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Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017

Type Act of Senedd Cymru

Publication 2017-05-24

Last updated 2026-02-13

State In force

Jurisdiction Wales

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(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, “"mortgage”” means—

(a) in England and Wales, and Northern Ireland, any legal or equitable charge, and

(b) in Scotland, any right in security.

PART 4 — WITHDRAWAL OF RELIEF

Interpretation: relieved transaction

7

In this Part of this Schedule, a transaction that is relieved from tax by virtue of paragraph 2 (group relief) is referred to as a “"relieved transaction””.

Withdrawal of group relief

8

(1) Where sub-paragraph (2) applies, group relief in relation to a relieved transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

(2) This sub-paragraph applies where, in the case of a relieved transaction—

(a) the buyer ceases to be a member of the same group as the seller—

(i) before the end of the period of 3 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 buyer ceases to be a member of the same group as the seller (“"the relevant time””), it or a relevant associated company holds a chargeable interest—

(i) that was acquired by the buyer in the relieved 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.

(3) The amount chargeable is the tax that would have been chargeable in respect of the relieved 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.

(4) In sub-paragraphs (1) and (3), “"an appropriate proportion”” means an appropriate proportion having regard to the subject-matter of the relieved 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.

(5) In this paragraph—

“"arrangements”” (“"trefniadau**”") includes any scheme, agreement or understanding, whether or not legally enforceable;

“"relevant associated company”” (“"cwmni cyswllt perthnasol**”"), in relation to the buyer, means a company that—is a member of the same group as the buyer immediately before the buyer ceases to be a member of the same group as the seller, andceases to be a member of the same group as the seller in consequence of the buyer so ceasing.

(6) This paragraph has effect subject to paragraphs 9 and 10 (cases in which group relief not withdrawn) and paragraph 12 (withdrawal of group relief in certain cases involving successive transactions).

Cases in which group relief not withdrawn

9

(1) Group relief is not withdrawn under paragraph 8 in the following cases.

(2) The first case is where the buyer ceases to be a member of the same group as the seller by reason of—

(a) anything done for the purposes of, or in the course of, winding up the seller or another company that is above the seller in the group structure, or

(b) the seller or another company that is above the seller in the group structure otherwise ceasing to exist.

(3) For the purposes of sub-paragraph (2), a company is ““above”” the seller in the group structure if the seller, or another company that is above the seller in the group structure, is a 75% subsidiary of the company.

(4) The second case is where—

(a) the buyer ceases to be a member of the same group as the seller 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 buyer is immediately after that acquisition a member of the same group as the acquiring company.

(5) But in a case within sub-paragraph (4), sub-paragraph (6) applies if—

(a) the buyer ceases to be a member of the same group as the acquiring company—

(i) before the end of the period of 3 years beginning with the effective date of the relieved transaction, or

(ii) in pursuance of, or in connection with, arrangements made before the end of that period, and

(b) at the time the buyer 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 buyer in the relieved 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.

(6) The provisions of this Schedule apply as if the buyer had then ceased to be a member of the same group as the seller.

(7) In sub-paragraph (5)—

“"arrangements”” (“"trefniadau**”") includes any scheme, agreement or understanding, whether or not legally enforceable;

“"relevant associated company”” (“"cwmni cyswllt perthnasol**”"), in relation to the buyer, means a company that is a member of the same group as the buyer that ceases to be a member of the same group as the acquiring company in consequence of the buyer so ceasing.

Group relief not withdrawn where seller leaves group

10

(1) Group relief is not withdrawn under paragraph 8 where the buyer ceases to be a member of the same group as the seller because the seller leaves the group.

(2) The seller 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 seller, or

(b) another company that—

(i) is above the seller in the group structure, and

(ii) as a result of the transaction ceases to be a member of the same group as the buyer.

(3) For the purpose of sub-paragraph (2), a company is ““above”” the seller in the group structure if the seller, or another company that is above the seller in the group structure, is a 75% subsidiary of the company.

(4) But if there is a change in the control of the buyer after the seller leaves the group, paragraphs 8, 9(4) and (6), 13 and 14 have effect as if the buyer had then ceased to be a member of the same group as the seller (but see sub-paragraph (7)).

(5) For the purposes of this paragraph, there is a change in the control of the buyer if—

(a) a person who controls the buyer (alone or with others) ceases to do so,

(b) a person obtains control of the buyer (alone or with others), or

(6) For the purposes of sub-paragraph (5), a person (““P””) does not control, or obtain control of, the buyer if P 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 buyer because a loan creditor (within the meaning given by section 453 of the Corporation Tax Act 2010 (c. 4)) obtains control of, or ceases to control, the buyer, and

(b) the other persons who controlled the buyer before that change continue to do so.

(8) In this paragraph, references to ““control”” are to be interpreted in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c. 4) (subject to sub-paragraph (6)).

Group relief not withdrawn as a result of certain transfers of business etc. by mutual societies

11

(1) Group relief is not withdrawn under paragraph 8 where—

(a) there is a relevant transfer of business or engagement,

(b) before the date of the relevant transfer there had been a relieved transaction, and

(c) as a result of that transfer, the buyer in the relieved transaction ceases to be a member of the same group as the seller—

(i) before the end of the period of 3 years beginning with the effective date of the relieved transaction, or

(ii) in pursuance of, or in connection with, arrangements made before the end of that period.

(2) In this paragraph, a “"relevant transfer of business or engagement”” means—

(a) a transfer of business described in paragraph 10(1)(a) and (b) of Schedule 22 (transactions entered into by building societies);

(b) a transfer of business described in paragraph 11(1) of that Schedule (transactions entered into by friendly societies);

(c) a transfer of business described in paragraph 12(1) of that Schedule (transactions entered into by co-operative and community benefit societies or credit unions).

Withdrawal of group relief in certain cases involving successive transactions

12

(1) Where in the case of a relieved transaction—

(a) there is a change in the control of the buyer,

(b) that change occurs—

(i) before the end of the period of 3 years beginning with the effective date of the relieved 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 relieved transaction would not be withdrawn under paragraph 8, and

(d) any previous transaction falls within sub-paragraph (3),

paragraphs 8, 9 and 10 have effect in relation to the relieved transaction as if the seller in the earliest previous transaction falling within sub-paragraph (3) were the seller in the relieved transaction.

(2) Sub-paragraph (1) has effect subject to sub-paragraph (6).

(3) A previous transaction falls within this sub-paragraph if—

(a) the previous transaction is a relieved transaction or is relieved from tax by virtue of Schedule 17 (reconstruction and acquisition reliefs),

(b) the effective date of the previous transaction is less than 3 years before the date of the event falling within sub-paragraph (1)(a),

(c) the chargeable interest acquired under the relieved transaction by the buyer in that transaction is the same as, comprises, forms part of, or is derived from, the chargeable interest acquired under the previous transaction by the buyer in the previous transaction, and

(d) since the previous transaction, the chargeable interest acquired under that transaction has not been acquired by any person in a transaction that is not a relieved transaction nor is relieved from tax by virtue of Schedule 17 (reconstruction and acquisition reliefs).

(4) 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

(5) References to ““control”” in this paragraph are to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c. 4).

