of each of those supplies shall be determined on a just and reasonable basis.

Vouchers supplied free with other goods or services

7Where—

a a face-value voucher (other than a postage stamp) and other goods or services are supplied to the same person in a composite transaction, and

b the total consideration for the supplies is no different, or not significantly different, from what it would be if the voucher were not supplied,

the supply of the voucher shall be treated as being made for no consideration.

Interpretation

1 In this Schedule—

“credit voucher” has the meaning given by paragraph 3(1) above;
“face value” has the meaning given by paragraph 1(2) above;
“face value voucher” has the meaning given by paragraph 1(1) above;
“retailer voucher” has the meaning given by paragraph 4(1) above.

2 For the purposes of this Schedule—

a the “rate categories” of supplies are—

i supplies chargeable at the rate in force under section 2(1) (standard rate),

ii supplies chargeable at the rate in force under section 29A (reduced rate),

iii zero-rated supplies, and

iv exempt supplies and other supplies that are not taxable supplies;

b the “non-standard rate categories” of supplies are those in sub-paragraphs (ii), (iii) and (iv) of paragraph (a) above;

c goods or services are in a particular rate category if a supply of those goods or services falls in that category.

3 A reference in this Schedule to a voucher being used to obtain goods or services includes a reference to the case where it is used as part-payment for those goods or services.

3In Schedule 6 to the Value Added Tax Act 1994 (c. 23) (valuation: special cases), omit paragraph 5 (vouchers etc).

4The amendments made by this Schedule apply to supplies of tokens, stamps or vouchers issued on or after 9th April 2003.

^F1080SCHEDULE 2 ¶

Supply of electronic services in member States: VAT special accounting scheme

Section 23

^F1080Introductory¶

^F10801. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1080Insertion of new section 3A¶

^F10802. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1080Persons registered under Schedule 1¶

^F10803. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1080The special accounting scheme¶

^F10804. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 2A ¶

Transactions entered into before completion of contract

Pre-completion transactions¶

1 This Schedule applies where—

a a person (“the original purchaser”) enters into a contract (“the original contract”) for the acquisition by that person of a chargeable interest under which the acquisition is to be completed by a conveyance, and

b there is a pre-completion transaction.

2 A transaction is a “pre-completion transaction” for the purposes of sub-paragraph (1) if—

a as a result of the transaction a person other than the original purchaser (“the transferee”) becomes entitled to call for a conveyance to that person of the whole or part of the subject-matter of the original contract, and

b immediately before the transaction took place a person was entitled under the original contract to call for a conveyance of the whole or part of that subject-matter.

3 A transaction that effects a person's acquisition of the whole or part of the subject-matter of the original contract is not a pre-completion transaction.

4 The grant or assignment of an option is not a pre-completion transaction.

5 The fact that a transaction has the effect of discharging the original contract does not prevent that transaction from being a pre-completion transaction.

6 The reference in sub-paragraph (1)(a) to a contract does not include a contract that is an assignment of rights in relation to another contract.

7 In this Schedule references to “part of the subject-matter of the original contract”—

a are to a chargeable interest that is the same as the chargeable interest referred to in sub-paragraph (1)(a) except that it relates to part only of the land concerned, and

b also include, so far as is appropriate, interests or rights appurtenant or pertaining to the chargeable interest.

8 This Schedule does not apply where paragraph 12B of Schedule 17A (assignment of agreement for lease) applies.

Other key expressions¶

1 A pre-completion transaction is an “assignment of rights” if the entitlement of the transferee referred to in paragraph 1(2)(a) is an entitlement to exercise rights under the original contract.

2 A pre-completion transaction other than an assignment of rights is referred to in this Schedule as a “free-standing transfer”.

3 In this Schedule “the transferor”, in relation to a pre-completion transaction, means a party to the pre-completion transaction who immediately before the pre-completion transaction took place was entitled to call for a conveyance of (what became) the subject-matter of the pre-completion transaction.

4 References in this Schedule to the “subject-matter” of a pre-completion transaction—

a are to the chargeable interest the conveyance of which the transferee is entitled to call for as a result of the pre-completion transaction, and

b include, so far as appropriate, any interest or right appurtenant or pertaining to the chargeable interest.

Tax not charged on transferee by reason of the pre-completion transaction¶

3The transferee is not regarded as entering into a land transaction by reason of the pre-completion transaction.

Assignments of rights: application of rules about completion and consideration¶

1 This paragraph applies if the pre-completion transaction is an assignment of rights.

2 If the subject-matter of the original contract is conveyed to the transferee, the conveyance is taken to effect the completion of the original contract (despite section 44(10)).

3 Sub-paragraphs (4) to (6) apply if—

a the subject-matter of the original contract is conveyed to the transferee, or

b the original contract is substantially performed by the transferee.

4 The transferee is taken to be the purchaser under the land transaction effected as mentioned in section 44(3), or treated as effected under section 44(4).

5 For the purpose of determining the chargeable consideration for that land transaction, the land transaction is taken to give effect to a contract the consideration under which is—

a the consideration under the original contract, and

b the consideration for the assignment of rights.

Paragraph 1 of Schedule 4 has effect accordingly (but this sub-paragraph does not allow any amount of consideration given by a person to be counted twice in determining the chargeable consideration).

6 In any case in which there is a relevant connection between parties as mentioned in paragraph 12(2) (minimum consideration rule), the chargeable consideration for the land transaction mentioned in sub-paragraph (4) of this paragraph is calculated (regardless of whether the consideration is taken to be the amount in paragraph (a), (b) or (c) of sub-paragraph 12(2)), as if in paragraph 1(1) of Schedule 4 the words, “or a person connected with him” were omitted.

7 The original contract is said to be “substantially performed by the transferee” where a land transaction is treated under section 44(4) as effected by reason of—

a the transferee under the assignment of rights, or a person connected with the transferee, taking possession of the whole, or substantially the whole, of the subject-matter of the original contract, or

b a substantial amount of the consideration being paid or provided by the transferee or a person connected with the transferee, or

c consideration paid or provided by a person within paragraph (b) amounting, when taken together with consideration paid or provided by another person, to a substantial amount of the consideration.

8 References in sub-paragraph (7) to possession and to the payment or provision of a substantial amount of the consideration are to be read in accordance with section 44(6) and (7).

9 In sub-paragraph (5) “the consideration”—

a in relation to the land transaction, means (what is to be taken to be) the consideration for the acquisition of the subject-matter of the land transaction;

b in relation to the original contract, means the consideration for the acquisition of the subject-matter of that contract;

c in relation to the assignment of rights, means the consideration for the transferee's acquisition of the rights to which that contract relates.

Assignment of rights: transferor treated as making separate acquisition¶

1 Where paragraph 4(4) to (6) applies (assignment of rights: original contract completed or substantially performed) this Part of this Act has effect as if—

a the effective date of the land transaction mentioned in paragraph 4(4) (“the transferee's land transaction”) were also the effective date of another land transaction (a “notional land transaction”), and

b the original purchaser were the purchaser under that notional land transaction.

The notional land transaction is referred to below as “associated with” the assignment of rights under which the original purchaser is the transferor.

2 Where sub-paragraph (1) applies and the assignment of rights mentioned in paragraph 4(1) (“the implemented assignment of rights”) was preceded by one or more related assignments of rights, then for the purposes of this Part of this Act there is taken to be, for each assignment of rights (other than the first) in the chain formed by the implemented assignment of rights and those preceding assignments of rights, an additional land transaction in the case of which—

a the effective date is the effective date of the transferee's land transaction, and

b the purchaser is the transferor under that assignment of rights.

The additional land transaction is referred to below as “associated with” the assignment of rights.

3 For the purpose of determining the chargeable consideration for the notional land transaction, Schedule 4 has effect as if paragraph 1(1) of that Schedule provided that the chargeable consideration is (except as otherwise expressly provided) the total of amounts A and B.

4 For the purpose of determining the chargeable consideration for any additional land transaction, Schedule 4 has effect as if paragraph 1(1) of that Schedule provided that the chargeable consideration is (except as otherwise expressly provided) the total of amounts A, B and C.

5 For the purposes of sub-paragraphs (3) and (4)—

A is the total amount of any consideration in money or money's worth given (whether directly or indirectly) by any of the following as consideration under the original contract—
1. the transferee under the assignment of rights with which the notional land transaction or (as the case requires) the additional land transaction is associated;
2. where that assignment of rights is one in a chain of successive transactions that are pre-completion transactions in relation to the original contract (all having at least part of their subject-matter in common), the transferee under any subsequent pre-completion transaction in that chain;
3. a person connected with a person falling within paragraph (a) or (b);
B is the total amount of any other consideration in money or money's worth given as consideration under the original contract (directly or indirectly) by—
1. the purchaser (under the notional land transaction or, as the case requires, the additional land transaction), or
2. a person connected with the purchaser;
C is the amount of any consideration in money or money's worth given for the preceding assignment of rights by—
1. the purchaser (under the additional land transaction), or
2. a person connected with the purchaser.

6 In the definition of amount C, “the preceding assignment of rights” means the assignment of rights as a result of which the purchaser became entitled to call for a conveyance of (what became) the subject-matter of the assignment of rights associated with the additional land transaction.

7 In sub-paragraph (2) “related assignment of rights” means a transaction that is an assignment of rights in relation to the original contract and has some subject-matter in common with the implemented assignment of rights.

Paragraph 5: effect of rescission etc following substantial performance¶

1 This paragraph applies where paragraph 5(1) (transferor treated as making separate acquisition) applies by virtue of the substantial performance by the transferee of the original contract.

2 If the original contract is (to any extent) subsequently rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of paragraph 5(1), and any tax paid by virtue of paragraph 5(2), must (to that extent) be repaid by HMRC.

3 Repayment under sub-paragraph (2) must be claimed by amendment of the land transaction return made in respect of the notional or additional land transaction.

Assignment of rights relating to part only of subject-matter of original contract¶

7Where the transferee under the assignment of rights referred to in paragraph 4(1) is entitled to call for the conveyance of part, but not the whole, of the subject-matter of the original contract—

a paragraph 4 applies as if the original contract, so far as relating to that part of its subject-matter, were a separate contract, and

b the references in paragraph 5 to the original contract are to be read accordingly.

Assignment of rights: references to “the vendor”¶

1 This paragraph applies where—

a the pre-completion transaction is an assignment of rights, and

b either the subject-matter of the original contract is conveyed to the transferee or the original contract is substantially performed by the transferee.

2 This paragraph does not apply if the original contract is itself a free-standing transfer. See paragraphs 10 and 11 for the treatment of such cases.

3 In relation to a relevant land transaction, the general rule is that references in this Part of this Act to the vendor are to be read as references to the vendor under the original contract (but see sub-paragraphs (4) and (5)).

4 In cases where the original contract was substantially performed before the transferee became entitled to call for a conveyance of the whole or part of the subject-matter of the original contract, references in this Part of this Act to the vendor are to be read as references to the person who was the purchaser under the original contract when it was substantially performed.

5 In relation to a relevant land transaction, references to the vendor in the specified provisions (see sub-paragraph (6)) are to be read as including—

a the vendor under the original contract, and

b the transferor under any relevant assignment of rights.

6 The specified provisions are—

a section 61(1)(a) (compliance with planning obligations: conditions for exemption);

b section 66(1) and (2) (transfers involving public bodies);

c paragraph 8(1)(a) of Schedule 4 (debt as consideration);

d paragraph 10(2)(c) of Schedule 4 (carrying out of works);

e paragraph 16 of Schedule 4 (indemnity given by vendor).

7 The following are “relevant land transactions”—

a the land transaction effected by the conveyance mentioned in sub-paragraph (1)(b) or treated as effected by the substantial performance mentioned in that provision;

b the notional land transaction mentioned in paragraph 5(1)(b) and any additional land transaction under paragraph 5(2).

8 In determining under section 108(1) whether or not a relevant land transaction such as is mentioned in sub-paragraph (7)(a) is linked to another transaction, it may be assumed that any of the following is the vendor under the relevant land transaction—

a the vendor (determined in accordance with sub-paragraph (3)), or

b the transferor under any relevant assignment of rights.

9 The following are “relevant assignments of rights” in relation to a relevant land transaction—

a the assignment of rights mentioned in sub-paragraph (1)(a);

b any other transaction that is an assignment of rights in relation to the original contract and has some subject-matter in common with the assignment of rights mentioned in paragraph (a).

Free-standing transfers: consideration and substantial performance¶

1 This paragraph applies where the pre-completion transaction is a free-standing transfer.

2 If the transferee acquires the subject-matter of the free-standing transfer, the consideration for the transaction effecting that acquisition is taken to include the consideration given for the free-standing transfer (if that would not otherwise be the case).

3 References in sub-paragraph (2) to an acquisition include an acquisition deemed to take place under section 44(4) (and the reference to the transaction effecting that acquisition is read accordingly).

4 An action taken by the transferee (or an assignee of the transferee) that would, if taken by the original purchaser, constitute (for the purposes of section 44(5)) the taking of possession of the whole or substantially the whole of the subject-matter of the original contract is treated as effecting the substantial performance of the original contract.

5 If a transaction that is a free-standing transfer in relation to a contract is also a free-standing transfer in relation to another contract (in particular, where there have been successive free-standing transfers), each of those contracts may be regarded as “the original contract” for the purposes of separate applications of sub-paragraph (4).

6 In sub-paragraph (4)—

a the reference to the transferee includes a person connected with the transferee, and

b the reference to an assignee of the transferee includes a person connected with such a person.

7 References in this paragraph to an assignee of the transferee are to a person who, as a result of a transaction that is an assignment of rights in relation to the free-standing transfer, is entitled to call for a conveyance of the whole or part of the subject-matter of the free-standing transfer.

Meaning of “the vendor”: cases involving free-standing transfers¶

1 This paragraph applies where—

a a land transaction is effected, or treated as effected, by an acquisition falling within paragraph 9(2) (read with paragraph 9(3)), or

b paragraph 8(1) (meaning of “vendor” where the transferee is the assignee under an assignment of rights) would apply but for paragraph 8(2) (exclusion of cases where the original contract is itself a free-standing transfer).

2 In this paragraph “the relevant land transaction” means the land transaction—

a mentioned in sub-paragraph (1)(a), or

b in a case falling within sub-paragraph (1)(b), effected by the conveyance to the transferee of the subject-matter of the original contract or the substantial performance by the transferee of the original contract.

3 References in this paragraph to “the specified transaction” are to—

a the free-standing transfer mentioned in paragraph 9(2), or

b the original contract the subject-matter of which is conveyed to the transferee or which is substantially performed by the transferee.

4 The general rule is that in relation to the relevant land transaction references in this Part of this Act to “the vendor” are to be read as references to the vendor or (as the case may be) transferor under the first appropriate transaction (but see sub-paragraph (5)).

5 In relation to the relevant land transaction, references to the vendor in the specified provisions (see sub-paragraph (6)) are to be read as including—

a the vendor under the first appropriate transaction, and

b each person who is the transferor in the case of a relevant pre-completion transaction.

6 The specified provisions are—

a section 61(1)(a) (compliance with planning obligations: conditions for exemption);

b section 66(1) and (2) (transfers involving public bodies);

c paragraph 8(1)(a) of Schedule 4 (debt as consideration);

d paragraph 10(2)(c) of Schedule 4 (carrying out of works);

e paragraph 16 of Schedule 4 (indemnity given by vendor).

7 In determining under section 108(1) whether or not the relevant land transaction is linked to another transaction it may be assumed that any of the following is the vendor under the relevant land transaction—

a the vendor (determined under sub-paragraph (4)), or

b the transferor under any relevant pre-completion transaction.

8 The following are “relevant pre-completion transactions” in relation to the relevant land transaction—

a the specified transaction;

b any other transaction that is a pre-completion transaction in relation to the original contract and has some subject-matter in common with the specified transaction.

Paragraph 10: “the first appropriate transaction” and “the original contract”¶

1 Subject to the following provisions of this paragraph, “the first appropriate transaction” means the original contract.

2 If the original contract is not performed at the same time as, and in connection with the performance of, the specified transaction, “the first appropriate transaction” means a transaction that is a pre-completion transaction in relation to the original contract and meets the following conditions.

3 The conditions are that the pre-completion transaction—

a is performed at the time when the specified transaction is performed and (if it is not itself the specified transaction) is performed in connection with the performance of the specified transaction,

b is a transaction on which the entitlement of the transferee to call for the conveyance of the subject-matter of the specified transaction depends, and

c is not preceded by another pre-completion transaction meeting the conditions in paragraphs (a) and (b).

4 For the purposes of this paragraph—

a a contract for a land transaction is taken to be “performed” when it is substantially performed or completed (whichever is earlier);

b a free-standing transfer other than a contract is taken to be “performed” when the transferee under that free-standing transfer (or an assignee of that transferee, as defined in paragraph 9(7)) acquires the subject-matter of that free-standing transfer.

5 Where the specified transaction is a pre-completion transaction in relation to each of two or more contracts such as are mentioned in paragraph 1(1)(a) that together form a series of such contracts (each having some subject-matter in common with all the others), references in paragraph 10 and this paragraph to “the original contract” are to be read as references to the first contract in that series.

6 In this paragraph “the specified transaction” has the meaning given by paragraph 10(3).

Minimum consideration rule¶

1 This paragraph applies where either of the following provisions applies—

a paragraph 4(3) (assignment of rights: chargeable interest acquired or treated as acquired by transferee);

b paragraph 9(2) (free-standing transfers: chargeable interest acquired or treated as acquired by transferee).

2 If there is a relevant connection between parties, then for the purposes of paragraph 1(1) of Schedule 4 the consideration given by the purchaser for the subject-matter of the land transaction referred to in paragraph 4(4) or 9(2) is taken to be—

a the amount that it would be apart from this sub-paragraph, or

b (if higher) the first minimum amount, or

c (if higher than both those amounts) the second minimum amount.

3 There is a “relevant connection between parties” if—

a the persons who are the transferor and transferee in relation to the pre-completion transaction mentioned in paragraph 4(1) or 9(1) (“the implemented transaction”) are connected with each other, or are not acting at arm's length, or

b sub-paragraph (4) applies.

4 This sub-paragraph applies if—

a the implemented transaction is one in a chain of successive transactions (all having at least part of their subject-matter in common) that are pre-completion transactions in relation to the original contract, and

b a person who is the transferor in relation to a pre-completion transaction that precedes the implemented transaction in the chain of transactions is connected with, or not acting at arm's length in relation to, the transferee under the implemented transaction.

5 Where the implemented transaction is a pre-completion transaction in relation to—

a a contract for a land transaction that is not itself a free-standing transfer in relation to any other contract, and

b a contract, or two or more successive contracts, that are themselves free-standing transfers in relation to the contract mentioned in paragraph (a),

references in this paragraph to “the original contract” are to the contract mentioned in paragraph (a) (and do not include any contract mentioned in paragraph (b)).

The first minimum amount¶

1 “The first minimum amount” means—

a if the chargeable interest acquired (or treated as acquired) under the land transaction referred to in paragraph 4(4) or 9(2) is the whole subject-matter of the original contract, the amount of any consideration (in money or money's worth) agreed to be given, under the terms of the original contract, for the acquisition of that subject-matter, or

b if paragraph (a) does not apply, so much of the amount mentioned in paragraph (a) as is referable, on a just and reasonable apportionment, to the chargeable interest mentioned in that paragraph.

This is subject to sub-paragraph (2).

2 If conditions A to C are met, “the first minimum amount” means the amount of any consideration (in money or money's worth) agreed, under the terms of the transfer to the first T, to be given in respect of the subject-matter of that transaction (including any consideration relating to an obligation of the transferor under the transfer to the first T).

3 The conditions mentioned in sub-paragraph (2) are as follows.

Condition A is that the pre-completion transaction referred to in paragraph 4(4) or 9(2) is one of a chain of successive transactions (all having at least part of their subject-matter in common) that are pre-completion transactions in relation to the original contract.
Condition B is that a person (“T”) is the transferor under a pre-completion transaction that forms part of that chain and T is connected with, or not acting at arm's length in relation to—
1. the transferee under that transaction, or
2. the transferee under a subsequent transaction in the chain.
Condition C is that having regard to all the circumstances it would not be reasonable to conclude that the obtaining of a tax advantage (for any person) was the main purpose, or one of main purposes, of T in entering into—
1. any pre-completion transaction in the chain, or
2. any arrangements of which such a transaction forms part.

4 Where conditions A to C are met, “the first T” means—

a if condition B is met in relation to only one pre-completion transaction, T, or

b if condition B is met in relation to more than one pre-completion transaction in the chain, the transferor in relation to the first of the pre-completion transactions in relation to which condition B is met.

5 In this paragraph “the transfer to the first T” means—

a the pre-completion transaction under which the first T is the transferee, or

b the original contract (if T is the original purchaser).

6 In this paragraph—

a references to “the original contract” are to be read in accordance with paragraph 12(5) (and references to the original purchaser are to be read accordingly);

b “tax advantage” has the same meaning as in paragraph 18.

The second minimum amount¶

1 In paragraph 12 “the second minimum amount” means the total of the net amounts of consideration given by the relevant parties.

2 The net amount of consideration given by any relevant party is—

CP - CR

where—

CP is the total amount of consideration given by the party for the acquisition of the chargeable interest or as consideration for a pre-completion transaction;

CR is the total of any amounts of consideration given to the party by another relevant party (or other relevant parties) as consideration for the acquisition of the chargeable interest or as consideration for a pre-completion transaction.

If CR is greater than CP, the net amount of consideration given by the relevant party is taken to be zero.

3 Except where sub-paragraph (4) applies, the relevant parties for the purposes of this paragraph are—

a the original purchaser, and

b the transferee.

4 If the pre-completion transaction referred to in paragraph 4(4) or 9(2) (“the implemented transaction”) is one in a chain of successive transactions (having at least part of their subject-matter in common) that are pre-completion transactions in relation to the original contract, only the following are relevant parties—

a the persons who are the transferor and transferee in relation to the implemented transaction;

b a person who is the transferor in relation to preceding transaction, if that person is connected with, or not acting at arm's length in relation to, the transferee under the implemented transaction,

c the transferee under a pre-completion transaction, if the transferor is a relevant party (whether by virtue of this paragraph (c) or otherwise).

5 For the purposes of sub-paragraph (2)—

a amounts given by a person connected with a relevant party are treated as given by the relevant party;

b amounts given to a person connected with a relevant party are treated as given to the relevant party.

References in this paragraph to a person connected with a relevant party do not include a person who is a relevant party.

6 If the subject-matter of the implemented transaction is not the whole subject-matter of the original contract—

a the amounts that are taken for the purposes of sub-paragraph (2) to be given “for the acquisition of the chargeable interest” are to be determined on a just and reasonable basis, and

b only so much of the consideration for a preceding transaction as is referable, on a just and reasonable apportionment, to the subject-matter of the implemented transaction is taken into account under sub-paragraph (2).

7 In this paragraph—

a references to “the original contract” are to be read in accordance with paragraph 12(5) (and references to “the original purchaser” are to be read accordingly);

b “preceding transaction” means a pre-completion transaction that precedes the implemented transaction in a chain of successive pre-completion transactions (all having at least part of their subject-matter in common).

Relief for transferor: assignment of rights¶

1 This paragraph applies where—

a a person would, in the absence of this paragraph, be liable to pay tax in respect of a notional land transaction deemed to take place under paragraph 5(1) or an additional land transaction deemed to take place under paragraph 5(2), and

b the original contract had not been substantially performed when the assignment of rights mentioned in paragraph 4(1) was entered into.

2 If the purchaser claims relief under this paragraph in respect of the notional land transaction or additional land transaction, no liability to tax arises in respect of that transaction.

3 Sub-paragraph (2) does not apply if the land transaction mentioned in paragraph 4(4) is exempt from charge by virtue of any of sections 71A to 73 (which relate to alternative property finance).

4 Relief under this section must be claimed in a land transaction return or an amendment of such a return.

Relief for original purchaser: qualifying subsales¶

1 This paragraph applies if—

a the pre-completion transaction is a qualifying subsale,

b the original purchaser would, in the absence of this paragraph, be liable to pay tax in respect of a land transaction effected by the completion of the original contract or deemed to be effected by the substantial performance of the original contract,

c the performance of the qualifying subsale takes place at the same time as, and in connection with, the performance of the original contract, and

d relief is claimed in respect of the land transaction mentioned in paragraph (b).

2 If the subject-matter of the qualifying subsale is the whole of the subject-matter of the original contract, no liability to tax arises in respect of the land transaction.

3 If the subject-matter of the qualifying subsale is part (but not the whole) of the subject-matter of the original contract, the amount of the consideration for the land transaction is taken to be—

a the amount that it would be apart from this subsection, less

b so much of that amount as is referable to the subject-matter of the qualifying subsale.

4 The amount mentioned in sub-paragraph (3)(a) may be reduced more than once under sub-paragraph (3) if there is more than one qualifying subsale.

5 Sub-paragraphs (2) to (4) do not apply if—

a the original contract had been substantially performed when the qualifying subsale was entered into, or

b the transaction effected, or deemed to be effected, by the performance of the qualifying subsale is exempt from charge by virtue of any of sections 71A to 73.

6 Relief under this section must be claimed in a land transaction return or an amendment of a land transaction return.

7 For the purposes of this paragraph a contract for a land transaction is taken to be “performed” when it is substantially performed or completed (whichever is earlier).

8 A pre-completion transaction is a “qualifying subsale” if it is a contract under which the original purchaser contracts to sell the whole or part of the subject-matter of the original contract to the transferee.

Application of paragraph 16 to successive subsales¶

17If a transaction is a qualifying subsale in relation to more than one contract such as is mentioned in paragraph 1(1)(a), paragraph 16 is to be applied separately in relation to each such original contract for the purpose of determining what relief, if any, may be available with respect to the land transaction in question.

Tax avoidance arrangements¶

1 Relief may not be claimed—

a under paragraph 15 if the assignment of rights referred to in sub-paragraph (1)(b) of that paragraph forms part of any tax avoidance arrangements, or

b under paragraph 16 if the qualifying subsale referred to in sub-paragraph (1)(c) of that paragraph forms part of any tax avoidance arrangements.

2 Arrangements are “tax avoidance arrangements” if, having regard to all the circumstances, it would be reasonable to conclude that the obtaining of a tax advantage for the original purchaser or any other person was the main purpose, or one of the main purposes, of the original purchaser in entering into the arrangements.

3 In this paragraph “tax advantage” means—

a a relief from tax or increased relief from tax,

b a repayment of tax or increased repayment of tax,

c the avoidance or reduction of a charge to tax, or

d the avoidance of a possible assessment to tax.

4 In this paragraph “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

5 Nothing in paragraphs 12 to 14 (minimum consideration rule) or this paragraph affects the breadth of the application of sections 75A to 75C (anti-avoidance).

Exclusion of transactions from duty to make returns etc¶

1 The Treasury may by regulations amend this Schedule, or any provision of this Part of this Act relating to the making of returns, so as to—

a exempt relevant purchasers of any specified description, or in specified circumstances, from the duty to deliver a land transaction return,

b provide for relief under paragraph 15 or 16 to be available without a claim in the case of any specified class of transactions, or

c provide that paragraph 5 does not apply in specified cases.

2 In this paragraph “relevant purchaser” means a person who is the transferor under a pre-completion transaction.

Connected persons¶

20Section 1122 of CTA 2010 (connected persons) applies for the purposes of this Schedule.

Interpretation of Schedule¶

1 In this Schedule—

“assignment of rights” has the meaning given by paragraph 2(1);
“contract” includes any agreement;
“conveyance” includes any instrument;
“free-standing transfer” has the meaning given by paragraph 2(2);
“pre-completion transaction” (in relation to a contract such as is mentioned in paragraph 1(1)) has the meaning given by paragraph 1(2);
“qualifying subsale” has the meaning given by paragraph 16(8);
“the transferee”, in relation to a pre-completion transaction, has the meaning given by paragraph 1(2)(a);
“the transferor”, in relation to a pre-completion transaction, has the meaning given by paragraph 2(3).

2 In this Schedule—

a references to “the original contract” are to be read in accordance with paragraph 1(1)(a);

b references to “the original purchaser” are to be read in accordance with paragraph 1(1)(a) and see also sub-paragraph (3);

c references to “part of the subject-matter of the original contract” are to be read in accordance with paragraph 1(7);

d references to the “subject-matter” of a pre-completion transaction are to be read in accordance with paragraph 2(4);

e references to substantial performance of the original contract “by the transferee” (in cases involving an assignment of rights) are to be read in accordance with paragraph 4(7).

3 For any one contract for the acquisition of a chargeable interest there is only one original purchaser (disregarding cases involving joint purchasers).

SCHEDULE 3 ¶

Stamp duty land tax: transactions exempt from charge

Section 49

No chargeable consideration¶

1A land transaction is exempt from charge if there is no chargeable consideration for the transaction.

Transactions in connection with divorce etc¶

3A transaction between one party to a marriage and the other is exempt from charge if it is effected—

a in pursuance of an order of a court made on granting in respect of the parties an order or decree for their divorce, the annulment of the marriage or their judicial separation;

b in pursuance of an order of a court made in connection with the dissolution or annulment of the marriage, or the parties' judicial separation, at any time after the granting of such an order or decree for divorce, annulment or judicial separation as is mentioned in paragraph (a);

c in pursuance of—

i an order of a court made at any time under section 22A, 23A or 24A of the Matrimonial Causes Act 1973 (c. 18), or

ii an incidental order of a court made under section 8(2) of the Family Law (Scotland) Act 1985 (c. 37) by virtue of section 14(1) of that Act;

d at any time in pursuance of an agreement of the parties made in contemplation or otherwise in connection with the dissolution or annulment of the marriage, their judicial separation or the making of a separation order in respect of them.

Assents and appropriations by personal representatives¶

1 The acquisition of property by a person in or towards satisfaction of his entitlement under or in relation to the will of a deceased person, or on the intestacy of a deceased person, is exempt from charge.

2 Sub-paragraph (1) does not apply if the person acquiring the property gives any consideration for it, other than the assumption of secured debt.

3 Where sub-paragraph (1) does not apply because of sub-paragraph (2), the chargeable consideration for the transaction is determined in accordance with paragraph 8A(1) of Schedule 4.

4 In this paragraph—

“debt” means an obligation, whether certain or contingent, to pay a sum of money either immediately or at a future date, and
“secured debt” means debt that, immediately after the death of the deceased person, is secured on the property.

Transactions in connection with dissolution of civil partnership etc¶

3AA transaction between one party to a civil partnership and the other is exempt from charge if it is effected —

a in pursuance of an order of a court made on granting in respect of the parties an order or decree for the dissolution or annulment of the civil partnership or their judicial separation;

b in pursuance of an order of a court made in connection with the dissolution or annulment of the civil partnership, or the parties' judicial separation, at any time after the granting of such an order or decree for dissolution, annulment or judicial separation as mentioned in paragraph (a);

c in pursuance of —

i an order of a court made at any time under any provision of Schedule 5 to the Civil Partnership Act 2004 that corresponds to section 22A, 23A or 24A of the Matrimonial Causes Act 1973, or

ii an incidental order of a court made under any provision of the Civil Partnership Act 2004 that corresponds to section 8(2) of the Family Law (Scotland) Act 1985 by virtue of section 14(1) of that Act of 1985;

d at any time in pursuance of an agreement of the parties made in contemplation of or otherwise in connection with the dissolution or annulment of the civil partnership, their judicial separation or the making of a separation order in respect of them.

Variation of testamentary dispositions etc¶

1 A transaction following a person’s death that varies a disposition (whether effected by will, under the law relating to intestacy or otherwise) of property of which the deceased was competent to dispose is exempt from charge if the following conditions are met.

2 The conditions are—

a that the transaction is carried out within the period of two years after a person’s death, and

b that no consideration in money or money’s worth other than the making of a variation of another such disposition is given for it.

2A Where the condition in sub-paragraph (2)(b) is not met, the chargeable consideration for the transaction is determined in accordance with paragraph 8A(2) of Schedule 4.

3 This paragraph applies whether or not the administration of the estate is complete or the property has been distributed in accordance with the original dispositions.

Power to add further exemptions¶

1 The Treasury may by regulations provide that any description of land transaction specified in the regulations is exempt from charge.

2 The regulations may contain such supplementary, incidental and transitional provision as appears to the Treasury to be appropriate.

SCHEDULE 4 ¶

Stamp duty land tax: chargeable consideration

Section 50

Money or money’s worth¶

^C581

1 The chargeable consideration for a transaction is, except as otherwise expressly provided, any consideration in money or money’s worth given for the subject-matter of the transaction, directly or indirectly, by the purchaser or a person connected with him.

2 Section 1122 of the Corporation Tax Act 2010 (connected persons) applies for the purposes of sub-paragraph (1).

Value added tax¶

2The chargeable consideration for a transaction shall be taken to include any value added tax chargeable in respect of the transaction, other than value added tax chargeable by virtue of an option to tax any land under Part 1 of Schedule 10 to the Value Added Tax Act 1994 (c. 23) made after the effective date of the transaction.

Postponed consideration¶

3The amount or value of the chargeable consideration for a transaction shall be determined without any discount for postponement of the right to receive it or any part of it.

Just and reasonable apportionment¶

1 For the purposes of this Part consideration attributable—

a to two or more land transactions, or

b in part to a land transaction and in part to another matter, or

c in part to matters making it chargeable consideration and in part to other matters,

shall be apportioned on a just and reasonable basis.

2 If the consideration is not so apportioned, this Part has effect as if it had been so apportioned.

3 For the purposes of this paragraph any consideration given for what is in substance one bargain shall be treated as attributable to all the elements of the bargain, even though—

a separate consideration is, or purports to be, given for different elements of the bargain, or

b there are, or purport to be, separate transactions in respect of different elements of the bargain.

Exchanges¶

1 This paragraph applies to determine the chargeable consideration where one or more land transactions are entered into by a person as purchaser (alone or jointly) wholly or partly in consideration of one or more other land transactions being entered into by him (alone or jointly) as vendor.

2 In this paragraph—

a “relevant transaction” means any of those transactions, and

b “relevant acquisition” means a relevant transaction entered into as purchaser and “relevant disposal” means a relevant transaction entered into as vendor.

3 The following rules apply if the subject-matter of any of the relevant transactions is a major interest in land—

a where a single relevant acquisition is made, the chargeable consideration for the acquisition is—

i the amount determined under sub-paragraph (3A) in respect of the acquisition, or

ii if greater, the amount which would be the chargeable consideration for the acquisition ignoring paragraph 5;

b where two or more relevant acquisitions are made, the chargeable consideration for each relevant acquisition is—

i the amount determined under sub-paragraph (3A) in respect of that acquisition, or

ii if greater, the amount which would be the chargeable consideration for that acquisition ignoring paragraph 5;

3A The amount mentioned in sub-paragraph (3)(a)(i) and (b)(i) is—

a the market value of the subject-matter of the acquisition, and

b if the acquisition is the grant of a lease at a rent, that rent.

4 The following rules apply if the subject-matter of none of the relevant transactions is a major interest in land—

a where a single relevant acquisition is made in consideration of one or more relevant disposals, the chargeable consideration for the acquisition is the amount or value of any chargeable consideration other than the disposal or disposals that is given for the acquisition;

b where two or more relevant acquisitions are made in consideration of one or more relevant disposals, the chargeable consideration for each relevant acquisition is the appropriate proportion of the amount or value of any chargeable consideration other than the disposal or disposals that is given for the acquisitions.

5 For the purposes of sub-paragraph (4)(b) the appropriate proportion is—

\frac{MV}{TMV}

where—

MV is the market value of the subject-matter of the acquisition for which the chargeable consideration is being determined, and

TMV is the total market value of the subject-matter of all the relevant acquisitions.

6 This paragraph has effect subject to—

paragraph 6 of this Schedule (partition etc: disregard of existing interest), ^F60...
^F9...
^F60...

7 This paragraph does not apply in a case to which paragraph 17 applies.

Partition etc: disregard of existing interest¶

6In the case of a land transaction giving effect to a partition or division of a chargeable interest to which persons are jointly entitled, the share of the interest held by the purchaser immediately before the partition or division does not count as chargeable consideration.

Valuation of non-monetary consideration¶

7Except as otherwise expressly provided, the value of any chargeable consideration for a land transaction, other than—

a money (whether in sterling or another currency), or

b debt as defined for the purposes of paragraph 8 (debt as consideration),

shall be taken to be its market value at the effective date of the transaction.

Debt as consideration¶

^C4^C598

1 Where the chargeable consideration for a land transaction consists in whole or in part of—

a the satisfaction or release of debt due to the purchaser or owed by the vendor, or

b the assumption of existing debt by the purchaser,

the amount of debt satisfied, released or assumed shall be taken to be the whole or, as the case may be, part of the chargeable consideration for the transaction.

1A Where—

a debt is secured on the subject-matter of a land transaction immediately before and immediately after the transaction, and

b the rights or liabilities in relation to that debt of any party to the transaction are changed as a result of or in connection with the transaction,

then for the purposes of this paragraph there is an assumption of that debt by the purchaser, and that assumption of debt constitutes chargeable consideration for the transaction.

1B Where in a case in which sub-paragraph (1)(b) applies—

a the debt assumed is or includes debt secured on the property forming the subject-matter of the transaction, and

b immediately before the transaction there were two or more persons each holding an undivided share of that property, or there are two or more such persons immediately afterwards,

the amount of secured debt assumed shall be determined as if the amount of that debt owed by each of those persons at a given time were the proportion of it corresponding to his undivided share of the property at that time.

1C For the purposes of sub-paragraph (1B), ^F709... each joint tenant of property is treated as holding an equal undivided share of it.

2 If the effect of this paragraph would be that the amount of the chargeable consideration for the transaction exceeded the market value of the subject-matter of the transaction, the amount of the chargeable consideration is treated as limited to that value.

3 In this paragraph—

a “debt” means an obligation, whether certain or contingent, to pay a sum of money either immediately or at a future date,

b “existing debt”, in relation to a transaction, means debt created or arising before the effective date of, and otherwise than in connection with, the transaction, and

c references to the amount of a debt are to the principal amount payable or, as the case may be, the total of the principal amounts payable, together with the amount of any interest that has accrued due on or before the effective date of the transaction.

Cases where conditions for exemption not fully met¶

1 Where a land transaction would be exempt from charge under paragraph 3A of Schedule 3 (assents and appropriations by personal representatives) but for sub-paragraph (2) of that paragraph (cases where person acquiring property gives consideration for it), the chargeable consideration for the transaction does not include the amount of any secured debt assumed.

“Secured debt” has the same meaning as in that paragraph.

2 Where a land transaction would be exempt from charge under paragraph 4 of Schedule 3 (variation of testamentary dispositions etc) but for a failure to meet the condition in sub-paragraph (2)(b) of that paragraph (no consideration other than variation of another disposition), the chargeable consideration for the transaction does not include the making of any such variation as is mentioned in that sub-paragraph.

Conversion of amounts in foreign currency¶

1 References in this Part to the amount or value of the consideration for a transaction are to its amount or value in sterling.

2 For the purposes of this Part the sterling equivalent of an amount expressed in another currency shall be ascertained by reference to the London closing exchange rate on the effective date of the transaction (unless the parties have used a different rate for the purposes of the transaction).

Carrying out of works¶

1 Where the whole or part of the consideration for a land transaction consists of the carrying out of works of construction, improvement or repair of a building or other works to enhance the value of land, then—

a to the extent that the conditions specified in sub-paragraph (2) are met, the value of the works does not count as chargeable consideration, and

b to the extent that those conditions are not met, the value of the works shall be taken into account as chargeable consideration.

2 The conditions referred to in sub-paragraph (1) are—

a that the works are carried out after the effective date of the transaction,

b that the works are carried out on land acquired or to be acquired under the transaction or on other land held by the purchaser or a person connected with him, and

c that it is not a condition of the transaction that the works are carried out by the vendor or a person connected with him.

2A Where by virtue of—

a subsection (8) of section 44 (contract and conveyance),

b paragraph 12A of Schedule 17A (agreement for lease), or

^F710c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

there are two notifiable transactions (the first being the contract or agreement and the second being the transaction effected on completion or, as the case may be, the grant or execution of the lease), the condition in sub-paragraph (2)(a) is treated as met in relation to the second transaction if it is met in relation to the first.

3 In this paragraph—

a references to the acquisition of land are to the acquisition of a major interest in it;

b the value of the works shall be taken to be the amount that would have to be paid in the open market for the carrying out of the works in question.

4 Section 839 of the Taxes Act 1988 (connected persons) has effect for the purposes of this paragraph.

5 This paragraph is subject to paragraph 17 (arrangements involving public or educational bodies).

Provision of services¶

1 Where the whole or part of the consideration for a land transaction consists of the provision of services (other than the carrying out of works to which paragraph 10 applies), the value of that consideration shall be taken to be the amount that would have to be paid in the open market to obtain those services.

2 This paragraph is subject to paragraph 17 (arrangements involving public or educational bodies).

Land transaction entered into by reason of employment¶

1 Where a land transaction is entered into by reason of the purchaser’s employment, or that of a person connected with him, then—

a if the transaction gives rise to a charge to tax under Chapter 5 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (taxable benefits: living accommodation) and—

i no rent is payable by the purchaser, or

ii the rent payable by the purchaser is less than the cash equivalent of the benefit calculated under section 105 or 106 of that Act,

there shall be taken to be payable by the purchaser as rent an amount equal to the cash equivalent chargeable under those sections;

b if the transaction would give rise to a charge under that Chapter but for section 99 of that Act (accommodation provided for performance of duties), the consideration for the transaction is the actual consideration (if any);

c if neither paragraph (a) nor paragraph (b) applies, the consideration for the transaction shall be taken to be not less than the market value of the subject-matter of the transaction as at the effective date of the transaction.

2 Section 839 of the Taxes Act 1988 (connected persons) has effect for the purposes of this paragraph.

Obligations under lease¶

^F2913. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Surrender of existing lease in return for new lease¶

^F2914. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reverse premium¶

^F2915. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Indemnity given by purchaser¶

16Where the purchaser agrees to indemnify the vendor in respect of liability to a third party arising from breach of an obligation owed by the vendor in relation to the land that is the subject of the transaction, neither the agreement nor any payment made in pursuance of it counts as chargeable consideration.

Purchaser bearing inheritance tax liability¶

16AWhere—

a there is a land transaction that is—

i a transfer of value within section 3 of the Inheritance Tax Act 1984 (transfers of value), or

ii a disposition, effected by will or under the law of intestacy, of a chargeable interest comprised in the estate of a person immediately before his death,

and

b the purchaser is or becomes liable to pay, agrees to pay or does in fact pay any inheritance tax due in respect of the transfer or disposition,

his liability, agreement or payment does not count as chargeable consideration for the transaction.

Purchaser bearing capital gains tax liability¶

16B

1 Where—

a there is a land transaction under which the chargeable interest in question—

i is acquired otherwise than by a bargain made at arm’s length, or

ii is treated by section 18 of the Taxation of Chargeable Gains Act 1992 (connected persons) as so acquired,

and

b the purchaser is or becomes liable to pay, or does in fact pay, any capital gains tax due in respect of the corresponding disposal of the chargeable interest,

his liability or payment does not count as chargeable consideration for the transaction.

2 Sub-paragraph (1) does not apply if there is chargeable consideration for the transaction (disregarding the liability or payment referred to in sub-paragraph (1)(b)).

Costs of enfranchisement¶

16CCosts borne by the purchaser under section 9(4) of the Leasehold Reform Act 1967 or section 33 of the Leasehold Reform, Housing and Urban Development Act 1993 (costs of enfranchisement) do not count as chargeable consideration.

Arrangements involving public or educational bodies¶

1 This paragraph applies in any case where arrangements are entered into under which—

a there is a transfer, or the grant or assignment of a lease, of land by a qualifying body (“A”) to a non-qualifying body (“B”) (“the main transfer”),

b in consideration (whether in whole or in part) of the main transfer there is a grant by B to A of a lease or under-lease of the whole, or substantially the whole, of that land (“the leaseback”),

c B undertakes to carry out works or provide services to A, and

d some or all of the consideration given by A to B for the carrying out of those works or the provision of those services is consideration in money,

whether or not there is also a transfer, or the grant or assignment of a lease, of any other land by A to B (a “transfer of surplus land”).

2 The following are qualifying bodies—

a public bodies within section 66,

b institutions within the further education sector or the higher education sector within the meaning of 91 of the Further and Higher Education Act 1992,

c further education corporations within the meaning of section 17 of that Act,

ca sixth form college corporations within the meaning of section 90 of that Act,

d higher education corporations within the meaning section 90 of that Act,

e persons who undertake to establish and maintain, and carry on, or provide for the carrying on, of an Academy within the meaning of section 1 of the Academies Act 2010 , and

f in Scotland, institutions funded by the Scottish Further Education Funding Council or the Scottish Higher Education Funding Council.

3 The following shall not count as chargeable consideration for the main transfer or any transfer of surplus land—

a the lease-back;

b the carrying out of building works by B for A; or

c the provision of services by B to A.

4 The chargeable consideration for the lease back does not include—

a the main transfer;

b any transfer of surplus land; or

c the consideration in money paid by A to B for the building works or other services referred to in sub-paragraph (3).

4A Sub-paragraphs (3) and (4) shall be disregarded for the purposes of determining whether the land transaction in question is notifiable.

^F7115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 In this paragraph “under-lease” includes a sub-lease.

^C49^C51 SCHEDULE 4ZA ¶

Stamp duty land tax: higher rates for additional dwellings and dwellings purchased by companies

PART 1 Higher rates¶

1 In its application for the purpose of determining the amount of tax chargeable in respect of a chargeable transaction which is a higher rates transaction, section 55 (amount of tax chargeable: general) has effect with the modification in sub-paragraph (2).

2 In subsection (1B) of section 55, for Table A substitute—

TABLE A: RESIDENTIAL

Part of relevant consideration	Percentage
So much as does not exceed £125,000	5%
So much as exceeds £125,000 but does not exceed £250,000	7%
So much as exceeds £250,000 but does not exceed £925,000	10%
So much as exceeds £925,000 but does not exceed £1,500,000	15%
The remainder (if any)	17%

PART 2 Meaning of “higher rates transaction”¶

Meaning of “higher rates transaction” etc¶

1 This paragraph explains how to determine whether a chargeable transaction is a “higher rates transaction” for the purposes of paragraph 1.

2 In the case of a transaction where there is only one purchaser, determine whether the transaction falls within any of paragraphs 3 to 7; if it does fall within any of those paragraphs it is a “higher rates transaction” (otherwise it is not).

3 In the case of a transaction where there are two or more purchasers—

a take one of the purchasers and determine, having regard to that purchaser only, whether the transaction falls within any of paragraphs 3 to 7, and

b do the same with each of the other purchasers.

If the transaction falls within any of those paragraphs when having regard to any one of the purchasers it is a “higher rates transaction” (otherwise it is not).

3A Sub-paragraphs (2) and (3) are subject to paragraph 9A (spouses and civil partners purchasing from one another).

4 For the purposes of this Schedule any term of years absolute or leasehold estate is not a “major interest” if its term does not exceed 7 years on the date of its grant.

5 References in this Schedule to a major interest in a dwelling include an undivided share in a major interest in a dwelling.

Single dwelling transactions¶

1 A chargeable transaction falls within this paragraph if—

a the purchaser is an individual,

b the main subject-matter of the transaction consists of a major interest in a single dwelling (“the purchased dwelling”), and

c Conditions A to D are met.

1A But sub-paragraph (1) is subject to paragraph 7A.

2 Condition A is that the chargeable consideration for the transaction is £40,000 or more.

3 Condition B is that on the effective date of the transaction the purchased dwelling—

a is not subject to a lease upon which the main subject-matter of the transaction is reversionary, or

b is subject to such a lease but the lease has an unexpired term of no more than 21 years.

4 Condition C is that at the end of the day that is the effective date of the transaction—

a the purchaser has a major interest in a dwelling other than the purchased dwelling,

b that interest has a market value of £40,000 or more, and

c that interest is not reversionary on a lease which has an unexpired term of more than 21 years.

5 Condition D is that the purchased dwelling is not a replacement for the purchaser's only or main residence.

6 For the purposes of sub-paragraph (5) the purchased dwelling is a replacement for the purchaser's only or main residence if—

a on the effective date of the transaction (“the transaction concerned”) the purchaser intends the purchased dwelling to be the purchaser's only or main residence,

b in another land transaction (“the previous transaction”) whose effective date was during the period of three years ending with the effective date of the transaction concerned, the purchaser or the purchaser's spouse or civil partner at the time disposed of a major interest in another dwelling (“the sold dwelling”),

ba immediately after the effective date of the previous transaction, neither the purchaser nor the purchaser's spouse or civil partner had a major interest in the sold dwelling,

c at any time during the period of three years referred to in paragraph (b) the sold dwelling was the purchaser's only or main residence, and

d at no time during the period beginning with the effective date of the previous transaction and ending with the effective date of the transaction concerned has the purchaser or the purchaser's spouse or civil partner acquired a major interest in any other dwelling with the intention of it being the purchaser's only or main residence.

6A Sub-paragraph (6)(ba) does not apply in relation to a spouse or civil partner of the purchaser if the two of them were not living together (see paragraph 9(3)) on the effective date of the transaction concerned.

7 For the purposes of sub-paragraph (5) the purchased dwelling is also a replacement for the purchaser's only or main residence if—

a on the effective date of the transaction (“the transaction concerned”) the purchaser intended the purchased dwelling to be the purchaser's only or main residence,

b in another land transaction whose effective date is during a permitted period, the purchaser or the purchaser's spouse or civil partner disposes of a major interest in another dwelling (“the sold dwelling”),

ba immediately after the effective date of that other land transaction, neither the purchaser nor the purchaser's spouse or civil partner has a major interest in the sold dwelling, and

c at any time during the period of three years ending with the effective date of the transaction concerned the sold dwelling was the purchaser's only or main residence.

7A For the purposes of sub-paragraph (7)(b), the permitted periods are—

a the period of three years beginning with the day after the effective date of the transaction concerned, or

b if HMRC are satisfied that the purchaser or the purchaser's spouse or civil partner would have disposed of the major interest in the sold dwelling within that three year period but was prevented from doing so by exceptional circumstances that could not reasonably have been foreseen, such longer period as HMRC may allow in response to an application made in accordance with sub-paragraph (7B).

7B An application for the purposes of sub-paragraph (7A)(b) must—

a be made within the period of 12 months beginning with the effective date of the transaction disposing of the major interest in the sold dwelling, and

b be made in such form and manner, and contain such information, as may be specified by HMRC.

7C Schedule 11A (claims not included in returns) does not apply in relation to an application made in accordance with sub-paragraph (7B).

8 Sub-paragraph (7)(ba) does not apply in relation to a spouse or civil partner of the purchaser if the two of them are not living together (see paragraph 9(3)) on the effective date of that other land transaction.

4A chargeable transaction falls within this paragraph if—

a the purchaser is not an individual,

b the main subject-matter of the transaction consists of a major interest in a single dwelling, and

c Conditions A and B in paragraph 3 are met.

Multiple dwelling transactions¶

1 A chargeable transaction falls within this paragraph if—

a the purchaser is an individual,

b the main subject-matter of the transaction consists of a major interest in two or more dwellings (“the purchased dwellings”), and

c at least two of the purchased dwellings meet conditions A, B and C.

2 A purchased dwelling meets condition A if the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to the purchased dwelling is £40,000 or more.

3 A purchased dwelling meets condition B if on the effective date of the transaction the purchased dwelling—

a is not subject to a lease upon which the main subject-matter of the transaction is reversionary, or

b is subject to such a lease but the lease has an unexpired term of no more than 21 years.

4 A purchased dwelling meets condition C if it is not subsidiary to any of the other purchased dwellings.

5 One of the purchased dwellings (“dwelling A”) is subsidiary to another of the purchased dwellings (“dwelling B”) if—

a dwelling A is situated within the grounds of, or within the same building as, dwelling B, and

b the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to dwelling B is equal to, or greater than, two thirds of the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to the following combined—

i dwelling A,

ii dwelling B, and

iii each of the other purchased dwellings (if any) which are situated within the grounds of, or within the same building as, dwelling B.

1 A chargeable transaction falls within this paragraph if—

a the purchaser is an individual,

b the main subject-matter of the transaction consists of a major interest in two or more dwellings (“the purchased dwellings”),

c only one of the purchased dwellings meets conditions A, B and C,

d the purchased dwelling which meets those conditions is not a replacement for the purchaser's only or main residence, and

e at the end of the day that is the effective date of the transaction—

i the purchaser has a major interest in a dwelling other than one of the purchased dwellings,

ii that interest has a market value of £40,000 or more, and

iii that interest is not reversionary on a lease which has an unexpired term of more than 21 years.

1A But sub-paragraph (1) is subject to paragraph 7A.

2 Sub-paragraphs (2) to (5) of paragraph 5 apply for the purposes of sub-paragraph (1)(c) of this paragraph as they apply for the purposes of sub-paragraph (1)(c) of that paragraph.

3 Sub-paragraphs (6) to (8) of paragraph 3 apply for the purposes of sub-paragraph (1)(d) of this paragraph as they apply for the purposes of sub-paragraph (5) of that paragraph.

1 A chargeable transaction falls within this paragraph if—

a the purchaser is not an individual,

b the main subject-matter of the transaction consists of a major interest in two or more dwellings (“the purchased dwellings”), and

c at least one of the purchased dwellings meets conditions A and B.

2 Sub-paragraphs (2) and (3) of paragraph 5 apply for the purposes of sub-paragraph (1)(c) of this paragraph as they apply for the purposes of sub-paragraph (1)(c) of that paragraph.

Exception where purchaser has prior interest in purchased dwelling¶

1 A chargeable transaction which would (but for this paragraph) fall within paragraph 3 or paragraph 6 does not fall within that paragraph if—

a the purchaser had a major interest (“the prior interest”) in the relevant purchased dwelling immediately before the effective date of the transaction, and

b the relevant purchased dwelling had been the purchaser's only or main residence throughout the period of three years ending with the effective date of the transaction.

2 Sub-paragraph (1) does not apply if—

a the prior interest is a term of years absolute or a leasehold estate, and

b immediately before the effective date of the transaction, the remaining term of the prior interest is less than 21 years.

3 Sub-paragraph (1) does not apply if immediately before the effective date of the transaction—

a the purchaser is beneficially entitled as a joint tenant to the prior interest, and

b there are more than three other joint tenants.

4 Sub-paragraph (1) does not apply if immediately before the effective date of the transaction the purchaser is beneficially entitled as a tenant in common or coparcener to less than a quarter of the prior interest.

5 In this paragraph “relevant purchased dwelling” means—

a the purchased dwelling mentioned in paragraph 3(1)(b), or (as the case may be)

b the purchased dwelling which meets the conditions mentioned in paragraph 6(1)(c).

PART 3 Supplementary provisions¶

Further provision in connection with paragraph 3(6) and (7)¶

1 This paragraph applies where by reason of paragraph 3(7) a chargeable transaction (“the transaction concerned”) is not a higher rates transaction for the purposes of paragraph 1.

2 The land transaction (“the subsequent transaction”) by reference to which the condition in paragraph 3(7)(b) is met may not be taken into account for the purposes of paragraph 3(6)(b) in determining whether any other chargeable transaction is a higher rates transaction.

3 A land transaction return in respect of the transaction concerned may be amended, to take account of the application of paragraph 3(7) by virtue of paragraph 3(7A)(a), at any time within the period of 12 months beginning with—

a the effective date of the subsequent transaction, or

b if later, the filing date for the return.

4 Where a land transaction return in respect of the transaction concerned is amended to take account of the application of paragraph 3(7) by virtue of paragraph 3(7A)(a) (and not for any other reason), paragraph 6(2A) of Schedule 10 (notice of amendment of return to be accompanied by the contract for the transaction etc) does not apply in relation to the amendment.

5 Where HMRC grant an application made in accordance with paragraph 3(7B)—

a the land transaction return in respect of the transaction concerned is treated as having been amended to take account of the application of paragraph 3(7) by virtue of paragraph 3(7A)(b), and

b HMRC must notify the purchaser accordingly.

Spouses and civil partners purchasing alone¶

1 Sub-paragraph (2) applies in relation to a chargeable transaction if—

a the purchaser (or one of them) is married or in a civil partnership on the effective date,

b the purchaser and the purchaser's spouse or civil partner are living together on that date, and

c the purchaser's spouse or civil partner is not a purchaser in relation to the transaction.

2 The transaction is to be treated as being a higher rates transaction for the purposes of paragraph 1 if it would have been a higher rates transaction had the purchaser's spouse or civil partner been a purchaser.

3 Persons who are married to, or are civil partners of, each other are treated as living together for the purposes of this Schedule if they are so treated for the purposes of the Income Tax Acts (see section 1011 of the Income Tax Act 2007).

Spouses and civil partners purchasing from one another¶

1 A chargeable transaction is not a higher rates transaction for the purposes of paragraph 1 if—

a there is only one purchaser,

b there is only one vendor, and

c on the effective date of the transaction the two of them are—

i married to, or civil partners of, each other, and

ii living together (see paragraph 9(3)).

2 Where—

a there are two purchasers in relation to a chargeable transaction, and

b one of them (“P”) is also the vendor in relation to the transaction,

P is to be treated for the purposes of sub-paragraph (1) as not being a purchaser.

3 Where—

a there are two vendors in relation to a chargeable transaction, and

b one of them (“V”) is also the purchaser in relation to the transaction,

V is to be treated for the purposes of sub-paragraph (1) as not being a vendor.

Property adjustment on divorce, dissolution of civil partnership etc¶

1 This paragraph applies where—

a a person (“A”) has a major interest in a dwelling,

b a property adjustment order has been made in respect of the interest for the benefit of another person (“B”), and

c the dwelling—

i is B's only or main residence, and

ii is not A's only or main residence.

2 A is to be treated for the purposes of this Schedule as not having the interest in the dwelling.

3 “Property adjustment order” means—

a an order under section 24(1)(b) of the Matrimonial Causes Act 1973 (property adjustment orders in connection with matrimonial proceedings),

b an order under section 17(1)(a)(ii) of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders after overseas divorce) corresponding to such an order as is mentioned in paragraph (a),

c an order under Article 26(1)(b) of the Matrimonial Causes (Northern Ireland) Order 1978 (property adjustment orders in connection with divorce proceedings etc),

d an order under Article 21(a)(ii) of the Matrimonial and Family Proceedings (Northern Ireland) Order 1989 (property adjustment orders after overseas divorce) corresponding to such an order as is mentioned in paragraph (c),

e an order under paragraph 7(1)(b) of Schedule 5 or paragraph 7(1)(b) of Schedule 15 to the Civil Partnership Act 2004 (property adjustment orders in connection with dissolution etc of civil partnership), or

f an order under paragraph 9 of Schedule 7 or paragraph 9 of Schedule 17 to the Civil Partnership Act 2004 (property adjustment orders in connection with overseas dissolution etc of civil partnership) corresponding to such an order as is mentioned in paragraph (e).

Settlements and bare trusts¶

1 Sub-paragraph (3) applies in relation to a land transaction if—

a the main subject-matter of the transaction consists of a major interest in one or more dwellings,

b the purchaser (or one of them) is acting as trustee of a settlement, and

c under the terms of the settlement a beneficiary will be entitled to—

i occupy the dwelling or dwellings for life, or

ii income earned in respect of the dwelling or dwellings.

2 Sub-paragraph (3) also applies in relation to a land transaction if—

a the main subject-matter of the transaction consists of a term of years absolute in a dwelling, and

b the purchaser (or one of them) is acting as a trustee of a bare trust.

3 Where this sub-paragraph applies in relation to a land transaction the beneficiary of the settlement or bare trust (rather than the trustee) is to be treated for the purposes of this Schedule as the purchaser (or as one of them).

4 Paragraphs 3(3) and 4 of Schedule 16 (trustees to be treated as the purchaser) have effect subject to sub-paragraph (3).

1 Sub-paragraph (3) applies where—

a a person is a beneficiary under a settlement,

b a major interest in a dwelling forms part of the trust property, and

c under the terms of the settlement, the beneficiary is entitled to—

i occupy the dwelling for life, or

ii income earned in respect of the dwelling.

2 Sub-paragraph (3) also applies where—

a a person is a beneficiary under a bare trust, and

b a term of years absolute in a dwelling forms part of the trust property.

3 Where this sub-paragraph applies—

a the beneficiary is to be treated for the purposes of this Schedule as holding the interest in the dwelling, and

b if the trustee of the settlement or bare trust disposes of the interest, the beneficiary is to be treated for the purposes of this Schedule as having disposed of it.

1 This paragraph applies where, by reason of paragraph 10 or 11 or paragraph 3(1) of Schedule 16, the child of a person (“P”) would (but for this paragraph) be treated for the purposes of this Schedule as—

a being the purchaser in relation to a land transaction,

b holding an interest in a dwelling, or

c having disposed of an interest in a dwelling.

1A But this paragraph does not apply if the trustee (or any of the trustees) of the settlement or bare trust concerned—

a was the purchaser in relation to the land transaction,

b holds the interest in the dwelling, or

c disposed of the interest in the dwelling,

in the exercise of powers conferred on the trustee by reason of a relevant court appointment made in respect of the child concerned.

1B In sub-paragraph (1A) “relevant court appointment” means—

a an appointment under section 16 of the Mental Capacity Act 2005,

b an appointment under section 113 of the Mental Capacity Act (Northern Ireland) 2016, or

c an equivalent appointment under the law of a country or territory outside England, Wales and Northern Ireland.

2 Where this paragraph applies—

a P and any relevant spouse or civil partner of P are to be treated for the purposes of this Schedule as being the purchaser, holding the interest or (as the case may be) having disposed of the interest, and

b the child is not to be so treated.

3 For the purposes of sub-paragraph (2) a spouse or civil partner of P is “relevant” if the spouse or civil partner—

a is not a parent of the child, and

b is living together with P (see paragraph 9(3)).

^F10014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 “Child” means a person under the age of 18.

1 This paragraph applies in relation to a land transaction if—

a the main subject-matter of the transaction consists of a major interest in one or more dwellings,

b the purchaser (or one of them) is acting as trustee of a settlement,

c that purchaser is an individual, and

d under the terms of the settlement a beneficiary is not entitled to—

i occupy the dwelling or dwellings for life, or

ii income earned in respect of the dwelling or dwellings.

2 In determining whether the transaction falls within paragraph 4 or paragraph 7—

a if the purchaser mentioned in sub-paragraph (1) is the only purchaser, ignore paragraph (a) of those paragraphs, and

b if that purchaser is not the only purchaser, ignore paragraph (a) of those paragraphs when having regard to that purchaser.

Partnerships¶

1 Sub-paragraph (2) applies in relation to a chargeable transaction whose subject-matter consists of a major interest in one or more dwellings if—

a the purchaser (or one of them) is a partner in a partnership, but

b the purchaser does not enter into the transaction for the purposes of the partnership.

2 For the purposes of determining whether the transaction falls within paragraph 3 or 6 any major interest in any other dwelling that is held by or on behalf of the partnership for the purposes of a trade carried on by the partnership is not to be treated as held by or on behalf of the purchaser.

3 Paragraph 2(1)(a) of Schedule 15 (chargeable interests held by partnerships treated as held by the partners) has effect subject to sub-paragraph (2).

Alternative finance arrangements¶

1 This paragraph applies in relation to a chargeable transaction which is the first transaction under an alternative finance arrangement entered into between a person and a financial institution.

2 The person (rather than the institution) is to be treated for the purposes of this Schedule as the purchaser in relation to the transaction.

3 In this paragraph—

“alternative finance arrangement” means an arrangement of a kind mentioned in section 71A(1) or 73(1);
“financial institution” has the meaning it has in those sections (see section 73BA);
“first transaction”, in relation to an alternative finance arrangement, has the meaning given by section 71A(1)(a) or (as the case may be) section 73(1)(a)(i).

Major interests in dwellings inherited jointly¶

1 This paragraph applies where by virtue of an inheritance—

a a person (“P”) becomes jointly entitled with one or more other persons to a major interest in a dwelling, and

b P's beneficial share in the interest does not exceed 50% (see sub-paragraph (4)).

2 P is not to be treated for the purposes of paragraph 3(4)(a) or 6(1)(e) as having the major interest at any time during the period of three years beginning with the date of the inheritance.

3 But if at any time during that period of three years P becomes the only person beneficially entitled to the whole of the interest or P's beneficial share in the interest exceeds 50% P is, from that time, to be treated as having the major interest for the purposes of paragraph 3(4)(a) and 6(1)(e) (subject to any disposal by P).

4 P's share in the interest exceeds 50% if—

a P is beneficially entitled as a tenant in common or coparcener to more than half the interest,

b P and P's spouse or civil partner taken together are beneficially entitled as tenants in common or coparceners to more than half the interest, or

c P and P's spouse or civil partner are beneficially entitled as joint tenants to the interest and there is no more than one other joint tenant who is so entitled.

5 In this section “inheritance” means the acquisition of an interest in or towards satisfaction of an entitlement under or in relation to the will of a deceased person, or on the intestacy of a deceased person.

Dwellings outside England, ^F1143... and Northern Ireland¶

1 In the provisions of this Schedule specified in sub-paragraph (3), references to a “dwelling” include references to a dwelling situated in a country or territory outside England^F972... and Northern Ireland.

1A In the application of those provisions in relation to a dwelling situated in Wales—

a references to a “major interest” in the dwelling are to an interest in the dwelling of a kind mentioned in section 117(2),

b references to a “land transaction” in relation to the dwelling are to the acquisition of an interest in the dwelling, and

c references to the “effective date” of a land transaction in relation to the dwelling are to the date on which the interest in the dwelling is acquired.

2 In the application of those provisions in relation to a dwelling situated in a country or territory outside England, Wales and Northern Ireland—

a references to a “major interest” in the dwelling are to an equivalent interest in the dwelling under the law of that country or territory,

b references to persons being beneficially entitled as joint tenants, tenants in common or coparceners to an interest in the dwelling are to persons having an equivalent entitlement to the interest in the dwelling under the law of that country or territory,

c references to a “land transaction” in relation to the dwelling are to the acquisition of an interest in the dwelling under the law of that country or territory,

d references to the “effective date” of a land transaction in relation to the dwelling are to the date on which the interest in the dwelling is acquired under the law of that country or territory,

e references to “inheritance” are to the acquisition of an interest from a deceased person's estate in accordance with the laws of that country or territory concerning the inheritance of property.

3 The provisions of this Schedule referred to in sub-paragraphs (1), (1A) and (2) are—

a paragraph 3(4), (6)(b), (ba), (c) and (d) and (7)(b), (ba) and (c),

b paragraph 6(1)(e),

ba paragraph 9B,

c paragraph 11,

d paragraph 14(2), and

e paragraph 16.

4 Where the child of a person (“P”) has an interest in a dwelling which is situated in a country or territory outside England^F977... and Northern Ireland, P and any relevant spouse or civil partner of P are to be treated for the purposes of this Schedule as having that interest.

5 For the purposes of sub-paragraph (4) a spouse or civil partner of P is “relevant” if the spouse or civil partner—

a is not a parent of the child, and

b is living together with P (see paragraph 9(3)).

5A Sub-paragraph (4) does not apply if the interest in the dwelling was acquired in the child's name or on the child's behalf by a person acting in exercise of powers conferred on that person by reason of a relevant court appointment made in respect of the child.

5B In sub-paragraph (5A) “relevant court appointment” has the meaning given by paragraph 12(1B).

^F9806 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

What counts as a dwelling¶

1 This paragraph sets out rules for determining what counts as a dwelling for the purposes of this Schedule.

2 A building or part of a building counts as a dwelling if—

a it is used or suitable for use as a single dwelling, or

b it is in the process of being constructed or adapted for such use.

3 Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on that land) is taken to be part of that dwelling.

4 Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.

5 The main subject-matter of a transaction is also taken to consist of or include an interest in a dwelling if—

a substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,

b the main subject-matter of the transaction consists of or includes an interest in a building, or a part of a building, that is to be constructed or adapted under the contract for use as a single dwelling, and

c construction or adaptation of the building, or part of a building, has not begun by the time the contract is substantially performed.

6 In sub-paragraph (5)—

“contract” includes any agreement;
“relevant deeming provision” means any of sections 44 to 45A or paragraph 5(1) or (2) of Schedule 2A or paragraph 12A of Schedule 17A;
“substantially performed” has the same meaning as in section 44.

7 A building or part of a building used for a purpose specified in section 116(2) or (3) is not used as a dwelling for the purposes of sub-paragraph (2) or (5).

8 Where a building or part of a building is used for a purpose mentioned in sub-paragraph (7), no account is to be taken for the purposes of sub-paragraph (2) of its suitability for any other use.

Power to modify this Schedule¶

1 The Treasury may by regulations amend or otherwise modify this Schedule for the purpose of preventing certain chargeable transactions from being higher rates transactions for the purposes of paragraph 1.

2 The provision which may be included in regulations under this paragraph by reason of section 114(6)(c) includes incidental or consequential provision which may cause a chargeable transaction to be a higher rates transaction for the purposes of paragraph 1.

^C27^C56SCHEDULE 4A ¶

Stamp duty land tax: higher rate for certain transactions

Meaning of “higher threshold interest”¶

1 In this paragraph “interest in a single dwelling” means so much of the subject-matter of a chargeable transaction as consists of a chargeable interest in or over a single dwelling (together with appurtenant rights).

2 An interest in a single dwelling is a higher threshold interest for the purposes of this Schedule if chargeable consideration of more than £500,000 is attributable to that interest.

Transactions involving a higher threshold interest¶

1 Sub-paragraphs (2) to (8) apply to a chargeable transaction whose subject-matter consists of or includes a higher threshold interest.

2 If the main subject-matter of the transaction consists entirely of higher threshold interests, the transaction is a high-value residential transaction for the purposes of paragraph 3.

3 If the main subject-matter of the transaction includes a chargeable interest other than a higher threshold interest, the transaction (“the primary transaction”) is to be treated for the relevant purposes as two separate chargeable transactions as follows—

a a transaction whose subject-matter is all the higher threshold interests, together with any appurtenant rights;

b a transaction whose subject-matter is the remainder of the subject-matter of the primary transaction.

4 For those purposes, the chargeable consideration for a transaction treated as occurring under sub-paragraph (3) is so much of the chargeable consideration for the primary transaction as is attributable to that transaction.

5 The transaction mentioned in sub-paragraph (3)(a) is a high-value residential transaction for the purposes of paragraph 3.

6 “Relevant purposes” means the purposes of—

a paragraphs 3 , 5 to 5L and 6A to 6I of this Schedule,

b section 55 (amount of tax chargeable: general),

c Schedule 5 (amount of tax chargeable: rent),

^F1176d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

da Schedule 7A (PAIF seeding relief and co-ownership scheme seeding relief), and

e any other provision of this Part, so far as it is necessary because of any of paragraphs (a) to (da) to treat the purposes in question as relevant purposes.

7 If a transaction treated under sub-paragraph (3) as two separate transactions is notifiable, each of the separate transactions (but not the primary transaction) is also treated as a separate, and notifiable, transaction for the purposes of section 76 (duty to deliver land transaction return).

8 The provisions relating to land transaction returns are to be read with any adjustments that may be necessary as a result of sub-paragraph (7).

9 The reference in sub-paragraph (1) to a chargeable transaction does not include a transaction to which section 74 (exercise of collective rights by tenants of flats) or section 75 (crofting community right to buy) applies.

Amount of tax chargeable: higher rate for certain transactions¶

1 Where this paragraph applies to a chargeable transaction—

a the amount of tax chargeable in respect of the transaction is 17% of the chargeable consideration for the transaction, and

b the transaction is not taken to be linked to any other transaction for the purposes of section 55(1B), (1C) and (4).

2 This paragraph applies to a chargeable transaction if—

a the transaction is a high-value residential transaction, and

b the condition in sub-paragraph (3) is met.

3 The condition is that—

a the purchaser is a company but is not a public body,

b the acquisition is made by or on behalf of the members of a partnership one or more of whose members is a company but is not a public body, or

c the acquisition is made for the purposes of a collective investment scheme.

4 References in sub-paragraph (3) to a company do not include a company acting in its capacity as trustee of a settlement and, for the purposes of that sub-paragraph, whether a person is a public body is to be determined in accordance with section 66.

5 If there are two or more purchasers acting jointly, the condition in sub-paragraph (3) is treated as met if it is met in relation to at least one of those purchasers.

6 In relation to a transfer of an interest in a partnership that is a chargeable transaction by virtue of paragraph 17(2) of Schedule 15, sub-paragraph (3) has effect as if the following were substituted for paragraph (b) of that sub-paragraph—

7 In relation to an event that is a chargeable transaction by virtue of paragraph 17A(4) of that Schedule, sub-paragraph (3) has effect as if the following were substituted for paragraph (b) of that sub-paragraph—

8 For the purposes of sub-paragraph (3), paragraph 3 of Schedule 16 (bare trustees) applies as if sub-paragraphs (2) and (3) of that paragraph were omitted.

9 In the case of a transaction for which the whole or part of the chargeable consideration is rent, this paragraph has effect subject to section 56 and Schedule 5 (amount of tax chargeable: rent).

10 The Treasury may by order amend this paragraph for the purpose of limiting the circumstances in which the condition in sub-paragraph (3) is to be treated as met.

Acquisitions of interests in the same dwelling through different transactions¶

1 Sub-paragraphs (2) and (3) apply if—

a the subject-matter of a chargeable transaction includes a chargeable interest in or over a dwelling,

b one or more land transactions, the subject-matter of each of which includes a chargeable interest in or over the dwelling, are linked to that chargeable transaction, and

c the total consideration attributable to the interests mentioned in paragraphs (a) and (b) (and to any appurtenant rights, but disregarding any rent) is more than £500,000.

2 Each of those chargeable interests is treated as a higher threshold interest for the purposes of this Schedule.

3 If the condition in paragraph 3(3) is met in the case of the transaction mentioned in sub-paragraph (1)(a), it is also treated as met in the case of each transaction mentioned in sub-paragraph (1)(b) that is a chargeable transaction.

4 The transactions referred to in this paragraph do not include any transaction to which section 74 (exercise of collective rights by tenants of flats) or section 75 (crofting community right to buy) applies.

Businesses of letting, trading in or redeveloping properties¶

1 Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest that is acquired exclusively for one or more of the following purposes—

a exploitation as a source of rents or other receipts (other than excluded rents) in the course of a qualifying property rental business;

aa use as business premises for the purposes of a qualifying property rental business (other than one which gives rise to income consisting wholly or mainly of excluded rents);

ab use for the purposes of a relievable trade;

b development or redevelopment and—

i resale in the course of a property development trade, or

ii exploitation falling within paragraph (a) or use falling within paragraph (aa) or (ab);

c resale in the course of a property development trade (in a case where the chargeable transaction is part of a qualifying exchange);

d resale (as stock of the business) in the course of a property trading business.

2 A chargeable interest does not count as being acquired exclusively for one or more of those purposes if it is intended that a non-qualifying individual will be permitted to occupy a dwelling on the land.

3 In this paragraph—

“excluded rents” has the same meaning as in section 133 of the Finance Act 2013;
“property development trade” means a trade that—
1. consists of or includes buying and developing or redeveloping for resale residential or non-residential property, and
2. is run on a commercial basis and with a view to profit;
“part of a qualifying exchange” is to be construed in accordance with section 139(4) of the Finance Act 2013;
“property trading business” means a business that—
1. consists of or includes activities in the nature of a trade of buying and selling dwellings, and
2. is run on a commercial basis and with a view to profit;
“qualifying property rental business” has the same meaning as in section 133 of the Finance Act 2013.
“relievable trade” means a trade that is run on a commercial basis and with a view to profit.