(6) Sub-paragraph (1) does not apply where—

(a) there is a change in the control of the buyer because a loan creditor (within the meaning given by section 453 of the Corporation Tax Act 2010 (c. 4)) obtains control of, or ceases to control, the buyer, and

(b) the other persons who controlled the buyer before that change continue to do so.

(7) If two or more transactions effected at the same time are the earliest previous transactions falling within sub-paragraph (3), the reference in sub-paragraph (1) to the seller in the earliest previous transaction is a reference to the persons who are the sellers in the earliest previous transactions.

(8) In this paragraph, “"arrangements”” includes any scheme, agreement or understanding, whether or not legally enforceable.

PART 5 — RECOVERY OF RELIEF FROM CERTAIN PERSONS

Recovery of group relief from another group company or controlling director

13

(1) This paragraph applies where—

(a) tax is chargeable under paragraph 8 (withdrawal of group relief),

(b) the amount so chargeable has been finally determined, and

(2) The following persons may, by notice under paragraph 14, be required to pay the unpaid tax (together with any interest payable)—

(a) the seller;

(b) any company that at any relevant time was a member of the same group as the buyer and was above it in the group structure;

(c) any person who at any relevant time was a controlling director of the buyer or a company having control of the buyer.

(3) For the purposes of sub-paragraph (2)(b)—

(a) a “"relevant time”” means any time between the effective date of the relieved transaction and the buyer ceasing to be a member of the same group as the seller;

(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””(““cyfarwyddwr””), 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 (c. 4);

““controlling director””(““cyfarwyddwr â rheolaeth””), 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 (c. 4)).

(5) For the purposes of this paragraph, a claim is not finally determined until—

(a) the claim, or

(b) the amount to which it relates,

can no longer be varied (whether on review, appeal or otherwise).

Recovery of group relief: supplementary

14

(1) WRA may issue a notice to a person within paragraph 13(2) requiring the person to pay the amount that remains unpaid before the end of the period of 30 days beginning with the day on which the notice is issued.

(2) A notice under sub-paragraph (1) must be issued before the end of the period of 3 years beginning with the date of the final determination mentioned in paragraph 13(1)(b).

(3) The notice must state the amount required to be paid by the person to whom the notice is issued.

(4) That amount is a ““relevant amount”” payable by the person to whom the notice is issued for the purposes of Part 7 of TCMA (payment and enforcement).

(5) A person who has paid an amount in pursuance of a notice under this paragraph may recover that amount from the buyer.

SCHEDULE 17

PART 1 — INTRODUCTORY

Overview

1

(1) This Schedule makes provision about reconstruction relief and acquisition relief.

(2) This Schedule is arranged as follows—

(a) Part 2 describes the relief available for transactions entered into in pursuance of a scheme of reconstruction,

(b) Part 3 provides for the amount of tax chargeable where a land transaction is entered into in connection with a company acquiring the whole or part of the undertaking of another company,

(d) Part 5 makes provision about recovery of unpaid tax from certain persons.

PART 2 — RECONSTRUCTION RELIEF

Reconstruction relief

2

(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 and second 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 relieved from tax.

(2) Relief under this paragraph is referred to in this Schedule as “"reconstruction relief””.

(3) 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.

(4) Where the consideration for the acquisition consists partly of the issue of non-redeemable shares, 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.

(5) In sub-paragraphs (3) and (4), “"non-redeemable shares”” means shares that are not redeemable shares.

(6) 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.

(7) 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 (3) and (6) as having been cancelled before the acquisition (and, accordingly, the company is to be treated as if it were not a shareholder of itself).

(8) This paragraph is subject to paragraph 5 (withdrawal of reconstruction or acquisition relief).

PART 3 — ACQUISITION RELIEF

Acquisition relief

3

(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 0.5% of the chargeable consideration for the transaction (or such other proportion of that consideration as the Welsh Ministers may specify by regulations under this paragraph).

(2) Relief under this paragraph is referred to in this Schedule as “"acquisition relief””.

(3) 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.

(4) Where the consideration for the acquisition consists partly of the issue of non-redeemable shares, that condition is met only if the rest of the consideration consists wholly of—

(a) cash not exceeding 10% of the nominal value of the non-redeemable shares so issued,

(b) the assumption or discharge by the acquiring company of liabilities of the target company, or

(5) In sub-paragraphs (3) and (4), “"non-redeemable shares”” means shares that are not redeemable shares.

(6) 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.

(7) For this purpose, companies are associated if one has control of the other or both are controlled by the same person or persons; and the reference to control is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c. 4).

(8) 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.

(9) In sub-paragraph (8), “"trade”” has the same meaning as in section 1119 of the Corporation Tax Act 2010 (c. 4).

(10) In this paragraph, ““arrangements”” include any scheme, agreement or understanding, whether or not legally enforceable.

(11) This paragraph is subject to paragraph 5 (withdrawal of reconstruction or acquisition relief).

PART 4 — WITHDRAWAL OF RECONSTRUCTION OR ACQUISITION RELIEF

Interpretation

4

In this Part and in Part 5 of this Schedule, a transaction—

(a) that is relieved from tax by virtue of reconstruction relief, or

(b) on which tax is chargeable in accordance with paragraph 3 (acquisition relief),

is referred to as a “"relieved transaction””.

Withdrawal of reconstruction or acquisition relief

5

(1) Where sub-paragraph (2) applies, reconstruction or acquisition relief in relation to a relieved transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph.

(2) This sub-paragraph applies where—

(a) control of the acquiring company changes—

(i) before the end of the period of 3 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 relieved 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.

(3) The amount chargeable is the tax that would have been chargeable in respect of the relieved 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.

(4) In sub-paragraphs (1) and (3), “"an appropriate proportion”” means an appropriate proportion having regard to the subject-matter of the relieved 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”” is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c. 4);

(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.

(7) This paragraph has effect subject to paragraph 6 (cases in which reconstruction or acquisition relief not withdrawn).

Cases in which reconstruction or acquisition relief not withdrawn

6

(1) Reconstruction or acquisition relief is not withdrawn under paragraph 5 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—

(a) any of paragraphs (a) to (d) of paragraph 3 of Schedule 3 (transactions in connection with divorce etc.), or

(b) any of paragraphs (a) to (d) of paragraph 4 of that Schedule (transactions in connection with dissolution of civil partnership 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 sub-paragraph (1) of paragraph 6 of Schedule 3 (variation of testamentary dispositions etc.), and

(b) meets the conditions in sub-paragraph (2) of that paragraph.

(4) The third case is where control of the acquiring company changes as a result of an exempt intra-group transfer.

(5) 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).

(6) But see paragraph 7 (withdrawal of relief in case of subsequent non-exempt transfer).

(7) 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.

(8) “"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.

(9) But see paragraph 7 (withdrawal of relief in case of subsequent non-exempt transfer).

(10) 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.

(11) ““Loan creditor”” here has the meaning given by section 453 of the Corporation Tax Act 2010 (c. 4).

Withdrawal of reconstruction or acquisition relief on subsequent non-exempt transfer

7

(1) Reconstruction or acquisition relief in relation to a relieved transaction, or an appropriate proportion of it, is withdrawn and tax is chargeable in accordance with this paragraph in the following cases.