Meaning of “non-qualifying individual”¶

1 In paragraph 5 “non-qualifying individual”, in relation to a chargeable transaction, means any of the following—

a the purchaser (other than a purchaser entering into the transaction as a member of a partnership);

b a purchaser who enters into the transaction as a member of a partnership and has a major share in the partnership,

c an individual (a “connected person”) who is connected with the purchaser;

d a relevant settlor;

e the spouse or civil partner of a connected person or of a relevant settlor;

f a relative of a connected person or of a relevant settlor, or the spouse or civil partner of a relative of a connected person or of a relevant settlor;

g a relative of the spouse or civil partner of a connected person or of a relevant settlor;

h the spouse or civil partner of a person falling within paragraph (g);

i an individual who is a major participant in a relevant collective investment scheme or is connected with a major participant in a relevant collective investment scheme.

2 A member of a partnership has a “major share” in the partnership if the member is entitled to a 50% or greater share—

a in the income profits of the partnership, or

b in the partnership's assets.

3 A collective investment scheme is a “relevant collective investment scheme” for the purposes of sub-paragraph (1)(i) if the purchaser under the chargeable transaction referred to in that sub-paragraph acquires the subject-matter of the transaction for the purposes of that scheme.

4 An individual who participates in a collective investment scheme is a “major participant” in the scheme if the individual—

a is entitled to a share of at least 50% either of all the profits or income arising from the scheme or of any profits or income arising from the scheme that may be distributed to participants, or

b would in the event of the winding up of the scheme be entitled to 50% or more of the assets of the scheme that would then be available for distribution among the participants.

5 The reference in sub-paragraph (4)(a) to profits or income arising from a collective investment scheme is to profits or income arising from the acquisition, holding, management or disposal of the property subject to the scheme.

6 In this paragraph—

“participant”, in relation to a collective investment scheme, is to be read in accordance with section 235 of the Financial Services and Markets Act 2000;
“relative” means brother, sister, ancestor or lineal descendant;
“relevant settlor”, in relation to a chargeable transaction, means an individual who is a settlor in relation to a relevant settlement (as defined in sub-paragraph (7));
“settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act).

7 Where a person, in the capacity of trustee of a settlement, is connected with a person who is the purchaser under a chargeable transaction, that settlement is a “relevant settlement” in relation to the chargeable transaction.

8 In sub-paragraph (7) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected persons”: supplementary).

9 In this paragraph “the purchaser”, in relation to a chargeable transaction, is to be read as a reference to any of the purchasers (if there are more than one).

10 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this paragraph, but for those purposes—

a subsections (7) and (8) of that section (application of rules about connected persons to partnerships) are to be disregarded, and

b subsections (2) to (7) of section 172 of the Finance Act 2013 apply as they apply for the purposes of Part 3 of that Act.

Trades involving making a dwelling available to the public¶

1 Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in relation to which the conditions in sub-paragraph (2) are met.

2 The conditions are that—

a the higher threshold interest is acquired with the intention that it will be exploited as a source of income in the course of a qualifying trade, and

b reasonable commercial plans have been formulated to carry out that intention without delay (except so far as delay may be justified by commercial considerations or cannot be avoided).

3 “Qualifying trade”, in relation to a higher threshold interest, means a trade that—

a is carried on on a commercial basis and with a view to profit, and

b involves, in its normal course, offering the public the opportunity to make use of, stay in or otherwise enjoy the dwelling as customers of the trade on at least 28 days in any calendar year.

4 For the purposes of sub-paragraph (3), persons are not considered to have the opportunity to make use of, stay in or otherwise enjoy a dwelling unless the areas that they have the opportunity to make use of, stay in or otherwise enjoy include a significant part of the interior of the dwelling.

5 The size (relative to the size of the whole dwelling), nature and function of any relevant area or areas in a dwelling are taken into account in determining whether they form a significant part of the interior of the dwelling.

Financial institutions acquiring dwellings in the course of lending¶

1 Sub-paragraph (2) applies to a chargeable transaction if the purchaser is a financial institution carrying on a business that involves the lending of money.

2 Paragraph 3 does not apply to the chargeable transaction so far as its subject-matter consists of a higher threshold interest that is acquired in the course of that business—

a for the purpose of resale in the course of the business and,

b in connection with those lending activities.

Acquisition under a regulated home reversion plan¶

5CA

1 Paragraph 3 does not apply to a chargeable transaction if (and so far as) the purchaser—

a is an authorised plan provider, and

b acquires the subject-matter of the chargeable transaction as a plan provider.

2 For the purposes of this paragraph the purchaser acquires the subject-matter of the chargeable transaction “as a plan provider” so far as the purchaser acquires it under a regulated home reversion plan which the purchaser enters into as plan provider.

3 In this paragraph—

“authorised plan provider” means a person authorised under the Financial Services and Markets Act 2000 to carry on in the United Kingdom the regulated activity specified in article 63B(1) of the Regulated Activities Order (entering into regulated home reversion plan as plan provider);
“the Regulated Activities Order” means the Financial Services and Markets (Regulated Activities) Order 2001 (S.I. 2001/544);
“regulated home reversion plan” means an arrangement which is a regulated home reversion plan for the purposes of Chapter 15A of Part 2 of the Regulated Activities Order.

4 In this section references to entering into a regulated home reversion plan “as plan provider” are to be interpreted as if the references were in the Regulated Activities Order.

Dwellings for occupation by certain employees etc of a relievable business¶

1 Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in relation to which the conditions in sub-paragraph (2) are met. Those conditions can only be met if the purchaser, or a relevant group member, carries on or is to carry on a relievable business.

2 The conditions are that—

a the interest is acquired for the purpose of making the dwelling available to one or more qualifying employees or qualifying partners for use as living accommodation, and

b the dwelling is to be made available as mentioned in paragraph (a) for purposes that are solely or mainly purposes of the relievable business.

3 For the purposes of the relief under this paragraph it does not matter whether or not the individuals mentioned in sub-paragraph (2)(a) are identified at the time of the chargeable transaction.

4 “Relievable business” means a trade or property rental business that is run on a commercial basis and with a view to profit.

5 In this paragraph references to making a dwelling available to a qualifying employee or qualifying partner include making it available to persons who are to share the accommodation with a qualifying employee or qualifying partner as that individual's family.

6 Where the purchaser is a company, “relevant group member” means a company which is a member of the same group of companies as the purchaser for the purposes mentioned in paragraph 1(2) of Schedule 7 (group relief).

More about the condition in paragraph 5D(2)(a)¶

1 In a case where the person carrying on the relievable business mentioned in paragraph 5D(1) carries it on in partnership with one or more other persons, “qualifying partner” means any individual who is a member of the partnership.

2 “Qualifying employee” means an individual employed for the purposes of the relievable business.

3 In a case falling within sub-paragraph (1), the condition in paragraph 5D(2)(a) is taken not to be met if the individuals, or a class of individuals, to whom it is proposed to make the dwelling available for use as living accommodation include, or are likely to include, a member of the partnership who is (or will at the relevant time be) entitled to a 10% or greater share—

a in the income profits of the partnership, or

b in any company beneficially entitled to the higher threshold interest mentioned in paragraph 5D(1), or

c in that higher threshold interest.

4 In addition, the condition in paragraph 5D(2)(a) is taken not to be met if the individuals, or a class of individuals, to whom it is proposed to make the dwelling available for use as living accommodation include, or are likely to include, an individual employed for the purposes of the relievable business in question who is (or will at the relevant time be)—

a entitled to a 10% or greater share—

i in the income profits of the relievable business, or

ii in any company that is beneficially entitled to the higher threshold interest, or

iii in that higher threshold interest, or

b employed to provide excluded domestic services.

5 The reference in sub-paragraph (4)(b) to an individual employed to provide excluded domestic services is to an individual the duties of whose employment include the provision of services in connection with the (actual or intended) occupation, by an individual to whom sub-paragraph (6) applies, of the dwelling mentioned in paragraph 5D(2)(a) (“the relevant dwelling”), or a linked dwelling.

6 This sub-paragraph applies to any individual who is connected with a person who is or is to be beneficially entitled to the higher threshold interest.

7 The following are “linked” dwellings for the purposes of sub-paragraph (5)—

a if the conditions in section 116(2) of the Finance Act 2013 are met in relation to the relevant dwelling and another dwelling, that other dwelling;

b a dwelling that is linked to the relevant dwelling, as described in section 117(1) of the Finance Act 2013.

8 For the purposes of sub-paragraphs (3)(c) and (4)(a) persons who are entitled to a chargeable interest as beneficial joint tenants (or, in Scotland, as joint owners) are taken to be entitled to the chargeable interest as beneficial tenants in common (or, in Scotland, as owners in common) in equal shares.

9 Section 147 of the Finance Act 2013 (meaning of “10% or greater share in a company”) applies for the purposes of this paragraph as for the purposes of section 146 of that Act.

10 In this paragraph references to employment include the holding of an office.

Acquisition by management company of flat for occupation by caretaker¶

5EA

1 Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in or over a flat which—

a is one of at least three flats contained in the same premises, and

b is acquired by a tenants' management company for the purpose of making the flat available for use as caretaker accommodation.

2 For the purposes of this paragraph a tenants' management company makes a flat available for use “as caretaker accommodation” if it makes it available to an individual for use as living accommodation in connection with the individual's employment as caretaker of the premises.

3 In relation to the acquisition of a flat, a company is a “tenants' management company” if—

a the tenants of two or more other flats contained in the premises are members of the company, and

b the company owns, or it is intended that the company will acquire, the freehold of the premises;

but a company which carries on a relievable business is not a tenants' management company.

4 In this paragraph “premises” means premises constituting the whole or part of a building.

Farmhouses¶

1 Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest in or over a dwelling—

a that is, or is to be, a farmhouse, and

b in relation to which the conditions in sub-paragraph (3) are met.

2 The reference in sub-paragraph (1) to a dwelling that “is or is to be a farmhouse” is to a dwelling that forms part of land that is to be occupied, or to continue to be occupied, for the purposes of a qualifying trade of farming.

3 The conditions are that—

a the dwelling is to be occupied for the purposes of that trade by a qualifying farm worker,

b reasonable commercial plans have been formulated under which such occupation is either to continue from the effective date of the chargeable transaction or to begin without delay (except so far as delay may be justified by commercial considerations or cannot be avoided), and

c occupation of the farmhouse by a qualifying farm worker is then expected to continue as part of the normal way in which the trade is, or is to be, carried on.

4 In sub-paragraph (3) “qualifying farm worker” means an individual who occupies the dwelling for the purposes of the trade mentioned in that sub-paragraph and has a substantial involvement—

a in the day-to-day work of the trade, or

b in the direction and control of the conduct of the trade.

5 “Qualifying trade of farming” means a trade of farming that is carried on—

a on a commercial basis, and

b with a view to profit.

6 A person occupying part of a dwelling is regarded as occupying the dwelling for the purposes of this paragraph.

7 In this paragraph—

a “farming” has the same meaning as in the Corporation Tax Acts (see section 1125 of CTA 2010), except that in this paragraph “farming” includes market gardening;

b “market gardening” has the same meaning as in the Corporation Tax Acts (see section 1125(5) of CTA 2010).

Qualifying housing co-operatives¶

5FAParagraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest that is acquired by a company on a day on which the company is a qualifying housing co-operative for the purposes of section 150(3A) of the Finance Act 2013 (relief from ATED).

Withdrawal of relief¶

1 Sub-paragraph (2) applies where relief under paragraph 5 has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

2 The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) a requirement in sub-paragraph (3) is not met.

3 The requirements are that—

a the higher threshold interest (if still held by the purchaser) is held exclusively for one or more of the purposes mentioned in paragraph 5(1),

b any chargeable interest derived from the higher threshold interest that may be held by the purchaser is held exclusively for one or more of those purposes, and

c (if the higher threshold interest or a chargeable interest derived from it is held by the purchaser) no non-qualifying individual is permitted to occupy any dwelling on the land.

4 The requirements in sub-paragraph (3)(a) and (b) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect the purposes for which the higher threshold interest was acquired to be carried out.

5 Sub-paragraph (6) applies if a higher threshold interest was acquired for a purpose mentioned in paragraph 5(1) but at some time in the control period the activity in question (for instance, exploitation of the interest as mentioned in paragraph 5(1)(a))—

a has not yet begun, or

b has ceased.

6 For the purposes of sub-paragraph (3), the interest is taken to be held for the purpose in question only if reasonable steps are being taken to ensure that the purpose in question is carried out.

7 In this paragraph “non-qualifying individual” (in relation to the chargeable transaction mentioned in sub-paragraph (1)) has the meaning given by paragraph 5A.

1 This paragraph applies where relief under paragraph 5B (trades involving making a dwelling open to the public) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

3 The requirements are that—

a the higher threshold interest (if still held by the purchaser), is being exploited as a source of income in the course of a qualifying trade, and

b any chargeable interest derived from that interest that may be held by the purchaser is being exploited as mentioned in paragraph (a).

4 The requirements in sub-paragraph (3) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect the chargeable interest concerned to be exploited in the manner specified.

5 Sub-paragraph (6) applies if at some time in the control period the higher threshold interest, or a chargeable interest derived from it—

a has not begun to be exploited as mentioned in sub-paragraph (3), or

b has ceased to be so exploited.

6 The requirements in sub-paragraph (3) are treated as being met if reasonable steps are being taken to ensure that the chargeable interest in question begins to be exploited as mentioned in that sub-paragraph, or that such exploitation of the interest is resumed.

1 This paragraph applies where relief under paragraph 5C (financial institutions acquiring dwellings in the course of lending) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

2 The relief is withdrawn if any requirement in sub-paragraph (3) is not met at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) (but see sub-paragraphs (4) and (5)).

3 The requirements are that—

a the purchaser continues to be a financial institution carrying on a business that involves the lending of money, and

b the interest is held for the purpose of resale in the course of the business.

4 The requirements in sub-paragraph (3) apply only to times in the control period when the purchaser holds—

a the higher threshold interest, or

b a chargeable interest that is derived from the higher threshold interest.

5 The requirements in sub-paragraph (3) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the purchaser's control, it is not reasonable to expect those requirements to be met.

5IA

1 This paragraph applies where relief under paragraph 5CA (acquisition under a regulated home reversion plan) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

2 The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction the purchaser holds the higher threshold interest otherwise than for the purposes of the regulated home reversion plan (as defined in paragraph 5CA).

3 But sub-paragraph (2) does not apply if—

a after ceasing to hold the higher threshold interest for the purposes of the regulated home reversion plan, the purchaser sells the higher threshold interest without delay (except so far as delay is justified by commercial considerations or cannot be avoided), and

b at no time when the higher threshold interest is held by the purchaser as mentioned in sub-paragraph (2) is the dwelling (or any part of the dwelling) occupied by a non-qualifying individual.

4 In this paragraph—

“the dwelling” means the dwelling to which the relief under paragraph 5CA relates;
“non-qualifying individual” is to be interpreted in accordance with paragraph 5A.

1 This paragraph applies where relief under paragraph 5D (dwellings for occupation by certain employees etc) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

3 The requirements are that—

a the purchaser, or a relevant group member (as defined in paragraph 5D(6)), carries on a relievable business,

b the dwelling is made available as mentioned in paragraph 5D(2)(a), and

c the dwelling is made so available for purposes that are solely or mainly purposes of the relievable business.

4 The requirements in sub-paragraph (3) apply only to times in the control period when the purchaser holds—

a the higher threshold interest, or

b a chargeable interest that is derived from the higher threshold interest.

6 Sub-paragraph (7) applies if at some time in the control period the dwelling—

a has not begun to be made available as mentioned in sub-paragraph (3)(b) and (c), or

b has ceased to be so made available.

7 The requirements in paragraphs (b) and (c) of sub-paragraph (3) are treated as being met if reasonable steps are being taken to ensure that the dwelling will begin to be, or will return to being, available as mentioned in those paragraphs.

5JA

1 This paragraph applies where relief under paragraph 5EA (acquisition by management company of flat for occupation by caretaker) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

2 The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction the purchaser holds the higher threshold interest otherwise than for the purpose of making the flat available for use as caretaker accommodation.

3 For the purposes of this paragraph a tenants' management company makes a flat available for use “as caretaker accommodation” if it makes it available to an individual for use as living accommodation in connection with the individual's employment as caretaker of the premises.

1 This paragraph applies where relief under paragraph 5F (farmhouses) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

2 The relief is withdrawn if at any time in the period of three years beginning with the effective date of the chargeable transaction (“the control period”) the requirements in sub-paragraph (3) are not met (but see sub-paragraphs (4) and (5)).

3 The requirements are that—

a the land mentioned in paragraph 5F(2) is occupied for the purposes of a qualifying trade of farming, and

b the dwelling is occupied for the purposes of that trade by a qualifying farm worker.

4 The requirements in sub-paragraph (3) apply only to times in the control period when the purchaser holds—

a the higher threshold interest, or

b a chargeable interest that is derived from the higher threshold interest.

6 Sub-paragraph (7) applies if at some time in the control period a requirement in sub-paragraph (3)—

a has not begun to be met, or

b has ceased to be met.

7 The requirement is treated as being met if reasonable steps are being taken to ensure that the requirement begins to be met, or is again met.

1 This paragraph applies where relief under paragraph 5FA (qualifying housing co-operatives) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

2 References in this paragraph to a qualifying housing body are to—

a a company that is a qualifying housing co-operative for the purposes of section 150(3A) of the Finance Act 2013 (relief from ATED),

b a registered provider of social housing, or

c a registered social landlord.

3 The relief under paragraph 5FA is withdrawn (subject to sub-paragraph (4)) if—

a on any day in the period of three years beginning with the effective date of the chargeable transaction (“the control period”), the purchaser is not a qualifying housing body, and

b immediately before the first day on which that is the case the purchaser still holds the higher threshold interest or holds a chargeable interest derived from it.

4 If, on any day in the control period, the purchaser is not a qualifying housing body because it ceases to exist (whether by virtue of a conversion into, or amalgamation with, another person or for any other reason), relief is not to be withdrawn under this paragraph unless—

a another person (“the first successor”) has succeeded to the engagements of the purchaser, and

b condition A or condition B is met (and if condition B is met, subject to sub-paragraph (7)).

5 Condition A is that, on the day the first successor succeeds to the engagements of the purchaser (“the day of succession”), the first successor is not a qualifying housing body.

6 Condition B is that—

a on any day in the part of the control period that falls after the day of succession, the first successor is not a qualifying housing body, and

b immediately before the first day on which that is the case the first successor still holds the higher threshold interest or holds a chargeable interest derived from it.

7 If condition B is met because the first successor ceases to exist (whether by virtue of a conversion into, or amalgamation with, another person or for any other reason), relief is not to be withdrawn under this paragraph unless it would have been withdrawn by virtue of sub-paragraph (4) if references in sub-paragraphs (4) to (6)—

a to the purchaser were references to the first successor, and

b to the first successor were references to the person who has succeeded to the engagements of the first successor (“the second successor”).

8 Sub-paragraph (7) is to apply to the second successor as it applies to the first successor, and so on, subject to the necessary modifications.

Partnerships: application of paragraph 2 to certain transactions¶

1 Sub-paragraphs (2) and (3) apply where the subject-matter of a transaction to which Part 3 of Schedule 15 applies consists of or includes a higher threshold interest.

2 The transaction is not to be treated as a high-value residential transaction by virtue of paragraph 2(2) unless the chargeable consideration for the transaction is more than £500,000.

3 Paragraph 2(3) to (8) does not apply to the transaction if—

a the subject-matter of the transaction includes a chargeable interest other than a higher threshold interest, and

b the result of applying paragraph 2(3) and (4) would be that chargeable consideration of £500,000 or less would be attributable to the separate transaction mentioned in paragraph 2(3)(a).

4 For the purposes of sub-paragraph (1) and paragraph 2, the subject-matter (and the main subject-matter) of a transfer of an interest in a partnership that is a chargeable transaction by virtue of sub-paragraph (2) of paragraph 14 of Schedule 15 is—

a if the transfer is a Type A transfer, the relevant partnership property as defined in sub-paragraph (5) of that paragraph, or

b if the transfer is a Type B transfer, the relevant partnership property as defined in sub-paragraph (5A) of that paragraph.

5 For the purposes of sub-paragraph (1) and paragraph 2, the subject-matter (and the main subject-matter) of a transfer of an interest in a partnership that is a chargeable transaction by virtue of sub-paragraph (2) of paragraph 17 of Schedule 15 is the subject-matter of the land transfer referred to in sub-paragraph (1)(a) of that paragraph.

6 For the purposes of sub-paragraph (1) and paragraph 2, the subject-matter (and the main subject-matter) of a chargeable transaction that is treated as occurring by virtue of sub-paragraph (4) of paragraph 17A of Schedule 15 is the subject-matter of the land transfer referred to in sub-paragraph (1)(a) of that paragraph.

Modifications for cases involving alternative finance arrangements¶

1 This paragraph applies where—

a section 71A (land sold to financial institution and leased to person), section 72 (land in Scotland sold to financial institution and leased to person) or section 73 (land sold to financial institution and re-sold to person) applies, and

b the major interest in land purchased under the first transaction consists of or includes a higher threshold interest.

2 In this paragraph “the first transaction” means—

a where section 71A applies, the transaction mentioned in section 71A(1)(a);

b where section 72 applies, the transaction mentioned in section 72(1)(a);

c where section 73 applies, the transaction mentioned in section 73(1)(a)(i).

3 The condition in paragraph 3(3) is treated as being met with respect to the first transaction only if that condition is met with respect to the second transaction.

4 If the second transaction would qualify for relief under any of paragraphs 5(1), 5B(1), 5D(1) , 5F(1) and 5FA (disregarding the exemptions in sections 71A(3), 72(3) and 73(3) and assuming, for this purpose, that the subject-matter of the second transaction is a higher threshold interest), the first transaction is taken to qualify for relief under the same provision (and accordingly paragraph 3 does not apply in relation to the first transaction).

5 The first transaction does not qualify for relief under any of paragraphs 5(1), 5B(1), 5D(1) , 5F(1) or 5FA except in accordance with sub-paragraph (4).

6 In this paragraph “the second transaction” has the same meaning as in section 71A, 72 or 73 (as the case requires).

1 This paragraph applies where section 72A (land in Scotland sold to financial institution and person in common) applies and the major interest in land purchased under the transaction mentioned in section 72A(1)(a) (“the first transaction”) consists of or includes a higher threshold interest.

2 In determining whether or not the first transaction meets the condition in paragraph 3(3) it is to be assumed that the financial institution referred to in section 72A(1) is not one of the persons acquiring the major interest in land under that transaction.

3 Paragraphs 5 to 5F have effect in relation to the first transaction as they would have effect if the financial institution were not a purchaser under that transaction.

Paragraphs 6A and 6B: application where transaction is split under paragraph 2(3)¶

1 Where paragraph 6A or 6B (“the modifying paragraph”) applies and the first transaction (within the meaning of that paragraph) is treated under paragraph 2(3) as two separate chargeable transactions, references in the modifying paragraph to the first transaction include those separate transactions.

2 If the subject-matter of the second transaction (within the meaning of paragraph 6A) includes a chargeable interest other than a higher threshold interest, that fact is ignored in determining for the purposes of paragraph 6A—

a whether that transaction meets the condition in paragraph 3(3), or

b whether it would qualify for relief under any of paragraphs 5(1), 5B(1), 5D(1) , 5F(1) and 5FA.

Alternative finance arrangements: withdrawal of relief¶

1 This paragraph applies where relief under paragraph 5 (businesses of letting, trading in or redeveloping properties) has been allowed, in accordance with paragraph 6A(4) or 6B(3), with respect to the purchase of a major interest in land.

2 The relief is withdrawn if at any time in the period of three years beginning with the effective date of the first transaction (“the control period”) a relevant requirement is not met.

3 The relevant requirements are that—

a any relevant interest (see sub-paragraphs (5) and (6)) held by the relevant person is held by that person exclusively for one or more of the purposes mentioned in paragraph 5(1), and

b (if a relevant interest is held by the relevant person) no non-qualifying individual is permitted to occupy any dwelling on the land concerned.

4 For the purposes of sub-paragraph (3)(a) and (b) it does not matter whether the relevant interest is held by the relevant person—

a jointly or (in Scotland) in common, or

b otherwise.

5 In relation to relief allowed in accordance with sub-paragraph 6A(4), “relevant interest” means any of the following—

a the interest acquired under the second transaction (within the meaning of paragraph 6A);

b any interest transferred to the relevant person as a result of the exercise of the right mentioned in section 71A(1)(d) or 72(1)(c);

c any chargeable interest derived from an interest such as is mentioned in paragraph (a) or (b).

6 In relation to relief allowed in accordance with paragraph 6B(3), “relevant interest” means any of the following—

a the interest purchased under the first transaction (within the meaning of paragraph 6B);

b any interest transferred to the relevant person as a result of the exercise of the right mentioned in section 72A(1)(c);

c any chargeable interest derived from an interest such as is mentioned in paragraph (a) or (b).

7 In this paragraph—

“non-qualifying individual” (in relation to the chargeable transaction mentioned in sub-paragraph (1)) has the meaning given by paragraph 5A;
“the relevant person” means the person (other than the financial institution) who entered into the arrangements in question as mentioned in section 71A(1), 72(1), 72A(1) or 73(1).

1 The requirement in paragraph 6D(3)(a) does not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the relevant person's control, it is not reasonable to expect the interest in question to be held for the purpose for which the relevant person acquired that person's initial interest.

2 Sub-paragraph (3) applies if the relevant person's initial interest was acquired by the relevant person for a purpose mentioned in paragraph 5(1), but at some time in the control period the activity in question (for instance, exploitation as mentioned in paragraph 5(1)(a))—

a has not begun in the case of a relevant interest, or

b has ceased in the case of a relevant interest.

3 For the purposes of paragraph 6D(3)(a) the relevant interest is taken to be held for the purpose in question only if reasonable steps are being taken to ensure that the purpose in question is carried out.

4 In this paragraph—

a “the control period”, “relevant interest” and “the relevant person” have the same meaning as in paragraph 6D;

b references to the relevant person's “initial interest” are to the interest mentioned in sub-paragraph (5)(a) or (6)(a) of paragraph 6D (as the case requires).

1 This paragraph applies where relief under paragraph 5B (trades involving making a dwelling open to the public) has been allowed, in accordance with paragraph 6A(4) or 6B(3), with respect to the purchase of a major interest in land.

2 The relief is withdrawn if at any time in the period of three years beginning with the effective date of the first transaction (“the control period”) the requirement in sub-paragraph (3) is not met.

3 The requirement is that the dwelling is being exploited as a source of income in the course of a qualifying trade.

4 The requirement in sub-paragraph (3) does not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the relevant person's control, it is not reasonable to expect the interest in question to be exploited as mentioned in that sub-paragraph.

5 Sub-paragraph (6) applies if at some time in the control period that person—

a has not begun to exploit the interest as a source of income in the course of a relevant trade, or

b has ceased so to exploit it.

6 The requirement in sub-paragraph (3) is treated as being met if reasonable steps are being taken to ensure that the relevant interest begins to be exploited as mentioned in that sub-paragraph, or that such exploitation of the interest is resumed.

7 In this paragraph—

a “the relevant person” means the person (other than the financial institution) who enters into the arrangements mentioned in section 71A(1), 72(1), 72A(1) or 73(1);

b references to a major interest in land include an undivided share in a major interest in land.

1 This paragraph applies where relief under paragraph 5D (dwellings for occupation by certain employees etc) has been allowed, in accordance with paragraph 6A(4) or 6B(3), with respect to the purchase of a major interest in land.

2 The relief is withdrawn if at any time in the control period when the relevant person holds a relevant interest (whether jointly, or in common, or otherwise) any requirement in sub-paragraph (4) is not met.

3 In sub-paragraph (2) “the control period” means the three years beginning with the effective date of the first transaction.

4 The requirements are that—

a the relevant person, or a relevant group member, carries on a relievable business,

b the dwelling is made available as mentioned in paragraph 5D(2)(a), and

c the dwelling is made so available for purposes that are solely or mainly purposes of the relievable business mentioned in sub-paragraph (a).

5 The requirements in sub-paragraph (4) do not apply in relation to times when, because of a change of circumstances that is unforeseen and beyond the relevant person's control, it is not reasonable to expect those requirements to be met.

6 Sub-paragraph (7) applies if at some time in the control period the relevant interest—

a has not begun to be made available as mentioned in sub-paragraph (4)(b) and (c), or

b has ceased to be so made available.

7 The requirements in paragraphs (b) and (c) of sub-paragraph (4) are treated as being met if reasonable steps are being taken to ensure that the dwelling will begin to be, or will return to being, made available as mentioned in those paragraphs.

8 Where the relevant person is a company, “relevant group member” means a company which is a member of the same group of companies as the relevant person for the purposes mentioned in paragraph 1(2) of Schedule 7.

9 In this paragraph—

a “relevant interest” has the same meaning as in paragraph 6D;

b “the relevant person” means the person (other than the financial institution) who enters into the arrangements mentioned in section 71A(1), 72(1), 72A(1) or 73(1);

c references to a major interest in land include an undivided share in a major interest in land.

1 This paragraph applies where relief under paragraph 5F (farmhouses) has been allowed, in accordance with paragraph 6A(4) or 6B(3), in relation to the purchase of a major interest in land.

3 In sub-paragraph (2) “the control period” means the three years beginning with the effective date of the first transaction.

4 The requirements are that—

a the land mentioned in paragraph 5F(2) is occupied for the purposes of a qualifying trade of farming, and

b the dwelling is occupied for the purposes of that trade by a qualifying farm worker.

6 Sub-paragraph (7) applies if at some time in the control period a requirement in sub-paragraph (4)—

a has not begun to be met, or

b has ceased to be met.

7 The requirement is treated as being met if reasonable steps are being taken to ensure that the requirement begins to be met, or is again met.

8 In this paragraph—

a “the relevant interest” has the same meaning as in paragraph 6D;

b “the relevant person” means the person (other than the financial institution) who enters into the arrangements mentioned in section 71A(1), 72(1), 72A(1) or 73(1);

c references to a major interest in land include an undivided share in a major interest in land.

1 This paragraph applies where relief under paragraph 5FA (qualifying housing co-operatives) has been allowed, in accordance with paragraph 6A(4), in relation to the purchase of a major interest in land.

2 The relief is withdrawn (subject to sub-paragraph (3)) if—

a on any day in the period of three years beginning with the effective date of the first transaction (“the control period”), the relevant person is not a qualifying housing body, and

b immediately before the first day on which that is the case the relevant person holds a relevant interest (whether jointly, or in common, or otherwise).

3 If, on any day in the control period, the relevant person is not a qualifying housing body because it ceases to exist (whether by virtue of a conversion into, or amalgamation with, another person or for any other reason), relief is not to be withdrawn under this paragraph unless—

a another person (“the first successor”) has succeeded to the engagements of the relevant person, and

b condition A or condition B is met (and if condition B is met, subject to sub-paragraph (6)).

4 Condition A is that, on the day the first successor succeeds to the engagements of the relevant person (“the day of succession”), the first successor is not a qualifying housing body.

5 Condition B is that—

a on any day in the part of the control period that falls after the day of succession, the first successor is not a qualifying housing body, and

b immediately before the first day on which that is the case the first successor still holds a relevant interest (whether jointly, or in common, or otherwise).

6 If condition B is met because the first successor ceases to exist (whether by virtue of a conversion into, or amalgamation with, another person or for any other reason), relief is not to be withdrawn under this paragraph unless it would have been withdrawn by virtue of sub-paragraph (3) if references in sub-paragraphs (3) to (5)—

a to the relevant person were references to the first successor, and

b to the first successor were references to the person who has succeeded to the engagements of the first successor (“the second successor”).

7 Sub-paragraph (6) is to apply to the second successor as it applies to the first successor, and so on, subject to the necessary modifications.

8 In this paragraph—

a “qualifying housing body” means—

i a company that is a qualifying housing co-operative for the purposes of section 150(3A) of the Finance Act 2013 (relief from ATED),

ii a registered provider of social housing, or

iii a registered social landlord;

b “relevant interest” has the same meaning as in paragraph 6D;

c “the relevant person” means the person (other than the financial institution) who enters into the arrangements mentioned in section 71A(1) or 73(1);

d references to a major interest include an undivided share in a major interest in land.

Meaning of “dwelling”¶

1 This paragraph sets out rules for determining what counts as a dwelling for the purposes of this Schedule.

2 A building or part of a building counts as a dwelling if—

a it is used or suitable for use as a single dwelling, or

b it is in the process of being constructed or adapted for such use.

3 Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on such land) is taken to be part of that dwelling.

4 Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of the dwelling.

5 The subject-matter of a transaction is also taken to include an interest in a dwelling if—

a substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,

c construction or adaptation of the building, or part of the building, has not begun by the time the contract is substantially performed.

6 In sub-paragraph (5)—

“contract” includes any agreement;
“relevant deeming provision” means any of sections 44 to 45A, paragraph 5(1) or (2) of Schedule 2A or paragraph 12A or 19(3) of Schedule 17A.

7 A building or part of a building used for a purpose specified in section 116(2) or (3) is not used as a dwelling for the purposes of sub-paragraph (2) or (5).

8 Where a building or part of a building is used for a purpose mentioned in sub-paragraph (7), no account is to be taken for the purposes of sub-paragraph (2) of its suitability for any other use.

1 The Treasury may by order amend paragraph 7 so as to specify cases where use of a building is to be use of a building as a dwelling for the purposes of sub-paragraph (2) or (5) of that paragraph.

2 The reference in section 116(8)(a) (power to amend section 116(2) and (3)) to “the purposes of subsection (1)” includes a reference to the purposes of paragraph 7(2) and (5).

Interpretation¶

9In this Schedule—

“appurtenant rights”, in relation to a chargeable interest that is, or is part of, the subject-matter of a transaction, means any rights or interests appurtenant or pertaining to the chargeable interest that are acquired with it;
“attributable” means attributable on a just and reasonable basis;
“collective investment scheme” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000 (see section 235 of that Act);
“company” means a body corporate other than a partnership.
“financial institution” is to be read in accordance with subsections (1) and (2) of section 73BA and, in paragraphs 6A to 6I, also in accordance with subsection (3) of that section;
“property development trade ” has the meaning given by paragraph 5(3);
“ property rental business” has the meaning given by section 133(4) of the Finance Act 2013;
“property trading business attributable” has the meaning given by paragraph 5(3);
“qualifying farm worker” has the meaning given by paragraph 5F(4);
“qualifying trade” has the meaning given by paragraph 5B(3);
“qualifying trade of farming” has the meaning given by paragraph 5F(5);
“relievable business” has the meaning given by paragraph 5D(4).

SCHEDULE 5 ¶

Stamp duty land tax: amount of tax chargeable: rent

Section 56

Introduction¶

1This Schedule provides for calculating the tax chargeable—

a in respect of a chargeable transaction for which the chargeable consideration consists of or includes rent, or

b where such a transaction is to be taken into account as a linked transaction.

Amounts payable in respect of periods before grant of lease¶

1AFor the purposes of this Part “rent” does not include any chargeable consideration for the grant of a lease that is payable in respect of a period before the grant of the lease.

Calculation of tax chargeable in respect of rent¶

1 Tax is chargeable under this Schedule in respect of so much of the chargeable consideration as consists of rent.

2 The tax chargeable is the total of the amounts produced by taking the relevant percentage of so much of the relevant rental value as falls within each rate band.

^C19^C45^C523 The relevant percentages and rate bands are determined by reference to whether the relevant land—

a consists entirely of residential property (in which case Table A below applies), or

b consists of or includes land that is not residential property (in which case Table B below applies).

TABLE A: RESIDENTIAL

Rate bands	Percentage
£0 to £125,000	0%
Over £125,000	1%

TABLE B: NON-RESIDENTIAL OR MIXED

Rate bands	Percentage
£0 to £150,000	0%
Over £150,000 but not over £5 million	1%
Over £5 million	2%

4 For the purposes of sub-paragraphs (2) and (3)—

a the relevant rental value is the net present value of the rent payable over the term of the lease, and

b the relevant land is the land that is the subject of the lease.

5 If the lease in question is one of a number of linked transactions for which the chargeable consideration consists of or includes rent, the above provisions are modified.

6 In that case the tax chargeable is determined as follows.

First, calculate the amount of the tax that would be chargeable if the linked transactions were a single transaction, so that—
1. the relevant rental value is the total of the net present values of the rent payable over the terms of all the leases, and
2. the relevant land is all land that is the subject of any of those leases.
Then, multiply that amount by the fraction:
$\frac{NPV}{TNPV}$
where—
NPV is the net present value of the rent payable over the term of the lease in question, and
TNPV is the total of the net present values of the rent payable over the terms of the all the leases.

Net present value of rent payable over term of lease¶

3The net present value (v) of the rent payable over the term of a lease is calculated by applying the formula:

where—

ri is the rent payable ^F94... in respect of year i,
i is the first, second, third, etc year of the term,
n is the term of the lease ^F94..., and
T is the temporal discount rate (see paragraph 8).

Rent payable¶

^F314. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of provision for rent review¶

^F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Term of lease¶

^F316. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Treatment of lease for indefinite term¶

^F317. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Temporal discount rate¶

1 For the purposes of this Schedule the “temporal discount rate” is 3.5% or such other rate as may be specified by regulations made by the Treasury.

2 Regulations under this paragraph may make any such provision as is mentioned in subsection (3)(b) to (f) of section 178 of the Finance Act 1989 (c. 26) (power of Treasury to set rates of interest).

3 Subsection (5) of that section (power of Inland Revenue to specify rate by order in certain circumstances) applies in relation to regulations under this paragraph as it applies in relation to regulations under that section.

Tax chargeable in respect of consideration other than rent : general ¶

1 Where in the case of a transaction to which this Schedule applies there is chargeable consideration other than rent, the provisions of this Part apply in relation to that consideration as in relation to other chargeable consideration ^F959....

^F3852 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F3862A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F3873 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Tax chargeable under this Schedule is in addition to any tax chargeable under section 55 or 74(1A) or Schedule 4A ^F1181... in respect of consideration other than rent.