(2) The first case is where paragraph 6(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 3 years beginning with the effective date of the relieved 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 relieved 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.

(3) The second case is where paragraph 6(7) (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 3 years beginning with the effective date of the relieved 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 relieved 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.

(4) The amount chargeable is the tax that would have been chargeable in respect of the relieved 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.

(5) In sub-paragraphs (1) and (4), “"an appropriate proportion”” means an appropriate proportion having regard to the subject-matter of the relieved 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.

(6) 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.

(7) In this paragraph—

(a) “"arrangements”” includes any scheme, agreement or understanding, whether or not legally enforceable;

(b) “"control”” is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c. 4);

(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.

PART 5 — RECOVERY OF RECONSTRUCTION OR ACQUISITION RELIEF

Recovery of reconstruction or acquisition relief from another group company or controlling director

8

(1) This paragraph applies where—

(a) tax is chargeable under paragraph 5 or 7 (withdrawal of reconstruction or acquisition relief),

(b) the amount so chargeable has been finally determined, and

(2) The following persons may, by notice under paragraph 9, be required to pay the unpaid tax (together with any interest payable)—

(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 relieved 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 (c. 4);

(b) “"controlling director””, in relation to a company, means a director of the company who has control of it; and ““control”” here is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c. 4).

(6) For the purposes of this paragraph, a claim is not finally determined until—

(a) the claim, or

(b) the amount to which it relates,

can no longer be varied (whether on review, appeal or otherwise).

Recovery of reconstruction or acquisition relief: supplementary

9

(1) WRA may issue a notice to a person within paragraph 8(2) requiring the person to pay the amount that remains unpaid before the end of the period of 30 days beginning with the day on which the notice is issued.

(2) A notice under sub-paragraph (1) must be issued before the end of the period of 3 years beginning with the date of the final determination mentioned in paragraph 8(1)(b).

(3) The notice must state the amount required to be paid by the person to whom the notice is issued.

(4) That amount is a ““relevant amount”” payable by the person to whom the notice is issued for the purposes of Part 7 of TCMA (payment and enforcement).

(5) A person who has paid an amount in pursuance of a notice under this paragraph may recover that amount from the acquiring company.

SCHEDULE 18

Overview

1

This Schedule is arranged as follows—

(a) paragraph 2 defines key terms,

(aa) paragraphs 2A to 2D make provision about the meaning of “charity”,

(b) paragraph 3 describes the relief available to a charity that is a buyer in a land transaction and the circumstances in which it is available,

(d) paragraph 5 describes the relief available where a charity does not qualify for relief under paragraph 3 but meets other criteria, and makes provision about the circumstances where such relief is withdrawn,

(e) paragraph 6 describes the relief available where at least one charity and at least one person who is not a charity are buyers under a land transaction,

(f) paragraph 7 describes the circumstances where that relief is withdrawn,

(g) paragraph 8 describes the relief available where a charity does not qualify for relief under paragraph 6 but meets other criteria, and makes provision about the circumstances where such relief is withdrawn, and

(h) paragraph 9 makes provision about reliefs available for charitable trusts.

Key terms

2

(1) In this Schedule, a charity (““C””) which is a buyer in a land transaction is a ““qualifying charity””—

(a) for the purposes of paragraphs 3, 4 and 5, if C intends to hold the whole of the subject-matter of the transaction for qualifying charitable purposes;

(b) for the purposes of paragraphs 6, 7 and 8, if C intends to hold the whole of its undivided share of the subject-matter of the transaction for qualifying charitable purposes.

(2) For the purposes of this Schedule, C holds the subject-matter of the transaction for ”qualifying charitable purposes” if C 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.

(3) In this Schedule—

(a) “"charity”” has the meaning given by paragraph 2A, and

(b) “"charitable purpose”” has the meaning given by section 2 of the Charities Act 2011 (c. 25).

(4) In this Schedule, in relation to C which is a buyer in a land transaction, a ““disqualifying event”” occurs when—

(a) C ceases to be established for charitable purposes only, or

(b) the whole or any part of the subject-matter of the transaction relieved from tax under this Schedule, or any interest or right derived from it, is used or held by C otherwise than for qualifying charitable purposes.

The relief

3

(1) A land transaction is relieved from tax where the buyer is a qualifying charity.

(2) But see paragraph 4 (withdrawal of relief).

Withdrawal of charities relief

4

(1) This paragraph applies where—

(a) a land transaction is relieved from tax under paragraph 3 (““the relieved transaction””),

(b) a disqualifying event occurs in relation to a charity (““C””) which was the buyer under the relieved transaction, and

(2) Where this paragraph applies, relief under paragraph 3, or an appropriate proportion of it, is withdrawn and tax is chargeable (see sub-paragraph (5)).

(3) The disqualifying event must occur—

(a) before the end of the period of 3 years beginning with the effective date of the relieved transaction, or

(b) in pursuance of, or in connection with, arrangements made before the end of that period.

(4) At the time of the disqualifying event C must hold a chargeable interest that—

(a) was acquired by C under the relieved transaction, or

(b) that is derived from an interest so acquired.

(5) The amount chargeable is the amount of tax that would have been chargeable but for paragraph 3 or, as the case may be, an appropriate proportion of that amount.

(6) An “"appropriate proportion”” means an appropriate proportion having regard to—

(a) what was acquired by C under the relieved 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 is or becomes used or held for purposes other than qualifying charitable purposes.

Charity not a qualifying charity

5

(1) This paragraph applies where—

(a) a land transaction is not relieved from tax under paragraph 3 because the buyer is not a qualifying charity, but

(b) the buyer is a charity (““C””) which intends to hold the greater part of the subject-matter of the transaction for qualifying charitable purposes.

(2) In such a case—

(a) paragraphs 3 and 4 have effect as if C were a qualifying charity, but

(b) for the purposes of paragraph 4, “"disqualifying event”” includes the following if they are made otherwise than in furtherance of C's charitable purpose—

(i) any transfer by C of a major interest in the whole or any part of the subject-matter of the relieved transaction;

(ii) any grant by C at a premium of a low-rental lease of the whole or any part of that subject-matter.

(3) In relation to a transfer or grant that, by virtue of sub-paragraph (2)(b), is a disqualifying event for the purposes of paragraph 4—

(a) the date of the disqualifying event for those purposes is the effective date of the relieved transaction, and

(b) paragraph 4 has effect with the modifications in sub-paragraph (4).

(4) The modifications to paragraph 4 are—

(a) sub-paragraph (4) is to have effect as if for ““At the time of”” there were substituted “ Immediately before ”;

(b) sub-paragraph (6)(a) is to have effect as if for ““at the time of”” there were substituted “ immediately before and immediately after ”;

(5) For the purposes of this paragraph—

(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.

(6) In this paragraph—

(a) “"annual rent”” has the meaning given by paragraph 36(2) of Schedule 6, and

(b) “"rent”” has the same meaning as in that Schedule.