5 Where a transaction to which this Schedule applies falls to be taken into account for the purposes of section 55 ^F1182... as a linked transaction, no account shall be taken of rent in determining the relevant consideration.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .¶

^F9609A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase of rent treated as grant of new lease¶

^F4410. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation¶

^F4511. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756SCHEDULE 6 ¶

Stamp duty land tax: disadvantaged areas relief

Section 57

^F756Part 1 Disadvantaged areas¶

^F756Meaning of “disadvantaged area”¶

^F7561. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Continuation of regulations made for purposes of stamp duty¶

^F7562. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Part 2 Land wholly situated in a disadvantaged area¶

^F756Introduction¶

^F7563. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Land all non-residential¶

^F7564. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Land all residential¶

^F7565. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Land partly non-residential and partly residential¶

^F7566. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Part 3 Land partly situated in a disadvantaged area¶

^F756Introduction¶

^F7567. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Land all non-residential¶

^F7568. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Land all residential¶

^F7569. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Land partly non-residential and partly residential¶

^F75610. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Part 4 Supplementary¶

^F756Relevant consideration and relevant rental value¶

^F75611. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Rent and annual rent¶

^F75612. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F756Notification of transactions¶

^F75613. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^C53SCHEDULE 6ZA ¶

Relief for first-time buyers

PART 1 Eligibility for relief¶

Eligibility for relief¶

1 Relief may be claimed for a chargeable transaction if the following conditions are met (but this is subject to sub-paragraph (7)).

2 The first condition is that the main subject-matter of the transaction consists of a major interest in a single dwelling (“the purchased dwelling”).

3 The second condition is that the relevant consideration for the transaction (other than any consisting of rent) is not more than £500,000.

4 The third condition is that the purchaser, or (if more than one) each of the purchasers, is a first-time buyer who intends to occupy the purchased dwelling as the purchaser's only or main residence.

5 The fourth condition is that—

a the transaction is not linked to another land transaction, or

b the transaction is linked only to land transactions that are within sub-paragraph (6).

6 A land transaction is within this sub-paragraph if the main subject-matter of the transaction consists of—

a an interest in land that is or forms part of the garden or grounds of the purchased dwelling, or

b an interest in or right over land that subsists for the benefit of—

i the purchased dwelling, or

ii land that is or forms part of the garden or grounds of the purchased dwelling.

7 Relief may not be claimed under this paragraph for a chargeable transaction if it is a higher rates transaction for the purposes of paragraph 1 of Schedule 4ZA.

Eligibility for relief: linked transactions within paragraph 1(6)¶

1 Where a land transaction (“the main transaction”) is eligible for relief under paragraph 1 (or would be if it were a chargeable transaction), relief may also be claimed for any chargeable transaction that is linked to the main transaction.

2 But relief may not be claimed under this paragraph for a chargeable transaction if the purchaser, or (if more than one) any of the purchasers in relation to the transaction is not a purchaser in relation to the main transaction.

Eligibility for relief: alternative finance arrangements¶

1 This paragraph applies in relation to a land transaction which is the first transaction under an alternative finance arrangement entered into between a person and a financial institution.

2 The person (rather than the institution) is to be treated as the purchaser in relation to the transaction for the purposes of paragraphs 1(4) and 2(2).

3 In this paragraph—

“alternative finance arrangement” means an arrangement of a kind mentioned in section 71A(1) or 73(1),
“financial institution” has the meaning it has in those sections (see section 73BA), and
“first transaction”, in relation to an alternative finance arrangement, has the meaning given by section 71A(1)(a) or (as the case may be) section 73(1)(a)(i).

Eligibility for relief: acquisition of new lease on bare trust¶

3AIn determining who is the purchaser for the purposes of paragraphs 1(4) and 2(2), paragraph 3 of Schedule 16 is to have effect as if sub-paragraphs (2) and (3) (trustee of bare trust granted a lease treated as purchaser of the whole of the interest acquired) were omitted.

PART 2 The Relief¶

The relief¶

4If relief is claimed under paragraph 1 or 2 for a chargeable transaction, the amount of tax chargeable in respect of the transaction is to be determined as if in section 55(1B) (amount of tax chargeable: general) for Table A there were substituted—

Withdrawal of relief¶

1 This paragraph applies if—

a relief is claimed under paragraph 1 or 2 for a chargeable transaction (“the first transaction”), and

b the effect of another land transaction (“the later transaction”) that is linked to the first transaction is that the first transaction ceases to be a transaction for which relief may be claimed under that paragraph.

2 Tax or (as the case may be) additional tax is chargeable on the first transaction as if the claim had not been made.

PART 3 Interpretation¶

“First-time buyer” ¶

1 In this Schedule “first-time buyer” means an individual who—

a has not previously been a purchaser in relation to a land transaction the main subject-matter of which was a major interest in a dwelling,

b has not previously acquired —

i an equivalent interest in a dwelling situated in a country or territory outside England, Wales and Northern Ireland, or

ii an interest of a kind mentioned in section 117(2) in a dwelling situated in Wales,

c has not previously been, or been one of the persons who was, “the person” for the purposes of section 71A or 73 in a case where the main subject-matter of the first transaction within the meaning of the section concerned was a major interest in a dwelling, and

d would not have been such a person for those purposes in such a case if the provisions mentioned in paragraph (c) had been in force, and had had effect in the country or territory concerned at all material times (subject, where required, to appropriate modifications).

2 For the purposes of sub-paragraph (1)(b) and (d), ignore a lease or, in the case of a dwelling situated in Wales, a term of years absolute which has less than 21 years to run at the beginning of the day after the date on which it is acquired.

3 In determining any question for the purposes of sub-paragraph (1), paragraph 3 of Schedule 16 is to have effect as if sub-paragraphs (2) and (3) (trustee of bare trust granted a lease treated as purchaser of the whole of the interest acquired) were omitted.

“Relevant consideration” ¶

7In this Schedule “relevant consideration” means—

a in the case of a transaction that is not one of a number of linked transactions, the chargeable consideration for the transaction, and

b in the case of a transaction that is one of a number of linked transactions, the total of the chargeable consideration for all those transactions.

“Major interest” ¶

8The main subject-matter of a transaction is not a major interest for the purposes of this Schedule if it is a term of years absolute which has less than 21 years to run at the beginning of the day after the effective date of the transaction.

What counts as a dwelling¶

1 This paragraph sets out rules for determining what counts as a dwelling for the purposes of this Schedule.

2 A building or part of a building counts as a dwelling if—

a it is used or suitable for use as a single dwelling, or

b it is in the process of being constructed or adapted for such use.

3 Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on that land) is taken to be part of that dwelling.

4 Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.

5 The main subject-matter of a transaction is also taken to consist of a major interest in a dwelling if—

a substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,

b the main subject-matter of the transaction consists of a major interest in a building, or a part of a building, that is to be constructed or adapted under the contract for use as a single dwelling, and

c construction or adaptation of the building, or part of a building, has not begun by the time the contract is substantially performed.

6 In sub-paragraph (5)—

“contract” includes any agreement,
“relevant deeming provision” means any of sections 44 to 45A or paragraph 5(1) or (2) of Schedule 2A or paragraph 12 of Schedule 17A, and
“substantially performed” has the same meaning as in section 44.

7 A building or part of a building used for a purpose specified in section 116(2) or (3) is not used as a dwelling for the purposes of sub-paragraphs (2) or (5).

8 Where a building or part of a building is used for a purpose mentioned in sub-paragraph (7), no account is to be taken for the purposes of sub-paragraph (2) of its suitability for any other use.

SCHEDULE 6A ¶

Relief for certain acquisitions of residential property

Section 58A

1 Acquisition by house-building company from individual acquiring new dwelling¶

1 Where a dwelling (“the old dwelling”) is acquired by a house-building company from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.

2 The conditions are—

a that the individual (whether alone or with other individuals) acquires from the house-building company a new dwelling,

b that the individual—

i occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and

ii intends to occupy the new dwelling as his only or main residence,

c that each acquisition is entered into in consideration of the other, and

d that the area of land acquired by the house-building company does not exceed the permitted area.

3 Where the conditions in sub-paragraph (2)(a) to (c) are met but the area of land acquired by the house-building company exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

4 A “house-building company” means a company that carries on the business of constructing or adapting buildings or parts of buildings for use as dwellings.References in this paragraph to such a company include any company connected with it.

5 In this paragraph—

a references to the acquisition of the new dwelling are to the acquisition, by way of grant or transfer, of a major interest in the dwelling;

b references to the acquisition of the old dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and

c references to the market value of the old dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area.

2 Acquisition by property trader from individual acquiring new dwelling¶

1 Where a dwelling (“the old dwelling”) is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.

2 The conditions are—

a that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals who acquire new dwellings from house-building companies,

b that the individual (whether alone or with other individuals) acquires a new dwelling from a house-building company,

c that the individual—

i occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and

ii intends to occupy the new dwelling as his only or main residence,

d that the property trader does not intend—

i to spend more than the permitted amount on refurbishment of the old dwelling, or

ii to grant a lease or licence of the old dwelling, or

iii to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and

e that the area of land acquired by the property trader does not exceed the permitted area.

Paragraph (d)(ii) does not apply to the grant of lease or licence to the individual for a period of no more than six months.

3 Where the conditions in sub-paragraph (2)(a) to (d) are met, but the area of land acquired by the property trader exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the old dwelling.

4 The provisions of paragraph 1(4) (meaning of “house-building company” etc) also have effect for the purposes of this paragraph.

5 In this paragraph—

a references to the acquisition of a new dwelling are to the acquisition, by way of grant or transfer, of a major interest in the dwelling;

b references to the acquisition of the old dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and

3 Acquisition by property trader from personal representatives¶

1 Where a dwelling is acquired by a property trader from the personal representatives of a deceased individual, the acquisition is exempt from charge if the following conditions are met.

2 The conditions are—

a that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from personal representatives of deceased individuals,

b that the deceased individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of his death,

c that the property trader does not intend—

i to spend more than the permitted amount on refurbishment of the dwelling, or

ii to grant a lease or licence of the dwelling, or

iii to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and

d that the area of land acquired does not exceed the permitted area.

3 Where the conditions in sub-paragraph (2)(a) to (c) are met, but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the dwelling.

4 In this paragraph—

a references to the acquisition of the dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and

b references to the market value of the dwelling and of the permitted area are, respectively, to the market value of that major interest in the dwelling and of that interest so far as it relates to that area.

4 Acquisition by property trader from individual where chain of transactions breaks down¶

1 Where a dwelling (“the old dwelling”) is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if—

a the individual has made arrangements to sell a dwelling (“the old dwelling”) and acquire another dwelling (“the second dwelling”),

b the arrangements to sell the old dwelling fail, and

c the acquisition of the old dwelling is made for the purpose of enabling the individual’s acquisition of the second dwelling to proceed,

and the following conditions are met.

2 The conditions are—

a that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in those circumstances,

b that the individual—

i occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and

ii intends to occupy the second dwelling as his only or main residence,

c that the property trader does not intend—

i to spend more than the permitted amount on refurbishment of the old dwelling, or

ii to grant a lease or licence of the old dwelling, or

iii to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and

d that the area of land acquired does not exceed the permitted area.

Paragraph (c)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than six months.

4 In this paragraph—

a references to the acquisition of the second dwelling are to the acquisition, by way of grant or transfer, of a major interest in the dwelling;

b references to the acquisition of the old dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and

5 Acquisition by employer in case of relocation of employment¶

1 Where a dwelling is acquired from an individual (whether alone or with other individuals) by his employer, the acquisition is exempt from charge if the following conditions are met.

2 The conditions are—

a that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition,

b that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment,

c that the consideration for the acquisition does not exceed the market value of the dwelling, and

d that the area of land acquired does not exceed the permitted area.

3 Where the conditions in sub-paragraph (2)(a) to (c) are met but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the dwelling.

4 In this paragraph “relocation of employment” means a change of the individual’s place of employment due to—

a his becoming an employee of the employer,

b an alteration of the duties of his employment with the employer, or

c an alteration of the place where he normally performs those duties.

5 For the purposes of this paragraph a change of residence is one “resulting from” relocation of employment if—

a the change is made wholly or mainly to allow the individual to have his residence within a reasonable daily travelling distance of his new place of employment, and

b his former residence is not within a reasonable daily travelling distance of that place.

The individual’s “new place of employment” means the place where he normally performs, or is normally to perform, the duties of his employment after the relocation.

6 In this paragraph—

a references to the acquisition of the dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling;

c references to an individual’s employer include a prospective employer.

6 Acquisition by property trader in case of relocation of employment¶

1 Where a dwelling is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.

2 The conditions are—

a that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in connection with a change of residence resulting from relocation of employment,

b that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition,

c that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment,

d that the consideration for the acquisition does not exceed the market value of the dwelling,

e that the property trader does not intend—

i to spend more than the permitted amount on refurbishment of the dwelling, or

ii to grant a lease or licence of the dwelling, or

iii to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and

f that the area of land acquired does not exceed the permitted area.

Paragraph (e)(ii) does not apply to the grant of a lease or licence to the individual for a period of no more than six months.

3 Where the conditions in sub-paragraph (2)(a) to (e) are met but the area of land acquired exceeds the permitted area, the chargeable consideration for the acquisition is taken to be the amount calculated by deducting the market value of the permitted area from the market value of the dwelling.

4 In this paragraph “relocation of employment” means a change of the individual’s place of employment due to—

a his becoming employed by a new employer,

b an alteration of the duties of his employment, or

c an alteration of the place where he normally performs those duties.

5 For the purposes of this paragraph a change of residence is one “resulting from” relocation of employment if—

a the change is made wholly or mainly to allow the individual to have his residence within a reasonable daily travelling distance of his new place of employment, and

b his former residence is not within a reasonable daily travelling distance of that place.

An individual’s “new place of employment” means the place where he normally performs, or is normally to perform, the duties of his employment after the relocation.

6 In this paragraph—

a references to the acquisition of the dwelling are to the acquisition, by way of transfer, of a major interest in the dwelling; and

7 Meaning of “dwelling”, “new dwelling” and “the permitted area”¶

1 “Dwelling” includes land occupied and enjoyed with the dwelling as its garden or grounds.

2 A building or part of a building is a “new dwelling”if—

a it has been constructed for use as a single dwelling and has not previously been occupied, or

b it has been adapted for use as a single dwelling and has not been occupied since its adaptation.

3 “The permitted area”, in relation to a dwelling, means land occupied and enjoyed with the dwelling as its garden or grounds that does not exceed—

a an area (inclusive of the site of the dwelling) of 0.5 of a hectare, or

b such larger area as is required for the reasonable enjoyment of the dwelling as a dwelling having regard to its size and character.

4 Where sub-paragraph (3)(b) applies, the permitted area is taken to consist of that part of the land that would be the most suitable for occupation and enjoyment with the dwelling as its garden or grounds if the rest of the land were separately occupied.

8 Meaning of “property trader” and “principal”¶

1 A “property trader” means—

a a company,

b a limited liability partnership, or

c a partnership whose members are all either companies or limited liability partnerships,

that carries on the business of buying and selling dwellings.

2 In relation to a property trader a “principal” means—

a in the case of a company, a director;

b in the case of a limited liability partnership, a member;

c in the case of a partnership whose members are all either companies or limited liability partnerships, a member or a person who is a principal of a member.

3 For the purposes of this Schedule—

a anything done by or in relation to a company connected with a property trader is treated as done by or in relation to that property trader, and

b references to the principals or employees of a property trader include the principals or employees of any such company.

9 Meaning of “refurbishment” and “the permitted amount”¶

1 “Refurbishment”of a dwelling means the carrying out of works that enhance or are intended to enhance the value of the dwelling, but does not include—

a cleaning the dwelling, or

b works required solely for the purpose of ensuring that the dwelling meets minimum safety standards.

2 The “permitted amount”, in relation to the refurbishment of a dwelling, is—

a 10,000, or

b 5% of the consideration for the acquisition of the dwelling,

whichever is the greater, but subject to a maximum of £20,000.

10 Connected companies etc¶

Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this Schedule.

11 Withdrawal of relief under this Schedule¶

1 Relief under this Schedule is withdrawn in the following circumstances.

2 Relief under paragraph 2 (acquisition by property trader from individual acquiring new dwelling) is withdrawn if the property trader—

a spends more than the permitted amount on refurbishment of the old dwelling, or

b grants a lease or licence of the old dwelling, or

c permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.

Paragraph (b) does not apply to the grant of lease or licence to the individual for a period of no more than six months.

3 Relief under paragraph 3 (acquisition by property trader from personal representatives) is withdrawn if the property trader—

a spends more than the permitted amount on refurbishment of the dwelling, or

b grants a lease or licence of the dwelling, or

c permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling.

4 Relief under paragraph 4 (acquisition by property trader from individual where chain of transactions breaks down) is withdrawn if the property trader—

a spends more than the permitted amount on refurbishment of the old dwelling, or

b grants a lease or licence of the old dwelling, or

c permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling.

Paragraph (b) does not apply to the grant of lease or licence to the individual for a period of no more than six months.

5 Relief under paragraph 6 (acquisition by property trader in case of relocation of employment) is withdrawn if the property trader—

a spends more than the permitted amount on refurbishment of the dwelling, or

b grants a lease or licence of the dwelling, or

c permits any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling.

Paragraph (b) does not apply to the grant of lease or licence to the individual for a period of no more than six months.

6 Where relief is withdrawn the amount of tax chargeable is the amount that would have been chargeable in respect of the acquisition but for the relief.

Schedule 6B ¶

Transfers involving multiple dwellings

Section 58D

Introduction¶

1This Schedule is arranged as follows—

a paragraph 2 identifies the transactions to which this Schedule applies,

b paragraph 3 defines key terms,

c paragraphs 4 and 5 describe the relief available if a claim is made,

d paragraph 6 provides for adjustments if circumstances change after a claim is made, and

e paragraph 7 contains rules for determining what counts as a dwelling.

Transactions to which this Schedule applies¶

1 This Schedule applies to a chargeable transaction that is—

a within sub-paragraph (2) or sub-paragraph (3), and

b not excluded by sub-paragraph (4).

2 A transaction is within this sub-paragraph if its main subject- matter consists of—

a an interest in at least two dwellings, or

b an interest in at least two dwellings and other property.

3 A transaction is within this sub-paragraph if—

a its main subject-matter consists of—

i an interest in a single dwelling, or

ii an interest in a single dwelling and other property,

b it is one of a number of linked transactions, and

c the main subject-matter of at least one of the other linked transactions consists of—

i an interest in some other dwelling or dwellings, or

ii an interest in some other dwelling or dwellings and other property.

4 A transaction is excluded by this sub-paragraph if—

a section 74 or 75 applies to it, ^F742...

aa paragraph 3 of Schedule 4A applies to it, or

b relief under Schedule 7, Schedule 7A or Schedule 8 is available for it or would be available for it on the making of a claim or has been withdrawn from it.

5 A reference in this Schedule to an interest in a dwelling is to any chargeable interest in or over a dwelling.

6 But, in the case of a dwelling subject to a lease granted for an initial term of more than 21 years, any interest that is a superior interest in relation to the lease is to be ignored in determining whether a transaction is a relevant transaction.

7 Sub-paragraph (6) does not apply where—

a the vendor is a qualifying body within the meaning of paragraph 5 of Schedule 9,

b the transaction is a sale under a sale and leaseback arrangement within the meaning of section 57A(2),

c that sale is the grant of a leasehold interest, and

d the leaseback element of that arrangement is exempt from charge under section 57A.

Key terms¶

1 A chargeable transaction to which this Schedule applies is referred to in this Schedule as a “relevant transaction”.

2 A relevant transaction is a “single dwelling transaction” if its main subject-matter consists of—

a an interest in a single dwelling, or

b an interest in a single dwelling and other property.

3 In relation to such a transaction, the single dwelling is referred to as “the dwelling”.

4 A relevant transaction is a “multiple dwelling transaction” if its main subject-matter consists of—

a an interest in at least two dwellings, or

b an interest in at least two dwellings and other property.

5 In relation to such a transaction, those dwellings are referred to as “the dwellings”.

The relief¶

1 If relief under this Schedule is claimed for a relevant transaction, the amount of tax chargeable in respect of the transaction is the sum of—

a the tax related to the consideration attributable to dwellings (see paragraph 5(1) and (2)), and

b the tax related to the remaining consideration (if any) (see paragraph 5(7)).

2 “The consideration attributable to dwellings” is—

a for a single dwelling transaction, so much of the chargeable consideration for the transaction as is attributable to the dwelling,

b for a multiple dwelling transaction, so much of the chargeable consideration for the transaction as is attributable to the dwellings in total.

3 “The remaining consideration” is the chargeable consideration for the transaction less the consideration attributable to dwellings.

^F8654 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 If the whole or part of the chargeable consideration for a relevant transaction is rent, sub-paragraph (1) has effect subject to section 56 and Schedule 5.

6 “Attributable” means attributable on a just and reasonable basis.

The amount of tax chargeable¶

1 For the purposes of paragraph 4(1)(a), “the tax related to the consideration attributable to dwellings” is determined as follows—

Step 1 Determine the amount of tax that would be chargeable under section 55 on the assumption that—
1. the relevant land consisted entirely of residential property, and
2. the relevant consideration were the fraction produced by dividing total dwellings consideration by total dwellings.
Step 2 Multiply the amount determined at Step 1 by total dwellings.
Step 3 If the relevant transaction is one of a number of linked transactions, go to Step 4. Otherwise, the amount found at Step 2 is the tax related to the consideration attributable to dwellings.
Step 4 Multiply the amount found at Step 2 by—
$\frac{CD}{TDC}$
where—
“CD” is the consideration attributable to dwellings for the relevant transaction, and
“TDC” is total dwellings consideration.

2 But if the amount found at Step 2 of sub-paragraph (1) is less than 1% of total dwellings consideration, for the purposes of paragraph 4(1)(a) “the tax related to the consideration attributable to dwellings” is an amount equal to 1% of the consideration attributable to dwellings.

3 For a transaction that is not one of a number of linked transactions, “total dwellings consideration” is the consideration attributable to dwellings for that transaction (see paragraph 4(2)).

4 For one of a number of linked transactions, “total dwellings consideration” is—

a the total of the consideration attributable to dwellings for that transaction and all the other linked transactions that are relevant transactions, plus

b so much of the chargeable consideration for any of the linked transactions (whether or not relevant transactions) as is not included in the calculation under paragraph (a) but is attributable to the same dwellings by reference to which that calculation is made.

5 “Total dwellings” is the total number of dwellings by reference to which total dwellings consideration is calculated.

6 In the application of sub-paragraph (1), no account is to be taken of—

a section 116(7), or

b paragraph 9A(4) of Schedule 5.

6A In the application of sub-paragraph (1), account is to be taken of paragraph 1 of Schedule 4ZA if the relevant transaction is a higher rates transaction for the purposes of that paragraph.

7 For the purposes of paragraph 4(1)(b), “the tax related to the remaining consideration” is the appropriate fraction of the amount of tax which (but for this Schedule) would be due in respect of the relevant transaction.

8 In subsection (7) “the appropriate fraction” means—

\frac{RC}{TDC + TRC}

where—

“RC” is the remaining consideration for the relevant transaction,

“TDC” is total dwellings consideration, and

“TRC” is total remaining consideration.

9 For a transaction that is not one of a number of linked transactions, “total remaining consideration” is the remaining consideration for that transaction (see paragraph 4(3)).

10 For one of a number of linked transactions, “total remaining consideration” is—

a the total of the chargeable consideration for all those transactions, less

b total dwellings consideration.

Adjustment for change of circumstances¶

1 This paragraph applies if—

a relief under this Schedule is claimed for a relevant transaction,

b an event occurs in the relevant period, and

c had the event occurred immediately before the effective date of the transaction, more tax (calculated according to the effective date of the transaction) would have been payable, whether because the transaction would not have been a relevant transaction or otherwise.

2 If this paragraph applies, tax is chargeable on the transaction as if the event had occurred immediately before the effective date of the transaction.

3 In that case—

a the purchaser must make a return to Her Majesty's Revenue and Customs before the end of the period of 30 days beginning with the date of the event,

b the return must contain a self-assessment of the tax chargeable in respect of the transaction on the basis of the information contained in the return,

c ^F870. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

d the additional tax payable must be paid not later than the filing date for the return.

4 The provisions of section 78A and Schedule 10 apply to a return under this paragraph as they apply to a return under section 76, but with references in Schedule 10 to the effective date of the transaction being read as references to the date of the event.

5 “The relevant period” means the shorter of—

a the period of 3 years beginning with the effective date of the transaction, and

b the period beginning with the effective date of the transaction and ending with the date on which the purchaser disposes of the dwelling, or the dwellings, to a person who is not connected with the purchaser.

6 In relation to a transaction effected on completion of a contract that was substantially performed before completion, sub-paragraph (5) applies as if references to the effective date of the transaction were to the date on which the contract was substantially performed.

7 In this paragraph—

“completion” has the same meaning as in section 44;
“contract” includes any agreement (including, in the case of Scotland, missives of let not constituting a lease);
“event” includes any change of circumstance or change of plan;
“substantially performed” has the same meaning as in section 44.

8 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this paragraph.

What counts as a dwelling¶

1 This paragraph sets out rules for determining what counts as a dwelling for the purposes of this Schedule.

2 A building or part of a building counts as a dwelling if—

a it is used or suitable for use as a single dwelling, or

b it is in the process of being constructed or adapted for such use.

3 Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on such land) is taken to be part of that dwelling.

4 Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.

5 The main subject-matter of a transaction is also taken to consist of or include an interest in a dwelling if—

a substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,

c construction or adaptation of the building, or the part of a building, has not begun by the time the contract is substantially performed.

6 In sub-paragraph (5)—

“contract” includes any agreement (including, in the case of Scotland, missives of let not constituting a lease);
“relevant deeming provision” means any of sections 44 to 45A or paragraph 5(1) or (2) of Schedule 2A or paragraph 12A or 19(3) of Schedule 17A;
“substantially performed” has the same meaning as in section 44.

7 Subsections (2) to (5) of section 116 apply for the purposes of this paragraph as they apply for the purposes of subsection (1)(a) of that section.

SCHEDULE 6C ¶

Stamp duty land tax: relief for special tax sites

Section 61A

PART 1 qualifying land ¶

1 Transaction land¶

In this Schedule, “transaction land”, in relation to a land transaction, means land a chargeable interest in which is the subject matter of the transaction.

2 Qualifying land¶

For the purposes of this Schedule, transaction land is “qualifying land” if, on the effective date of the transaction—

a it is situated in a special tax site, and

b the purchaser intends it to be used exclusively in a qualifying manner.

3 Use of land in a qualifying manner¶

1 For the purposes of this Schedule, transaction land is used in a qualifying manner if—

a it is used by the purchaser or a connected person in the course of a commercial trade or profession,

b it is developed or redeveloped by the purchaser or a connected person for use (by any person) in the course of a commercial trade or profession,

c it is exploited by the purchaser or a connected person, in the course of a commercial trade or profession, as a source of rents or other receipts (other than excluded rents), or

d it is used in two or more of the ways described in paragraphs (a) to (c).

2 But land is not used in a qualifying manner to the extent that it is—

a used as a dwelling or as the garden or grounds of a dwelling,

b developed or redeveloped to become residential property,

c exploited as a source of rents or other receipts payable by a person using the land as a dwelling or as the garden or grounds of a dwelling, or

d held (as stock of the business) for resale without development or redevelopment.

3 For the purposes of this paragraph, use of land in the course of a commercial trade or profession includes use of land for a purpose that is ancillary to the use of other land which—

a is situated in a special tax site, and

b is being used, or developed or redeveloped, in the course of a commercial trade or profession.

4 The references in sub-paragraph (2) to land used as the garden or grounds of a dwelling include a building or structure on the land.

5 The references in this paragraph to doing something in the course of a commercial trade or profession include doing something in the course of a property rental business.

6 In this paragraph—

“commercial”, in relation to a trade or profession, means carried on—
1. on a commercial basis, and
2. with a view to profit;
“excluded rents” has the same meaning as in section 133 of the Finance Act 2013;
“property rental business” means a property business as defined in Chapter 2 of Part 3 of the Income Tax (Trading and Other Income) Act 2005.

4 Connected persons¶

1 In this Schedule, “connected person” means a person who is connected with the purchaser.

2 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this paragraph.

PART 2 The relief¶

5 Exemption¶

1 This paragraph applies to a land transaction if at least 90% of the chargeable consideration for the transaction is attributable to qualifying land.

2 The transaction is exempt from charge.

6 Other relief¶

1 This paragraph applies to a land transaction if the proportion of the chargeable consideration for the transaction that is attributable to qualifying land (“the relevant proportion”) is less than 90% but at least 10%.

2 The tax chargeable in respect of the transaction is reduced by the relevant proportion.

7 Attributing chargeable consideration to land¶

1 For the purposes of this Schedule, the consideration attributable to qualifying land must be determined on a just and reasonable basis.

2 Sub-paragraphs (3) and (4) apply if less than 100% of the chargeable consideration attributable to transaction land situated in a special tax site (“the relevant consideration”) is attributable to land that satisfies the condition in paragraph 2(b).

3 If at least 90% of the freeport consideration is attributable to land that satisfies the condition in paragraph 2(b) then, for the purposes of this Schedule, all of the relevant consideration is to be treated as being attributable to qualifying land.

4 If less than 10% of the relevant consideration is attributable to land that satisfies the condition in paragraph 2(b) then, for the purposes of this Schedule, all of the freeport consideration is to be treated as not being attributable to qualifying land.

PART 3 Withdrawal of relief¶

8 Withdrawal of relief¶

1 This paragraph applies where relief under Part 2 of this Schedule has been allowed in respect of a land transaction.

2 The relief is withdrawn if, at any time during the control period, the qualifying land is not used exclusively in a qualifying manner.

3 But the relief is not withdrawn where, because of a change in circumstances that is unforeseen and beyond the purchaser’s control, it is not reasonable to expect the qualifying land to be used exclusively in a qualifying manner at that time.

4 Where, at a time during the control period, the use of all or part of the qualifying land in a qualifying manner has not yet begun, that land, or that part of the land, is to be treated as being used exclusively in a qualifying manner if reasonable steps are being taken to ensure that it is used in that manner.

5 Where, at a time during the control period, the use of all or part of the qualifying land in a qualifying manner has ceased, that land, or that part of the land, is to be treated as being used exclusively in a qualifying manner if reasonable steps are being taken—

a to ensure that it is used in that manner, or

b to dispose of all chargeable interests in that land, or that part of the land, that are held by the purchaser and connected persons in a timely manner.

9 The control period¶

1 In this Schedule, “the control period”, in relation to a land transaction, means the shorter of—

a the period of three years beginning with the effective date of that transaction, and

b the period beginning with the effective date of that transaction and ending with the effective date of the final transaction.

2 For the purposes of this paragraph, a land transaction is “the final transaction” if, immediately after the effective date of the transaction, neither the purchaser nor a connected person holds a chargeable interest in the qualifying land (whether as a result of that transaction alone or as a result of that transaction and other land transactions).

10 Disposal of interest in part of qualifying land during control period¶

1 This paragraph applies where the purchaser ceases to hold a chargeable interest in part of the qualifying land during the control period.

2 The references in paragraphs 8 and 9 to the qualifying land are to be treated as references only to the part of the qualifying land in relation to which the purchaser still holds a chargeable interest (whether the chargeable interest acquired in the land transaction in respect of which relief was allowed under Part 2 of this Schedule or another chargeable interest).

PART 4 Alternative finance arrangements¶

11 Cases involving alternative finance arrangements¶

1 This paragraph applies where either of the following applies—

a section 71A (land sold to financial institution and leased to person), or

b section 73 (land sold to financial institution and re-sold to person).

2 This paragraph applies for the purposes of determining—

a whether relief is available under Part 2 of this Schedule for the first transaction, and

b whether relief allowed for the first transaction is withdrawn under Part 3 of this Schedule.

3 For those purposes this Schedule has effect as if—

a references to the purchaser were references to the relevant person, and

b the reference in paragraph 3(2)(d) to land held (as stock of the business) for resale without development or redevelopment were a reference to land held in that manner by the relevant person.

4 The first transaction does not qualify for relief under Part 2 of this Schedule except where it does so by virtue of this paragraph.

5 In this paragraph—

“the first transaction” has the same meaning as in section 71A or 73 (as appropriate);
“the relevant person” means the person, other than the financial institution, who entered into the arrangements mentioned in section 71A(1) or 73(1) (as appropriate).

PART 5 Power to change when relief is available¶

12 Power to change the cases in which relief is available¶

1 The Treasury may by regulations—

a amend the meaning of “qualifying land”, or

b make other provision about the availability of relief under this Schedule, including provision—

i adding, removing or altering, or otherwise about, conditions that must be met in order for relief to be available,

ii about the withdrawal of relief, or

iii about returns where relief is withdrawn.

2 Regulations under this paragraph may not remove the requirement for land to be situated in a special tax site.

3 Regulations under this paragraph may, among other things—

a make provision by reference to the land, the land transaction, the purchaser or connected persons;

b impose conditions relating to accounts or other records;

c impose other conditions requiring a person to take steps specified in the regulations.

4 Regulations under this paragraph—

a may amend, repeal or otherwise modify provisions of this Schedule, and

b where made in reliance on sub-paragraph (1)(b) of this paragraph or on section 114(6)(c), may amend, repeal or otherwise modify other provisions of this Act.

5 The power to make regulations under this paragraph may be exercised only in relation to transactions with an effective date that is on or after the date on which the regulations come into force.

13 Approval of regulations¶

1 An instrument containing regulations under paragraph 12 must be laid before the House of Commons after being made.

2 If the regulations are not approved by the House of Commons before the end of the period of 28 days beginning with the day on which they are made, they cease to have effect at the end of that period (if they have not already ceased to have effect under sub-paragraph (3)).

3 If, on any day during that period of 28 days, the House of Commons, in proceedings on a motion that (or to the effect that) the regulations be approved, comes to a decision rejecting the regulations, they shall cease to have effect at the end of that day.

4 In reckoning any such period of 28 days, no account is to be taken of any time during which—

a Parliament is prorogued or dissolved, or

b the House of Commons is adjourned for more than four days.

5 Where regulations cease to have effect under sub-paragraph (3), their ceasing to have effect is without prejudice to anything done in reliance on them.

SCHEDULE 7 ¶

Stamp duty land tax: group relief and reconstruction and acquisition reliefs

Section 62

Part 1 Group relief¶

Group relief¶

^C51

1 A transaction is exempt from charge if the vendor and purchaser are companies that at the effective date of the transaction are members of the same group.

2 For the purposes of group relief—

a “company” means a body corporate, and

b companies are members of the same group if one is the 75% subsidiary of the other or both are 75% subsidiaries of a third company.

3 For the purposes of group relief a company (“company A”) is the 75% subsidiary of another company (“company B”) if company B—

a is beneficial owner of not less than 75% of the ordinary share capital of company A,

b is beneficially entitled to not less than 75% of any profits available for distribution to equity holders of company A, and

c would be beneficially entitled to not less than 75% of any assets of company A available for distribution to its equity holders on a winding-up.

4 The ownership referred to in sub-paragraph (3)(a) is ownership either directly or through another company or companies.For the purposes of that provision the amount of ordinary share capital of company A owned by company B through another company or companies shall be determined in accordance with sections 1155 to 1157 of the Corporation Tax Act 2010.

5 In sub-paragraphs (3)(a) and (4) above “ordinary share capital”, in relation to a company, means all the issued share capital (by whatever name called) of the company, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company.

6 Chapter 6 of Part 5 of the Corporation Tax Act 2010 (group relief: equity holders and profits or assets available for distribution) applies for the purposes of sub-paragraphs (3)(b) and (c) above as it applies for the purposes of section 151(4)(a) and (b) of that Act.

6A In that Chapter as it applies for the purposes of sub-paragraphs (3)(b) and (c) above, sections 171(1)(b) and (3), 173, 174 and 176 to 178 of that Act are to be treated as omitted.

7 This paragraph is subject to paragraph 2 (restrictions on availability of group relief) and paragraphs 3 and 4A (withdrawal of group relief).

Restrictions on availability of group relief¶

^C222

1 Group relief is not available if at the effective date of the transaction there are arrangements in existence by virtue of which, at that or some later time, a person has or could obtain, or any persons together have or could obtain, control of the purchaser but not of the vendor.This does not apply to arrangements entered into with a view to an acquisition of shares by a company (“the acquiring company”)—

a in relation to which section 75 of the Finance Act 1986 (c. 41) (stamp duty: acquisition relief) will apply,

b in relation to which the conditions for relief under that section will be met, and

c as a result of which the purchaser will be a member of the same group as the acquiring company.

For other exceptions to this, see sub-paragraph (3A) and paragraphs 2A and 2B.

2 Group relief is not available if the transaction is effected in pursuance of, or in connection with, arrangements under which—

a the consideration, or any part of the consideration, for the transaction is to be provided or received (directly or indirectly) by a person other than a group company, or

b the vendor and the purchaser are to cease to be members of the same group by reason of the purchaser ceasing to be a 75% subsidiary of the vendor or a third company.

3 Arrangements are within sub-paragraph (2)(a) if under them the vendor or the purchaser, or another group company, is to be enabled to provide any of the consideration, or is to part with any of it, by or in consequence of the carrying out of a transaction or transactions involving, or any of them involving, a payment or other disposition by a person other than a group company.

3A Sub-paragraphs (1) and (2)(b) do not apply to arrangements in so far as they are for the purpose of facilitating a transfer of the whole or part of the business of a company to another company in relation to which—

a section 96 of the Finance Act 1997 is intended to apply (stamp duty relief: demutualisation of insurance companies), and

b the conditions for relief under that section are intended to be met.

4 In sub-paragraphs (2)(a) and (3) a “group company” means a company that at the effective date of the transaction is a member of the same group as the vendor or the purchaser.

4A Group relief is not available if the transaction—

a is not effected for bona fide commercial reasons, or

b forms part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.

“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.

5 In this paragraph—

“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable; and
“control” has the meaning given by section 1124 of the Corporation Tax Act 2010.

Certain arrangements not within paragraph 2¶

1 Arrangements entered into by a joint venture company which, apart from this section, would be arrangements to which paragraph 2 applies are not to be treated as such arrangements if and so long as—

a the arrangements fall within sub-paragraph (2), and

b none of the contingencies mentioned in sub-paragraph (3) to which the arrangements relate has occurred.