Joint purchase by qualifying charity and another person: partial relief

6

(1) This paragraph applies where—

(a) there are two or more buyers under a land transaction,

(b) the buyers acquire the subject-matter of the transaction as tenants in common, and

(c) at least one of the buyers is a qualifying charity and at least one of the buyers is another person who is not a qualifying charity.

(2) The tax chargeable in respect of the transaction is reduced by the amount of the relief under sub-paragraph (3) (but see paragraph 7 (withdrawal of partial relief)).

(3) The relief is equal to the relevant proportion of the tax that would, ignoring paragraph 3, otherwise have been chargeable in respect of the transaction.

(4) 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 buyers 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 buyers under the transaction (in aggregate).

Withdrawal of partial relief

7

(1) This paragraph applies where—

(a) a land transaction is relieved from tax under paragraph 6 (““the relieved transaction””),

(b) a disqualifying event occurs in relation to a charity (““C””) which was the buyer under the relieved transaction, and

(2) Where this paragraph applies, C's portion of the relief, or an appropriate proportion of C's portion of that relief, is withdrawn and tax is chargeable in accordance with this paragraph (see sub-paragraph (5)).

(3) The disqualifying event must occur—

(a) before the end of the period of 3 years beginning with the effective date of the relieved transaction, or

(b) in pursuance of, or in connection with, arrangements made before the end of that period.

(4) At the time of the disqualifying event, C must hold a chargeable interest that—

(a) was acquired by C under the relieved transaction, or

(b) is derived from an interest so acquired.

(5) 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.

(6) C's portion of the relief depends on whether P1 or P2 was lower in the calculation under paragraph 6.

(7) If P1 was lower, C's portion of the relief is equal to—

$$p1 P1 × R$Figure 14 where—p1 is the proportion of the subject-matter of the transaction that was acquired by C under the transaction;P1 has the same meaning as in paragraph 6(4);R is the amount of the relief.$

(8) If P2 was lower, C's portion of the relief is equal to—

$$p2 P2 × R$Figure 15 where—p2 is the proportion of chargeable consideration for the transaction that was given by C;P2 has the same meaning as in paragraph 6(4);R is the amount of the relief.$

(9) In this paragraph, “"appropriate proportion”” means an appropriate proportion having regard to—

(a) what was acquired by C under the relieved 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 is or becomes used or held for purposes other than qualifying charitable purposes.

Partial relief: charity not a qualifying charity

8

(1) This paragraph applies where—

(a) a charity (““C””) is one of two or more buyers acquiring the subject-matter of a land transaction as tenants in common,

(b) C is not a qualifying charity,

(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) paragraphs 6 and 7 have effect as if C were a qualifying charity, but

(b) for the purposes of paragraph 7 “"disqualifying event”” includes the following if they are made otherwise than in furtherance of C's charitable purposes—

(i) any transfer by C of a major interest in the whole or any part of the subject-matter of the relieved transaction;

(ii) any grant by C at a premium of a low-rental lease of the whole or any part of that subject-matter.

(3) In relation to a transfer or a grant that, by virtue of sub-paragraph (2)(b), is a disqualifying event for the purposes of paragraph 7—

(a) the date of the event for those purposes is the effective date of the relieved transaction, and

(b) paragraph 7 has effect with the modifications in sub-paragraph (4).

(4) The modifications to paragraph 7 are—

(a) sub-paragraph (4) is to have effect as if for ““At the time of”” there were substituted “ Immediately before ”;

(b) sub-paragraph (9)(a) is to have effect as if for ““at the time of”” there were substituted “ immediately before and immediately after ”;

(5) For the purposes of this paragraph—

(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.

(6) In this paragraph—

(a) “"annual rent”” has the meaning given by paragraph 36(2) of Schedule 6, and

(b) “"rent”” has the same meaning as in that Schedule.

Application of this Schedule to certain trusts

9

(1) This Schedule applies to the following trusts as it applies to a charity but subject to the modifications in sub-paragraph (2)—

(a) a trust of which all the beneficiaries are charities, or

(b) a unit trust scheme in which all the unit holders are charities.

(2) The modifications to this Schedule are—

(a) the references in paragraph 2(2) to the charitable purposes of C are to have effect as if they were references to those of the beneficiaries or unit holders, or any of them;

(b) the references to C in paragraph 2(4), are to have effect as if they were references to any of the beneficiaries or unit holders;

(c) the references in paragraphs 5(2)(b) and 8(2)(b) to the charitable purposes of C are to have effect as if they were references to those of the beneficiaries or unit holders, or any of them.

SCHEDULE 19

Relief from land transaction tax: conversion of an authorised unit trust to an open-ended investment company

1

(1) A land transaction transferring any property which is subject to the trusts of an authorised unit trust (“"the target trust””) to an open-ended investment company (“"the acquiring company””) is relieved from tax if the conditions set out in sub-paragraph (2) are met.

(2) Those conditions are that—

(a) the transfer forms part of an arrangement for the conversion of an authorised unit trust to an open-ended investment company, as a result of which the whole of the available property of the target trust becomes the whole of the property of the acquiring company,

(b) under the arrangement all the units in the target trust are extinguished,

(c) the consideration under the arrangement consists of or includes the issue of shares (“"the consideration shares””) in the acquiring company to the persons who held the extinguished units,

(d) the consideration shares are issued to those persons in proportion to their holdings of the extinguished units, and

(e) the consideration under the arrangement does not include anything else, other than the assumption or discharge by the acquiring company of liabilities of the trustees of the target trust.

Relief from land transaction tax: amalgamation of an authorised unit trust with an open-ended investment company

2

(1) A land transaction transferring any property which is subject to the trusts of an authorised unit trust (“"the target trust””) to an open-ended investment company (“"the acquiring company””) is relieved from tax if the conditions set out in sub-paragraph (2) are met.

(2) Those conditions are that—

(a) the transfer forms part of an arrangement for the amalgamation of an authorised unit trust with an open-ended investment company, as a result of which the whole of the available property of the target trust becomes part (but not the whole) of the property of the acquiring company,

(b) under the arrangement all the units in the target trust are extinguished,

(c) the consideration under the arrangement consists of or includes the issue of shares (“"the consideration shares””) in the acquiring company to the persons who held the extinguished units,

(d) the consideration shares are issued to those persons in proportion to their holdings of the extinguished units, and

(e) the consideration under the arrangement does not include anything else, other than the assumption or discharge by the acquiring company of liabilities of the trustees of the target trust.

Interpretation

3

(1) For the purposes of this Schedule, “"the whole of the available property of the target trust”” means the whole of the property subject to the trusts of the target trust, other than any property which is retained for the purpose of discharging liabilities of the trustees of the target trust (and “"target trust”” has the meaning given by paragraph 1 or 2, as the case may be).

(2) For the purposes of this Schedule, each of the parts of an umbrella scheme (and not the scheme as a whole) is regarded as an authorised unit trust; and “"umbrella scheme”” has the same meaning as in section 619 of the Corporation Tax Act 2010 (c. 4).

(3) In this Schedule, “"authorised unit trust”” means a unit trust scheme in the case of which an order under section 243 of the Financial Services and Markets Act 2000 (c. 8) is in force.

SCHEDULE 20

Relief for certain acquisitions involving public bodies

1

(1) A land transaction entered into on, or in consequence of, or in connection with, a reorganisation effected by or under an enactment is relieved from tax if the buyer and seller are both public bodies.

(2) The Welsh Ministers may by regulations provide that a land transaction that is not entered into as mentioned in sub-paragraph (1) is relieved from tax if—

(a) the transaction is effected by or under an enactment specified in the regulations, and

(b) either the buyer or the seller is a public body.

(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 (discharged, or to be discharged) by one or more public bodies, or

(4) The following are public bodies for the purposes of this paragraph—

(a) a Minister of the Crown;

(b) the Welsh Ministers, the First Minister for Wales and the Counsel General to the Welsh Government;

(d) a county or county borough council constituted under section 21 of the Local Government Act 1972 (c. 70);

(da) a corporate joint committee established by regulations made under Part 5 of the Local Government and Elections (Wales) Act 2021;

(e) a county or district council constituted under section 2 of that Act;

(f) the council of a London borough;

(g) any other authority that is a local planning authority within the meaning of the Town and Country Planning Act 1990 (c. 8);

(h) a Special Health Authority established under section 22 of the National Health Service (Wales) Act 2006 (c. 42) or section 28 of the National Health Service Act 2006 (c. 41);

(i) a Local Health Board established under section 11 of the National Health Service (Wales) Act 2006 (c. 42);

(j) a National Health Service Trust established under section 18 of the National Health Service (Wales) Act 2006 (c. 42) or section 25 of the National Health Service Act 2006 (c. 41);

(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(l) a person specified for the purposes of this paragraph by the Welsh Ministers by regulations.

(5) In this paragraph, references to a public body include—

(a) a company in which all the shares are owned by such a body;

(b) a wholly-owned subsidiary of such a company.

Relief for acquisitions by certain health service bodies

2

A land transaction is relieved from tax if the buyer is any of the following—

(a) a Local Health Board established under section 11 of the National Health Service (Wales) Act 2006 (c. 42);

(b) a Special Health Authority established established under section 22 of that Act;

(d) a person specified for the purposes of this paragraph by the Welsh Ministers by regulations.

SCHEDULE 21

Relief for compulsory purchase facilitating development

1

(1) A compulsory purchase facilitating development is relieved from tax.

(2) In this paragraph—

“"compulsory purchase facilitating development”” (“"pryniant gorfodol sy'n hwyluso datblygiad**”") means a land transaction under which the buyer acquires a chargeable interest pursuant to a compulsory purchase order made by the buyer for the purpose of facilitating development by another person;

“"development”” (“"datblygiad**”") has the meaning given by the Town and Country Planning Act 1990 (c. 8) (see section 55 of that Act).

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

Relief for compliance with planning obligations

2

(1) A land transaction that is entered into in order to comply with a planning obligation or a modification of a planning obligation is relieved from tax if—

(a) the planning obligation or modification is enforceable against the seller,

(b) the buyer is a public body, and

(c) the effective date of the transaction falls within the period of 5 years beginning with the date on which the planning obligation was entered into or modified.

(2) In this paragraph—

“"modification”” (“"addasiad**”") of a planning obligation means modification as mentioned in section 106A(1) (modification and discharge of planning obligations) of the Town and Country Planning Act 1990 (c. 8);

“"planning obligation”” (“"rhwymedigaeth gynllunio**”") means a planning obligation within the meaning of section 106 of that Act that is entered into in accordance with subsection (9) of that section (matters relating to the form and execution of the instrument effecting the planning obligation).

(3) The following are public bodies for the purposes of this paragraph—

(a) a county or county borough council constituted under section 21 of the Local Government Act 1972 (c. 70);

(b) a Special Health Authority established under section 22 of the National Health Service (Wales) Act 2006 (c. 42);

(d) a National Health Service Trust established under section 18 of that Act;

(e) a person specified for the purposes of this paragraph by the Welsh Ministers by regulations.

SCHEDULE 22

Lighthouses reliefs

1

A land transaction entered into by or under the direction of the Secretary of State for the purposes of carrying into effect Part 8 of the Merchant Shipping Act 1995 (c. 21) (lighthouses) is relieved from tax.

2

(1) A land transaction entered into by or under the direction of the Trinity House for the purpose of carrying out the services referred to in section 221(1) of the Merchant Shipping Act 1995 (c. 21) is relieved from tax.

(2) In this paragraph, “"the Trinity House”” has the meaning given by section 223 of the Merchant Shipping Act 1995 (c. 21).

Visiting forces and international military headquarters reliefs

3

A land transaction entered into with a view to—

(a) building or enlarging barracks or camps for a visiting force,

(b) facilitating the training of a visiting force, or

is relieved from tax.

4

(1) Paragraph 3 has effect in relation to a designated international military headquarters as if —

(a) the headquarters were a visiting force of a designated country, and

(b) the members of that force consisted of such of the persons serving at or attached to the headquarters as are members of the armed forces of a designated country.

(2) In this paragraph, “"designated”” means designated for the purpose in question by or under any Order in Council made to give effect to an international agreement.

5

In paragraphs 3 and 4, “"visiting force”” means any body, contingent or detachment of a country's forces which is for the time being or is to be present in the United Kingdom on the invitation of Her Majesty's Government in the United Kingdom.

Relief for property accepted in satisfaction of tax

6

A land transaction—

(a) which is entered into under section 9 of the National Heritage Act 1980 (c. 17) (disposal of property accepted by the Commissioners for Revenue and Customs in satisfaction of inheritance tax) and by which property is transferred to a person mentioned in subsection (2) of that section, or

(b) which is entered into under subsection (4) of that section,

is relieved from tax.

Trunk roads relief

7

(1) A land transaction to which the Welsh Ministers are a party, or to which the Secretary of State is a party, is relieved from tax if—

(a) it relates to a highway or proposed highway which is, or is to become, a trunk road, and

(b) but for this paragraph tax would be payable in respect of the transaction as an expense incurred by the Welsh Ministers or the Secretary of State under the Highways Act 1980 (c. 66).

(2) In this paragraph—

“"highway”” (“"priffordd**”") has the meaning given by section 328 of the Highways Act 1980 (c. 66);

“"proposed highway”” (“"priffordd arfaethedig**”") has the meaning given by section 329(1) of that Act;

“"trunk road”” (“"cefnffordd**”") has the meaning given by section 329(1) of that Act.

Relief for acquisitions by bodies established for national purposes

8

A land transaction is relieved from tax if the buyer is any of the following—

(a) the Trustees of the British Museum;

(b) the Trustees of the National Heritage Memorial Fund;

Relief for acquisitions in consequence of reorganisation of parliamentary constituencies

9

(1) A land transaction is relieved from tax where an Order in Council is made under the Parliamentary Constituencies Act 1986 (c. 56) (orders specifying new parliamentary constituencies) and where—

(a) the seller is an existing local constituency association, and

(b) the buyer is—

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

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

(2) Where sub-paragraph (1)(b)(ii) applies, the land transaction giving effect to the transfer mentioned in that sub-paragraph is also relieved.