2 Arrangements fall within this sub-paragraph if they are—

a an agreement which provides for the transfer of shares or securities in the joint venture company to one or more members of that company on, or as a result of, one or more contingencies mentioned in sub-paragraph (3) occurring, or

b a provision in a constitutional document of the joint venture company which provides for the suspension of a member’s voting rights on, or as a result of, one or more of those contingencies occurring.

3 The contingencies referred to in sub-paragraph (1)(b) and (2) are—

a the voluntary departure of a member,

b the commencement of the liquidation, administration, administrative receivership or receivership of, or the entering into of a voluntary arrangement by, a member under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989 or the commencement, or entering into, of equivalent proceedings or arrangements under the law of any country or territory outside the United Kingdom,

c a serious deterioration in the financial condition of a member,

d a change of control of a member,

e a default by a member in performing its obligations under any agreement between the members or with the joint venture company (which, for this purpose, includes any constitutional document of the joint venture company),

f an external change in the commercial circumstances in which the joint venture company operates such that its viability is threatened,

g an unresolved disagreement between the members, and

h any contingency of a similar kind to that mentioned in any of paragraphs (a) to (g) which is provided for, but not intended to happen, when the options arrangements in question were entered into.

4 This paragraph does not apply if a member could alone or together with connected persons dictate the terms or timing of—

a the transfer of shares or securities, or

b the suspension of a member’s voting rights,

in advance of one or more of the contingencies occurring.

5 For the purposes of sub-paragraph (4) members are not connected with each other by reason only of their membership of the joint venture company.

6 In this paragraph—

“connected” has the same meaning as in section 1122 of the Corporation Tax Act 2010;
“constitutional document” means a memorandum of association, articles of association or any other similar document regulating the affairs of the joint venture company;
“joint venture company” means a company which—
1. has two or more member companies, and
2. carries on a commercial activity governed by an agreement regulating the affairs of its members;
“member” means a holder of shares or securities in the joint venture company.

Certain mortgage arrangements not within paragraph 2¶

1 Arrangements entered into by a company which, apart from this paragraph, would be arrangements to which paragraph 2 applies are not to be treated as such arrangements if and so long as—

a the arrangements are a mortgage, secured by way of shares or securities in the company, which on default or the happening of any other event allows the mortgagee to exercise its rights against the mortgagor, and

b the mortgagee has not exercised its rights against the mortgagor.

2 This paragraph does not apply if the mortgagee—

a possesses greater rights in respect of the shares or securities which are the subject of the mortgage than it requires to protect its interest as mortgagee, or

b could alone or together with connected persons dictate the terms or timing of the default or the happening of any event which allows it to exercise its rights against the mortgagor.

3 For the purposes of sub-paragraph (2)(b) a mortgagee is not, by reason only of the mortgage, connected with a company whose shares or securities are the subject of the mortgage.

4 In this paragraph—

“connected” has the same meaning as in section 1122 of the Corporation Tax Act 2010;
“mortgage” means—
1. in England ^F1013... , and Northern Ireland, any legal or equitable charge, and
2. in Scotland, any right in security.

Withdrawal of group relief¶

^C183

^C61 Where in the case of a transaction (“the relevant transaction”) that is exempt from charge by virtue of paragraph 1 (group relief)—

a the purchaser ceases to be a member of the same group as the vendor—

i before the end of the period of three years beginning with the effective date of the transaction, or

ii in pursuance of, or in connection with, arrangements made before the end of that period,

and

b at the time the purchaser ceases to be a member of the same group as the vendor (“the relevant time”), it or a relevant associated company holds a chargeable interest—

i that was acquired by the purchaser under the relevant transaction, or

ii that is derived from a chargeable interest so acquired,

and that has not subsequently been acquired at market value under a chargeable transaction for which group relief was available but was not claimed,

group relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

2 The amount chargeable is the tax that would have been chargeable in respect of the relevant transaction but for group relief if the chargeable consideration for that transaction had been an amount equal to—

a the market value of the subject-matter of the transaction, and

b if the acquisition was the grant of a lease at a rent, that rent,

or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

3 In sub-paragraphs (1) and (2) “an appropriate proportion” means an appropriate proportion having regard to the subject matter of the relevant transaction and what is held at the relevant time by the transferee company or, as the case may be, by that company and its relevant associated companies.

4 In this paragraph—

“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable; and
“relevant associated company”, in relation to the purchaser, means a company that—
1. is a member of the same group as the purchaser immediately before the purchaser ceases to be a member of the same group as the vendor, and
2. ceases to be a member of the same group as the vendor in consequence of the purchaser so ceasing.

5 This paragraph has effect subject to paragraphs 4 and 4ZA (cases in which group relief not withdrawn) and paragraph 4A (withdrawal of group relief in certain cases involving successive transactions).

Cases in which group relief not withdrawn¶

1 Group relief is not withdrawn under paragraph 3 in the following cases.

^F3362 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F3343 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 The second case is where the purchaser ceases to be a member of the same group as the vendor by reason of anything done for the purposes of, or in the course of, winding up the vendor or another company that is above the vendor in the group structure.

5 For the purposes of sub-paragraph (4) a company is “above” the vendor in the group structure if the vendor, or another company that is above the vendor in the group structure, is a 75% subsidiary of the company.

6 The third case is where—

a the purchaser ceases to be a member of the same group as the vendor as a result of an acquisition of shares by another company (“the acquiring company”) in relation to which—

i section 75 of the Finance Act 1986 (c. 41) applies (stamp duty: acquisition relief), and

ii the conditions for relief under that section are met,

and

b the purchaser is immediately after that acquisition a member of the same group as the acquiring company.

6A The fourth case is where—

a the purchaser ceases to be a member of the same group as the vendor as a result of the transfer of the whole or part of the vendor's business to another company (“the acquiring company”) in relation to which—

i section 96 of the Finance Act 1997 applies (stamp duty relief: demutualisation of insurance companies), and

ii the conditions for relief under that section are met, and

b the purchaser is immediately after that transfer a member of the same group as the acquiring company.

7 But if in a case within sub-paragraph (6) or (6A) —

a the purchaser ceases to be a member of the same group as the acquiring company—

i before the end of the period of three years beginning with the effective date of the relevant transaction, or

ii in pursuance of, or in connection with, arrangements made before the end of that period,

and

b at the time the purchaser ceases to be a member of the same group as the acquiring company, it or a relevant associated company holds a chargeable interest—

i that was acquired by the purchaser under the relevant transaction, or

ii that is derived from an interest so acquired,

and that has not subsequently been acquired at market value under a chargeable transaction for which group relief was available but was not claimed,

the provisions of this Part relating to group relief apply as if the purchaser had then ceased to be a member of the same group as the vendor.

8 In sub-paragraph (7)—

“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable; and
“relevant associated company”, in relation to the purchaser, means a company that is a member of the same group as the purchaser that ceases to be a member of the same group as the acquiring company in consequence of the purchaser so ceasing.

Group relief not withdrawn where vendor leaves group¶

4ZA

1 Group relief is not withdrawn under paragraph 3 where the purchaser ceases to be a member of the same group as the vendor because the vendor leaves the group.

2 The vendor is regarded as leaving the group if the companies cease to be members of the same group by reason of a transaction relating to shares in—

a the vendor, or

b another company that—

i is above the vendor in the group structure, and

ii as a result of the transaction ceases to be a member of the same group as the purchaser.

3 For the purpose of sub-paragraph (2) a company is “above” the vendor in the group structure if the vendor, or another company that is above the vendor in the group structure, is a 75% subsidiary of the company.

4 But if there is a change in the control of the purchaser after the vendor leaves the group, paragraphs 3, 4(6) and (7), 5 and 6 have effect as if the purchaser had then ceased to be a member of the same group as the vendor (but see sub-paragraph (7)).

5 For the purposes of this paragraph there is a change in the control of the purchaser if—

a a person who controls the purchaser (alone or with others) ceases to do so,

b a person obtains control of the purchaser (alone or with others), or

c the purchaser is wound up.

6 For the purposes of sub-paragraph (5) a person does not control, or obtain control of, the purchaser if that person is under the control of another person or other persons.

7 Sub-paragraph (4) does not apply where—

a there is a change in the control of the purchaser because a loan creditor (within the meaning given by section 453 of the Corporation Tax Act 2010) obtains control of, or ceases to control, the purchaser, and

b the other persons who controlled the purchaser before that change continue to do so.

8 In this paragraph references to “control” shall be interpreted in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (subject to sub-paragraph (6)).

Withdrawal of group relief in certain cases involving successive transactions¶

1 Where, in the case of a transaction (“the relevant transaction”) that is exempt from charge by virtue of paragraph 1 (group relief)—

a there is a change in the control of the purchaser,

b that change occurs—

i before the end of the period of three years beginning with the effective date of the relevant transaction, or

ii in pursuance of, or in connection with, arrangements made before the end of that period,

c apart from this paragraph, group relief in relation to the relevant transaction would not be withdrawn under paragraph 3, and

d any previous transaction falls within sub-paragraph (2),

paragraphs 3, 4 and 4ZA have effect in relation to the relevant transaction as if the vendor in relation to the earliest previous transaction falling within sub-paragraph (2) were the vendor in relation to the relevant transaction.

1A Sub-paragraph (1) has effect subject to sub-paragraph (3A).

2 A previous transaction falls within this sub-paragraph if—

a the previous transaction is exempt from charge by virtue of paragraph 1, 7 or 8,

b the effective date of the previous transaction is less than three years before the date of the event falling within sub-paragraph (1)(a),

c the chargeable interest acquired under the relevant transaction by the purchaser in relation to that transaction is the same as, comprises, forms part of, or is derived from, the chargeable interest acquired under the previous transaction by the purchaser in relation to the previous transaction, and

d since the previous transaction, the chargeable interest acquired under that transaction has not been acquired by any person under a transaction that is not exempt from charge by virtue of paragraph 1, 7 or 8.

3 For the purposes of this paragraph there is a change in the control of a company if—

a any person who controls the company (alone or with others) ceases to do so,

b a person obtains control of the company (alone or with others), or

c the company is wound up.

References to “control” in this paragraph shall be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010.

3A Sub-paragraph (1) does not apply where—

b the other persons who controlled the purchaser before that change continue to do so.

4 If two or more transactions effected at the same time are the earliest previous transactions falling within sub-paragraph (2), the reference in sub-paragraph (1) to the vendor in relation to the earliest previous transaction is a reference to the persons who are the vendors in relation to the earliest previous transactions.

5 In this paragraph “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

Recovery of group relief from another group company or controlling director¶

1 This paragraph applies where—

a tax is chargeable under paragraph 3 (withdrawal of group relief),

b the amount so chargeable has been finally determined, and

c the whole or part of the amount so chargeable is unpaid six months after the date on which it became payable.

2 The following persons may, by notice under paragraph 6, be required to pay the unpaid tax—

a the vendor;

b any company that at any relevant time was a member of the same group as the purchaser and was above it in the group structure;

c any person who at any relevant time was a controlling director of the purchaser or a company having control of the purchaser.

3 For the purposes of sub-paragraph (2)(b)—

a a “relevant time” means any time between the effective date of the relevant transaction and the purchaser ceasing to be a member of the same group as the vendor; and

b a company (“company A”) is “above” another company (“company B”) in a group structure if company B, or another company that is above company B in the group structure, is a 75% subsidiary of company A.

4 In sub-paragraph (2)(c)—

“director”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (read with subsection (2) of that section) and includes any person falling within section 452(1) of the Corporation Tax Act 2010; and
“controlling director”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010).

Recovery of group relief: supplementary¶

1 The Inland Revenue may serve a notice on a person within paragraph 5(2) above requiring him within 30 days of the service of the notice to pay the amount that remains unpaid.

2 Any such notice must be served before the end of the period of three years beginning with the date of the final determination mentioned in paragraph 5(1)(b).

3 The notice must state the amount required to be paid by the person on whom the notice is served.

4 The notice has effect—

a for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

b for the purposes of appeals,

as if it were a notice of assessment and that amount were an amount of tax due from that person.

5 A person who has paid an amount in pursuance of a notice under this paragraph may recover that amount from the purchaser.

6 A payment in pursuance of a notice under this paragraph is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

Part 2 Reconstruction and acquisition reliefs¶

Reconstruction relief¶

1 Where—

a a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”) in pursuance of a scheme for the reconstruction of the target company, and

b the first, second and third conditions specified below are met,

a land transaction entered into for the purposes of or in connection with the transfer of the undertaking or part is exempt from charge.Relief under this paragraph is referred to in this Part as “reconstruction relief”.

2 The first condition is that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to all the shareholders of the target company.

“Non-redeemable shares” means shares that are not redeemable shares.

3 Where the consideration for the acquisition consists partly of the issue of non-redeemable shares as mentioned in the first condition, that condition is met only if the rest of the consideration consists wholly of the assumption or discharge by the acquiring company of liabilities of the target company.

4 The second condition is that after the acquisition has been made—

a each shareholder of each of the companies is a shareholder of the other, and

b the proportion of shares of one of the companies held by any shareholder is the same, or as nearly as may be the same, as the proportion of shares of the other company held by that shareholder.

5 The third condition is that the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.

“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.

5A If immediately before the acquisition the target company or the acquiring company holds any of its own shares, the shares are to be treated for the purposes of sub-paragraphs (2) and (4) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

6 This paragraph is subject to paragraph 9 (withdrawal of reconstruction or acquisition relief).

Acquisition relief¶

1 Where—

a a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”), and

b all the conditions specified below are met,

the amount of tax chargeable on a land transaction entered into for the purposes of or in connection with the transfer of the undertaking or part is limited to an amount equal to 0.5% of the chargeable consideration for the transaction.Relief under this paragraph is referred to in this Part as “acquisition relief”.

2 The first condition is that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to—

a the target company, or

b all or any of the target company’s shareholders.

“Non-redeemable shares” means shares that are not redeemable shares.

a cash not exceeding 10% of the nominal value of the non-redeemable shares so issued, or

b the assumption or discharge by the acquiring company of liabilities of the target company, or

c both of those things.

4 The second condition is that the acquiring company is not associated with another company that is a party to arrangements with the target company relating to shares of the acquiring company issued in connection with the transfer of the undertaking or part.

5 For this purpose companies are associated if one has control of the other or both are controlled by the same person or persons.The reference to control shall be construed in accordance with section 416 of the Taxes Act 1988.

5A The third condition is that the undertaking or part acquired by the acquiring company has as its main activity the carrying on of a trade that does not consist wholly or mainly of dealing in chargeable interests.In this sub-paragraph “trade” has the same meaning as in the Taxes Act 1988.

5B The fourth condition is that the acquisition is effected for bona fide commercial reasons and does not form part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.

5C In this paragraph “arrangements” include any scheme, agreement or understanding, whether or not legally enforceable.

6 This paragraph is subject to paragraph 9 (withdrawal of reconstruction or acquisition relief).

Withdrawal of reconstruction or acquisition relief¶

1 Where in the case of a transaction (“the relevant transaction”) that is exempt by virtue of reconstruction relief or is subject to a reduced rate of tax by virtue of acquisition relief—

a control of the acquiring company changes—

i before the end of the period of three years beginning with the effective date of the transaction, or

ii in pursuance of, or in connection with, arrangements made before the end of that period,

and

b at the time control of the acquiring company changes (“the relevant time”), it or a relevant associated company holds a chargeable interest—

i that was acquired by the acquiring company under the relevant transaction, or

ii that is derived from an interest so acquired,

and that has not subsequently been acquired at market value under a chargeable transaction in relation to which reconstruction or acquisition relief was available but was not claimed,

reconstruction or acquisition relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

2 The amount chargeable is the tax that would have been chargeable in respect of the relevant transaction but for reconstruction or acquisition relief if the chargeable consideration for that transaction had been an amount equal to—

a the market value of the subject-matter of the transaction, and

b if the acquisition was the grant of a lease at a rent, that rent,

or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

3 In sub-paragraphs (1) and (2) “an appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held at the relevant time by the acquiring company or, as the case may be, by that company and any relevant associated companies.

4 In this paragraph “relevant associated company”, in relation to the acquiring company, means a company—

a that is controlled by the acquiring company immediately before the control of that company changes, and

b of which control changes in consequence of the change of control of that company.

5 In this paragraph—

a “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable;

b “control” shall be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010; and

c references to control of a company changing are to the company becoming controlled—

i by a different person,

ii by a different number of persons, or

iii by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.

6 This paragraph has effect subject to paragraph 10 (cases in which reconstruction or acquisition relief not withdrawn).

Cases in which reconstruction or acquisition relief not withdrawn¶

1 Reconstruction or acquisition relief is not withdrawn under paragraph 9 in the following cases.

2 The first case is where control of the acquiring company changes as a result of a share transaction that is effected as mentioned in any of paragraphs (a) to (d) of paragraph 3 of Schedule 3 (transactions in connection with divorce etc).

3 The second case is where control of the acquiring company changes as a result of a share transaction that—

a is effected as mentioned in paragraph 4(1) of Schedule 3, and

b meets the conditions in paragraph 4(2) of that Schedule (variation of testamentary dispositions etc).

4 The third case is where control of the acquiring company changes as a result of an exempt intra-group transfer.An “exempt intra-group transfer” means a transfer of shares effected by an instrument that is exempt from stamp duty by virtue of section 42 of the Finance Act 1930 (c. 28) or section 11 of the Finance Act (Northern Ireland) 1954 (c. 23 (N. I.)) (transfers between associated bodies corporate).But see paragraph 11 (withdrawal of relief in case of subsequent non-exempt transfer).

5 The fourth case is where control of the acquiring company changes as a result of a transfer of shares to another company in relation to which share acquisition relief applies.

“Share acquisition relief” means relief under section 77 of the Finance Act 1986 (c. 41) and a transfer is one in relation to which that relief applies if an instrument effecting the transfer is exempt from stamp duty by virtue of that provision. But see paragraph 11 (withdrawal in case of subsequent non-exempt transfer).

6 The fifth case is where—

a control of the acquiring company changes as a result of a loan creditor becoming, or ceasing to be, treated as having control of the company, and

b the other persons who were previously treated as controlling the company continue to be so treated.

“Loan creditor” here has the meaning given by section 453 of the Corporation Tax Act 2010.

Withdrawal of reconstruction or acquisition relief on subsequent non-exempt transfer¶

1 Where paragraph 10(4) (change of control of acquiring company as a result of exempt intra-group transfer) has effect to prevent the withdrawal of reconstruction or acquisition relief on a change of control of the acquiring company, but—

a a company holding shares in the acquiring company to which the exempt intra-group transfer related, or that are derived from shares to which that transfer related, ceases to be a member of the same group as the target company—

i before the end of the period of three years beginning with the effective date of the relevant transaction, or

ii in pursuance of or in connection with arrangements made before the end of that period,

and

b the acquiring company or a relevant associated company, at that time (“the relevant time”), holds a chargeable interest—

i that was transferred to the acquiring company by the relevant transaction, or

ii that is derived from an interest that was so transferred,

and that has not subsequently been transferred at market value by a chargeable transaction in relation to which reconstruction or acquisition relief was available but was not claimed,

reconstruction or acquisition relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

2 Where paragraph 10(5) (change of control of acquiring company as a result of a transfer to which share acquisition relief applies) has effect to prevent the withdrawal of reconstruction or acquisition relief on a change of control of the acquiring company, but—

a control of the other company mentioned in that provision changes—

i before the end of the period of three years beginning with the effective date of the relevant transaction, or

ii in pursuance of or in connection with arrangements made before the end of that period,

at a time when that company holds any shares transferred to it by the exempt transfer, or any shares derived from shares so transferred,

and

b the acquiring company or a relevant associated company, at that time (“the relevant time”), holds a chargeable interest—

i that was transferred to the acquiring company by the relevant transaction, or

ii that is derived from an interest that was so transferred,

and that has not subsequently been transferred at market value by a chargeable transaction in relation to which reconstruction or acquisition relief was available but was not claimed,

reconstruction or acquisition relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

3 The amount chargeable is the tax that would have been chargeable in respect of the relevant transaction but for reconstruction or acquisition relief if the chargeable consideration for that transaction had been an amount equal to the market value of the subject matter of the transaction or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

4 In sub-paragraphs (1), (2) and (3) “an appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held at the relevant time by the acquiring company or, as the case may be, by that company and any relevant associated companies.

5 In this paragraph “relevant associated company”, in relation to the acquiring company, means a company—

a that is controlled by the acquiring company immediately before the control of that company changes, and

b of which control changes in consequence of the change of control of that company.

6 In this paragraph—

a “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable;

b “control” shall be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010; and

c references to control of a company changing are to the company becoming controlled—

i by a different person,

ii by a different number of persons, or

iii by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.

Recovery of reconstruction or acquisition relief from another group company or controlling director¶

1 This paragraph applies where—

a tax is chargeable under paragraph 9 or 11 (withdrawal of reconstruction or acquisition relief),

b the amount so chargeable has been finally determined, and

c the whole or part of the amount so chargeable is unpaid six months after the date on which it became payable.

2 The following persons may, by notice under paragraph 13, be required to pay the unpaid tax—

a any company that at any relevant time was a member of the same group as the acquiring company and was above it in the group structure;

b any person who at any relevant time was a controlling director of the acquiring company or a company having control of the acquiring company.

3 For the purposes of sub-paragraph (2) “relevant time” means any time between effective date of the relevant transaction and the change of control by virtue of which tax is chargeable.

4 For the purposes of sub-paragraph (2)(a) a company (“company A”) is “above” another company (“company B”) in a group structure if company B, or another company that is above company B in the group structure, is a 75% subsidiary of company A.

5 For the purposes of sub-paragraph (2)(b)—

a “director”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (read with subsection (2) of that section) and includes any person falling within section 452(1) of the Corporation Tax Act 2010; and

b “controlling director”, in relation to a company, means a director of the company who has control of it (construing control in accordance with sections 450 and 451 of the Corporation Tax Act 2010).

Recovery of reconstruction or acquisition relief: supplementary¶

1 The Inland Revenue may serve a notice on a person within paragraph 12(2) above requiring him within 30 days of the service of the notice to pay the amount that remains unpaid.

2 Any such notice must be served before the end of the period of three years beginning with the date of the final determination mentioned in paragraph 12(1)(b).

3 The notice must state the amount required to be paid by the person on whom the notice is served.

4 The notice has effect—

a for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

b for the purposes of appeals,

as if it were a notice of assessment and that amount were an amount of tax due from that person.

5 A person who has paid an amount in pursuance of a notice under this paragraph may recover that amount from the acquiring company.

6 A payment in pursuance of a notice under this paragraph is not allowed as a deduction in computing any income, profits or losses for any tax purpose.

SCHEDULE 7A ¶

Seeding relief

Section 65A

PART 1 Property authorised investment funds¶

PAIF seeding relief¶

1 A land transaction is exempt from charge if conditions A to D are met.

Relief under this paragraph is referred to in this Part of this Act as “PAIF seeding relief”.

2 Condition A is that the purchaser is a property AIF (see paragraph 2).

3 Condition B is that the main subject-matter of the transaction consists of a major interest in land.

4 Condition C is that the only consideration for the transaction is the issue of units in the property AIF to a person who is the vendor.

5 Condition D is that the effective date of the transaction is a day within the seeding period (see paragraph 3).

6 This paragraph is subject to paragraph 4 (restrictions on availability of relief) and paragraphs 5 to 8 (withdrawal of relief).

Meaning of “property AIF”¶

1 This paragraph has effect for the purposes of this Schedule.

2 A “property AIF” is an open-ended investment company to which Part 4A of the AIF (Tax) Regulations applies.

3 In sub-paragraph (2) “open-ended investment company” is to be read in accordance with regulation 7(1) and (2) of those Regulations (part of an umbrella company is regarded as an open-ended investment company).

4 Regulation 7(3)(a) of those Regulations applies for the purposes of this Schedule as it applies for the purposes of those Regulations but as if references to investments and scheme property were a reference to chargeable interests.

5 References to a property AIF are treated as including a collective investment scheme which—

a is a company incorporated under the law of an EEA State ^F1079..., and

b is authorised under the law of that EEA State in a way which makes it, under that law, the equivalent of a property AIF as defined in sub-paragraph (2).

6 In sub-paragraph (5) “collective investment scheme” has the meaning given by section 235 of FSMA 2000.

Meaning of “seeding period”¶

1 In this Part of this Schedule, subject to sub-paragraph (2), the “seeding period” means—

a the period beginning with the first property seeding date and ending with the date of the first external investment into the property AIF, or

b if shorter, the period of 18 months beginning with the first property seeding date.

2 The property AIF may elect to bring the seeding period to an end sooner than it would otherwise end under sub-paragraph (1).

Where an election is made, the seeding period is the period beginning with the first property seeding date and ending with the date specified in the election.

3 An election under sub-paragraph (2) may be made—

a by being included in a notice accompanying a claim for PAIF seeding relief (see section 65A), or

b by separate notice in writing to HMRC.

4 In sub-paragraphs (1) and (2), “the first property seeding date” means the earliest effective date of a transaction in respect of which conditions A to C in paragraph 1 are met.

5 In this paragraph—

“external investment” means a non-land transaction in which the vendor is an external investor;
“external investor” means a person other than a person who has been a vendor in a transaction—
1. the effective date of which is on or before the date of the non-land transaction, and
2. in respect of which conditions A to C in paragraph 1 are met;
“non-land transaction” means a transaction by which the property AIF acquires assets which do not consist of or include a chargeable interest.

Restrictions on availability of relief¶

1 This paragraph restricts the availability of PAIF seeding relief for a transaction in respect of which conditions A to D in paragraph 1 are met.

2 PAIF seeding relief is not available unless, at the effective date of the transaction, the property AIF has arrangements in place requiring a person who is the vendor to notify the authorised corporate director of the property AIF of the following matters—

a the identity of the beneficial owner of the units in the property AIF received in consideration of the transaction, and

b any disposal of units in the property AIF on or after the effective date of that transaction by that owner (or, where that person is a company, by a group company) which is or could be a relevant disposal (see paragraph 7).

In paragraph (b) “group company” means a company which is a member of the same group of companies as the person mentioned in paragraph (a) for the purposes mentioned in paragraph 1(2) of Schedule 7 (group relief).

3 PAIF seeding relief is not available if at the effective date of the transaction there are arrangements in existence by virtue of which, at that or some later time, a person who is the vendor makes or could make a disposal of units in the property AIF which is or could be a relevant disposal (see paragraph 7).

4 PAIF seeding relief is not available if the transaction—

a is not effected for bona fide commercial reasons, or

b forms part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.

“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.

Withdrawal of relief: ceasing to be property AIF¶

1 Where PAIF seeding relief has been allowed in respect of a transaction (“the relevant transaction”), and the purchaser ceases to be a property AIF—

a at any time after the effective date of that transaction but within the seeding period,

b at any time in the control period (see paragraph 21), or

c in pursuance of, or in connection with, arrangements made before the end of the control period,

then, subject to sub-paragraph (2), the relief, or an appropriate proportion of it, is withdrawn, and tax is chargeable in accordance with this paragraph.

2 Relief is withdrawn only if, at the time when the purchaser ceases to be a property AIF, the purchaser holds—

a the chargeable interest that was acquired by the purchaser under the relevant transaction, or

b a chargeable interest that is derived from that interest.

3 The amount chargeable is the amount that would have been chargeable in respect of the relevant transaction but for PAIF seeding relief or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

4 In sub-paragraphs (1) and (3) an “appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held by the purchaser at the time it ceases to be a property AIF.

Withdrawal of relief: portfolio test not met¶

1 Where PAIF seeding relief has been allowed in respect of a transaction, and the portfolio test is not met immediately before the end of the seeding period, the relief is withdrawn and tax is chargeable in accordance with sub-paragraph (2).See sub-paragraph (7) for the meaning of “portfolio test”.

2 The amount chargeable is the amount that would have been chargeable in respect of the transaction but for PAIF seeding relief.

3 Where PAIF seeding relief has been allowed in respect of a transaction (“the relevant transaction”), and the portfolio test is met immediately before the end of the seeding period, but is not met—

a at a time in the control period, or

b at a time after the end of the control period, where the failure is pursuant to or in connection with arrangements made before the end of that period,

then, subject to sub-paragraph (4), the relief, or an appropriate proportion of it, is withdrawn, and tax is chargeable in accordance with sub-paragraph (5).

4 The requirement to meet the portfolio test at a time mentioned in sub-paragraph (3)(a) or (b) applies only to times when the property AIF holds—

a the chargeable interest that was acquired by the property AIF under the relevant transaction, or

b a chargeable interest that is derived from that interest.

5 The amount chargeable is the amount that would have been chargeable in respect of the relevant transaction but for PAIF seeding relief or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

6 In sub-paragraphs (3) and (5) an “appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held by the property AIF at the time when the portfolio test is not met.

7 The portfolio test is a requirement that the property AIF meets—

a the non-residential portfolio test (see sub-paragraph (8)), or

b the residential portfolio test (see sub-paragraph (9)).

8 The “non-residential portfolio test” is met at any time if—

a the property AIF holds at least 10 seeded interests at that time,

b so much of the total chargeable consideration as is attributable to all the seeded interests held by the property AIF at that time (“the seeded portfolio”) is at least £100 million, and

c so much of the total chargeable consideration as is attributable to so many of those seeded interests as are interests in or over residential property (if any) does not exceed 10% of the seeded portfolio.

9 The “residential portfolio test” is met at any time if—

a so much of the total chargeable consideration as is attributable to all the seeded interests held by the property AIF at that time is at least £100 million, and

b at least 100 of the seeded interests held by the property AIF at that time are interests in or over residential property.

10 In sub-paragraphs (8) and (9)—

“seeded interest” means a chargeable interest acquired by the property AIF in a transaction for which PAIF seeding relief is allowed (whether or not relief is subsequently withdrawn to any extent) (a “seeding transaction”), and
“total chargeable consideration” means the total of the chargeable consideration for all seeding transactions.

11 For the purposes of this paragraph, section 116(7) does not apply (modification of what counts as residential property).

Withdrawal of relief: units disposed of¶

1 This paragraph applies where—

a a person (“V”) makes a relevant disposal of one or more units in a property AIF—

i at any time in the seeding period,

ii at any time in the control period, or

iii in pursuance of, or in connection with, arrangements made before the end of the control period, and

b there is, in relation to that disposal, a relevant seeding transaction (see sub-paragraph (6)).

2 In respect of a transaction which is, in relation to the relevant disposal, a relevant seeding transaction—

a PAIF seeding relief is withdrawn to the extent set out in this paragraph, and

b tax is chargeable in accordance with this paragraph.

3 V's disposal of units in a property AIF is a “relevant disposal” for the purposes of this paragraph if, in relation to the disposal, A exceeds B.

4 In this paragraph—

“A” means—
1. where the value of V's investment in the property AIF immediately before the disposal is equal to or greater than the total of the chargeable consideration for all relevant seeding transactions, the total of the chargeable consideration for all relevant seeding transactions, or
2. where the value of V's investment in the property AIF immediately before the disposal is less than the total of the chargeable consideration for all relevant seeding transactions, the value of V's investment in the property AIF immediately before the disposal, and
“B” means the value of V's investment in the property AIF immediately after the disposal.

5 The amount chargeable in respect of a relevant seeding transaction (“RST”) is—

\frac{C}{CCRST} \times SDLT

where—

“C” means the difference between A and B;

“CCRST” means the total of the chargeable consideration for all relevant seeding transactions;

“SDLT” means the amount of tax that would have been chargeable in respect of RST but for PAIF seeding relief, ignoring any amount of tax that has been charged under this paragraph in respect of RST in relation to an earlier disposal of units by V.

6 In this paragraph—

“group company” means (where V is a company) a company which is a member of the same group of companies as V for the purposes mentioned in paragraph 1(2) of Schedule 7 (group relief);
“relevant seeding transaction”, in relation to a disposal of units by V in a property AIF, means a seeding transaction—
1. the effective date of which is, or is before, the date of the disposal,
2. in which that property AIF is the purchaser, and
3. in which a vendor is—
  1. V, or
  2. (where V is a company) a company which is a group company at the time of the disposal;
“seeding transaction” means a transaction in respect of which PAIF seeding relief is allowed (whether or not relief is subsequently withdrawn to any extent);
“the value of V's investment in the property AIF” at a particular time means the market value of all units in the property AIF held at that time by—
1. V, and
2. (where V is a company) a company which—
  1. is a group company at that time, and
  2. before that time, has been a vendor in one or more seeding transactions in which the property AIF was the purchaser.

7 For the purposes of this paragraph, the “market value” on a particular date of units in the property AIF is an amount equal to the buying price (that is, the lower price) published by the authorised corporate director on that date (or, if no such price is published on that date, on the latest date before).

Withdrawal of relief: dwelling occupied by non-qualifying individual¶

1 This paragraph applies to a transaction (“the relevant transaction”) if—

a PAIF seeding relief has been allowed in respect of the transaction,

b the main subject-matter of the transaction consists of a chargeable interest in or over land which is or includes a dwelling, and

c a non-qualifying individual (see paragraph 9) is permitted to occupy the dwelling at any time on or after the effective date of the transaction.

The dwelling which a non-qualifying individual is permitted to occupy is referred to as “the disqualifying dwelling”.

2 The relief, or an appropriate proportion of it, is withdrawn, and tax is chargeable in accordance with this paragraph.This is subject to sub-paragraphs (3) and (4).

3 Relief is withdrawn only if, at the time a non-qualifying individual is permitted to occupy the disqualifying dwelling, the property AIF holds a chargeable interest in or over that dwelling—

a that was acquired by the property AIF under the relevant transaction, or

b that is derived from an interest so acquired.

4 Where a non-qualifying individual is first permitted to occupy the disqualifying dwelling at a time after the end of the control period, relief is withdrawn only if, at that time, the purchaser in the relevant transaction fails to meet the genuine diversity of ownership condition set out in regulation 9A of the AIF (Tax) Regulations.For the purposes of this sub-paragraph, regulation 9A(2)(a) of those Regulations is to be read as if the words “throughout the accounting period” were omitted.

6 In sub-paragraphs (2) and (5), an “appropriate proportion” means an appropriate proportion having regard to the extent to which the subject-matter of the relevant transaction was an interest in or over land other than the disqualifying dwelling.

1 In paragraph 8 “non-qualifying individual”, in relation to a land transaction and a property AIF, means any of the following—

a an individual who is a major participant in the property AIF;

b an individual who is connected with a major participant in the property AIF;

c an individual who is connected with the property AIF;

d a relevant settlor;

e the spouse or civil partner of an individual falling within paragraph (b), (c) or (d);

f a relative of an individual falling within paragraph (b), (c) or (d), or the spouse or civil partner of a relative of an individual falling within paragraph (b), (c) or (d);

g a relative of the spouse or civil partner of an individual falling within paragraph (b), (c) or (d);

h the spouse or civil partner of an individual falling within paragraph (g).

2 An individual who participates in a property AIF is a “major participant” in it if the individual—

a is entitled to a share of at least 50% either of all the profits or income arising from the property AIF or of any profits or income arising from it that may be distributed to participants, or

b would in the event of the winding up of the property AIF be entitled to 50% or more of the assets of the property AIF that would then be available for distribution among the participants.

3 The reference in sub-paragraph (2)(a) to profits or income arising from the property AIF is to profits or income arising from the acquisition, holding, management or disposal of the property subject to the property AIF.

4 In this paragraph—

“relative” means brother, sister, ancestor or lineal descendant;
“relevant settlor”, in relation to a land transaction, means an individual who is a settlor in relation to a relevant settlement (as defined in sub-paragraph (5));
“settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act).

5 Where a person, in the capacity of trustee of a settlement, is connected with a person who is the purchaser under a land transaction, that settlement is a “relevant settlement” in relation to the transaction.

6 In sub-paragraph (5) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected” persons: supplementary).

7 Section 1122 of CTA 2010 (connected persons) has effect for the purposes of this paragraph, but for those purposes, subsections (7) and (8) of that section (application of rules about connected persons to partnerships) are to be disregarded.

PART 2 Co-ownership ^F1204... contractual schemes¶

Co-ownership scheme seeding relief¶

1 A land transaction is exempt from charge if conditions A to D are met.Relief under this paragraph is referred to in this Part of this Act as “co-ownership scheme seeding relief”.

2 Condition A is that the purchaser is a co-ownership ^F1245... contractual scheme (see section 102A).

3 Condition B is that the main subject-matter of the transaction consists of a major interest in land.

4 Condition C is that the only consideration for the transaction is the issue of units in the co-ownership ^F1246... contractual scheme to a person who is the vendor.

5 Condition D is that the effective date of the transaction is a day within the seeding period (see paragraph 11).

5A But condition D is met in a case where the purchaser is a Reserved Investor Fund (Contractual Scheme) only if an entry notice has been given in relation to the scheme on or before the effective date.

5B In sub-paragraph (5A), “entry notice” has the meaning it has in the Co-ownership Contractual Schemes (Tax) Regulations 2025.

6 This paragraph is subject to paragraph 12 (restrictions on availability of relief) and paragraphs 13, 14, 16, 17 and 18 (withdrawal of relief).

Meaning of “seeding period”¶

1 In this Part of this Schedule, subject to sub-paragraph (2), the “seeding period” means—

a the period beginning with the first property seeding date and ending with the date of the first external investment into the co-ownership ^F1248... contractual scheme, or

b if shorter, the period of 18 months beginning with the first property seeding date.

2 The co-ownership ^F1249... contractual scheme may elect to bring the seeding period to an end sooner than it would otherwise end under sub-paragraph (1).

Where an election is made, the seeding period is the period beginning with the first property seeding date and ending with the date specified in the election.

3 An election under sub-paragraph (2) may be made—

a by being included in a notice accompanying a claim for co-ownership scheme seeding relief (see section 65A), or

b by separate notice in writing to HMRC.

4 In sub-paragraphs (1) and (2), “the first property seeding date” means the earliest effective date of a transaction in respect of which conditions A to C in paragraph 10 are met.