(3) In this paragraph—

“"existing local constituency association”” (“"cymdeithas etholaeth leol sy'n bodoli eisoes**”") 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 immediately before the relevant date;

“"former parliamentary constituency”” (“"etholaeth seneddol flaenorol**”") means an area that, for the purposes of parliamentary elections, was a constituency immediately before the relevant date but is no longer such a constituency after that date;

“"local constituency association”” (“"cymdeithas etholaeth leol**”") 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 is or was the same or substantially the same as the area of a parliamentary constituency or two or more parliamentary constituencies;

“"new association”” (“"cymdeithas newydd**”") 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 immediately after the relevant date;

““new parliamentary constituency””(““etholaeth seneddol newydd””) means an area that, for the purposes of parliamentary elections, is such a constituency after the relevant date but was not such a constituency immediately before that date;

“"related body”” (“"corff perthynol**”"), in relation to a local constituency association, means a body (whether corporate or unincorporated) that is an organ of the political party concerned;

“"relevant date”” (“"dyddiad perthnasol**”") means the date which the Order mentioned in sub-paragraph (1) comes into operation (see section 4(6) of the Parliamentary Constituencies Act 1986 (c. 56)).

(4) For the purposes of this paragraph, 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.

Building societies relief

10

(1) A land transaction is relieved from tax if it is effected by or in consequence of—

(a) an amalgamation of two or more building societies under section 93 of the Building Societies Act 1986 (c. 53) (amalgamation), or

(b) a transfer of engagements between building societies under section 94 of that Act (transfer of engagements).

(2) In this paragraph, “"building society”” has the meaning given by section 119(1) of the Building Societies Act 1986 (c. 53).

Friendly societies relief

11

(1) A land transaction is relieved from tax if it is effected by or in consequence of—

(a) an amalgamation of two or more registered societies under section 82 of the Friendly Societies Act 1974 (c. 46) (the “"1974 Act””) (amalgamation and transfer of engagements),

(b) a transfer of engagements under that section,

(c) an amalgamation of two or more friendly societies under section 85 of the Friendly Societies Act 1992 (c. 40) (the “"1992 Act””) (amalgamation of friendly societies),

(d) a transfer of the engagements of a friendly society under section 86 of the 1992 Act (transfer of engagements by or to friendly society), or

(e) a transfer of the engagements of a friendly society pursuant to a direction given by the appropriate authority under section 90 of the 1992 Act (power of appropriate authority to effect transfer of engagement).

(2) In this paragraph—

“"appropriate authority”” (“"awdurdod priodol**”") has the meaning given by section 119 of the 1992 Act;

“"friendly society”” (“"cymdeithas gyfeillgar**”") has the meaning given by section 116 of the 1992 Act;

““registered””(““cofrestredig””) in relation to a society, has the meaning given by section 111 of the 1974 Act.

Co-operative and community benefit society and credit union relief

12

(1) A land transaction is relieved from tax if it is effected by or in consequence of—

(a) a transfer by a registered society of its engagements to another registered society in accordance with section 110 of the Co-operative and Community Benefit Societies Act 2014 (c. 14) (the “"2014 Act””) (transfer of engagements between societies),

(b) a conversion of a registered society into a company in accordance with section 112 of the 2014 Act (conversion of society into a company, amalgamation with a company etc.),

(d) a transfer by a registered society of the whole of its engagements to a company in accordance with that section.

(2) In sub-paragraph (1), “"registered society”” means a registered society within the meaning given by section 1(1) of the 2014 Act, but in paragraphs (b) to (d) of that sub-paragraph it does not include a society registered as a credit union under that Act by virtue of section 1 of the Credit Unions Act 1979 (c. 34) (the “"1979 Act””).

(3) In so far as it applies to a credit union, sub-paragraph (1)(a) has effect as if the reference to section 110 of the 2014 Act were a reference to that section as it has effect subject to section 21 of the 1979 Act (additional provisions relating to amalgamations and transfers of engagements).

SCHEDULE 23

1

TCMA is amended as follows.

2

In section 1 (overview of Act), after paragraph (b) insert—

(ba) Part 3A makes provision about counteracting avoidance arrangements in relation to devolved taxes;

3

In the Welsh text, in section 37 (overview of Part), in paragraph (f), for ““ymwared”” substitute “ ryddhad ”.

4

In Chapter 2 of Part 3, in the chapter heading omit ““TAXPAYER””.

5

In section 38 (duty to keep and preserve records)—

(a) in subsection (1)—

(i) in paragraph (a), for the words from ““make”” to the end substitute “ demonstrate that the tax return is correct and complete, ”;

(ii) for paragraph (b) substitute—

(b) preserve any records that may be needed for that purpose.

;

(b) in subsection (2)—

(i) for ““day””, in both places where it occurs, substitute “ date ”;

(ii) in paragraph (b), for the words from ““WRA”” to the end substitute “ the enquiry period ends (see section 43(1A)). ”;

(3) The ““relevant date”” is the sixth anniversary of whichever is the later of— (a) the filing date, and (b) if the return has been made and subsequently amended under section 41, the date on which notice of amendment is given under that section. (3A) But if WRA specifies an earlier date under this subsection, the “"relevant date”” means the date specified.

;

(d) in subsection (4)—

(i) for ““days”” substitute “ dates ”;

(ii) for ““(3)(b)”” substitute “ (3A) ”;

(e) for subsection (5) substitute—

(5) In this Chapter, “"records”” includes supporting documents (for example, accounts, books, deeds, contracts, vouchers and receipts).

;

(f) omit subsections (6) to (8);

(g) the section heading becomes “ Duty to keep and preserve records: cases where a tax return is required ”.

6

After section 38 insert—

(38A) (1) This section applies in relation to a land transaction, other than a transaction of a type listed in section 65(4) of LTTA, in respect of which no tax return is required to be made. (2) The buyer in a land transaction in relation to which this section applies must— (a) keep any records that may be needed to enable the buyer to demonstrate that no tax return is required to be made, and (b) preserve any records that may be needed for that purpose. (3) The records must be preserved until the end of the relevant date. (4) The ““relevant date”” is the sixth anniversary of the effective date of the transaction. (5) But if WRA specifies an earlier date under this subsection, the ““relevant date”” is the date specified. (6) Different dates may be specified for different purposes under subsection (5). (7) In subsection (4), “"effective date”” has the same meaning as in LTTA.

7

In section 39 (preservation of information etc.), after ““38”” insert “ or 38A ”.

8

After section 39 insert—

(39A) The Welsh Ministers may by regulations provide that the records required to be kept and preserved under this Chapter do, or do not, include records of a description prescribed by the regulations.

9

In section 40 (meaning of filing date), for ““this Act”” substitute “ the Welsh Tax Acts ”.

10

In section 41 (amendment of tax return by taxpayer), for subsection (3) substitute—

(3) The relevant date is the filing date. (3A) But if the Welsh Ministers prescribe another date in regulations under this subsection, the relevant date is that date.

11

In section 42 (correction of tax return by WRA)—

(a) after subsection (4) insert—

(4A) If, as a result of a correction made under this section, an amount, or an additional amount, of devolved tax is payable, the person who made the tax return must pay the amount, or additional amount, before the end of the period of 30 days beginning with the day on which notice of the correction is issued.

;

(b) in subsection (5)(a), after ““return”” insert “ under section 41 ”.

12

In section 43 (notice of enquiry)—

(a) in subsection (1), for the words from ““period”” to the end substitute “ enquiry period (but see subsection (1B)). ”;

(b) after subsection (1) insert—

(1A) The enquiry period for a tax return is the period of 12 months beginning with the relevant date. (1B) But WRA may enquire into a tax return after the expiry of the enquiry period if— (a) the tax return is made in respect of a land transaction, (b) after the tax return is made, a further return is made in respect of the same land transaction, (c) WRA has issued a notice of enquiry into the further return, and (d) WRA believes it is necessary to enquire into the tax return mentioned in paragraph (a).

;

(d) in subsection (3), for the words ““in consequence of an amendment of the tax return under section 41”” substitute—

(a) as a result of an amendment of the tax return under section 41, or (b) by virtue of subsection (1B)

;

(e) after subsection (3) insert—

(4) In subsection (1B), “"further return”” means a further return made under LTTA.

13

In section 45 (amendment of tax return during enquiry to prevent loss of tax)—

(a) in subsection (1)(a), for ““payable”” substitute “ chargeable ”;

(b) in subsection (5), for ““section 46”” substitute “ sections 45A and 46 ”.

14

After section 45 insert—

(45A) (1) This section applies if a person who has made a tax return amends it during the period when an enquiry into the return is in progress. (2) For the purposes of section 44 (scope of enquiry), the amendment is to be treated as something contained in the tax return. (3) The amendment takes effect on the day on which the enquiry is completed unless WRA states in the closure notice issued under section 50 that— (a) the amendment has been taken into account in formulating the amendments required to give effect to WRA's conclusions, or (b) WRA's conclusion is that the amendment is incorrect.

15

In section 50 (completion of enquiry), in subsection (4), for ““chargeable”” substitute “ payable ”.

16

In section 52 (determination of tax chargeable if no tax return made), in subsection (5), for ““as a result of ”” substitute “ in accordance with ”.

17

In the Welsh text, in section 54 (assessment where loss of tax), in paragraph (c), for ““ymwared”” substitute “ rhyddhad ”.

18

In section 58 (conditions for making WRA assessments)—

(a) in subsection (1)(a)—

(i) for ““two”” substitute “ three ”;

(ii) for ““(2) and (3)”” substitute “ (2), (3) and (3A) ”;

(b) for subsection (3) substitute—

(3) The second case is where— (a) a tax return has been made, (b) WRA has ceased to be entitled to issue a notice of enquiry into the return, or has completed its enquiries into it, and (c) at the time when WRA ceased to be so entitled or completed those enquiries, it could not reasonably have been expected to be aware of the situation mentioned in section 54 or 55 on the basis of information made available to WRA before that time.

;

(3A) The third case is where WRA makes an adjustment under the general anti-avoidance rule (see Part 3A, in particular section 81E).

;

(d) in subsection (4)—

(i) after ““made””, where it first occurs, insert “ in the first or second case ”;

(ii) in paragraph (a), for ““the tax return”” substitute “ a tax return ”.

19

In section 59 (time limits for WRA assessments), in subsection (7), in the definition of ““relevant date””—

(a) before paragraph (a), insert—

(za) if a tax return has not been made, the date by which WRA believes a tax return was required to be made,

;

(b) in paragraph (a), for ““the tax return””, in the first place where it occurs, substitute “ a tax return ”.

20

In section 61 (assessment procedure), omit subsection (3).

21

In the Welsh text, in the heading to Chapter 7 of Part 3 (relief in case of excessive assessment or overpaid tax) for ““YMWARED”” substitute “ RHYDDHAD ”.

22

In the Welsh text, in section 62 (claims for relief in case of double assessment)—

(a) for ““ymwared”” substitute “ ryddhad ”;

(b) in the section heading, for ““ymwared”” substitute “ rhyddhad ”.

23

In section 63 (claims for relief for overpaid tax etc.)—

(a) in subsection (1)(b), before ““determination”” insert “ WRA ”;

(b) in the Welsh text, in subsection (2), for ““ ei ryddhau ohono”” substitute “ ollwng y swm ”;

(i) in the Welsh text, for ““ymwared”” substitute “ rhyddhad ”;

(ii) for ““this Act”” substitute “ the Welsh Tax Acts ”;

(d) in subsection (4), for ““64”” substitute “ 63A ”;

(e) in the Welsh text, in the section heading, for ““ymwared”” substitute “ rhyddhad ”.

24

After section 63 insert—

(63A) (1) If— (a) by virtue of section 26(2) of LTTA the tax bands and tax rates specified in rejected regulations apply to a chargeable transaction, and (b) in consequence, the amount of land transaction tax chargeable in respect of the transaction is greater than the amount that would otherwise have been chargeable, the buyer in the transaction may make a claim to WRA for the discharge or repayment of the amount of land transaction tax that would not have been chargeable had the rejected regulations not been made. (2) Where WRA decides to give effect to a claim under subsection (1) it must also discharge or repay any penalty or interest related to the amount of tax discharged or repaid. (3) Any penalty or interest is related to an amount of tax for this purpose to the extent that it— (a) is attributable to the amount, and (b) would not have been incurred but for the application to the transaction in question of the tax bands and tax rates specified in the rejected regulations. (4) A claim under subsection (1) must be made before the end of the period of 12 months beginning with the later of— (a) the date on which the rejected regulations cease to have effect, or (b) the filing date for a tax return containing an assessment of tax chargeable calculated using the tax bands and tax rates specified in the rejected regulations. (5) A claim under subsection (1) is to be treated as if it were an amendment made under section 41 to the assessment of tax chargeable contained in a tax return. (6) In this section— - “"chargeable transaction”” (“"trafodiad trethadwy”") has the meaning given by section 17 of LTTA; - “"rejected regulations”” (“"rheoliadau a wrthodir”") has the meaning given by section 26(1)(a) of that Act.

25

(1) In section 64 (disallowing claims for relief due to unjustified enrichment)—

(a) after ““63”” insert “ or 63A ”;

(b) in the Welsh text—

(i) for ““ymwared”” substitute “ ryddhad ”;

(ii) for “ryddhau'r” substitute “ ollwng y ”.

(2) The section heading becomes “ Disallowing claims for relief due to unjustified enrichment ”.

26

In the Welsh text, in section 65 (unjustified enrichment: further provision)—

(a) in subsection (1)(a), for “y byddai person o'r fath i'w ryddhau ohono” substitute “i'w ollwng”;

(b) in subsection (2)(a), for ““ei ryddhau ohono”” substitute “ ollwng y swm ”.

27

In section 66 (unjustified enrichment: reimbursement arrangements)—

(a) in subsection (2), after ““63”” insert “ or 63A ”;

(b) in the Welsh text, in subsection (2)(a), for ““ryddhau”” substitute “ ollwng ”.