5 In this paragraph—

“external investment” means a non-land transaction in which the vendor is an external investor;
“external investor” means a person other than a person who has been a vendor in a transaction—
1. the effective date of which is on or before the date of the non-land transaction, and
2. in respect of which conditions A to C in paragraph 10 are met;
“non-land transaction” means a transaction by which the scheme acquires assets which do not consist of or include a chargeable interest.

Restrictions on availability of relief¶

1 This paragraph restricts the availability of co-ownership scheme seeding relief for a transaction in respect of which conditions A to D in paragraph 10 are met.

2 Co-ownership scheme seeding relief is not available unless, at the effective date of the transaction, the arrangements constituting the co-ownership ^F1253... contractual scheme require a person who is the vendor to notify the operator of the scheme of the following matters—

a the identity of the beneficial owner of the units in the scheme received in consideration of the transaction, and

b any disposal of units in the scheme on or after the effective date of that transaction by that owner (or, where that person is a company, by a group company) which is or could be a relevant disposal (see paragraph 17).

3 Co-ownership scheme seeding relief is not available if at the effective date of the transaction there are arrangements in existence by virtue of which, at that or some later time, a person who is the vendor makes or could make a disposal of units in the co-ownership ^F1255... contractual scheme which is or could be a relevant disposal (see paragraph 17).

4 Co-ownership scheme seeding relief is not available if the transaction—

a is not effected for bona fide commercial reasons, or

b forms part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.

“Tax” here means stamp duty, income tax, corporation tax, capital gains tax or tax under this Part.

Withdrawal of relief: ceasing to be co-ownership ^F1206... contractual scheme¶

1 Where co-ownership scheme seeding relief has been allowed in respect of a transaction (“the relevant transaction”), and the purchaser ceases to be a co-ownership ^F1258... contractual scheme—

a at any time after the effective date of that transaction but within the seeding period,

b at any time in the control period (see paragraph 21), or

c in pursuance of, or in connection with, arrangements made before the end of the control period,

then, subject to sub-paragraph (2), the relief, or an appropriate proportion of it, is withdrawn, and tax is chargeable in accordance with this paragraph.

2 Relief is withdrawn only if, at the time when the purchaser ceases to be a co-ownership ^F1259... contractual scheme, the purchaser holds—

a the chargeable interest that was acquired by the purchaser under the relevant transaction, or

b a chargeable interest that is derived from that interest.

3 The amount chargeable is the amount that would have been chargeable in respect of the relevant transaction but for co-ownership scheme seeding relief or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

Withdrawal of relief: genuine diversity of ownership condition not met by COACS ¶

A1 This paragraph applies where co-ownership scheme seeding relief has been allowed in respect of a transaction (“the relevant transaction”) entered into by—

a a co-ownership authorised contractual scheme, or

b a Reserved Investor Fund (Contractual Scheme) that has since become a co-ownership authorised contractual scheme.

1 Where , in relation to the relevant transaction, the genuine diversity of ownership condition (see paragraph 15) is not met—

a immediately before the end of the seeding period,

b at a time in the control period, or

c at a time after the end of the control period, where the failure is pursuant to or in connection with arrangements made before the end of that period,

then, subject to sub-paragraph (2), the relief, or an appropriate proportion of it, is withdrawn, and tax is chargeable in accordance with this paragraph.

2 The requirement to meet the genuine diversity of ownership condition at a time mentioned in sub-paragraph (1) applies only to times when the co-ownership authorised contractual scheme holds—

a the chargeable interest that was acquired by the scheme under the relevant transaction, or

b a chargeable interest that is derived from that interest.

4 In sub-paragraphs (1) and (3) an “appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held by the scheme at the time when the genuine diversity of ownership condition is not met.

5 For the purposes of this paragraph, the operator of a co-ownership authorised contractual scheme may apply to HMRC in writing for clearance that the scheme meets the genuine diversity of ownership condition, and where an application is made, HMRC must notify the scheme of its decision within 28 days of the receipt of all the information that is needed to make the decision.

6 Any such clearance has effect only for so long as the information on which HMRC relies in granting clearance is materially unchanged and the scheme is operated in accordance with it (including, in particular, continuing to operate in accordance with condition C of the genuine diversity of ownership condition).

Genuine diversity of ownership condition¶

1 This paragraph has effect for the purposes of paragraphs 14 and 18(4).

1A Sub-paragraphs (2) to (8) and (9) apply where the relevant transaction was entered into by a co-ownership authorised contractual scheme.

1B Sub-paragraph (8A) applies where the relevant transaction was entered into by a Reserved Investor Fund (Contractual Scheme) that has since become a co-ownership authorised contractual scheme.

2 A co-ownership authorised contractual scheme meets the genuine diversity of ownership condition at any time when it meets conditions A to C.

3 Condition A is that the scheme documents, which are available to investors and to HMRC, contain—

a a statement specifying the intended categories of investor,

b an undertaking that units in the scheme will be widely available, and

c an undertaking that units in the scheme will be marketed and made available in accordance with the requirements of sub-paragraph (6)(a).

4 Condition B is that—

a the specification of the intended categories of investor does not have a limiting or deterrent effect, and

b any other terms or conditions governing participation in the scheme do not have a limiting or deterrent effect.

5 In sub-paragraph (4) “limiting or deterrent effect” means an effect which—

a limits investors to a limited number of specific persons or specific groups of connected persons, or

b deters a reasonable investor falling within one of (what are specified as) the intended categories of investor from investing in the scheme.

6 Condition C is that—

a units in the scheme are marketed and made available—

i sufficiently widely to reach the intended categories of investors, and

ii in a manner appropriate to attract those categories of investors, and

b a person who falls within one of the intended categories of investors can, upon request to the operator of the scheme, obtain information about the scheme and acquire units in it.

7 A scheme is not regarded as failing to meet condition C at any time by reason of the scheme's having, at that time, no capacity to receive additional investments, unless—

a the capacity of the scheme to receive investments in it is fixed by the scheme documents (or otherwise), and

b a pre-determined number of specific persons or specific groups of connected persons make investments in the scheme which collectively exhaust all, or substantially all, of that capacity.

8 A co-ownership authorised contractual scheme also meets the genuine diversity of ownership condition at any time when—

a there is a feeder fund in relation to the scheme (see paragraph 20), and

b conditions A to C are met in relation to the scheme after taking into account—

i the scheme documents relating to the feeder fund, and

ii the intended investors in the feeder fund.

8A A co-ownership authorised contractual scheme which at the time of the relevant transaction was a Reserved Investor Fund (Contractual Scheme) meets the genuine diversity of ownership condition at any time that the scheme—

a meets the genuine diversity of ownership condition under regulation 7 of the Co-ownership Contractual Schemes (Tax) Regulations 2025 (but not solely by virtue of regulation 9 of those Regulations), or

b meets the non-close condition under regulation 8 of those Regulations (but not solely by virtue of regulation 9 of those Regulations).

9 Section 1122 of CTA 2010 (connected persons) has effect for the purposes of this paragraph.

Withdrawal of relief: portfolio test not met¶

1 Where co-ownership scheme seeding relief has been allowed in respect of a transaction, and the portfolio test is not met immediately before the end of the seeding period, the relief is withdrawn and tax is chargeable in accordance with sub-paragraph (2).See sub-paragraph (7) for the meaning of “portfolio test”.

2 The amount chargeable is the amount that would have been chargeable in respect of the transaction but for co-ownership scheme seeding relief.

3 Where co-ownership scheme seeding relief has been allowed in respect of a transaction (“the relevant transaction”), and the portfolio test is met immediately before the end of the seeding period, but is not met—

a at a time in the control period, or

b at a time after the end of the control period, where the failure is pursuant to or in connection with arrangements made before the end of that period,

then, subject to sub-paragraph (4), the relief, or an appropriate proportion of it, is withdrawn, and tax is chargeable in accordance with sub-paragraph (5).

4 The requirement to meet the portfolio test at a time mentioned in sub-paragraph (3)(a) or (b) applies only to times when the co-ownership ^F1268... contractual scheme holds—

a the chargeable interest that was acquired by the scheme under the relevant transaction, or

b a chargeable interest that is derived from that interest.

5 The amount chargeable is the amount that would have been chargeable in respect of the relevant transaction but for co-ownership scheme seeding relief or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

6 In sub-paragraphs (3) and (5) an “appropriate proportion” means an appropriate proportion having regard to the subject-matter of the relevant transaction and what is held by the scheme at the time when the portfolio test is not met.

7 The portfolio test is a requirement that the scheme meets—

a the non-residential portfolio test (see sub-paragraph (8)), or

b the residential portfolio test (see sub-paragraph (9)).

8 The “non-residential portfolio test” is met at any time if—

a the scheme holds at least 10 seeded interests at that time,

b so much of the total chargeable consideration as is attributable to all the seeded interests held by the scheme at that time (“the seeded portfolio”) is at least £100 million, and

9 The “residential portfolio test” is met at any time if—

a so much of the total chargeable consideration as is attributable to all the seeded interests held by the scheme at that time is at least £100 million, and

b at least 100 of the seeded interests held by the scheme at that time are interests in or over residential property.

10 In sub-paragraphs (8) and (9)—

“seeded interest” means a chargeable interest acquired by the scheme in a transaction for which co-ownership scheme seeding relief is allowed (whether or not relief is subsequently withdrawn to any extent) (a “seeding transaction”), and
“total chargeable consideration” means the total of the chargeable consideration for all seeding transactions.

11 For the purposes of this paragraph, section 116(7) does not apply (modification of what counts as residential property).

Withdrawal of relief: units disposed of¶

1 This paragraph applies where—

a a person (“V”) makes a relevant disposal of one or more units in a co-ownership ^F1271... contractual scheme—

i at any time in the seeding period,

ii at any time in the control period, or

iii in pursuance of, or in connection with, arrangements made before the end of the control period, and

b there is, in relation to that disposal, a relevant seeding transaction (see sub-paragraph (6)).

2 In respect of a transaction which is, in relation to the relevant disposal, a relevant seeding transaction—

a co-ownership scheme seeding relief is withdrawn to the extent set out in this paragraph, and

b tax is chargeable in accordance with this paragraph.

3 V's disposal of units in a scheme is a “relevant disposal” for the purposes of this paragraph if, in relation to the disposal, A exceeds B.

4 In this paragraph—

“A” means—
1. where the value of V's investment in the scheme immediately before the disposal is equal to or greater than the total of the chargeable consideration for all relevant seeding transactions, the total of the chargeable consideration for all relevant seeding transactions, or
2. where the value of V's investment in the scheme immediately before the disposal is less than the total of the chargeable consideration for all relevant seeding transactions, the value of V's investment in the scheme immediately before the disposal, and
“B” means the value of V's investment in the scheme immediately after the disposal.

5 The amount chargeable in respect of a relevant seeding transaction (“RST”) is—

\frac{C}{CCRST} \times SDLT

where—

“C” means the difference between A and B;

“CCRST” means the total of the chargeable consideration for all relevant seeding transactions;

“SDLT” means the amount of tax that would have been chargeable in respect of RST but for co-ownership scheme seeding relief, ignoring any amount of tax that has been charged under this paragraph in respect of RST in relation to an earlier disposal of units by V.

6 In this paragraph—

“group company” means (where V is a company) a company which is a member of the same group of companies as V for the purposes mentioned in paragraph 1(2) of Schedule 7 (group relief);
“relevant seeding transaction”, in relation to a disposal of units by V in a co-ownership ^F1274... contractual scheme, means a seeding transaction—
1. the effective date of which is, or is before, the date of the disposal,
2. in which that scheme is the purchaser, and
3. in which a vendor is—
  1. V, or
  2. (where V is a company) a company which is a group company at the time of the disposal;
“seeding transaction” means a transaction in respect of which co-ownership scheme seeding relief is allowed (whether or not relief is subsequently withdrawn to any extent);
“the value of V's investment in the scheme” at a particular time means the market value of all units in the co-ownership ^F1276... contractual scheme held at that time by—
1. V, and
2. (where V is a company) a company which—
  1. is a group company at that time, and
  2. before that time, has been a vendor in one or more seeding transactions in which the scheme was the purchaser.

7 For the purposes of this paragraph, the “market value” on a particular date of units in the scheme is an amount equal to the buying price (that is, the lower price) published by the operator on that date (or, if no such price is published on that date, on the latest date before).

Withdrawal of relief: dwelling occupied by non-qualifying individual¶

1 This paragraph applies to a transaction (“the relevant transaction”) if—

a co-ownership scheme seeding relief has been allowed in respect of the transaction,

b the main subject-matter of the transaction consists of a chargeable interest in or over land which is or includes a dwelling, and

c a non-qualifying individual (see paragraph 19) is permitted to occupy the dwelling at any time on or after the effective date of the transaction.

The dwelling which a non-qualifying individual is permitted to occupy is referred to as “the disqualifying dwelling”.

2 The relief, or an appropriate proportion of it, is withdrawn, and tax is chargeable in accordance with this paragraph.This is subject to sub-paragraphs (3) and (4).

3 Relief is withdrawn only if, at the time a non-qualifying individual is permitted to occupy the disqualifying dwelling, the co-ownership ^F1278... contractual scheme holds a chargeable interest in or over that dwelling—

a that was acquired by the scheme under the relevant transaction, or

b that is derived from an interest so acquired.

1 In paragraph 18 “non-qualifying individual”, in relation to a land transaction and a co-ownership ^F1280... contractual scheme, means any of the following—

a an individual who is a major participant in the scheme;

b an individual who is connected with a major participant in the scheme;

c an individual who is connected with the operator of the scheme (see section 102A) or the depositary of the scheme;

d a relevant settlor;

e the spouse or civil partner of an individual falling within paragraph (b), (c) or (d);

f a relative of an individual falling within paragraph (b), (c) or (d), or the spouse or civil partner of a relative of an individual falling within paragraph (b), (c) or (d);

g a relative of the spouse or civil partner of an individual falling within paragraph (b), (c) or (d);

h the spouse or civil partner of an individual falling within paragraph (g).

2 An individual who participates in a scheme is a “major participant” in it if the individual—

a is entitled to a share of at least 50% either of all the profits or income arising from the scheme or of any profits or income arising from it that may be distributed to participants, or

b would in the event of the winding up of the scheme be entitled to 50% or more of the assets of the scheme that would then be available for distribution among the participants.

3 The reference in sub-paragraph (2)(a) to profits or income arising from the scheme is to profits or income arising from the acquisition, holding, management or disposal of the property subject to the scheme.

4 In this paragraph—

“depositary”, in relation to a co-ownership ^F1281... contractual scheme, means the person to whom the property subject to the scheme is entrusted for safekeeping;
“relative” means brother, sister, ancestor or lineal descendant;
“relevant settlor”, in relation to a land transaction, means an individual who is a settlor in relation to a relevant settlement (as defined in sub-paragraph (5));
“settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act).

6 In sub-paragraph (5) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected” persons: supplementary).

PART 3 Interpretation¶

“Feeder fund” and “units”¶

20In this Schedule—

a “feeder fund” of a property AIF means a unit trust scheme—
1. one of the main objects of which is investment in the property AIF, and
2. which is managed by the same person as the property AIF;
a “feeder fund” of a co-ownership ^F1282... contractual scheme means an open-ended investment company, an offshore fund or a unit trust scheme—
1. one of the main objects of which is investment in the co-ownership ^F1282... contractual scheme, and
2. which is managed by the same person as the scheme;
“units in the property AIF” means—
1. units in the property AIF (and, where the property AIF is a part of an umbrella company as mentioned in regulation 7(1) and (2) of the AIF (Tax) Regulations, this means units in the separate pool to which that part of the umbrella company relates), and
2. units in a feeder fund of the property AIF;
“units in the co-ownership ^F1282... contractual scheme” means—
1. units in the co-ownership ^F1282... contractual scheme (and, where the co-ownership ^F1282... contractual scheme is a sub-scheme of an umbrella scheme (see section 102A(3) and (4)), this means units in the separate pool to which that sub-scheme relates), and
2. units in a feeder fund of the scheme;
“units” means the rights or interests (however described) of the participants in the property AIF or the co-ownership ^F1282... contractual scheme.

Interpretation of other terms¶

21In this Schedule—

the “AIF (Tax) Regulations” means the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964);
“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable;
“attributable” means attributable on a just and reasonable basis;
“authorised corporate director”, in relation to a property AIF, has the same meaning as in regulation 8 of the AIF (Tax) Regulations;
“co-ownership scheme seeding relief” means relief under paragraph 10;
“control period” means the period of 3 years beginning with the day following the last day of the seeding period;
“co-ownership authorised contractual scheme” is to be construed in accordance with section 102A (see in particular subsections (2), (2A), (5), (7) and (8) of that section);
“CTA 2010” means the Corporation Tax Act 2010;
“FSMA 2000” means the Financial Services and Markets Act 2000;
the “genuine diversity of ownership condition”, in relation to a co-ownership authorised contractual scheme, has the meaning given by paragraph 15;
“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;
“non-qualifying individual” has the meaning given by paragraph 9 (in relation to a property AIF) and paragraph 19 (in relation to a co-ownership ^F1286... contractual scheme);
“offshore fund” has the meaning given by section 355 of the Taxation (International and Other Provisions) Act 2010;
“open-ended investment company” has the meaning given by section 236 of FSMA 2000;
“operator”, in relation to a co-ownership ^F1286... contractual scheme, has the same meaning as in section 102A;
“PAIF seeding relief” means relief under paragraph 1;
“participant” is to be read in accordance with section 235 of FSMA 2000;
“portfolio test” has the meaning given by paragraph 6(7) (in relation to a property AIF) and paragraph 16(7) (in relation to a co-ownership ^F1286... contractual scheme);
“property AIF” is to be construed in accordance with paragraph 2 (see in particular sub-paragraphs (2), (3) and (5) of that paragraph);
“relevant disposal” has the meaning given by paragraph 7(3) (in relation to a property AIF) and paragraph 17(3) (in relation to a co-ownership ^F1286... contractual scheme);
“seeding period” has the meaning given by paragraph 3 (in relation to a property AIF) and paragraph 11 (in relation to a co-ownership ^F1286... contractual scheme);
“unit trust scheme” has the meaning given by section 237(1) of FSMA 2000.

SCHEDULE 8 ¶

Stamp duty land tax: charities relief

Section 68

Charities relief¶

1 A land transaction is exempt from charge if the purchaser is a charity and the following conditions are met.Relief under this Schedule is referred to in this Part as “charities relief”.

2 The first condition is that the purchaser must intend to hold the subject-matter of the transaction for qualifying charitable purposes, ^F839...

3 The second condition is that the transaction must not have been entered into for the purpose of avoiding tax under this Part (whether by the purchaser or any other person).

3A For the purposes of this Schedule, a charity (“C”) holds a chargeable interest for qualifying charitable purposes if it holds it—

a for use in furtherance of the charitable purposes of C or another charity, or

b as an investment from which the profits are applied to the charitable purposes of C.

^F6524 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Withdrawal of charities relief¶

1 Where in the case of a transaction (“the relevant transaction”) that is exempt by virtue of this Schedule —

a a disqualifying event occurs—

i before the end of the period of three years beginning with the effective date of the transaction, or

ii in pursuance of, or in connection with, arrangements made before the end of that period,

and

b at the time of the disqualifying event the purchaser holds a chargeable interest—

i that was acquired by the purchaser under the relevant transaction, or

ii that is derived from an interest so acquired,

charities relief in relation to the relevant transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

2 The amount chargeable is the amount that would have been chargeable in respect of the relevant transaction but for charities relief or, as the case may be, an appropriate proportion of the tax that would have been so chargeable.

3 For the purposes of this paragraph a “disqualifying event” means—

a the purchaser ceasing to be established for charitable purposes only, or

b the subject-matter of the transaction, or any interest or right derived from it, being used or held by the purchaser otherwise than for qualifying charitable purposes.

4 In sub-paragraphs (1) and (2) an “appropriate proportion” means an appropriate proportion having regard to—

a what was acquired by the purchaser under the relevant transaction and what is held by the purchaser at the time of the disqualifying event, and

b the extent to which what is held by the purchaser at that time becomes used or held for purposes other than qualifying charitable purposes.

5 In this paragraph “qualifying charitable purposes” has the same meaning as in paragraph 1.

Cases where first condition not fully met¶

1 This paragraph applies where—

a a land transaction is not exempt from charge under paragraph 1 because the first condition in that paragraph is not met, but

b the purchaser (“C”) intends to hold the greater part of the subject-matter of the transaction for qualifying charitable purposes.

2 In such a case—

a the transaction is exempt from charge, but

b for the purposes of paragraph 2 (withdrawal of charities relief) “disqualifying event” includes—

i any transfer by C of a major interest in the whole or any part of the subject-matter of the transaction, or

ii any grant by C at a premium of a low-rental lease of the whole or any part of that subject-matter,

that is not made in furtherance of the charitable purposes of C.

3 For the purposes of sub-paragraph (2)(b)(ii)—

a a lease is granted “at a premium” if there is consideration other than rent, and

b a lease is a “low-rental”lease if the annual rent (if any) is less than £1,000 a year.

4 In relation to a transaction that, by virtue of this paragraph, is a disqualifying event for the purposes of paragraph 2—

a the date of the event for those purposes is the effective date of the transaction;

b paragraph 2 has effect as if—

i in sub-paragraph (1)(b), for “at the time of” there were substituted “ immediately before ”,

ii in sub-paragraph (4)(a), for “at the time of” there were substituted “ immediately before and immediately after ”, and

iii sub-paragraph (4)(b) were omitted.

5 In this paragraph—

“qualifying charitable purposes” has the same meaning as in paragraph 1;
“rent” has the same meaning as in Schedule 5 (amount of tax chargeable: rent) and “annual rent” has the same meaning as in paragraph 9A of that Schedule.

Joint purchasers: partial relief¶

1 Sub-paragraphs (3) to (5) apply in any case where—

a there are two or more purchasers under a land transaction,

b the purchasers acquire the subject-matter of the transaction as tenants in common (or, in Scotland, as owners in common),

c at least one of them is, and at least one of them is not, a qualifying charity, and

d no purchaser enters into the transaction for the purpose of the avoidance of tax under this Part (whether by that purchaser or another person).

2 A charity (“C”) that is a purchaser under a land transaction is a “qualifying charity” in relation to the transaction if C intends to hold its undivided share of the subject-matter of the transaction for qualifying charitable purposes.

3 The tax chargeable in respect of the transaction is reduced by the amount of the relief under sub-paragraph (4).

4 The relief is equal to the relevant proportion of the tax that would have been chargeable in respect of the transaction without this Schedule.

5 The “relevant proportion”, in the case of a qualifying charity, is the lower of P1 and P2, where—

P1 is the proportion of the subject-matter of the transaction that is acquired by all the qualifying charities that are purchasers under the transaction (in aggregate);
P2 is the proportion of the chargeable consideration for the transaction that is given by all the qualifying charities that are purchasers under the transaction (in aggregate).

Withdrawal of relief given under paragraph 3A¶

1 This paragraph applies where—

a relief has been given under paragraph 3A in respect of a transaction (“the relevant transaction”),

b a disqualifying event occurs in relation to a qualifying charity (“C”) which was a purchaser under the transaction, and

c the disqualifying event occurs in the circumstances required by sub-paragraphs (2) and (3).

2 The disqualifying event must occur—

a before the end of the period of 3 years beginning with the effective date of the transaction, or

b in pursuance of, or in connection with, arrangements made before the end of that period.

3 At the time of the disqualifying event C must hold a chargeable interest that—

a was acquired by C under the relevant transaction, or

b is derived from an interest so acquired.

4 There is a “disqualifying event” in relation to C if —

a C ceases to be established for charitable purposes only, or

b the chargeable interest acquired by C under the transaction, or any interest or right derived from that interest, is used or held by C otherwise than for qualifying charitable purposes.

5 C's portion of the relief mentioned in sub-paragraph (1)(a), or an appropriate proportion of C's portion of that relief, is withdrawn and tax is chargeable in accordance with this paragraph.

6 The amount chargeable is equal to C's portion of the relief or, as the case may be, the appropriate proportion of C's portion of the relief.

7 C's portion of the relief depends on whether P1 or P2 was lower in the calculation under paragraph 3A(5).

8 If P1 was lower, C's portion of the relief is equal to—

\frac{p1}{P1} \times R

where—

p1 is the proportion of the subject-matter of the transaction that was acquired by C under the transaction;

P1 has the same meaning as in paragraph 3A(5);

9 If P2 was lower, C's portion of the relief is equal to—

\frac{p2}{P2} \times R

where—

p2 is the proportion of chargeable consideration for the transaction that was given by C;

P2 has the same meaning as in paragraph 3A(5);

10 In sub-paragraphs (5) and (6) “appropriate proportion” means an appropriate proportion having regard to—

a what was acquired by C under the relevant transaction and what is held by C at the time of the disqualifying event, and

b the extent to which what is held by C at that time becomes used or held for purposes other than qualifying charitable purposes.

Partial relief: charity not fully meeting the “qualifying charity” condition¶

1 This paragraph applies where—

a a charity (“C”) is one of two or more purchasers acquiring the subject-matter of a land transaction (“the relevant transaction”) as tenants in common (or, in Scotland, as owners in common),

b C is not a qualifying charity in relation to the transaction,

c paragraph 3A(3) to (5) would apply if C were a qualifying charity, and

d C intends to hold the greater part of its undivided share of the subject-matter of the transaction for qualifying charitable purposes.

2 In such a case—

a paragraph 3A has effect as if C were a qualifying charity, but

b for the purposes of paragraph 3B (withdrawal of relief under paragraph 3A) “disqualifying event” includes any additional disqualifying transaction.

3 The following are “additional disqualifying transactions” if they are not made in furtherance of the charitable purposes of C—

a any transfer by C of a major interest in the whole or any part of the chargeable interest acquired by C under the relevant transaction;

b any grant by C at a premium of a low-rental lease of the whole or any part of that chargeable interest.

4 Paragraph 3(3) (meaning of “at a premium” and “low-rental”) applies for the purposes of sub-paragraph (3)(b) as it applies for the purposes of paragraph 3(2)(b)(ii).

5 In relation to a transaction that, by virtue of this paragraph, is a disqualifying event for the purposes of paragraph 3B—

a the date of the event for those purposes is the effective date of the transaction;

b paragraph 3B has effect with the modifications in sub-paragraph (6).

6 The modifications to paragraph 3B are—

a in sub-paragraph (3), for “At the time of” substitute “ Immediately before ”;

b in sub-paragraph (10)(a), for “at the time of” substitute “ immediately before and immediately after ”;

c omit sub-paragraph (10)(b).

Charitable trusts¶

1 This Schedule applies in relation to a charitable trust as it applies in relation to a charity.

2 In this paragraph “charitable trust” means—

a a trust of which all the beneficiaries are charities, or

b a unit trust scheme in which all the unit holders are charities,

^F653...

3 In this Schedule as it applies by virtue of this paragraph—

a references in paragraph 1(3A) to the charitable purposes of C are to those of the beneficiaries or unit holders, or any of them;

b the references to the purchaser in paragraph 2(3)(a), and to C in paragraph 3B(4)(a), are to any of the beneficiaries or unit holders;

c the references in paragraphs 3(2)(b) and 3C(3) to the charitable purposes of C are to those of the beneficiaries or unit holders, or any of them.

^C46SCHEDULE 9 ¶

Stamp duty land tax: right to buy, shared ownership leases etc

Section 70

Right to buy transactions¶

1 In the case of a right to buy transaction—

a section 51(1) (contingent consideration to be included in chargeable consideration on assumption that contingency will occur) does not apply, and

b any consideration that would be payable only if a contingency were to occur, or that is payable only because a contingency has occurred, does not count as chargeable consideration.

2 A “right to buy transaction” means—

a the sale of a dwelling at a discount, or the grant of a lease of a dwelling at a discount, by a relevant public sector body, or

b the sale of a dwelling, or the grant of a lease of a dwelling, in pursuance of the preserved right to buy.

^C133 The following are relevant public sector bodies for the purposes of sub-paragraph (2)(a):

Government
A Minister of the Crown
The Scottish Ministers
A Northern Ireland department
Local Government
A local housing authority within the meaning of the Housing Act 1985 (c. 68)
A county council in England
A council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 (c. 39), the common good of such a council or any trust under its control
A district council within the meaning of the Local Government Act (Northern Ireland) 1972 (c. 9 (N.I.))
Social housing
The Regulator of Social Housing
Scottish Homes
The Northern Ireland Housing Executive
A non-profit registered provider of social housing
A registered social landlord
A housing action trust established under Part 3 of the Housing Act 1988 (c. 50)
New towns and development corporations etc.
The Homes and Communities Agency
The Greater London Authority so far as exercising its housing or regeneration functions or its new towns and urban development functions
A development corporation established by an order made, or having effect as if made, under the New Towns Act 1981 (c. 64)
A development corporation established by an order made, or having effect as if made, under the New Towns (Scotland) Act 1968 (c. 16)
A new town commission established under section 7 of the New Towns Act (Northern Ireland) 1965 (c. 13 (N.I.))
An urban development corporation established by an order made under section 135 of the Local Government, Planning and Land Act 1980 (c. 65)
^F168. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Police
A local policing body within the meaning of section 101(1) of the Police Act 1996 (c. 16)
The Scottish Police Authority
The Northern Ireland Policing Board
Miscellaneous
An Education and Libraries Board within the meaning of the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3))
The United Kingdom Atomic Energy Authority
Any person mentioned in paragraphs (g), (k), (l) or (n) of section 61(11) of the Housing (Scotland) Act 1987 (c. 26)
A body prescribed for the purposes of this sub-paragraph by Treasury order.

4 For the purposes of sub-paragraph (2)(b) the transfer of a dwelling, or the grant of a lease of a dwelling, is made in pursuance of the preserved right to buy if—

a the vendor is—

i in England and Wales, a person against whom the right to buy under Part 5 of the Housing Act 1985 (c. 68) is exercisable by virtue of section 171A of that Act, or

ii in Scotland, a person against whom the right to buy under section 61 of the Housing (Scotland) Act 1987 is exercisable by virtue of section 81A of that Act,

(which provide for the preservation of the right to buy on disposal to a private sector landlord),

b the purchaser is the qualifying person for the purposes of the preserved right to buy, and

c the dwelling is the qualifying dwelling-house in relation to the purchaser.

^F10195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 A grant under section 19 of the Housing and Regeneration Act 2008 which—

a is made by virtue of section 35 of that Act, or

b is otherwise made to a relevant provider of social housing (within the meaning of section 35 of that Act) in respect of discounts given by the provider on disposals of dwellings to tenants,

does not count as part of the chargeable consideration for a right to buy transaction to which the vendor is a relevant provider of social housing.

7 A grant by the Greater London Authority which—

a is made by virtue of section 35 of the Housing and Regeneration Act 2008 as applied by section 333ZE of the Greater London Authority Act 1999, or

b is otherwise made to a relevant provider of social housing (within the meaning of section 35 of the Housing and Regeneration Act 2008) in respect of discounts given by the provider on disposals of dwellings to tenants,

does not count as part of the chargeable consideration for a right to buy transaction to which the vendor is a relevant provider of social housing.

Shared ownership lease: election for market value treatment¶

1 This paragraph applies where—

a a lease is granted—

i by a qualifying body, or

ii in pursuance of the preserved right to buy,

b the conditions in sub-paragraph (2) are met, and

c the purchaser elects for tax to be charged in accordance with this paragraph.

2 The conditions are as follows—

a the lease must be of a dwelling;

b the lease must give the lessee or lessees exclusive use of the dwelling;

c the lease must provide for the lessee or lessees to acquire the reversion;

d the lease must be granted partly in consideration of rent and partly in consideration of a premium calculated by reference to—

i the market value of the dwelling, or

ii a sum calculated by reference to that value;

e the lease must contain a statement of—

i the market value of the dwelling, or

ii the sum calculated by reference to that value,

by reference to which the premium is calculated.

3 An election for tax to be charged in accordance with this paragraph must be included in the land transaction return made in respect of the grant of the lease, or in an amendment of that return, and is irrevocable, so that the return may not be amended so as to withdraw the election.

4 Where this paragraph applies the chargeable consideration for the grant of the lease shall be taken to be the amount stated in the lease in accordance with sub-paragraph (2)(e)(i) or (ii).As to the tax treatment of the acquisition of the reversion in pursuance of the lease, see paragraph 3.

4A Where this paragraph applies no account shall be taken for the purposes of stamp duty land tax of the rent mentioned in sub-paragraph (2)(d).

5 Section 118 (meaning of “market value”) does not apply in relation to the reference in sub-paragraph (2)(e) above to the market value of the dwelling.

Transfer of reversion under shared ownership lease where election made for market value treatment¶

3The transfer of the reversion to the lessee or lessees under the terms of a lease to which paragraph 2 applies (shared ownership lease: election for market value treatment) is exempt from charge if—

a an election was made for tax to be charged in accordance with that paragraph, and

b any tax chargeable in respect of the grant of the lease has been paid.

Shared ownership lease: election where staircasing allowed¶

1 This paragraph applies where—

a a lease is granted by a qualifying body or in pursuance of the preserved right to buy,

b the conditions in sub-paragraph (2) below are met, and

c the purchaser elects for tax to be charged in accordance with this paragraph.

2 The conditions are as follows—

a the lease must be of a dwelling;

b the lease must give the lessee or lessees exclusive use of the dwelling;

c the lease must provide that the lessee or lessees may, on the payment of a sum, require the terms of the lease to be altered so that the rent payable under it is reduced;

d the lease must be granted partly in consideration of rent and partly in consideration of a premium calculated by reference to—

i the premium obtainable on the open market for the grant of a lease containing the same terms as the lease but with the substitution of the minimum rent for the rent payable under the lease, or

ii a sum calculated by reference to that premium;

e the lease must contain a statement of the minimum rent and of—

i the premium obtainable on the open market, or

ii the sum calculated by reference to that premium,

by reference to which the premium is calculated.

4 Where this paragraph applies—

a the rent in consideration of which the lease is granted shall be taken to be the minimum rent stated in the lease in accordance with sub-paragraph (2)(e), and

b the chargeable consideration for the grant other than rent shall be taken to be the amount stated in the lease in accordance with sub-paragraph (2)(e)(i) or (ii).

4A See paragraph 15 for further provision in connection with relief for first-time buyers.

5 In this paragraph the “minimum rent” means the lowest rent which could become payable under the lease if it were altered as mentioned in sub-paragraph (2)(c) at the date when the lease is granted.

Shared ownership lease: treatment of staircasing transaction¶

1 This paragraph applies where under a shared ownership lease—

a the lessee or lessees have the right, on the payment of a sum, to require the terms of the lease to be altered so that the rent payable under it is reduced, and

b by exercising that right the lessee or lessees acquire an interest, additional to one already held, calculated by reference to the market value of the dwelling and expressed as a percentage of the dwelling or its value (a “share of the dwelling”).

2 Such an acquisition is exempt from charge if—

a an election was made for tax to be charged in accordance with paragraph 2 or, as the case may be, paragraph 4 and any tax chargeable in respect of the grant of the lease has been paid, or

b immediately after the acquisition the total share of the dwelling held by the lessee or lessees does not exceed 80%.

3 In this paragraph “shared ownership lease” means a lease granted—

a by a qualifying body, or

b in pursuance of the preserved right to buy,

in relation to which the conditions in paragraph 2(2) or 4(2) are met.

4 Section 118 (meaning of “market value”) does not apply in relation to the references in this paragraph to the market value of the dwelling.

Shared ownership lease: grant not linked with staircasing transactions etc¶

1 For the purpose of determining the amount of tax chargeable on the grant of a shared ownership lease of a dwelling, the grant shall be treated as if it were not linked to—

a any acquisition of an interest in the dwelling to which paragraph 4A applies, or

b a transfer of the reversion to the lessee or lessees under the terms of the lease.

2 In this paragraph “shared ownership lease” has the same meaning as in paragraph 4A.

Shared ownership leases: meaning of “qualifying body” and “preserved right to buy”¶

1 This paragraph has effect for the purposes of paragraphs 2, 4 and 4A (shared ownership leases: election as to basis of taxation).

2 A “qualifying body” means—

a a local housing authority within the meaning of the Housing Act 1985 (c. 68);

b a housing association within the meaning of—

i the Housing Associations Act 1985 (c. 69), or

ii Part 2 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15));

c a housing action trust established under Part 3 of the Housing Act 1988 (c. 50);

d the Northern Ireland Housing Executive;

e the Homes and Communities Agency;

ea the Greater London Authority so far as exercising its housing or regeneration functions or its new towns and urban development functions;

f a development corporation established by an order made, or having effect as if made, under the New Towns Act 1981 (c. 64).

g a private registered provider of social housing that is not within paragraph (b) (subject to sub-paragraph (2A)).

2A A private registered provider of social housing within sub-paragraph (2)(g) (“R”) is only a qualifying body in relation to a lease of premises if the following has been funded with the assistance of a grant or other financial assistance made or given under section 19 of the Housing and Regeneration Act 2008 or by the Greater London Authority —

a the purchase or construction of the premises by R (or a person connected with R), or

b the adaptation of the premises by R (or a person connected with R) for use as a dwelling.

2B Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of sub-paragraph (2A).

3 A lease is granted “in pursuance of the preserved right to buy” if—

a the vendor is a person against whom the right to buy under Part 5 of the Housing Act 1985 is exercisable by virtue of section 171A of that Act (preservation of right to buy on disposal to private sector landlord),

b the lessee is, or lessees are, the qualifying person for the purposes of the preserved right to buy, and

c the lease is of a dwelling that is the qualifying dwelling-house in relation to the purchaser.

Rent to mortgage or rent to loan: chargeable consideration¶

1 The chargeable consideration for a rent to mortgage or rent to loan transaction is determined in accordance with this paragraph.

2 A “rent to mortgage transaction” means—

a the transfer of a dwelling to a person, or

b the grant of a lease of a dwelling to a person,

pursuant to the exercise by that person of the right to acquire on rent to mortgage terms under Part 5 of the Housing Act 1985 (c. 68).