28

In section 67 (cases in which WRA need not give effect to a claim)—

(a) in the Welsh text, in subsection (1), for ““ymwared”” substitute “ ryddhad ”;

(b) in subsection (2)(a), after ““claim”” insert “ or election ”;

(d) after subsection (2) insert—

(2A) In subsection (2), “"election”” means an election made under paragraph 3, 5 or 12 of Schedule 15 to LTTA (social housing reliefs).

;

(e) in the Welsh text, in subsection (3), for ““ymwared”” substitute “ rhyddhad ”;

(f) in the Welsh text, in subsection (4), for ““ymwared”” substitute “ rhyddhad ” (in both places where it appears).

29

In section 68 (making claims)—

(a) in subsection (1), for ““or 63”” substitute “ , 63 or 63A ”;

(b) in the Welsh text, in subsection (3)(a) for ““ryddhau”” substitute “ ollwng ”.

30

In section 69 (duty to keep and preserve records), in subsection (1), for ““or 63”” substitute “ , 63 or 63A ”.

31

In section 71 (amendment of claim by claimant), in subsection (1), for ““or 63”” substitute “ , 63 or 63A ”.

32

In the Welsh text, in section 73 (giving effect to claims and amendments), in subsection (1)(b) for “ryddhau'r hawlydd o dreth ddatganoledig neu ei had-dalu iddo” substitute “ollwng y swm o dreth ddatganoledig neu ei ad-dalu i'r hawlydd”.

33

In the Welsh text, in section 77 (giving effect to amendments under section 75), in subsection (1)(b) for “ryddhau'r hawlydd ohoni” substitute “ ei gollwng ”.

34

In section 81 (contract settlements)—

(a) after subsection (1) insert—

(1A) In section 63A(1), the reference to repayment of an amount of land transaction tax includes repayment of an amount paid by a person under a contract settlement in connection with that amount of land transaction tax.

;

(b) in subsection (4), after ““63”” insert “ or 63A ”.

35

In section 90 (requiring information and documents in relation to a group of undertakings)—

(a) in subsection (1) for ““another undertaking (a ””subsidiary undertaking”)” substitute “ a subsidiary undertaking ”;

(b) in subsection (4) for the words from ““section 1162”” to the end substitute “ sections 1161 and 1162 of, and Schedule 7 to, the Companies Act 2006 (c. 46), but in the application of this section in relation to land transaction tax, section 1161(1)(b) of that 2006 Act has effect as if the words ““carrying on a trade or business, with or without a view to profit”” were omitted. ”

36

In section 95 (complying with an information notice), in subsection (1)(a) after ““notice”” insert “ (or such longer period as may be agreed to by WRA and the person) ”.

37

In the Welsh text, in section 100 (taxpayer notices following a tax return), in subsection (5)(c), for ““ymwared”” substitute “ rhyddhad ”.

38

In section 116(1) (no review or appeal of tribunal approvals), for ““the Tribunals, Courts and Enforcement Act 2007 (c. 15)”” substitute “ TCEA ”.

39

In section 118 (penalty for failure to make tax return on or before filing date), after ““A person”” insert “ who is required to make a tax return ”.

40

In section 119 (penalty for failure to make tax return within 6 months from filing date), in subsection (1), after ““A person”” insert “ who is required to make a tax return ”.

41

In section 120 (penalty for failure to make tax return within 12 months from filing date)—

(a) in subsection (1), after ““A person”” insert “ who is required to make a tax return ”, and

(b) in subsection (2), for the words from ““the greater of”” to the end substitute

— (a) £300, or (b) a greater amount, not exceeding 95% of the amount of devolved tax to which the person would have been liable if the tax return had been made.

42

For section 122 substitute—

(122) (1) A person is liable to a penalty if the person has failed to pay an amount of devolved tax on or before the penalty date in respect of that amount. (2) The penalty is 5% of the amount of unpaid tax. (3) In this section and in section 122A, the penalty date in respect of an amount of devolved tax specified in column 3 of Table A1 is the date specified in column 4.

Item	Devolved Tax	Amount of Tax	Penalty date
1	Land transaction tax	Amount (or additional amount) payable as a result of a tax return made by the buyer in a land transaction (unless the amount falls within item 8 or 9).	The date falling 30 days after the filing date for the return.
2	Landfill disposals tax	Amount stated in a tax return.	The date falling 30 days after the filing date for the return.
3	Any devolved tax	Amount payable as a result of a WRA determination made in place of a tax return.	The date falling 30 days after the date by which WRA believes the tax return was required to be made.
4	Any devolved tax	Amount payable as a result of a WRA assessment made in place of a tax return (unless the amount falls within item 7).	The date falling 30 days after the date by which WRA believes the tax return was required to be made.
5	Any devolved tax	Amount (or additional amount) payable as a result of a WRA assessment made where a tax return has been made.	The date falling 30 days after the date by which the amount (or additional amount) is required to be paid.
6	Any devolved tax	Amount (or additional amount) payable as a result of an amendment or a correction to a tax return.	The date falling 30 days after the date by which the amount (or additional amount) is required to be paid.
7	Any devolved tax	Amount (or additional amount) payable as a result of a WRA assessment made for the purposes of making an adjustment to counteract a tax advantage (see Part 3A) in a case where a tax return which WRA has reason to believe was required to be made has not in fact been made.	The date falling 30 days after the date by which the amount (or additional amount) is required to be paid.
8	Land transaction tax	Where a deferral request is made under section 58 of LTTA, a deferred amount required to be paid by virtue of section 61(1)of that Act.	The date falling 30 days after the date by which the deferred amount is required to be paid.
9	Land transaction tax	Where a deferral request is made under section 58 of LTTA, a refused amount within the meaning of section 61(2)(a) of that Act.	The date falling 30 days after the date by which the refused amount is required to be paid.
10	Landfill disposals tax	Amount charged by a charging notice issued under section 48 or 49 of LDTA.	The date falling 30 days after the date by which the amount is required to be paid.
11	Any devolved tax	A postponed amount within the meaning of section 181G(2).	The date falling 30 days after the date on which the postponement period ends (see section 181G as to the calculation of postponement periods).

(4) In this section, “"deferred amount”” has the same meaning as in section 58(6)(a) of LTTA. (5) The Welsh Ministers may by regulations modify Table A1. (122A) (1) This section applies where a person is liable to a penalty under section 122 in respect of a failure to pay an amount of devolved tax on or before the penalty date for that amount. (2) If any of the amount remains unpaid after the end of the period of 6 months beginning with the day falling 30 days before the penalty date, the person is liable to a further penalty. (3) The further penalty is 5% of the amount that remains unpaid. (4) If any of the amount remains unpaid after the end of the period of 12 months beginning with the day falling 30 days before the penalty date, the person is liable to a second further penalty. (5) The second further penalty is 5% of the amount that remains unpaid.

43

Omit sections 123 and 124.

44

In section 125 (special reduction in penalty), after subsection (2) insert—

(2A) But “"special circumstances”” may include the fact that WRA has agreed that a person may pay an amount of devolved tax in instalments over an agreed period.

45

In section 126 (reasonable excuse for failure to make tax return or pay tax), in subsection (2), after ““section 122”” insert “ or 122A ”.

46

In section 127 (assessment of penalties)—

(a) in subsection (5), after “section ““122”” insert “ or 122A ”, and

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