3 The chargeable consideration for such a transaction is equal to the price that, by virtue of section 126 of the Housing Act 1985, would be payable for—

a a transfer of the dwelling to the person (where the rent to mortgage transaction is a transfer), or

b the grant of a lease of the dwelling to the person (where the rent to mortgage transaction is the grant of a lease),

if the person were exercising the right to buy under Part 5 of that Act.

4 A “rent to loan transaction” means the execution of a heritable disposition in favour of a person pursuant to the exercise by that person of the right to purchase a house by way of the rent to loan scheme in Part 3 of the Housing (Scotland) Act 1987 (c. 26).

5 The chargeable consideration for such a transaction is equal to the price that, by virtue of section 62 of the Housing (Scotland) Act 1987, would be payable for the house if the person were exercising the right to purchase under section 61 of that Act.

Shared ownership trust: introduction¶

1 In this Schedule “shared ownership trust” means a trust of land, within the meaning of section 1 of the Trusts of Land and Appointment of Trustees Act 1996, which satisfies the following conditions.

2 Condition 1 is that the trust property is—

a a dwelling, and

b in England ^F1014...

3 Condition 2 is that one of the beneficiaries (“the social landlord”) is a qualifying body ^F513....

4 Condition 3 is that the terms of the trust—

a provide for one or more of the individual beneficiaries (“the purchaser”) to have exclusive use of the trust property as the only or main residence of the purchaser,

b require the purchaser to make an initial payment to the social landlord (“the initial capital”),

c require the purchaser to make additional payments to the social landlord by way of compensation under section 13(6)(a) of the Trusts of Land and Appointment of Trustees Act 1996 (“rent-equivalent payments”),

d enable the purchaser to make other additional payments to the social landlord (“equity-acquisition payments”),

e determine the initial beneficial interests of the social landlord and of the purchaser by reference to the initial capital,

f specify a sum, equating or relating to the market value of the dwelling, by reference to which the initial capital was calculated, and

g provide for the purchaser's beneficial interest in the trust property to increase, and the social landlord's to diminish (or to be extinguished), as equity-acquisition payments are made.

5 Section 118 (meaning of “market value”) does not apply to this paragraph.

6 In Condition 1 “dwelling” includes—

a a building which is being constructed or adapted for use as a dwelling,

b land which is to be used for the purpose of the construction of a dwelling, and

c land which is, or is to become, the garden or grounds of a dwelling.

7 In Condition 2 “qualifying body” means—

a a qualifying body within the meaning of paragraph 5(2)(a) to (f), or

b a private registered provider of social housing within paragraph 5(2)(g) (subject to sub-paragraph (8)).

8 A private registered provider of social housing within paragraph 5(2)(g) (“R”) is only a qualifying body in relation to a shared ownership trust if the following has been or is being funded with the assistance of a grant or other financial assistance made or given under section 19 of the Housing and Regeneration Act 2008 or by the Greater London Authority —

a the purchase or construction of the trust property by R (or a person connected with R), or

b the adaptation of the trust property by R (or a person connected with R) for use as a dwelling.

9 Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of sub-paragraph (8).

Shared ownership trust: “purchaser”¶

8For the purposes of the application of stamp duty land tax in relation to a shared ownership trust, the person (or persons) identified as the purchaser in accordance with paragraph 7, and not the social landlord or any other beneficiary, is (or are) to be treated as the purchaser of the trust property.

Shared ownership trust: election for market value treatment¶

1 This paragraph applies where—

a a shared ownership trust is declared, and

b the purchaser elects for tax to be charged in accordance with this paragraph.

2 An election must be included in—

a the land transaction return for the declaration of the shared ownership trust, or

b an amendment of that return.

3 An election may not be revoked.

4 Where this paragraph applies—

a the chargeable consideration for the declaration of the shared ownership trust shall be taken to be the amount stated in accordance with paragraph 7(4)(f), and

b no account shall be taken for the purposes of stamp duty land tax of rent-equivalent payments.

5 The transfer to the purchaser of an interest in the trust property upon the termination of the trust is exempt from charge if—

a an election was made under this paragraph, and

b any tax chargeable in respect of the declaration of the shared ownership trust has been paid.

Shared ownership trust: treatment of staircasing transaction¶

1 An equity-acquisition ^F355... payment under a shared ownership trust, and the consequent increase in the purchaser's beneficial interest, shall be exempt from charge if—

a an election was made under paragraph 9, and

b any tax chargeable in respect of the declaration of trust has been paid.

2 An equity-acquisition ^F356... payment under a shared ownership trust, and the consequent increase in the purchaser's beneficial interest, shall also be exempt from charge if following the increase the purchaser's beneficial interest does not exceed 80% of the total beneficial interest in the trust property.

Shared ownership trust: treatment of additional payments where no election made¶

11Where no election has been made under paragraph 9 in respect of a shared ownership trust—

a the initial capital shall be treated for the purposes of stamp duty land tax as chargeable consideration other than rent, and

b any rent-equivalent ^F357... payment by the purchaser shall be treated for the purposes of stamp duty land tax as a payment of rent.

Shared ownership trust: declaration not linked with staircasing transactions etc¶

12For the purpose of determining the amount of tax chargeable on the declaration of a shared ownership trust, the declaration shall be treated as if it were not linked to—

a any equity-acquisition payment under the trust or any consequent increase in the purchaser's beneficial interest in the trust property, or

b a transfer to the purchaser of an interest in the trust property upon the termination of the trust.

Rent to shared ownership lease: charge to tax¶

1 The chargeable consideration for transactions forming part of a rent to shared ownership lease scheme is determined in accordance with this paragraph.

2 A “rent to shared ownership lease scheme” means a scheme or arrangement under which a qualifying body—

a grants an assured shorthold tenancy of a dwelling to a person (“the tenant”) or persons (“the tenants”), and

b subsequently grants a shared ownership lease of the dwelling or another dwelling to the tenant or one or more of the tenants.

3 The following transactions are to be treated as if they were not linked to each other—

a the grant of the assured shorthold tenancy,

b the grant of the shared ownership lease, and

c any other land transaction between the qualifying body and the tenant, or any of the tenants, entered into as part of the scheme.

4 For the purpose of determining the effective date of the grant of the shared ownership lease, the possession of the dwelling by the tenant or tenants pursuant to the assured shorthold tenancy is to be disregarded.

5 In this paragraph—

“assured shorthold tenancy” has the same meaning as in Part 1 of the Housing Act 1988;
“qualifying body” has the same meaning as in paragraph 5;
“shared ownership lease” has the same meaning as in paragraph 4A.

Rent to shared ownership trust: charge to tax¶

1 The chargeable consideration for transactions forming part of a rent to shared ownership trust scheme is determined in accordance with this paragraph.

2 A “rent to shared ownership trust scheme” means a scheme or arrangement under which—

a a qualifying body grants an assured shorthold tenancy of a dwelling to a person (“the tenant”) or persons (“the tenants”), and

b the tenant, or one or more of tenants, subsequently becomes the purchaser under a shared ownership trust of the dwelling, or another dwelling, under which the qualifying body is the social landlord.

3 The following transactions are to be treated as if they were not linked to each other—

a the grant of the assured shorthold tenancy,

b the declaration of the shared ownership trust, and

c any other land transaction between the qualifying body and the tenant, or any of the tenants, entered into as part of the scheme.

4 For the purpose of determining the effective date of the declaration of the shared ownership trust, the possession of the dwelling by the tenant or tenants pursuant to the assured shorthold tenancy is to be disregarded.

5 In this paragraph—

“assured shorthold tenancy” has the same meaning as in Part 1 of the Housing Act 1988;
“qualifying body” has the same meaning as in paragraph 5;
“social landlord” and “purchaser”, in relation to a shared ownership trust, have the same meaning as in paragraph 7.

Relief for first-time buyers: shared ownership lease where election made¶

15Where—

a paragraph 4 applies, and

b relief is claimed under paragraph 1 of Schedule 6ZA in respect of the grant of the lease concerned,

no tax is chargeable in respect of so much of the chargeable consideration for the grant as consists of rent.

Relief for first-time buyers: shared ownership lease where no election made¶

15A

1 This paragraph applies where—

a a shared ownership lease is granted, and

b no election is made for tax to be charged in accordance with paragraph 2 or 4.

2 For the purpose of determining whether the second condition in paragraph 1 of Schedule 6ZA is met in respect of the grant, the chargeable consideration for the grant is to be treated as being the amount stated in the lease in accordance with paragraph 2(2)(e) or paragraph 4(2)(e)(i) or (ii).

3 If relief is claimed in respect of the grant under paragraph 1 of Schedule 6ZA no tax is chargeable in respect of so much of the chargeable consideration for the grant as consists of rent.

4 In this paragraph “shared ownership lease” has the same meaning as in paragraph 4A.

Relief for first-time buyers: shared ownership trust where no election made¶

15B

1 This paragraph applies where—

a a shared ownership trust is declared, and

b no election is made for tax to be charged in accordance with paragraph 9.

2 For the purpose of determining whether the second condition in paragraph 1 of Schedule 6ZA is met in respect of the declaration, the chargeable consideration for the declaration is to be treated as being the sum specified in the trust in accordance with paragraph 7(4)(f).

3 If relief is claimed in respect of the declaration under paragraph 1 of Schedule 6ZA no tax is chargeable in respect of any rent-equivalent payment treated by reason of paragraph 11(b) as rent.

No relief for first-time buyers for staircasing transactions etc¶

1 This paragraph applies where—

^F1021a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F1022b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c paragraph 4A applies in relation to the acquisition of an interest (but the acquisition is not exempt from charge by virtue of sub-paragraph (2) of that paragraph),

^F1023d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or

e an equity-acquisition payment is made under a shared ownership trust (but the equity-acquisition payment, and the consequential increase in the purchaser's beneficial interest, are not exempt from charge by virtue of paragraph 10).

2 Schedule 6ZA (relief for first-time buyers) does not apply in relation to—

^F1024a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b the acquisition of the interest,

^F1025c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or

d the equity-acquisition payment and the consequential increase in the purchaser's beneficial interest.

SCHEDULE 9A ¶

Increased rates for non-resident transactions

Section 75ZA

PART 1 Introduction¶

1This Schedule is arranged as follows—

a Part 2 explains how to determine for the purposes of this Part of this Act whether a chargeable transaction is a “non-resident transaction”;

b Part 3 explains how to determine for the purposes of this Schedule whether an individual is “non-resident” in relation to a chargeable transaction;

c Part 4 explains how to determine for the purposes of this Schedule whether a company is “non-resident” in relation to a chargeable transaction;

d Part 5 contains special rules applying in relation to particular purchasers and transactions;

e Part 6 contains supplementary provision.

PART 2 Meaning of “non-resident transaction”¶

2 Meaning of “non-resident transaction”¶

1 A chargeable transaction is a “non-resident transaction” for the purposes of this Part of this Act if—

a the purchaser is, or (if there is more than one) the purchasers include, a person who is non-resident in relation to the transaction,

b the main subject-matter of the transaction consists of—

i a major interest in one or more dwellings, or

ii a major interest in one or more dwellings and other property,

c that major interest, at the beginning of the effective date of the transaction, is not a term of years absolute or leasehold estate that has 7 years or less to run, and

d the de minimis threshold is exceeded.

2 A reference in sub-paragraph (1)(b) or (c) to a major interest in a dwelling includes an undivided share in a major interest in a dwelling.

3 For the purposes of sub-paragraph (1)(d), the de minimis threshold is exceeded if—

a in a case in which the chargeable consideration for the transaction does not consist of or include rent, the chargeable consideration for the transaction is £40,000 or more;

b in a case in which the chargeable consideration for the transaction consists of or includes rent—

i the chargeable consideration other than rent is £40,000 or more, or

ii the annual rent is £1,000 or more.

4 In sub-paragraph (3) “annual rent” in relation to a transaction, means the average annual rent over the term of the lease to which the transaction relates or, if—

a different amounts of rents are payable for different parts of the term, and

b those amounts (or any of them) are ascertainable at the effective date of the transaction,

the average annual rent over the period for which the highest ascertainable rent is payable.

5 For provision modifying sub-paragraph (1)(a) in its application to chargeable transactions of particular descriptions, see—

paragraph 13 (bare trust acquiring new lease);
paragraph 14 (purchases by certain settlements).

6 Sub-paragraph (1) is subject to paragraph 17 (completion of contract previously substantially performed).

PART 3 “Non-resident” in relation to a chargeable transaction: individuals¶

3 Whether individual “non-resident” in relation to a chargeable transaction¶

For the purposes of this Schedule, an individual is “non-resident” in relation to a chargeable transaction if the individual is not UK resident in relation to the transaction (see paragraphs 4 and 5).

4 Whether individual “UK resident” in relation to a chargeable transaction: basic rule¶

1 For the purposes of this Schedule, an individual is “UK resident” in relation to a chargeable transaction if the individual is present in the United Kingdom on at least 183 days during any continuous period of 365 days that falls within the relevant period.

2 “The relevant period” means the period that—

a begins with the day 364 days before the effective date of the chargeable transaction, and

b ends with the day 365 days after the effective date of the chargeable transaction.

3 This paragraph does not apply in relation to a chargeable transaction to which paragraph 5 applies.

4 References in this paragraph to an individual being present in the United Kingdom on a day are to the individual being present in the United Kingdom at the end of that day.

5 This paragraph is subject to paragraph 12 (spouses and civil partners of UK residents).

5 Whether individual “UK resident” in relation to a chargeable transaction: special cases¶

1 For the purposes of this Schedule, an individual is “UK resident” in relation to a chargeable transaction to which this paragraph applies if the individual is present in the United Kingdom on at least 183 days during the period that—

a begins with the day 364 days before the effective date of the chargeable transaction, and

b ends with the effective date of the chargeable transaction.

2 This paragraph applies to a chargeable transaction if any of conditions A to C is met in relation to the transaction.

3 Condition A is that the purchaser is, or (if there is more than one) the purchasers include—

a a company, or

b a person acting as a trustee of a unit trust scheme.

4 Condition B is that the purchaser is, or (if there is more than one) the purchasers include, an individual who is treated as entering into the transaction by virtue of paragraph 2 of Schedule 15 (transaction entered into for the purposes of a partnership treated as entered into by partners).

5 Condition C is that—

a the purchaser is, or (if there is more than one) the purchasers include, an individual who is acting as a trustee of a settlement, and

b under the terms of the settlement no beneficiary is entitled—

i to occupy the dwelling or dwellings for life, or

ii to income earned in respect of the dwelling or dwellings.

6 References in this paragraph to an individual being present in the United Kingdom on a day are to the individual being present in the United Kingdom at the end of that day.

7 This paragraph is subject to paragraph 12 (spouses and civil partners of UK residents).

6 Crown employment¶

1 For the purposes of paragraphs 4 and 5, an individual is (subject to sub-paragraph (3)) treated as present in the United Kingdom at the end of a day if at that time the individual—

a is in Crown employment, and

b is present in a country or territory outside the United Kingdom for the purpose of performing activities in the course of that employment.

2 For the purposes of paragraphs 4 and 5, an individual is (subject to sub-paragraph (3)) treated as present in the United Kingdom at the end of a day if at that time the individual—

a is the spouse or civil partner of an individual who is treated as present in the United Kingdom at the end of that day under sub-paragraph (1), and

b is living with that spouse or civil partner.

3 Sub-paragraph (1) or (2) applies in relation to an individual only if a claim that it should so apply is included in a land transaction return or an amendment of such a return.

4 “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 Northern Ireland.

5 Section 1011 of the Income Tax Act 2007 (references to married persons, or civil partners, living together) applies for the purposes of this paragraph.

PART 4 “Non-resident” in relation to a chargeable transaction: companies¶

7 Whether company is “non-resident” in relation to a chargeable transaction¶

1 For the purposes of this Schedule a company is “non-resident” in relation to a chargeable transaction if either of the following conditions is met.

2 The first condition is that, on the effective date of the chargeable transaction, the company is not UK resident for the purposes of the Corporation Tax Acts (see Chapter 3 of Part 2 of CTA 2009).

3 The second condition is that, on the effective date of the chargeable transaction, the company (though UK resident for the purposes of the Corporation Tax Acts)—

a is a close company (see paragraph 8),

b meets the non-UK control test in relation to the transaction (see paragraphs 9 and 10), and

c is not an excluded company (see paragraph 11).

4 This paragraph is subject to—

a paragraph 15 (co-ownership ^F1287... contractual schemes);

b paragraph 16 (alternative property finance).

8 Meaning of “close company”¶

1 For the purposes of this Schedule, a company is a “close company” if it is a close company within the meaning given by Chapter 2 of Part 10 of CTA 2010 (basic definitions), applying that Chapter subject to the following modifications.

2 Section 444 (companies involved with close companies) applies as if condition A in that section were omitted.

3 Section 446 (particular types of quoted company not treated as close) is treated as omitted.

9 Non-UK control¶

1 For the purposes of this Schedule, a company meets the “non-UK control test” in relation to a chargeable transaction if it is a close company within the meaning given by Chapter 2 of Part 10 of CTA 2010 (basic definitions), applying that Chapter subject to the following modifications.

2 Section 439 (“close company”) applies as if—

a references to a participator were to a relevant participator, and

b references to five or fewer participators were to any number of relevant participators.

3 In sub-paragraph (2), “relevant participator” means a participator (within the meaning given by Chapter 2 of Part 10 of CTA 2010) who—

a is non-resident in relation to the chargeable transaction (within the meaning of this Schedule), and

b is not a general partner in a limited partnership.

4 Section 444 (companies involved with close companies) applies as if condition A in that section were omitted.

5 Section 446 (particular types of quoted company not treated as close) is treated as omitted.

6 Section 451 (attribution of rights and powers) has effect subject to the limitations set out in paragraph 10.

7 The reference in sub-paragraph (3)(b) to a general partner does not include a general partner who possesses, or is entitled to acquire, rights that entitle the general partner, in the event of the winding up of the company or in any other circumstances, to receive more than 1% of the assets of the company which would then be available for distribution among its members.

10 Non-UK control: attribution of rights and powers¶

1 This paragraph sets out limitations on the rights and powers of a person (A) that, apart from this paragraph, would be capable of being attributed to another person (B) under section 451(4) of CTA 2010, as that provision applies for the purposes of paragraph 9(1).

2 Where A and B are partners in a partnership, no rights and powers of A may be attributed to B under paragraph (c) or (d) of section 451(4) of CTA 2010 by virtue of that fact.

3 Where—

a A and B are spouses or civil partners of each other,

b A and B are living together, and

c A is UK resident in relation to the chargeable transaction,

no rights and powers of A may be attributed to B under paragraph (c) or (d) of section 451(4) of CTA 2010 by virtue of the fact mentioned in paragraph (a).

4 Where A’s or B’s interest in a company is de minimis, no rights and powers of A in relation to the company may be attributed to B under any of paragraphs (a) to (d) of section 451(4) of CTA 2010.

5 For this purpose, a person’s interest in a company is “de minimis” if—

a the proportion of the share capital or issued share capital in the company that the person possesses or is entitled to acquire is less than 5%,

b the proportion of the voting rights in the company that the person possesses or is entitled to acquire is less than 5%,

c the issued share capital in the company that the person possesses or is entitled to acquire would, on the assumption that the whole of the income of the company were distributed among the participators, entitle the person to receive less than 5% of the income so distributed, and

d the person’s rights in the company entitle the person, in the event of the winding up of the company or in any other circumstances, to less than 5% of the assets of the company which would then be available for distribution among the participators.

6 Any rights A has as a loan creditor are to be disregarded for the purposes of the assumption in sub-paragraph (5)(c).

7 Section 1011 of the Income Tax Act 2007 (references to married persons, or civil partners, living together) applies for the purposes of this paragraph.

11 Excluded companies¶

1 A company is an “excluded company” for the purposes of paragraph 7(3)(c) if it is any of the following—

a a PAIF;

b a body corporate that is a 51% subsidiary of PAIF;

c a company UK REIT;

d a company that is a member of a group UK REIT;

e a company acting as a trustee of a settlement.

2 In this paragraph—

a “PAIF” means a body corporate that is a property AIF for the purposes of Schedule 7A to this Act by virtue of paragraph 2(2) of that Schedule;

b “51% subsidiary” has the same meaning as in the Corporation Tax Acts (see Chapter 3 of Part 24 of CTA 2010);

c “company UK REIT” has the same meaning as in Part 12 of CTA 2010 (see section 524(5) of that Act);

d “group UK REIT” has the same meaning as in Part 12 of CTA 2010 (see section 523(5) of that Act).

PART 5 Special rules for particular purchasers and transactions¶

12 Spouses and civil partners of UK residents¶

1 This paragraph applies where—

a there are two or more purchasers in relation to a chargeable transaction who are or will be jointly entitled to the interest acquired, and

b the following conditions are met in relation to those purchasers.

2 The conditions are—

a that, on the effective date of the transaction, the purchasers, or (if there are more than two) two of them, are spouses or civil partners of each other;

b that, on the effective date of the transaction, those spouses or civil partners are living together;

c that one of those spouses or civil partners is UK resident in relation to the chargeable transaction;

d that (apart from this paragraph) one of those spouses or civil partners is non-resident in relation to the chargeable transaction;

e that neither of the spouses or civil partners is acting as a trustee of a settlement.

3 For the purposes of this Schedule, the spouse or civil partner mentioned in sub-paragraph (2)(d) is UK resident in relation to the chargeable transaction.

4 Section 1011 of the Income Tax Act 2007 (references to married persons, or civil partners, living together) applies for the purposes of this paragraph.

13 Bare trust acquiring new lease¶

1 Sub-paragraph (2) applies to a chargeable transaction if—

a the purchaser is, or (if there is more than one) the purchasers include, a person (P) who is acting as a trustee of a bare trust, and

b paragraph 3(3) of Schedule 16 (trustee of bare trust granted a lease treated as purchaser of the whole of the interest acquired) applies in relation to P.

2 In determining for the purposes of this Part of this Act whether the chargeable transaction is a “non-resident transaction”, paragraph 2(1)(a) (condition that purchaser be non-resident) has effect as if a reference to the purchaser or purchasers—

a included the beneficiary or beneficiaries of the bare trust, and

b did not include P.

14 Purchase by settlement if beneficiary entitled to occupy, or to income from, dwelling¶

1 Sub-paragraph (2) applies to a chargeable transaction if—

a the purchaser is, or (if there is more than one) the purchasers include, a person (P) who is acting as a trustee of a settlement, and

b under the terms of the settlement a beneficiary is entitled—

i to occupy the dwelling or dwellings for life, or

ii to income earned in respect of the dwelling or dwellings.

a included the beneficiary or beneficiaries of the settlement, and

b did not include P.

3 In this paragraph “settlement” does not include a settlement under a unit trust scheme.

15 Co-ownership ^F1288... contractual schemes¶

1 Subject to sub-paragraph (2), a co-ownership authorised contractual scheme is not “non-resident” in relation to any chargeable transaction.

2 A collective investment scheme that is a co-ownership authorised contractual scheme by virtue of section 102A(7) (EEA schemes) is “non-resident” in relation to all chargeable transactions.

3 A Reserved Investor Fund (Contractual Scheme) is not “non-resident” in relation to any chargeable transaction.

16 Alternative property finance¶

1 Sub-paragraph (2) applies in relation to a chargeable transaction within section 71A(1)(a) (purchase of land by financial institution as part of alternative property finance arrangements).

2 The financial institution that enters into the transaction is “non-resident” in relation to the transaction if and only if the person with whom it enters into the arrangements mentioned in section 71A(1) is non-resident in relation to the transaction.

3 Sub-paragraph (4) applies in relation to a chargeable transaction within section 73(1)(a)(i) (purchase of land by financial institution as part of alternative property finance arrangements).

4 The financial institution that enters into the transaction is “non-resident” in relation to the transaction if and only if the person with whom it enters into the arrangements mentioned in section 73(1) is non-resident in relation to the transaction.

17 Completion of contract previously substantially performed¶

In a case within section 44(8) (contract substantially performed and subsequently completed by a conveyance) the later of the notifiable transactions mentioned in that provision is a “non-resident transaction” for the purposes of this Part if and only if the earlier of those notifiable transactions is a non-resident transaction for the purposes of this Part.

PART 6 Supplementary provision¶

18 Completion of land transaction return¶

1 Sub-paragraph (2) applies in relation to a land transaction return in respect of a chargeable transaction if—

a in order to determine whether the chargeable transaction is a non-resident transaction, it is necessary to determine whether one or more individuals are UK resident in relation to the transaction under paragraph 4(1), and

b that individual or any of those individuals, at the beginning of the day on which the land transaction return is delivered, has not yet met the condition in that provision (but might turn out to do so depending on their residence during the remainder of the relevant period).

2 The land transaction return must be prepared on the assumption that the individual or (as the case may be) each of the individuals is resident outside the United Kingdom throughout the period—

a beginning with the day on which the land transaction return is delivered, and

b ending at the end of the relevant period.

3 In this paragraph “the relevant period” has the same meaning as in paragraph 4(1).

19 Amendment of return where individual becomes UK resident after return delivered¶

1 Sub-paragraph (2) applies where—

a a land transaction return in respect of a chargeable transaction is prepared on the assumption mentioned in paragraph 18(2), and

b the individual or (as the case may be) each of the individuals in respect of whom the assumption was made subsequently meets the condition in paragraph 4(1) (with the result that the transaction is not a non-resident transaction).

2 The land transaction return may be amended, at any time before the end of the period of 2 years beginning with the day after the effective date of the transaction, to take account of the fact that the transaction is not a non-resident transaction.

3 Where a land transaction return is amended under sub-paragraph (2), paragraph 6(2A) of Schedule 10 (notice of amendment of return to be accompanied by the contract for the transaction etc) does not apply in relation to the amendment.

20 What counts as a dwelling¶

1 This paragraph sets out rules for determining what counts as a dwelling for the purposes of this Schedule.

2 A building or part of a building counts as a dwelling if—

a it is used or suitable for use as a single dwelling, or

b it is in the process of being constructed or adapted for such use.

3 Land that is, or is to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on that land) is taken to be part of that dwelling.

4 Land that subsists, or is to subsist, for the benefit of a dwelling is taken to be part of that dwelling.

5 The main subject-matter of a transaction is also taken to consist of or include an interest in a dwelling if—

a substantial performance of a contract constitutes the effective date of that transaction by virtue of a relevant deeming provision,

c construction or adaptation of the building, or part of a building, has not begun by the time the contract is substantially performed.

6 In sub-paragraph (5)—

“contract” includes any agreement;
“relevant deeming provision” means any of sections 44 to 45A or paragraph 5(1) or (2) of Schedule 2A or paragraph 12A of Schedule 17A;
“substantially performed” has the same meaning as in section 44.

7 A building or part of a building used for a purpose specified in section 116(2) or (3) is not used as a dwelling for the purposes of sub-paragraph (2) or (5).

8 Where a building or part of a building is used for a purpose mentioned in sub-paragraph (7), no account is to be taken for the purposes of sub-paragraph (2) of its suitability for any other use.

21 Interpretation¶

In this Schedule—

“CTA 2009” means the Corporation Tax Act 2009;
“CTA 2010” means the Corporation Tax Act 2010.

22 Power to modify this Schedule¶

1 The Treasury may by regulations amend or otherwise modify this Schedule for the purpose of preventing certain chargeable transactions from being non-resident transactions for the purposes of this Schedule.

2 The provision which may be included in regulations under this paragraph by reason of section 114(6)(c) includes incidental or consequential provision which may cause a chargeable transaction to be a non-resident transaction for the purposes of this Schedule.

^C17SCHEDULE 10 ¶

Stamp duty land tax: returns, enquiries, assessments and appeals

Section 78

Part 1 Land transaction returns¶

Contents of return¶

1 A land transaction return must—

a be in the prescribed form,

b contain the prescribed information, and

c include a declaration by the purchaser (or each of them) that the return is to the best of his knowledge correct and complete.

1A Sub-paragraph (1)(c) is subject to paragraphs 1A and 1B.

2 In sub-paragraph (1) “prescribed” means prescribed by regulations made by the Inland Revenue.

3 The regulations may make different provision for different kinds of return.

4 Regulations under sub-paragraph (1)(b) may require the provision of information corresponding to any of the particulars formerly required under—

a Schedule 2 to the Finance Act 1931 (c. 28) (requirement to deliver particulars of land transactions in Great Britain), or

b section 244 of the Finance Act 1994 (c. 9) (corresponding provision for Northern Ireland).

5 The return is treated as containing any information provided by the purchaser for the purpose of completing the return.

Declaration by agent¶

1 Where —

a the purchaser (or each of them) authorises an agent to complete a land transaction return,

b the purchaser (or each of them) makes a declaration that, with the exception of the effective date, the information provided in the return is to the best of his knowledge correct and complete, and

c the land transaction return includes a declaration by the agent that the effective date provided in the return is to the best of his knowledge correct,

the requirement in paragraph 1(1)(c) shall be deemed to be met.

2 Sub-paragraph (1) applies only where the return is in a form specified by the Inland Revenue for the purposes of that sub-paragraph.

3 Nothing in this paragraph affects the liability of the purchaser (or each of them) under this Part of this Act.

Declaration by the relevant Official Solicitor¶

1 Where —

a the purchaser (or any of them) is a person under a disability,

b the Official Solicitor is acting for the purchaser (or any of them), and

c the land transaction return includes a declaration by the Official Solicitor that the return is to the best of his knowledge correct and complete,

the requirement in paragraph 1(1)(c) shall be deemed to be met.

2 Sub-paragraph (1) applies only where the return is in a form specified by the Inland Revenue for the purposes of that sub-paragraph.

3 Nothing in this paragraph affects the liability of the purchaser (or each of them) under this Part of this Act.

4 In this paragraph “the Official Solicitor” means the Official Solicitor to the Supreme Court of England and Wales or the Official Solicitor to the Supreme Court of Northern Ireland (as the case requires).

Meaning of filing date and delivery of return¶

1 References in this Part of this Act to the filing date, in relation to a land transaction return, are to the last day of the period within which the return must be delivered.

2 References in this Part of this Act to the delivery of a land transaction return are to the delivery of a return that—

a complies with the requirements of paragraph 1(1) (contents of return), ^F265...

^F265b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Failure to deliver return: flat-rate penalty¶

1 A person who is required to deliver a land transaction return and fails to do so by the filing date is liable to a flat-rate penalty under this paragraph.He may also be liable to a tax-related penalty under paragraph 4.

2 The penalty is—

a £100 if the return is delivered within three months after the filing date, and

b £200 in any other case.

Failure to deliver return: tax-related penalty¶

1 A purchaser who is required to deliver a land transaction return in respect of a chargeable transaction and fails to do so within twelve months after the filing date is liable to a tax-related penalty under this paragraph.This is in addition to any flat-rate penalty under paragraph 3.

2 The penalty is an amount not exceeding the amount of tax chargeable in respect of the transaction.

Formal notice to deliver return: daily penalty¶

1 If it appears to the Inland Revenue—

a that a purchaser required to deliver a land transaction return in respect of a chargeable transaction has failed to do so, and

b that the filing date has now passed,

they may issue a notice requiring him to deliver a land transaction return in respect of the transaction.

2 The notice must specify—

a the transaction to which it relates, and

b the period for complying with the notice (which must not be less than 30 days from the date of issue of the notice).

3 If the purchaser does not comply with the notice within the specified period, the Inland Revenue may apply to the tribunal for an order imposing a daily penalty.

4 On such an application the tribunal may direct that the purchaser shall be liable to a penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which he is notified of the direction.

5 This paragraph does not affect, and is not affected by, any penalty under paragraph 3 or 4 (flat-rate or tax-related penalty for failure to deliver return).

Amendment of return by purchaser¶

1 The purchaser may amend a land transaction return given by him by notice to the Inland Revenue.

2 The notice must be in such form, and contain such information, as the Inland Revenue may require.

^C382A If the effect of the amendment would be to entitle the purchaser to a repayment of tax, the notice must be accompanied by—

a the contract for the land transaction; and

b the instrument (if any) by which that transaction was effected.

^C383 Except as otherwise provided, an amendment may not be made more than twelve months after the filing date.

Correction of return by Revenue¶

1 The Inland Revenue may amend a land transaction return so as to correct obvious errors or omissions in the return (whether errors of principle, arithmetical mistakes or otherwise).

1A The power under sub-paragraph (1) may, in such circumstances as the Commissioners for Her Majesty's Revenue and Customs may specify in regulations, be exercised—

a in relation to England and Wales, by the Chief Land Registrar;

^F712b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c in relation to Northern Ireland, by the Registrar of Titles or the registrar of deeds;

d in any case, by such other persons with functions relating to the registration of land as the regulations may specify.

2 A correction under this paragraph is made by notice to the purchaser.

3 No such correction may be made more than nine months after—

a the day on which the return was delivered, or

b if the correction is required in consequence of an amendment under paragraph 6, the day on which that amendment was made.

4 A correction under this paragraph is of no effect if the purchaser—

a amends the return so as to reject the correction, or

b after the end of the period within which he may amend the return, but within three months from the date of issue of the notice of correction, gives notice rejecting the correction.

5 Notice under sub-paragraph (4)(b) must be given to the officer of the Board by whom notice of the correction was given.

Penalty for incorrect or uncorrected return¶

^F4918. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 2 Duty to keep and preserve records¶

Duty to keep and preserve records¶

1 A purchaser who is required to deliver a land transaction return must—

a keep such records as may be needed to enable him to deliver a correct and complete return, and

b preserve those records in accordance with this paragraph.

2 The records must be preserved until the end of the later of the relevant day and the date on which—

a an enquiry into the return is completed, or

b if there is no enquiry, the Inland Revenue no longer have power to enquire into the return.

2A “The relevant day” means—

a the sixth anniversary of the effective date of the transaction, or

b such earlier day as may be specified in writing by the Commissioners for Her Majesty's Revenue and Customs (and different days may be specified for different cases).

3 The records required to be kept and preserved under this paragraph include—

a relevant instruments relating to the transaction, in particular, any contract or conveyance, and any supporting maps, plans or similar documents;

b records of relevant payments, receipts and financial arrangements.

4 The Commissioners for Her Majesty's Revenue and Customs may by regulations—

a provide that the records required to be kept and preserved under this paragraph include, or do not include, records specified in the regulations, and

b provide that those records include supporting documents so specified.

5 Regulations under this paragraph may make provision by reference to things specified in a notice published by the Commissioners for Her Majesty's Revenue and Customs in accordance with the regulations (and not withdrawn by a subsequent notice).

6 “Supporting documents” includes accounts, books, deeds, contracts, vouchers and receipts.

Preservation of information etc ¶

10The duty under paragraph 9 to preserve records may be satisfied—

a by preserving them in any form and by any means, or

b by preserving the information contained in them in any form and by any means,

subject to any conditions or exceptions specified in writing by the Commissioners for Her Majesty's Revenue and Customs.

Penalty for failure to keep and preserve records¶

1 A person who fails to comply with paragraph 9 in relation to a transaction is liable to a penalty not exceeding £3,000, subject to the following exception.

2 No penalty is incurred if the Inland Revenue are satisfied that any facts that they reasonably require to be proved, and that would have been proved by the records, are proved by other documentary evidence provided to them.

Part 3 Enquiry into return¶

Notice of enquiry¶

1 The Inland Revenue may enquire into a land transaction return if they give notice of their intention to do so (“notice of enquiry”)—

a to the purchaser,

b before the end of the enquiry period.

2 The enquiry period is the period of nine months—

a after the filing date, if the return was delivered on or before that date;

b after the date on which the return was delivered, if the return was delivered after the filing date;

c after the date on which the amendment was made, if the return is amended under paragraph 6 (amendment by purchaser).

This is subject to the following qualification.

2A If—

a the Inland Revenue give notice, within the period specified in sub-paragraph (2), of their intention to enquire into a land transaction return delivered under section 80 (adjustment where contingency ceases or consideration is ascertained), 81 (further return where relief withdrawn) or 81A (return or further return in consequence of later linked transaction) ^F1184..., and

b it appears to the Inland Revenue to be necessary to give a notice under this paragraph in respect of an earlier land transaction return ^F1128...,

a notice may be given notwithstanding that the period referred to in sub-paragraph (2) has elapsed in relation to that earlier return.

3 A return that has been the subject of one notice of enquiry may not be the subject of another, except one given in consequence of an amendment (or another amendment) of the return under paragraph 6.

Scope of enquiry¶

1 An enquiry extends to anything contained in the return, or required to be contained in the return, that relates—

a to the question whether tax is chargeable in respect of the transaction, or

b to the amount of tax so chargeable.

This is subject to the following exception.

2 If the notice of enquiry is given as a result of an amendment of the return under paragraph 6 (amendment by purchaser)—

a at a time when it is no longer possible to give notice of enquiry under paragraph 12, or

b after an enquiry into the return has been completed,

the enquiry into the return is limited to matters to which the amendment relates or that are affected by the amendment.

Notice to produce documents etc for purposes of enquiry¶

^F52914. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appeal against notice to produce documents etc¶

^F52915. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Penalty for failure to produce documents etc¶

^F52916. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amendment of self-assessment during enquiry to prevent loss of tax¶

1 If at a time when an enquiry is in progress into a land transaction return the Inland Revenue form the opinion—

a that the amount stated in the self-assessment contained in the return as the amount of tax payable is insufficient, and

b that unless the assessment is immediately amended there is likely to be a loss of tax to the Crown,

they may by notice in writing to the purchaser amend the assessment to make good the deficiency.

2 In the case of an enquiry that under paragraph 13(2) is limited to matters arising from an amendment of the return, sub-paragraph (1) above applies only so far as the deficiency is attributable to the amendment.

3 For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

a beginning with the day on which notice of enquiry is given, and

b ending with the day on which the enquiry is completed.

Amendment of return by taxpayer during enquiry¶

1 This paragraph applies if a return is amended under paragraph 6 (amendment by purchaser) at a time when an enquiry is in progress into the return.

2 The amendment does not restrict the scope of the enquiry but may be taken into account (together with any matters arising) in the enquiry.

3 So far as the amendment affects the amount stated in the self-assessment included in the return as the amount of tax payable, it does not take effect while the enquiry is in progress and—

a if the Inland Revenue state in the closure notice that they have taken the amendments into account and that—

i the amendment has been taken into account in formulating the amendments contained in the notice, or

ii their conclusion is that the amendment is incorrect,

the amendment shall not take effect;

b otherwise, the amendment takes effect when the closure notice is issued.

4 For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

a beginning with the day on which notice of enquiry is given, and

b ending with the day on which the enquiry is completed.

Referral of questions to the tribunal during enquiry¶

1 At any time when an enquiry is in progress into a land transaction return any question arising in connection with the subject-matter of the enquiry may be referred to the tribunal for determination.

2 Notice of referral must be given—

a jointly by the purchaser and the Inland Revenue,

^F437b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c to the tribunal.

^F4393 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 More than one notice of referral may be given under this paragraph in relation to an enquiry.

5 For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

a beginning with the day on which the notice of enquiry was given, and

b ending with the day on which the enquiry is completed.

Withdrawal of notice of referral¶

1 The Inland Revenue or the purchaser may withdraw a notice of referral under paragraph 19 ^F470....

^F4712 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of referral on enquiry¶

1 While proceedings on a referral under paragraph 19 are in progress in relation to an enquiry—

a no closure notice shall be given in relation to the enquiry, and

b no application may be made for a direction to give such a notice.

2 For the purposes of this paragraph proceedings on a referral are in progress where—

a notice of referral has been given,

b the notice has not been withdrawn, and

c the questions referred have not been finally determined.

3 For the purposes of sub-paragraph (2)(c) a question referred is finally determined when—

a it has been determined by the tribunal, and

b there is no further possibility of the determination being varied or set aside (disregarding any power to grant permission to appeal out of time).

Effect of determination¶

1 The determination of a question referred to the tribunal under paragraph 19 is binding on the parties to the referral in the same way, and to the same extent, as a decision on a preliminary issue in an appeal.

2 The determination shall be taken into account by the Inland Revenue—

a in reaching their conclusions on the enquiry, and

b in formulating any amendments of the return required to give effect to those conclusions.

3 Any right of appeal under paragraph 35 (appeals against assessments etc) may not be exercised so as to reopen the question determined except to the extent (if any) that it could be reopened if it had been determined as a preliminary issue in that appeal.

Completion of enquiry¶

1 An enquiry under paragraph 12 is completed when the Inland Revenue by notice (a “closure notice”) inform the purchaser that they have completed their enquiries and state their conclusions.

2 A closure notice must either—

a state that in the opinion of the Inland Revenue no amendment of the return is required, or

b make the amendments of the return required to give effect to their conclusions.

3 A closure notice takes effect when it is issued.

Direction to complete enquiry¶

1 The purchaser may apply to the tribunal for a direction that the Inland Revenue give a closure notice within a specified period.

2 Any such application is to be subject to the relevant provisions of Part 5 of the Taxes Management Act 1970 (see, in particular, section 48(2)(b) of that Act).

3 The tribunal hearing the application shall give a direction unless ^F448... satisfied that the Inland Revenue have reasonable grounds for not giving a closure notice within a specified period.

Part 4 Revenue determination if no return delivered¶

Determination of tax chargeable if no return delivered¶

1 If in the case of a chargeable transaction no land transaction return is delivered by the filing date, the Inland Revenue may make a determination (a “Revenue determination”) to the best of their information and belief of the amount of tax chargeable in respect of the transaction.

2 Notice of the determination must be served on the purchaser, stating the date on which it is issued.

3 No Revenue determination may be made more than 4 years after the effective date of the transaction.

Determination to have effect as a self-assessment¶

1 A Revenue determination has effect for enforcement purposes as if were a self-assessment by the purchaser.

2 In sub-paragraph (1) “for enforcement purposes” means for the purposes of the following provisions of this Part of this Act—

a the provisions of this Schedule providing for tax-related penalties;

b section 87 (interest on unpaid tax);

c section 91 and Schedule 12 (collection and recovery of unpaid tax etc).

3 Nothing in this paragraph affects any liability of the purchaser to a penalty for failure to deliver a return.

Determination superseded by actual self-assessment¶

1 If after a Revenue determination has been made the purchaser delivers a land transaction return in respect of the transaction, the self-assessment included in that return supersedes the determination.

2 Sub-paragraph (1) does not apply to a return delivered—

a more than 4 years after the day on which the power to make the determination first became exercisable, or

b more than twelve months after the date of the determination,

whichever is the later.

3 Where—

a proceedings have been begun for the recovery of any tax charged by a Revenue determination, and

b before the proceedings are concluded the determination is superseded by a self-assessment,

the proceedings may be continued as if they were proceedings for the recovery of so much of the tax charged by the self-assessment as is due and payable and has not been paid.

4 Where—

a action is being taken under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement of deduction from accounts) for the recovery of an amount (“the original amount”) of tax charged by a Revenue determination, and

b before that action is concluded, the determination is superseded by a self-assessment,

that action may be continued as if it were action for the purposes of the recovery of so much of the tax charged by the self-assessment as is due and payable, has not yet been paid and does not exceed the original amount.

Part 5 Revenue assessments¶

Assessment where loss of tax discovered¶

1 If the Inland Revenue discover as regards a chargeable transaction that—

a an amount of tax that ought to have been assessed has not been assessed, or

b an assessment to tax is or has become insufficient, or

c relief has been given that is or has become excessive,

they may make an assessment (a “discovery assessment”) in the amount or further amount that ought in their opinion to be charged in order to make good to the Crown the loss of tax.

2 The power to make a discovery assessment in respect of a transaction for which the purchaser has delivered a return is subject to the restrictions specified in paragraph 30.

Assessment to recover excessive repayment of tax¶

1 If an amount of tax has been repaid to any person that ought not to have been repaid to him, that amount may be assessed and recovered as if it were unpaid tax.

2 Where the repayment was made with interest, the amount assessed and recovered may include the amount of interest that ought not to have been paid.

3 The power to make an assessment under this paragraph in respect of a transaction for which the purchaser has delivered a land transaction return is subject to the restrictions specified in paragraph 30.

Restrictions on assessment where return delivered¶

1 If the purchaser has delivered a land transaction return in respect of the transaction in question, an assessment under paragraph 28 or 29 in respect of the transaction—

a may only be made in the two cases specified in sub-paragraphs (2) and (3) below, and

b may not be made in the circumstances specified in sub-paragraph (5) below.

2 The first case is where the situation mentioned in paragraph 28(1) or 29(1) is attributable to fraudulent or negligent conduct on the part of—

a the purchaser,

b a person acting on behalf of the purchaser, or

c a person who was a partner of the purchaser at the relevant time.

3 The second case is where the Inland Revenue, at the time they—

a ceased to be entitled to give a notice of enquiry into the return, or

b completed their enquiries into the return,

could not have been reasonably expected, on the basis of the information made available to them before that time, to be aware of the situation mentioned in paragraph 28(1) or 29(1).

4 For this purpose information is regarded as made available to the Inland Revenue if—

a it is contained in a land transaction return made by the purchaser,

b it is contained in any documents produced or information provided to the Inland Revenue for the purposes of an enquiry into any such return, or

c it is information the existence of which, and the relevance of which as regards the situation mentioned in paragraph 28(1) or 29(1)—

i could reasonably be expected to be inferred by the Inland Revenue from information falling within paragraphs (a) or (b) above, or

ii are notified in writing to the Inland Revenue by the purchaser or a person acting on his behalf.

5 No assessment may be made if—

a the situation mentioned in paragraph 28(1) or 29(1) is attributable to a mistake in the return as to the basis on which the tax liability ought to have been computed, and

b the return was in fact made on the basis or in accordance with the practice generally prevailing at the time it was made.

Time limit for assessment¶

1 The general rule is that no assessment may be made more than 4 years after the effective date of the transaction to which it relates.

2 An assessment of a person to tax in a case involving a loss of tax brought about carelessly by the purchaser or a related person may be made at any time not more than 6 years after the effective date of the transaction to which it relates (subject to sub-paragraph (2A)).

2A An assessment of a person to tax in a case involving a loss of tax—

a brought about deliberately by the purchaser or a related person,

b attributable to a failure by the person to comply with an obligation under section 76(1) or paragraph 3(3)(a), 4(3)(a) or 8(3)(a) of Schedule 17A, ^F844...

c attributable to arrangements in respect of which the person has failed to comply with an obligation under section 309, 310 or 313 of the Finance Act 2004 (obligation of parties to tax avoidance schemes to provide information to Her Majesty's Revenue and Customs), or

d attributable to arrangements which were expected to give rise to a tax advantage in respect of which the person was under an obligation to notify the Commissioners for Her Majesty's Revenue and Customs under section 253 of the Finance Act 2014 (duty to notify Commissioners of promoter reference number) but failed to do so,

may be made at any time not more than 20 years after the effective date of the transaction to which it relates.

3 An assessment under paragraph 29 (assessment to recover excessive repayment of tax) is not out of time—

a in a case where notice of enquiry is given into the land transaction return delivered by the person concerned, if it is made before the enquiry is completed;

b in any case, if it is made within one year after the repayment in question was made.

4 Where the purchaser has died—

a any assessment on the personal representatives of the deceased must be made within 4 years after his death, and

b an assessment shall not be made by virtue of sub-paragraph (2) in respect of a transaction of which the effective date was more than six years before the death.

5 Any objection to the making of an assessment on the ground that the time limit for making it has expired can only be made on an appeal against the assessment.

6 In this paragraph “related person”, in relation to a purchaser, means—

a a person acting on behalf of the purchaser, or

b a person who was a partner of the purchaser at the relevant time.

Losses brought about carelessly or deliberately¶

31A

1 This paragraph applies for the purposes of paragraph 31.

2 A loss of tax is brought about carelessly by a person if the person fails to take reasonable care to avoid bringing about that loss.

3 Where—

a information is provided to Her Majesty's Revenue and Customs,

b the person who provided the information, or the person on whose behalf the information was provided, discovers some time later that the information was inaccurate, and

c that person fails to take reasonable steps to inform Her Majesty's Revenue and Customs,

any loss of tax brought about by the inaccuracy is to be treated as having been brought about carelessly by that person.

4 References to a loss of tax brought about deliberately by a person include a loss of tax brought about as a result of a deliberate inaccuracy in a document given to Her Majesty's Revenue and Customs by or on behalf of that person.

Assessment procedure¶

1 Notice of an assessment must be served on the purchaser.

2 The notice must state—

a the tax due,

b the date on which the notice is issued, and

c the time within which any appeal against the assessment must be made.

3 After notice of the assessment has been served on the purchaser, the assessment may not be altered except in accordance with the express provisions of this Part of this Act.

4 Where an officer of the Board has decided to make an assessment to tax, and has taken all other decisions needed for arriving at the amount of the assessment, he may entrust to some other officer of the Board responsibility for completing the assessing procedure, whether by means involving the use of a computer or otherwise, including responsibility for serving notice of the assessment.

Part 6 Relief in case of overpaid tax or excessive assessment¶

Relief in case of double assessment¶

1 A person who believes he has been assessed to tax more than once in respect of the same matter may make a claim to the Inland Revenue for relief against any double charge .

^F922 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F923 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 An appeal may be made against a decision on a claim for relief under this paragraph.

Claim for relief for overpaid tax etc¶

1 This paragraph applies where—

a a person has paid an amount by way of tax but believes that the tax was not due, or

b a person has been assessed as liable to pay an amount by way of tax, or there has been a determination to that effect, but the person believes that the tax is not due.

2 The person may make a claim to the Commissioners for Her Majesty's Revenue and Customs for repayment or discharge of the amount.

3 Paragraph 34A makes provision about cases in which the Commissioners for Her Majesty's Revenue and Customs are not liable to give effect to a claim under this paragraph.

4 The following make further provision about making and giving effect to claims under this paragraph—

a paragraphs 34B to 34D, and

b Schedule 11A.

5 Paragraph 34E makes provision about the application of this paragraph and paragraphs 34A to 34D to amounts paid under contract settlements.

6 The Commissioners for Her Majesty's Revenue and Customs are not liable to give relief in respect of a case described in sub-paragraph (1)(a) or (b) except as provided—

a by this Schedule and Schedule 11A (following a claim under this paragraph), or

b by or under another provision of this Part of this Act.

7 For the purposes of this paragraph and paragraphs 34A to 34E, an amount paid by one person on behalf of another is treated as paid by the other person.

Cases in which Commissioners not liable to give effect to a claim¶

34A

1 The Commissioners for Her Majesty's Revenue and Customs are not liable to give effect to a claim under paragraph 34 if or to the extent that the claim falls within a case described in this paragraph.

2 Case A is where the amount paid, or liable to be paid, is excessive by reason of—

a a mistake in a claim or election, or

b a mistake consisting of making or giving, or failing to make or give, a claim or election.

3 Case B is where the claimant is or will be able to seek relief by taking other steps under this Part of this Act.

4 Case C is where the claimant—

a could have sought relief by taking such steps within a period that has now expired, and

b knew, or ought reasonably to have known, before the end of that period that such relief was available.

5 Case D is where the claim is made on grounds that—

a have been put to a court or tribunal in the course of an appeal by the claimant relating to the amount paid or liable to be paid, or

b have been put to Her Majesty's Revenue and Customs in the course of an appeal by the claimant relating to that amount that is treated as having been determined by a tribunal (by virtue of paragraph 37 (settling of appeals by agreement)).

6 Case E is where the claimant knew, or ought reasonably to have known, of the grounds for the claim before the latest of the following—

a the date on which an appeal by the claimant relating to the amount paid, or liable to be paid, in the course of which the ground could have been put forward (a “relevant appeal”) was determined by a court or tribunal (or is treated as having been so determined),

b the date on which the claimant withdrew a relevant appeal to a court or tribunal, and

c the end of the period in which the claimant was entitled to make a relevant appeal to a court or tribunal.

7 Case F is where the amount in question was paid or is liable to be paid—

a in consequence of proceedings enforcing the payment of that amount brought against the claimant by Her Majesty's Revenue and Customs, or

b in accordance with an agreement between the claimant and Her Majesty's Revenue and Customs settling such proceedings.

8 Case G is where—

a the amount paid, or liable to be paid, is excessive by reason of a mistake in calculating the claimant's liability to tax, and

b liability was calculated in accordance with the practice generally prevailing at the time.

9 Case G does not apply where the amount paid, or liable to be paid, is tax which has been charged contrary to EU law.

10 For the purposes of sub-paragraph (9), an amount of tax is charged contrary to EU law if, in the circumstances in question, the charge to tax is contrary to—

a the provisions relating to the free movement of goods, persons, services and capital in Titles II and IV of Part 3 of the Treaty on the Functioning of the European Union, or

b the provisions of any subsequent treaty replacing the provisions mentioned in paragraph (a).

Making a claim¶

34B

1 A claim under paragraph 34 may not be made more than 4 years after the effective date of the transaction.

2 A claim under paragraph 34 may not be made by being included in a land transaction return.

The claimant: partnerships¶

34C

1 This paragraph applies where an amount is paid, or is liable to be paid, in respect of a land transaction entered into as purchaser by or on behalf of the members of a partnership (within the meaning of Schedule 15).

2 Paragraphs 6 and 8 of Schedule 15 do not apply to a claim under paragraph 34 in respect of the amount.

3 A claim under paragraph 34 in respect of the amount—

a may be made by a relevant person who has been nominated to make the claim by all of the relevant persons, and

b may not be made by any other person.

4 In relation to such a claim, references in paragraph 34A to the claimant are to any of the relevant persons.

5 The relevant persons are—

a any person who was a partner in the partnership at the effective date of the transaction, and

b the personal representative of such a person.

Assessment of claimant in connection with claim¶

34D

1 This paragraph applies where—

a a claim is made under paragraph 34,

b the grounds for giving effect to the claim also provide grounds for a discovery assessment on the claimant in respect of any land transaction, and

c such an assessment could be made but for a relevant restriction.

2 The reference to the claimant in subsection (1)(b) includes—

a in relation to a claim for an amount paid or liable to be paid in respect of a land transaction entered into as purchaser by or on behalf of the members of a partnership (within the meaning of Schedule 15), a responsible partner within the meaning of paragraph 6(2) of Schedule 15;

b in relation to a claim for an amount paid or liable to be paid in respect of a land transaction entered into by trustees of a settlement (within the meaning of Schedule 16), a responsible trustee within the meaning of paragraph 5(3) of Schedule 16.

3 The following are relevant restrictions—

a the restrictions in paragraph 30, and

b the expiry of a time limit for making a discovery assessment.

4 Where this paragraph applies—

a the relevant restrictions are to be disregarded, and

b the discovery assessment is not out of time if it is made before the final determination of the claim.

5 A claim is not finally determined until it, or the amount to which it relates, can no longer be varied (whether on appeal or otherwise).

Contract settlements¶

34E

1 In paragraph 34(1)(a) the reference to an amount paid by a person by way of tax includes an amount paid by a person under a contract settlement in connection with tax believed to be due.

2 Sub-paragraphs (3) to (6) apply if the person who paid the amount under the contract settlement (“the payer”) and the person from whom the tax was due (“the taxpayer”) are not the same person.

3 In relation to a claim under paragraph 34 in respect of that amount—

a the references to the claimant in paragraph 34A(5) to (7) (Cases D, E and F) have effect as if they included the taxpayer,

b the reference to the claimant in paragraph 34A(8) (Case G) has effect as if it were a reference to the taxpayer,

c the reference to the claimant in paragraph 34D(1)(b) has effect as if it were a reference to the taxpayer, and

d references to tax in Schedule 11A (as it applies to a claim under paragraph 34) include such an amount.

4 Sub-paragraph (5) applies where the grounds for giving effect to a claim by the payer in respect of the amount also provide grounds for a discovery assessment on the taxpayer in respect of any land transaction.

5 The Commissioners for Her Majesty's Revenue and Customs may set any amount repayable to the payer by virtue of the claim against any amount payable by the taxpayer by virtue of the assessment.

6 The obligations of the Commissioners for Her Majesty's Revenue and Customs and the taxpayer are discharged to the extent of any set-off under sub-paragraph (5).

7 “Contract settlement” means an agreement made in connection with any person's liability to make a payment to the Commissioners for Her Majesty's Revenue and Customs under or by virtue of an enactment.

Part 7 Reviews and appeals¶

Right of appeal¶

1 An appeal may be brought against—

a an amendment of a self-assessment under paragraph 17 (amendment by Revenue during enquiry to prevent loss of tax),

^C36b a conclusion stated or amendment made by a closure notice,

c a discovery assessment, ^F118...

d an assessment under paragraph 29 (assessment to recover excessive repayment), or

e a Revenue determination under paragraph 25 (determination of tax chargeable if no return delivered).

^F4552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 If An appeal under sub-paragraph (1)(a) against an amendment of a self-assessment is made while an enquiry is in progress none of the steps mentioned in paragraph 36A(2)(a) to (c) may be taken in relation to the appeal until the enquiry is completed.

Notice of appeal¶

1 Notice of an appeal under paragraph 35 must be given—

a in writing,

b within 30 days after the specified date,

c to the relevant officer of the Board.

2 In relation to an appeal under paragraph 35(1)(a)—

a the specified date is the date on which the notice of amendment was issued, and

b the relevant officer of the Board is the officer by whom the notice of amendment was given.

3 In relation to an appeal under paragraph 35(1)(b)—

a the specified date is the date on which the closure notice was issued, and

b the relevant officer of the Board is the officer by whom the closure notice was given.

4 In relation to an appeal under paragraph 35(1)(c) or (d)—

a the specified date is the date on which the notice of assessment was issued, and

b the relevant officer of the Board is the officer by whom the notice of assessment was given.

4A In relation to an appeal under paragraph 35(1)(e) —

a the specified date is the date on which the Revenue determination was issued, and

b the relevant officer of the Board is the officer by whom the determination was made.

5 The notice of appeal must specify the grounds of appeal.

5A The only grounds on which an appeal lies under paragraph 35(1)(e) are that—

a the purchase to which the determination relates did not take place,

b the interest in the land to which the determination relates has not been purchased,

c the contract for the purchase of the interest to which the determination relates has not been substantially performed, or

d the land transaction is not notifiable (for example, because the land transaction is exempt from charge under Schedule 3).

^F4956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appeal: HMRC review or determination by tribunal¶

^C1536A

1 This paragraph applies if notice of appeal has been given to HMRC.

2 In such a case—

a the appellant may notify HMRC that the appellant requires HMRC to review the matter in question (see paragraph 36B),

b HMRC may notify the appellant of an offer to review the matter in question (see paragraph 36C), or

c the appellant may notify the appeal to the tribunal (see paragraph 36D).

3 See paragraphs 36G and 36H for provision about notifying appeals to the tribunal after a review has been required by the appellant or offered by HMRC.

4 This paragraph does not prevent the matter in question from being dealt with in accordance with paragraph 37(1) (settling of appeals by agreement).

Appellant requires review by HMRC¶

36B

1 Sub-paragraphs (2) and (3) apply if the appellant notifies HMRC that the appellant requires HMRC to review the matter in question.

2 HMRC must, within the relevant period, notify the appellant of HMRC’s view of the matter in question.

3 HMRC must review the matter in question in accordance with paragraph 36E.

4 The appellant may not notify HMRC that the appellant requires HMRC to review the matter in question and HMRC shall not be required to conduct a review if—

a the appellant has already given a notification under this paragraph in relation to the matter in question,

b HMRC have given a notification under paragraph 36C in relation to the matter in question, or

c the appellant has notified the appeal to the tribunal under paragraph 36D.

5 In this paragraph “relevant period” means—

a the period of 30 days beginning with the day on which HMRC receive the notification from the appellant, or

b such longer period as is reasonable.

HMRC offer review¶

36C

1 Sub-paragraphs (2) to (6) apply if HMRC notify the appellant of an offer to review the matter in question.

2 When HMRC notify the appellant of the offer, HMRC must also notify the appellant of HMRC’s view of the matter in question.

3 If, within the acceptance period, the appellant notifies HMRC of acceptance of the offer, HMRC must review the matter in question in accordance with paragraph 36E.

4 If the appellant does not give HMRC such a notification within the acceptance period, HMRC’s view of the matter in question is to be treated as if it were contained in an agreement in writing under paragraph 37(1) for the settlement of that matter.

5 The appellant may not give notice under paragraph 37(2) (desire to withdraw from agreement) in a case where sub-paragraph (4) applies.

6 Sub-paragraph (4) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under paragraph 36H.

7 HMRC may not notify the appellant of an offer to review the matter in question (and, accordingly, HMRC shall not be required to conduct a review) if—

a HMRC have already given a notification under this paragraph in relation to the matter in question,

b the appellant has given a notification under paragraph 36B in relation to the matter in question, or

c the appellant has notified the appeal to the tribunal under paragraph 36D.

8 In this paragraph “acceptance period” means the period of 30 days beginning with the date of the document by which HMRC notify the appellant of the offer to review the matter in question.

Notifying appeal to the tribunal¶

36D

1 This paragraph applies in a case where paragraph 36A applies.

2 The appellant may notify the appeal to the tribunal.

3 If the appellant notifies the appeal to the tribunal, the tribunal is to decide the matter in question.

4 Sub-paragraphs (2) and (3) do not apply in a case where—

a HMRC have given a notification of their view of the matter in question under paragraph 36B, or

b HMRC have given a notification under paragraph 36C in relation to the matter in question.

5 In a case falling within sub-paragraph (4)(a) or (b), the appellant may notify the appeal to the tribunal, but only if permitted to do so by paragraph 36G or 36H.

Nature of review etc¶

36E

1 This paragraph applies if HMRC are required by paragraph 36B or 36C to review the matter in question.

2 The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

3 For the purpose of sub-paragraph (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—

a by HMRC in deciding the matter in question, and

b by any person in seeking to resolve disagreement about the matter in question.

4 The review must take account of any representations made by the appellant at a stage which gives HMRC a reasonable opportunity to consider them.

5 The review may conclude that HMRC’s view of the matter in question is to be—

a upheld,

b varied, or

c cancelled.

6 HMRC must notify the appellant of the conclusions of the review and their reasoning within—

a the period of 45 days beginning with the relevant day, or

b such other period as may be agreed.

7 In sub-paragraph (6) “relevant day” means—

a in a case where the appellant required the review, the day when HMRC notified the appellant of HMRC’s view of the matter in question,

b in a case where HMRC offered the review, the day when HMRC received notification of the appellant’s acceptance of the offer.

8 Where HMRC are required to undertake a review but do not give notice of the conclusions within the period specified in sub-paragraph (6), the review is treated as having concluded that HMRC’s view of the matter in question (see paragraphs 36B(2) and 36C(2)) is upheld.

9 If sub-paragraph (8) applies, HMRC must notify the appellant of the conclusions which the review is treated as having reached.

Effect of conclusions of review¶

36F

1 This paragraph applies if HMRC give notice of the conclusions of a review (see paragraph 36E).

2 The conclusions are to be treated as if they were an agreement in writing under paragraph 37(1) for the settlement of the matter in question.

3 The appellant may not give notice under paragraph 37(2) (desire to withdraw from agreement) in a case where sub-paragraph (2) applies.

4 Sub-paragraph (2) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under paragraph 36G.

Notifying appeal to tribunal after review concluded¶

36G

1 This paragraph applies if—

a HMRC have given notice of the conclusions of a review in accordance with paragraph 36E, or

b the period specified in paragraph 36E(6) has ended and HMRC have not given notice of the conclusions of the review.

2 The appellant may notify the appeal to the tribunal within the post-review period.

3 If the post-review period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.

4 If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question.

5 In this paragraph “post-review period” means—

a in a case falling with sub-paragraph (1)(a), the period of 30 days beginning with the date of the document in which HMRC give notice of the conclusions of the review in accordance with paragraph 36E(6), or

b in a case falling within sub-paragraph (1)(b), the period that—

i begins with the day following the last day of the period specified in paragraph 36E(6), and

ii ends 30 days after the date of the document in which HMRC give notice of the conclusions of the review in accordance with paragraph 36E(9).

Notifying appeal to tribunal after review offered but not accepted¶

36H

1 This paragraph applies if—

a HMRC have offered to review the matter in question (see paragraph 36C), and

b the appellant has not accepted the offer.

2 The appellant may notify the appeal to the tribunal within the acceptance period.

3 But if the acceptance period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.

4 If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question.

5 In this paragraph “acceptance period” has the same meaning as in paragraph 36C.

Other interpretation¶

36I

1 In paragraphs 36A to 36H—

a “matter in question” means the matter to which an appeal relates;

b a reference to a notification is a reference to a notification in writing.

2 In paragraphs 36A to 36H, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—

a notification of HMRC’s view under paragraph 36B(2),

b notification by HMRC of an offer of review (and of their view of the matter) under paragraph 36C,

c notification of the conclusions of a review under paragraph 36E(6), and

d notification of the conclusions of a review under paragraph 36E(9).

3 But if a notification falling within any of the sub-paragraphs of paragraph (2) is given to the appellant, a copy of the notification may also be given to a person acting on behalf of the appellant.

Settling of appeals by agreement¶

1 If, before an appeal under paragraph 35 is determined, the appellant and the Inland Revenue agree that the decision appealed against—

a should be upheld without variation,

b should be varied in a particular manner, or

c should be discharged or cancelled,

the same consequences shall follow, for all purposes, as would have followed if, at the time the agreement was come to, the tribunal had determined the appeal and had upheld the decision without variation, varied it in that manner or discharged or cancelled it, as the case may be.

2 Sub-paragraph (1) does not apply if, within 30 days from the date when the agreement was come to, the appellant gives notice in writing to the Inland Revenue that he wishes to withdraw from the agreement.

3 Where the agreement is not in writing—

a sub-paragraphs (1) and (2) do not apply unless the fact that an agreement was come to, and the terms agreed, are confirmed by notice in writing given by the Inland Revenue to the appellant or by the appellant to the Inland Revenue, and

b the references in those provisions to the time when the agreement was come to shall be read as references to the time when the notice of confirmation was given.

4 Where—

a the appellant notifies the Inland Revenue, orally or in writing, that he does not wish to proceed with the appeal, and

b the Inland Revenue do not, within 30 days after that notification, give the appellant notice in writing indicating that they are unwilling that the appeal should be withdrawn,

the provisions of sub-paragraphs (1) to (3) have effect as if, at the date of the appellant’s notification, the appellant and the Inland Revenue had come to an agreement (orally or in writing, as the case may be) that the decision under appeal should be upheld without variation.

5 References in this paragraph to an agreement being come to with an appellant, and to the giving of notice or notification by or to the appellant, include references to an agreement being come to, or notice or notification being given by or to, a person acting on behalf of the appellant in relation to the appeal.

Recovery of tax not postponed by appeal¶

1 Where there is an appeal ^F460... under paragraph 35, the tax charged by the amendment or assessment in question remains due and payable as if there had been no appeal.

2 Sub-paragraph (1) is subject to—

paragraph 39 (direction by the tribunal postponing payment), and
paragraph 40 (agreement to postpone payment).

Direction by the tribunal to postpone payment¶

^C6139

1 If the appellant has grounds for believing that the amendment or assessment overcharges the appellant to tax, or as a result of the conclusion stated in the closure notice the tax charged on the appellant is excessive, the appellant may—

a first apply by notice in writing to HMRC within 30 days of the specified date for a determination by them of the amount of tax the payment of which should be postponed pending the determination of the appeal;

b where such a determination is not agreed, refer the application for postponement to the tribunal within 30 days from the date of the document notifying HMRC’s decision on the amount to be postponed.

An application under sub-paragraph (a) must state the amount believed to be overcharged to tax and the grounds for that belief.

^F4312 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 An application may be made more than 30 days after the specified date if there is a change in the circumstances of the case as a result of which the appellant has grounds for believing that he is overcharged to tax by the decision appealed against.

4 If, after any determination on such an application of the amount of tax the payment of which should be postponed, there is a change in the circumstances of the case as a result of which either party has grounds for believing that the amount so determined has become excessive or, as the case may be, insufficient, he may, if the parties cannot agree on a revised determination, apply, at any time before the determination of the appeal, to the tribunal for a revised determination of that amount.

5 An application under this paragraph is to be subject to the relevant provisions of Part 5 of the Taxes Management Act 1970 (see, in particular, section 48(2)(b) of that Act).

6 The amount of tax of which payment is to be postponed pending the determination of the appeal is the amount (if any) by which it appears ^F434..., that there are reasonable grounds for believing that the appellant is overcharged.

7 Where an application is made under this paragraph, the date on which any tax of which payment is not postponed is due and payable shall be determined as if the tax were charged by an amendment or assessment of which notice was issued on the date on which the application was determined and against which there was no appeal.

8 On the determination of the appeal—

a the date on which any tax payable in accordance with that determination is due and payable shall, so far as it is tax the payment of which had been postponed, or which would not have been charged by the amendment or assessment if there had been no appeal, be determined as if the tax were charged by an amendment or assessment—

i of which notice was issued on the date on which HMRC issues to the appellant a notice of the total amount payable in accordance with the determination, and

ii against which there had been no appeal, and

b any tax overpaid shall be repaid.

9 Sub-paragraphs (10) and (11) apply where a person has been given an accelerated payment notice under Chapter 3 of Part 4 of the Finance Act 2014 and that notice has not been withdrawn.

10 Nothing in this paragraph enables the postponement of the payment of (as the case may be)—

a the understated tax to which the payment specified in the notice under section 220(2)(b) of that Act relates, or

b the disputed tax specified in the notice under section 221(2)(b) of that Act.

11 ^C37Accordingly, if the payment of an amount of tax within sub-paragraph (10)(b) is postponed by virtue of this paragraph immediately before the accelerated payment notice is given, it ceases to be so postponed with effect from the time that notice is given, and the tax is due and payable—

a if no representations were made under section 222 of that Act in respect of the notice, on or before the last day of the period of 90 days beginning with the day the notice is given, and

b if representations were so made, on or before whichever is later of—

i the last day of the 90 day period mentioned in paragraph (a), and

ii the last day of the period of 30 days beginning with the day on which HMRC's determination in respect of those representations is notified under section 222 of that Act.

Agreement to postpone payment of tax¶

^C6240

1 If the appellant and the relevant officer of the Board agree that payment of an amount of tax should be postponed pending the determination of the appeal, the same consequences shall follow, for all purposes, as would have followed if, at the time the agreement was come to, the tribunal had made a direction to the same effect.This is without prejudice to the making of a further agreement or of a further direction.

2 Where the agreement is not in writing—

a sub-paragraph (1) does not apply unless the fact that an agreement was come to, and the terms agreed, are confirmed by notice in writing given by the relevant officer of the Board to the appellant or by the appellant to that officer, and

b the reference in that provision to the time when the agreement was come to shall be read as a reference to the time when notice of confirmation was given.

3 References in this paragraph to an agreement being come to with an appellant, and to the giving of notice to or by the appellant, include references to an agreement being come to, or notice being given to or by, a person acting on behalf of the appellant in relation to the appeal.

4 Sub-paragraphs (9) to (11) of paragraph 39 apply for the purposes of this paragraph as they apply for the purposes of paragraph 39.

Tribunal determinations¶

41The determination of the tribunal in relation to any proceedings under the enactments relating to stamp duty land tax shall be final and conclusive except as otherwise provided in—

a sections 9 to 14 of the Tribunals, Courts and Enforcement Act 2007,

b the Taxes Management Act 1970 applied as modified, or

c the enactments relating to stamp duty land tax.

Assessments and self assessments¶

1 In this paragraph any reference to an appeal means an appeal under paragraphs 33(4) or 35(1).

2 If, on an appeal notified to the tribunal, the tribunal decides—

a that the appellant is overcharged by a self-assessment; or

b that the appellant is overcharged by an assessment other than a self-assessment,

the assessment shall be reduced accordingly, but otherwise the assessment shall stand good.

3 If, on appeal it appears to the tribunal—

a that the appellant is undercharged to stamp duty land tax by a self-assessment; or

b that the appellant is undercharged by an assessment other than a self-assessment,

the assessment shall be increased accordingly.

4 Where, on an appeal against an assessment other than a self-assessment which—

a assesses an amount which is chargeable to stamp duty land tax, and

b charges stamp duty land tax on the amount assessed,

it appears to the tribunal as mentioned in sub-paragraphs (2) or (3), it may, unless the circumstances of the case otherwise require, reduce or increase only the amount assessed; and where an appeal is so determined the stamp duty land tax charged by that assessment shall be taken to have been reduced or increased accordingly.

Payment of stamp duty land tax where there is a further appeal¶

1 Where a party to an appeal to the tribunal under paragraph 35 makes a further appeal, notwithstanding that the further appeal is pending, stamp duty land tax shall nevertheless be payable or repayable in accordance with the determination of the tribunal or court as the case may be.

2 But if the amount charged by the assessment is altered by the order or judgment of the Upper Tribunal or court—

a if too much stamp duty land tax has been paid, the amount overpaid shall be refunded with such interest, if any, as may be allowed by that order or judgment; and

b if too little stamp duty land tax has been charged, the amount undercharged shall be due and payable at the expiration of a period of thirty days beginning with the date on which HMRC issue to the other party a notice of the total amount payable in accordance with the order or judgment.

3 Sub-paragraph (4) applies where—

a an accelerated payment notice has been given to a party to the appeal under Chapter 3 of Part 4 of the Finance Act 2014 (and not withdrawn), and

b the assessment to which the appeal relates has effect, or partly has effect, to counteract the whole or part of the asserted advantage (within the meaning of section 219(3) of that Act) by reason of which the notice was given.

4 If, on the application of HMRC, the relevant court or tribunal considers it necessary for the protection of the revenue, it may direct that sub-paragraph (1) does not apply so far as the stamp duty land tax relates to the counteraction of the whole or part of the asserted advantage, and—

a give permission to withhold all or part of any repayment, or

b require the provision of adequate security before repayment is made.

5 “Relevant court or tribunal” means the tribunal or court from which permission or leave to appeal is sought.

Late notice of appeal¶

1 This paragraph applies in a case where—

a notice of appeal may be given to HMRC under this Schedule or any other provision of Part 4 of this Act, but

b no notice is given before the relevant time limit.

2 Notice may be given after the relevant time limit if—

a HMRC agree, or

b where HMRC do not agree, the tribunal gives permission.

3 If the following conditions are met, HMRC shall agree to notice being given after the relevant time limit.

4 Condition A is that the appellant has made a request in writing to HMRC to agree to the notice being given.

5 Condition B is that HMRC are satisfied that there was reasonable excuse for not giving the notice before the relevant time limit.

6 Condition C is that HMRC are satisfied that request under sub-paragraph (4) was made without unreasonable delay after the reasonable excuse ceased.

7 If a request of the kind referred to in sub-paragraph (4) is made, HMRC must notify the appellant whether or not HMRC agree to the appellant giving notice of appeal after the relevant time limit.

8 In this paragraph “relevant time limit”, in relation to notice of appeal, means the time before which the notice is to be given (but for this paragraph).

Questions to be determined by the relevant tribunal¶

1 Where the question in any dispute on any appeal under paragraph 35(1) is a question of the market value of the subject matter of the land transaction that question shall be determined on a reference by the relevant tribunal.

2 In this paragraph “the relevant tribunal” means—

a where the land is in England ^F1015... , the Upper Tribunal;

^F713b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c where the land is in Northern Ireland, the Lands Tribunal for Northern Ireland.

Meaning of HMRC¶

46In this Schedule “HMRC” means Her Majesty’s Revenue and Customs.

SCHEDULE 11 ¶

Stamp duty land tax: record-keeping where transaction is not notifiable

Section 79

^F309Part 1 General¶

^F309Introductory¶

^F3091. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F309Form and contents of self-certificate¶

^F3092. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Declaration by agent¶

^F3092A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Declaration by the relevant Official Solicitor¶

^F3092B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F309Tax-related penalty for fraud or negligence¶

^F3093. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 2 Duty to keep and preserve records¶

Duty to keep and preserve records¶

A1 This paragraph applies where a transaction is not notifiable, unless the transaction is a transaction treated as taking place under a provision listed in section 79(2)(a) to (d).

1 The purchaser must—

a keep such records as may be needed to enable him to demonstrate that the transaction is not notifiable, and

b preserve those records in accordance with this paragraph.

2 The records must be preserved until the end of—